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Friday, October 24, 2008

Tokyo's nexus with India deepens

Minister Manmohan Singh to Tokyo - his third since he became prime minister in 2004. During his three-day official visit, Manmohan and Japanese counterpart Taro Aso issued a joint statement on the advancement of the strategic and global partnership, but more significantly signed a joint declaration on security cooperation.

It is remarkable that Tokyo has signed such a declaration with New Delhi with which it fell out badly only 10 years ago when it condemned India's nuclear testing in 1998 and imposed severe economic sanctions. The declaration is hugely significant, as India is only the second country after Australia with which Japanhas signed such a declaration outside its security ties with the United States.

This declaration is a comprehensive package emanating from different types of bilateral cooperation and exchanges in defense and security areas occurring in the past three to four years. The package reaffirms the two nations' similar perceptions of the evolving environment in the region and the world at large. It also extends their common commitment to democracy, open society, human rights and the rule of law and their role in promoting peace, stability and development in Asia and beyond.

This is all highly rhetorical and symbolic, but nevertheless important in charting a new course in the relationship. A number of areas have been identified where interests and commitments intersect, including the safety of sea lines of communication, fighting terrorism and pursuing disarmament.

Mechanisms for security cooperation have been spelled out in the declaration that include consultations between the two foreign offices, meetings and dialogues at various levels, defense-level cooperation through meetings of defense ministers, exchange of service chiefs, bilateral and multilateral exercises and exchange of staff and personnel. The declaration also stipulates the two countries develop an action plan for further cooperation.

India-Japan security ties began to warm only recently during the Junichiro Koizumi and Shinzo Abe administrations. But the momentum was lost with the inauguration of the Yasuo Fukuda administration in 2007, which was less keen on India and wanted to focus on China and Southeast Asia. The architect of this declaration is undoubtedly Aso, an India enthusiast, and who in his former capacity as foreign minister was at the forefront of developing and strengthening ties with India.

This new development raises several strategic questions. One that stands out relates to China. Both prime ministers have denied that their rising bilateral interests have any implications for China. Manmohan commented that cooperation with Japan would not be "at the cost of any third country, least of all China". Similarly, Aso observed that "we regard security cooperation with India as very important ... and we do not have any assumption of a third country as a target such as China".

While no immediate comments appeared in Chinese media because Beijing is busy with the 7th Asia-Europe meeting, no matter what Manmohan and Aso might state, it is certain that Beijing will see in the new declaration a strategic design to curb its regional influence.

Only a few years ago when a proposal for a quadrilateral framework consisting of Japan, the United States, Australia and India was advanced, Beijing regarded it as an attempt to isolate and encircle the mainland within an "arc of democracy". Given its troubled ties with Tokyo, Beijing has reasons to be suspicious of Japan's separate security agreement with Australia and now with India.

While Australia has historically been a staunch ally of the US, India-US ties have deepened considerably in recent years and most recently through the signing of the civilian nuclear agreement. New developments in Japan's security ties with these nations will not be taken lightly in the Chinese strategic community. Although the quadrilateral process is on the backburner, Japan's alliance with the United States and its new security ties, no matter how loose, with Australia and India sends the signal of a new security order in the region.

How fast the broken lines existing through bilateral and trilateral security processes between Japan, the US, Australia and India will be joined together and in what shape and form will largely depend on the priority that the new administration in Washington will attach to this issue. Additionally, both India and Japan are heading for general elections. While it seems certain that there will be a new prime minister in New Delhi next year, the future of Aso depends on how his party performs at the general election.

Civilian nuclear cooperation

While cooperation in security and defense added a new chapter in the bilateral relationship, India's desire for civilian nuclear cooperation with Japan remains unfulfilled. Although Japan reluctantly supported India's case at the Nuclear Suppliers' Group, Tokyo is hesitant to cooperate with India in the civilian nuclear area. Japan possesses state-of-the-art technology in the field and it generates about one-third of its electricity through the existing 55 nuclear power plants. It is well placed to help India meet its much-required energy needs both through technology and finance.
Despite the US-India civilian nuclear technology agreement and strong support from the Japanese business community and some strategic thinkers in Japan, the Japanese government is reluctant to talk about such a deal due to strong domestic opposition from civic groups and anti-nuclear lobbyists. It is not difficult to appreciate domestic opposition as hundreds of thousands of Japanese were victims of nuclear bombings during World War II and some still suffer the consequences.

The ruling Liberal Democratic Party (LDP) acts cautiously and pragmatically over such controversial issues as nuclear cooperation, especially when its own political future remains uncertain. A general election is likely to be called soon in Japan and the LDP's electoral fortune hangs in the balance, although currently it enjoys a solid majority in the Lower House. That's why Aso reiterated Japan's long-held position that India become signatory to the nuclear Non-Proliferation Treaty and ratify the Comprehensive Nuclear Test Ban Treaty.

The Japanese side understands India's position on why it has refused to sign and ratify these treaties, and the Indian side also acknowledges Japan's position on the issue. When discussing this matter with his counterpart, Manmohan stated that India was willing to wait until Japan was ready to take it (cooperation in civilian nuclear technology) forward.

Economic ties: Mixed signals

While political and strategic ties have strengthened considerably in recent years, bilateral trade and Japanese investment in India still remain at a relatively low level, compared to other bilateral trade figures that Japan and India have achieved with their major partners. Prospects of high growth are not very strong. Even the two-way trade target of $20 billion annually by 2010 looks unachievable, given that the current level of bilateral trade stands at about $10 billion. The current global financial turmoil is also likely to slow down economic activities of both nations.

Furthermore, the much-discussed economic partnership agreement for which several rounds of negotiations have been carried out in the past two years could not be brought to a conclusion. The two sides were unable to reach agreement on how to lower trade barriers to both sides' satisfaction. Nevertheless the two leaders have agreed to continue working on it, but no deadline has been set.

The silver lining was an announcement that Japan will provide some 450 billion yen ($4.6 billion) worth of loans as part of Japan's official development assistance (ODA) to India to help it build a Mumbai-Delhi freight rail connection. This is Japan's largest package ever granted to a single project. Recently India has become Japan's largest overseas aid destination, replacing China, that long occupied this status.

India was the first recipient of Japan's ODA in 1958, but Japan's shifting focus on Southeast Asia and later on China took its attention away from India. This is now changing. In an environment where Japan's aid budget is shrinking - making Japan the fifth-largest donor in the world today from number one in the late 1990s, Japan's commitment to fund India's critical infrastructure is as much an economic decision as strategic and political.

Economically, Japan sees business opportunities in a rising economy that India symbolizes. Politically and strategically, it is largely a balancing act. Japan poured billions and billions of dollars into China in the 1980s and 1990s as part of its ODA that helped develop infrastructure in China. But Japan received very little kudos for its generosity. On the other hand, India has expressed great appreciation for such assistance. In the joint declaration issued in Tokyo, the Indian prime minister acknowledged the assistance of "the Japanese people for their generous role in India’s development".

Japan-India ties have travelled a somewhat unique trajectory. Conventional wisdom tells us that strong economic and trade ties lead to greater political and security ties. This was most definitely the case with Japan's relations with Australia. Sometimes trade ties develop strongly but political relations remain fragile, as in the case of Japan and China or Japan and South Korea.

Japan-India economic and trade ties remained static for many years and have grown slowly in recent years, but the pace of political and strategic relations has moved much faster than economic ties. Whether or not Japan-India ties "will be the most important bilateral relationship in the world", as Shinzo Abe once described, it is most definitely the case that an important new chapter has been added to the relationship through Manmohan's visit to Tokyo, although much is required to give substance to declarations and agreements. These will happen only slowly and gradually, not with a big bang.

(Source: Asia Times Online)

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