Asia

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  • India
    India and the World: Fueling a New Low-Carbon Growth Model
    Samir Saran is the President of the Observer Research Foundation. Aparajit Pandey is the Program Director for Climate, Energy, and Resources Program at the Oberver Research Foundation. As leaders gather in Katowice, Poland, for the Twenty-Fourth Conference of the Parties (COP24) to the United Nations Framework Convention on Climate Change, the possibility that India can shift to a new low-carbon growth model is a critical test for a global pact on climate change mitigation. India will be one of the first countries to transition from low- to high-income economy in a fossil fuel–constrained world. While American leadership reneges on its climate finance commitments towards the global community, India is taking a lead to develop its economy largely through its own political and financial arrangements. Done correctly, the method and mechanics of India’s low-carbon transition can provide a replicable template for energy development across the world—especially for mitigating carbon emissions, ensuring affordable energy access for all, and eradicating poverty. A study of India also provides assessments and recommendations that can inform development efforts in Africa, Latin America, and Southeast Asia. In the space of two years, India’s solar and wind energy prices have fallen dramatically, undercutting average coal prices by approximately 25 percent. At the same time, investments in clean energy projects have risen rapidly, with $42 billion flowing into Indian renewable energy projects over the past four years. These optimistic figures, however, should not hide the fact that the lower rates charged by renewable energy power producers are predicated upon two volatile factors: the price of materials and government policies. Prices of renewable energy components are vulnerable to shifts in trade policy, currency depreciation, or changes in supply and demand. Moreover, with renewable power prices dropping, both central and state governments are reassessing the need for the limited incentives and subsidies they provide. In India, the resulting clean energy sector optimism over the past few years has skirted over some serious fissures in the foundations of the architecture. Firstly, India’s public power distribution companies (DISCOMS) remain a gordian knot that the government has not been able to untangle. The issues with DISCOMS remain related to three distinct factors: poor pricing models due to political interests, weak corporate governance, and ailing infrastructure. Any measure to reform the sector needs to account for all three factors. Secondly, India’s energy sector suffers from a lack of developed local financial markets. Debt-financing options for renewable energy projects remain limited within India because the shorter terms of saving instruments inhibit long-term domestic bank loans. Under normal circumstances, this asset and liability mismatch can be bypassed through alternative debt instruments. Use of financial vehicles such as bonds or infrastructure investment funds, however, remains limited in Indian and other emerging markets. The loans that have been given out to the clean energy sector have largely been driven by short-term macroeconomic factors such as excess capital liquidity (a byproduct of India’s 2016 demonetization reform). As the Indian banking sector hovers on the precipice of a crisis, it is likely that domestic debt financing for these projects will quickly dry up. Finally, the risk premium that international commercial banks charge for operating in emerging economies such as India remains an unsurpassable barrier. ReNew Power, India’s largest renewable energy company, raised a $450 million bond issuance in 2017. But the bond was several levels below what was considered an investment grade rating, despite ReNew’s excellent business fundamentals and backing from Goldman Sachs, the Abu Dhabi Investment Authority, and the Green Environment Fund. Since the issuance of the bond, the firm has grown exponentially, cementing its place as one of India’s premier energy producers—demonstrating that projects and companies could be evaluated more independently of sovereign ratings.  We recommend that India reform power grids by implementing hybrid public-private systems. The Indian state of Gujarat is the exception to the country’s DISCOM issues, with all four of the state’s utilities currently showing profits. Gujarat’s path could be a model for other parts of the developing world. On financing, direct economic interventions designed to bolster debt financing are not always viable. To increase the availability of debt financing for clean energy projects in emerging markets, policymakers can encourage the creation of alternative debt vehicles. “Green” asset backed securities are one such alternative. Securitized debt has been a largely overlooked financial instrument outside of the developed world, but recent reforms have shown the potential of the asset class in emerging markets. By compiling renewable energy assets that come from different companies and geographies at various points in their operational lifecycles, banks and other financial institutions can dilute many of the risks associated with individual renewable energy projects. To further mitigate risk through diversification and bolster the credit rating of a securitized instrument, the financial creator of the asset can also add a tranche of non-green assets. The proceeds from selling the security can then be used to finance new projects, which can in turn be securitized themselves, creating a virtuous cycle. Another alternative to traditional debt could be developed through the creation of “green” investment banks (GIBs). GIBs are government-funded entities that “crowd in” private investment in low-carbon assets and operate like a normal investment bank, albeit with a sectoral bias. They can provide debt for projects with existing capital reserves and raise funds through the issuance of bonds and creation of asset-backed securities. They can also invest as equity partners, developing projects and conducting due diligence, if needed. The value of GIBs comes from their flexibility and ability to adapt to market conditions and trends. Moreover, GIBs have sectoral experts whose skillsets allow them to understand public- and private-sector dynamics and deal with a variety of transactions. Finally, Basel IV, the proposed reforms for the global banking regulatory framework, should include climate change in its assessment criteria—either by measuring the exposure of a bank’s portfolio to climate change–related damage or by implementing a green factor on the weighting of risk for renewable energy projects. The significance of India’s development choices should not be underestimated. If the success of the Millennium Development Goals was predicated on China’s economic rise, India’s capability to replicate the same in a carbon-scarce world will determine the fate of the UN Sustainable Development Goals. This blog is excerpted from the Council of Councils Global Governance Working paper, “India and the World: Fueling a New Low-Carbon Growth Model.” Read the full paper here.
  • India
    India and the World
    India’s capability to grow in a carbon-scarce world will determine the fate of the Sustainable Development Goals.
  • Syrian Civil War
    Global Conflict This Week: Atrocities Continue in Syria
    Developments in conflicts across the world that you might have missed this week.
  • India
    A Decade On, Will There Ever Be Justice for the Mumbai Attacks?
    Ten years ago today, terrorists laid siege to Mumbai over a period of three days. Images of the iconic Taj Mahal Palace Hotel in flames shocked the world, but terrorists also attacked the Oberoi Hotel, Chhatrapati Shivaji Terminus railway station, Leopold Cafe, and the Chabad House. One hundred sixty-six people were killed, including six Americans. The Government of India and the United States government hold the Pakistan-based terrorist group Lashkar-e-Taiba (LeT) responsible for the Mumbai attacks. This terrorist group is under UN Security Council and U.S. terrorism sanctions, including both Executive Order 13224 and Foreign Terrorist Organization designations, as well as sanctions for specific individuals in the group. Secretary of State Mike Pompeo issued a statement on November 25, 2018 expressing solidarity with victims of the attack, and bluntly adding: “It is an affront to the families of the victims that, after ten years, those who planned the Mumbai attack have still not been convicted for their involvement. We call upon all countries, particularly Pakistan, to uphold their UN Security Council obligations to implement sanctions against the terrorists responsible for this atrocity, including Lashkar-e-Tayyiba and its affiliates.” Ten years on, it’s worth reviewing who has been held to account. The one terrorist captured alive during his attack on the Chhatrapati Shivaji Terminus—a gunman, Ajmal Kasab—was tried in India, convicted, and hanged in 2012. Kasab was a Pakistani citizen from Punjab who joined LeT. In the United States, David Coleman Headley, a U.S. citizen, was convicted in 2013 for his roles in the planning of and advance reconnaissance for the Mumbai attack. Tahawwur Rana, a Canadian, was convicted the same year of support to LeT. But the trial of seven members of this terrorist group has been stalled in Pakistan for years; earlier this year, former (and ousted) Prime Minister of Pakistan Nawaz Sharif made headlines (and controversy in Pakistan) for publicly acknowledging the activity of this group, and asking publicly why the trial could not be completed. On November 25, 2018, the United States issued a new “Rewards for Justice” incentive of $5 million for “information about the individuals responsible for these [Mumbai] attacks.” The reward joins two issued back in 2012, one for $10 million concerning information that could “bring to justice” Hafiz Muhammad Saeed, the founder and head of LeT—which continues to operate under the name Jamaat-ud-Dawa—and one for $5 million issued in 2012 for Hafiz Abdur Rahman Makki, also of LeT. In the Financial Action Task Force (FATF), an international collective focused on denying financial flows to terrorist groups, Pakistan was placed on the “gray list” in June 2018. U.S. security assistance has been suspended for nearly a year due to Pakistan’s inaction on various terror groups operating from its soil. Despite specific sanctions, the suspension of security assistance, FATF scrutiny, and public calls for action, Hafiz Saeed remains at large in Pakistan. In the Pakistani general elections of July 2018, LeT/Jamaat-ud-Dawa “fielded” some two hundred candidates for office. Earlier this year the religious affairs minister of the Pakistani government appeared on stage with Saeed at a public discussion. Ten years on, we are still asking if there will ever be justice for the Mumbai attacks. Selected resources on the Mumbai attacks: C. Christine Fair, In Their Own Words: Understanding Lashkar-e-Tayyaba. Oxford University Press, 2018. Stephen Tankel, Storming the World Stage: The Story of Lashkar-e-Taiba. Oxford University Press, 2011. The ProPublica series by investigative reporter Sebastian Rotella on the Mumbai attacks deserves reading in full. Here are a few of many important stories over numerous installments: Sebastian Rotella, “The Hidden Intelligence Breakdowns Behind the Mumbai Attacks,” ProPublica, April 21, 2015. Sebastian Rotella, “In 2008 Mumbai Attacks, Piles of Spy Data But an Uncompleted Puzzle” ProPublica, April 21, 2014. Sebastian Rotella, “Terror Group Recruits from Pakistan’s ‘Best and Brightest’” ProPublica, April 4, 2013. Sebastian Rotella, “Four Disturbing Questions about the Mumbai Attacks,” ProPublica, February 22, 2013. Sebastian Rotella, “Trial Testimony Intensifies Allegations Pakistan is Playing Double Game,” ProPublica, May 23, 2011. Sebastian Rotella, “Pakistan and the Mumbai Attacks: The Untold Story,” ProPublica, January 26, 2011. (Part 1) Sebastian Rotella, “Mumbai: The Plot Unfolds, Lashkar Strikes and Investigators Scramble,” ProPublica, November 14, 2010. (Part 2) Video [53m]: “A Perfect Terrorist,” Frontline, PBS.org.   My book about India’s rise on the world stage, Our Time Has Come: How India Is Making Its Place in the World, was published by Oxford University Press in January. Follow me on Twitter: @AyresAlyssa. Or like me on Facebook (fb.me/ayresalyssa) or Instagram (instagr.am/ayresalyssa).
  • India
    The Quad and the Free and Open Indo-Pacific
    Over the weekend the Halifax International Security Forum convened its tenth iteration, one that observed the hundredth anniversary of the 1918 armistice ending World War I, and took the occasion of the forum’s own anniversary to reflect on the deliberations of the past decade. One of the distinguishing features of the Halifax forum lies in its selection of participating countries: only democracies are invited. An all-democracy forum on security raises the visibility of values issues—in the forum’s own words, “a security conference of democratic states that seeks to strengthen democracy.” This year’s plenary deliberations included more attention to Asia and the Indo-Pacific region than in the past—and surfaced concerns about China, trade, the Belt and Road Initiative, technology, and surveillance. The U.S. Indo-Pacific Command commander, Admiral Phil Davidson, provided a keynote that reinforced the speech Vice President Mike Pence had delivered away in Port Moresby just hours earlier at the Asia-Pacific Economic Cooperation forum summit. Davidson, given his specific focus on Indo-Pacific security, offered more expansive detail about what the administration means when it refers to a “free and open” region: “free from coercion by other nations” as well as free “in terms of values and belief systems” “individual rights and liberties” including religious freedom and good governance “the shared values of the United Nations Charter and the Universal Declaration of Human Rights”  “all nations should enjoy unfettered access to the seas and airways upon which our nations and economies depend” “open investment environments, transparent agreements between nations, protection of intellectual property rights, fair and reciprocal trade” Davidson took care to echo Vice President Pence’s invitation to China to participate in a free and open Indo-Pacific, as long as Beijing “chooses to respect its neighbors’ sovereignty, embrace free, fair, and reciprocal trade, and uphold human rights and freedom.” The session titled “Asia Values: A Free and Open Indo-Pacific” featured speakers from all four of the “Quad” countries: Australia, India, Japan, and the United States. One panelist noted the divergent geographic definitions of the Indo-Pacific: a common map for India, Japan, and Australia—one that ends on the east coast of Africa—but a U.S. view that ends with India’s west coast, leaving out the huge expanse of the Indian Ocean. (More on the geographic gap, with maps, from my perspective here.) Any number of other countries could have been represented, but by framing the discussion through the prism of the Quad, the session got to topics such as the Quad’s own evolution of purpose. What began as a humanitarian coordination effort among the four countries with the December 26, 2004 tsunami had a brief life as a “Quadrilateral Security Dialogue” meeting in 2007. But Australia later removed itself from that framework, and the four did not meet again until 2017. Since 2017, the Quad has met formally—at the assistant-secretary level—three times, the most recent of which took place in Singapore on November 15. These meetings, however, are no longer referred to as a “Quadrilateral Security Dialogue” but by the more anodyne “U.S.-Australia-India-Japan Consultations” (or other variants according to the capital issuing the statement: Canberra, New Delhi, or Tokyo). As the Halifax discussion on the Indo-Pacific highlighted, the Quad framework has evolved to take up matters not solely in the military-security lane. The conversation usefully raised ideas for the four countries to pursue together, such as increased cooperation for “instruments to meet the infrastructure demand” (some is already underway, but the need is great), counterproliferation and counterterrorism cooperation, and continued work to build greater interoperability among all four countries in order to better respond to humanitarian emergencies. Reflecting on the powerful symbol of all four democracies, and what they could do together, I was struck by the divergence in the otherwise similar statements released by each country following the November 15 Quad meeting in Singapore. Australia, Japan, and the United States all made reference to “exchang[ing] views on regional developments including in Sri Lanka and Maldives.” India, however, just noted “recent developments in the regional situation.” Challenges to democracy in Sri Lanka and Maldives suggest exactly the type of regional developments that all four Quad members ought to be able to discuss freely and openly, and consider what support they might be able to offer.   As we look ahead to more consultations among the Quad, all of us interested in the potential of this framework should be thinking about what it means for four democracies to develop a common agenda for the region. At a time of technological change, and new realizations about the vulnerabilities of all of our democracies—the precise vulnerabilities of open societies—perhaps the Quad democracies should be looking ahead to over-the-horizon issues that will be central to strengthening not only our own democracies but also others in the region. My book about India’s rise on the world stage, Our Time Has Come: How India Is Making Its Place in the World, was published by Oxford University Press in January. Follow me on Twitter: @AyresAlyssa. Or like me on Facebook (fb.me/ayresalyssa) or Instagram (instagr.am/ayresalyssa).
  • India
    APEC 2018 Is Missing a Major Asian Economy
    One of Asia’s most important annual economic gatherings still does not include India, a flaw that undermines efforts to expand trade and innovation throughout the region.
  • India
    Good News and Not-So-Great News: This Week in Economic Ties With India
    Earlier this week Secretary of State Mike Pompeo announced that India, along with seven other countries, would receive an exemption from the newly-imposed U.S. sanctions on oil imports from Iran. This was a significant announcement. India is the second-largest importer of oil from Iran after China, and due to the volume of oil trade from Iran to India, it was always going to be hard to meet the Donald J. Trump administration’s demand that countries “go to zero” imports by November 4. The exemption recognizes this challenge, and acknowledges that India had already made “significant reductions” in its imports from Iran. The significant reductions exemption was good news from the perspective of U.S.-India economic ties, at least for now. The exemption isn’t permanent, of course, and just postpones for another six months the possibility of a confrontation over what the Indian government sees as unilateral sanctions (longstanding Indian policy recognizes only UN sanctions). This exercise will come around again in 180 days for a reevaluation, so the issue—and potential for bilateral tension—will linger.    The State Department further announced that India would receive a waiver for its continued work with Iran to develop the port at Chabahar. The language the the State Department provided to the press recognized that the Chabahar port serves as India’s bridge to Afghanistan and that the port is “vital” for India’s “ongoing support of Afghanistan’s growth and humanitarian relief.” Given that the Trump administration’s South Asia strategy formally calls upon India to scale up its economic assistance and development activities in Afghanistan, the sanctions exemption for Chabahar will keep this channel alive, although as C. Christine Fair has noted, the overall economic viability of Chabahar depends on a transport market to use this port. The exemption provides for strategic alignment between the Trump administration’s South Asia strategy and its Iran policy, and puts to rest what had been a hovering uncertainty about how the administration would approach the port. That’s the good news. In the not-so-great news, the trade dialogue with India appears to be hitting rougher waters. Washington and New Delhi have long had a laundry list of trade and economic frictions that have persisted over the years and are not easy to resolve. The Trump administration has added to that laundry list with new creations: tariffs on steel and aluminum leading to the prospect of Indian retailiatory tariffs, held in abeyance for now; a focus on trade deficit reduction; ending a series of trade preferences under the Generalized System of Preferences (GSP); and a bizarre presidential fixation on Indian tariffs on Harley Davidsons. These new frictions build upon an ongoing set of trade and economic challenges with India that any current or former U.S. government official would recognize well. As it turns out, these challenges have remained impervious to recent efforts to find solutions, and as a result, the U.S. trade representative (USTR), Robert Lighthizer, will not be traveling to India as earlier anticipated for the Trade Policy Forum (TPF), the standing dialogue between the USTR and his Indian counterpart. (The State Department had earlier issued a “Free and Open Indo-Pacific” calendar of meetings that slotted the TPF for October 31.) Press accounts at best put the possibility of a TPF convening in December or even January, due to the lack of progress in advancing issues prior to this dialogue. It’s worth remembering that, at the conclusion of last year’s TPF, Lighthizer decided to issue a statement commenting on “differing views that could not be resolved immediately” rather than sign onto a more typical joint statement, however anodyne. Previous administrations struggled to overcome big trade hurdles with India on a mind-numbing array of subjects—just look at the last U.S.-India joint statement from the final TPF convened with the Barack Obama administration. But at least the trade principals met regularly, and kept meeting. Economic issues with India are tough and won’t get any easier by postponing dialogue.   My book about India’s rise on the world stage, Our Time Has Come: How India Is Making Its Place in the World, was published by Oxford University Press in January. Follow me on Twitter: @AyresAlyssa. Or like me on Facebook (fb.me/ayresalyssa) or Instagram (instagr.am/ayresalyssa).
  • Democracy
    A Review of Rachel Kleinfield’s "A Savage Order: How the World’s Deadliest Countries Can Forge a Path to Security"
    By Nicholas Borroz In A Savage Order: How the World’s Deadliest Countries Can Forge a Path to Security, Rachel Kleinfield explains why some societies are plagued by internal violence, how such violence undermines state functions, and how societies can restore order. Kleinfield, a senior fellow in the Carnegie Endowment for International Peace’s Democracy, Conflict, and Governance Program, thoroughly examines the devastating effects of violence in places as varied as Baltimore, Tajikistan, Mexico, and the state of Bihar in India. Kleinfield starts off with an explanation of the problem. She then describes case studies where societies have managed to reduce levels of societal violence. Finally, she offers recommendations for how to help troubled societies achieve security. Early on, she describes her book as a “blueprint for action”—a resource that can help societies escape deadly cycles of perpetual violence. The book’s critical takeaway is that nonwar, intrasocietal violence has vast consequences that can be as severe as the impacts of war. Kleinfield makes a compelling case, based both on statistical evidence and on anecdotes from her extensive travels and research. Although war receives more attention in headlines, she argues, intrasocietal violence triggered by corrupt elites is in many ways as serious a modern scourge. In the first and second parts of her book, Kleinfield identifies five factors that explain how violence can become normalized and how citizens and governments can combat such normalization. First, governments trigger the spread of violence by politicizing security forces to the point of making them inept and brutal. Second, changing norms, triggered by politicians and other elites accepting and even encouraging violence, begin to pervade society; she notes that when corrupt politicians enable criminal activity, everyday people lose their inhibitions and start partaking in the violence. Third, members of the middle class allow the spread of violence, or in some cases they combat it; they are often not as affected as poorer members of society and can thus allow violence to fester, but when they do become mobilized they can wield significant resources to curtail violence. Fourth, “dirty deals” are often necessary evils to reduce intrastate violence; temporary agreements with violent groups give governments the space to make lasting improvements in maintaining law and order. Fifth is that an escape from endemic violence, and from the consequent polarization of society, is only possible when governments and civil society work closely together. She argues that both government initiatives and social movements must work in tandem to achieve success. Kleinfield ends her book with recommendations to readers in relatively secure countries for how to help other societies wracked by violence. Her recommendations fall into three broad areas: training leaders and educating populations in peace-building; incentivizing intrasocietal peace deals to include provisions that will prevent future outbreaks of violence; and fixing issues in developed countries that perpetuate violence in the most troubled societies—for instance, opaque financial systems that can allow criminals to move funds without scrutiny, or foreign aid that may inadvertently support violent groups. The book is very erudite and a pleasure to read, full of detailed reporting. She ranges widely in the instances she examines of violence spreading within societies. While this makes for an entertaining and educational read, Kleinfeld’s approach also makes the reader sometimes wonder if the situations she describes are similar enough to make for effective comparisons. For instance, Kleinfield frames her study as looking at democracies, but she does not satisfactorily define what she means by democracy. She of course alludes to what a democratic order looks like—citizens “having a voice,” for instance. But nowhere does she come out and succinctly state what distinguishes a full-fledged democracy from a semidemocracy/hybrid regime or an outright autocracy. The ambiguity sometimes bubbles to the surface, when she discusses Mexico, for instance. She uses Mexico early on as an example of when dealmaking between politicians and criminals undermined democratic advances, but she then questions whether Mexico is a legitimate democracy. At the end of the book she excludes Mexico when recapping successful “recivilizing” democracies. Did she exclude it because it is not a democracy or because it was unsuccessful in curbing violence? Given her background, Kleinfield surely has a definition for democracy in mind, but her lack of a definition in the book muddles some of the analysis. If she is interested in explaining how violence rises and falls inside of democracies, then this implies a relationship exists between political systems and violence; in other words, what holds true for violence inside a democracy may not hold true for violence inside an autocracy. But if the type of political system matters, then why does Kleinfield discuss Tajikistan? It seems that this country—which she describes as decidedly nondemocratic—would not have much applicability in comparisons to democracies. Later on, she compares Mexico and Sicily. But she implies the latter is part of a secure democracy, so are the two cases really comparable? Kleinfeld also compares entire countries to portions of countries. She applies her arguments about the causes of societal violence to Colombia, and also to subnational entities like Bihar state in India and Sicily in Italy. Are they comparable? Given that one of Kleinfield’s key arguments is that governments can trigger the spread of internal violence, are there differences in the scope of violence triggered by national governments, state governments, and local governments? Another point regarding Kleinfield’s take on governments is that it is unclear when a government’s abuse of violence becomes coordinated enough that some threshold has been passed; at this point, the problem is no longer individual opportunistic politicians but a coordinated effort of politicians and other actors destabilizing societies. How does one tell when a sufficient level of internal coordination is happening among politicians and other elites, sparking the normalization of violence? Particularly since such coordination is often illicit, surely evidence is hard to find. How does one find this evidence? What does it look like? Although these questions may sound abstract, they have serious implications for Kleinfield’s argument. Without identifying clearly the threshold at which individuals politicians’ criminality and acceptance of violence sparks intrasocietal violence, one can argue individual corrupt politicians do not pose a serious threat to the stability of society. Overall, A Savage Order is a detailed, rich, and informative read that raises as many questions as it answers. It leaves the reader more aware of a dire problem and with a sense of what its underlying causes are. A Savage Order will spur interested readers to make further inquiries into how to solve intrasocietal violence. Nicholas Borroz is an international business doctoral candidate at the University of Auckland.
  • Ethiopia
    Women This Week: Equality in Ethiopian Cabinet
    Welcome to “Women Around the World: This Week,” a series that highlights noteworthy news related to women and U.S. foreign policy. This week’s post, covering October 7 to October 16, was compiled with support from Rebecca Turkington and Ao Yin.
  • India
    Review: America’s Deep History With South Asia
    Srinath Raghavan's history of U.S. involvement in South Asia—primarily India, Pakistan and Afghanistan—provides a rich backdrop of lessons for today’s U.S. policymakers as they consider dilemmas in the region.
  • India
    Three Problems with India’s Draft Data Protection Bill
    India is attempting to create a complex new legal framework for data protection faster than it took Europe to craft the General Data Protection Regulation. As a result, problems will invariably crop up. 
  • Women and Women's Rights
    Women This Week: Increasing Equality in India
    Welcome to “Women Around the World: This Week,” a series that highlights noteworthy news related to women and U.S. foreign policy. This week’s post, covering September 20 to Septembe 27, was compiled with support from Rebecca Turkington, Rebecca Hughes and Alexandra Bro.