India already finds itself in a foreign policy fix in Myanmar, as protesting monks face off against the ruling junta there. The next bit of bad news could come from Central Asia, a resource-rich region where Russia, China and the West are tussling for influence.
Two incidents illustrate this. First, India is likely to exit its first and only air base in that region, at Ayni in Tajikistan. The air base had been refurbished by India earlier this year under a 2002 bilateral defence agreement with that country. Russia has now arm-twisted the Tajikistan government into evicting India from the air base.
Second, the uncertain fate of Indian oil ventures in Kazakhstan. Bickering over equity size in oilfields and Indian help on Kazakhstan’s accession to the World Trade Organization have been spoilers. To add to the problems, the Kazakh government has taken a cue from Russia and passed a law that allows it to renegotiate energy contracts with foreign investors.
The two interlinking themes that connect these developments are trade and a lazy and rudderless foreign policy.
The five Central Asian republics of Kazakhstan, Uzbekistan, Kyrgyszstan, Tajikistan and Turkmenistan are not on India’s trade radar. With the possible exception of Central Africa, they account for the lowest volume of Indian exports. Imports from these countries are small beer. India has all the commodities these countries desire, from pharmaceuticals to foodstuffs and a host of other manufactured goods. Yet, the opportunity has not been encashed.
When seen in conjunction with their relative lack of growth and development and their near absolute dependence on Russia, things become clearer. They sit on a huge pile of hydrocarbon resources that Russia wants to pass through its territory and Western countries, led by the US, through routes they want. China smelt an opportunity and made good of it. We, as usual, were left clasping our hands.
It is in this context that bigger trade volumes, even at relatively unattractive terms would have secured much for India. This would have led to a loosening of the Russian bear hug and would probably have encouraged Tajikistan to take an independent view of the air base issue. Trade in such circumstances is the other flag of diplomacy. India has never learnt that.
Apologists will argue about the vigour of our foreign policy establishment. This, however, is to be measured in terms of outcomes like oilfields secured, pipelines bearing gas, ability to influence events in our neighbourhood using assets located in that region and so on.
By this measure, it’s as dismal as it can get. It’s here that one needs to blend oil with politics and diplomacy. Our efforts to get Kazakh oil have been clumsy. First, the Chinese outbid us to secure PetroKazakh a couple of years ago. The Chinese paid an inflated price, but secured a resource that is vital for their energy needs. Then the deals with Kazakhs for the various oil assets in that country floundered. Our oil and foreign policy establishments were too sluggish to cope with the fluid and changing circumstances. Again, the Chinese realized the goodwill that trade brings and stole a march over us in that country.
Still, all is not lost. Revving up trade will take some time, but deliver us what we need the most to secure our economic growth. Assuaging Russian sensibilities after what our careless political parties said over growing proximity to the US, will also help. For this, for starters, the coming $10 billion fighter aircraft deal must been seen to be fair by all those who bid. This will soothe the Russians.
Beyond these remedial measures, however, our diplomats must wake up. This requires that they understand the importance of trade and not mere “people-to-people” exchanges. We have various trade protocols with these countries, but little trade.
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