The Hindu : Budget and regional diplomacy

Online edition of India's National Newspaper
Monday, Feb 25, 2002

Opinion

Opinion - News Analysis

Budget and regional diplomacy
By C.Raja Mohan

NEW DELHI, FEB. 24. When the Union Finance Minister, Yashwant Sinha, presents the budget on Thursday, the foreign policy is unlikely to be at the top of his mind. But it should at least get a few moments of his time. For, Mr. Sinha could use the budget to send positive signals to India's smaller neighbours by demonstrating New Delhi's commitment to promote rapid economic integration of the subcontinent.

As all countries in the region pursue the logic of globalisation, India is the natural engine of economic growth in the subcontinent. Mr. Sinha has the opportunity this week to prove that India is ready to take that responsibility.

As he fiddles with tariffs in the budget, Mr. Sinha could signal India's readiness to boost imports from the neighbourhood and facilitate Indian investment there.

Eyebrows will be raised at such a suggestion in both the Commerce and External Affairs Ministries. Both prefer bilateral negotiations for better market access. But Mr. Sinha could do Indian diplomacy a great favour by moving unilaterally to promote economic interaction with the smaller neighbours who are looking to Indian markets to promote their growth.

India has a high political stake in promoting development across the borders in the subcontinent. New Delhi's myopic approach to economic problems in the neighbourhood will lead to huge commitment of resources in the future to cope with failing states at its door step.

If Mr. Sinha does not come with some creative ideas on encouraging the economic integration of the neighbourhood, the only diplomatic signal from the budget will be about the size of increase in defence spending and the thundering rhetoric that the Finance Minister will use to justify it.

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Staying with the neighbours, India will soon be reopening its consulate in Mandalay, in central Myanmar. Shut down years ago, negotiations in recent years between New Delhi and Yangon have facilitated the return of Indian diplomatic presence to Mandalay, the cultural and commercial heartland of Myanmar.

Reopening of the Consulate in Mandalay could help boost over-land trade with Myanmar. India has assisted Myanmar in constructing a road between Tamu on the border with the Indian North East and Kalemyo which has a railhead connecting to Mandalay.

India, however, needs a more liberal approach to border trade if it wants to emulate, let alone match, China whose economic presence around Mandalay has grown by leaps and bounds over the last decade. Otherwise China will become peerless in its influence in Yangon.

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The Chairman of the Atomic Energy Commission, Anil Kakodkar, has had a very productive visit to the U.S. recently. Three years ago, after the nuclear tests, it might be recalled, the previous Chairman of the AEC, R. Chidambaram, was denied a visa by the Clinton administration.

Such was the anger in Washington that Dr. Chidambaram was not allowed to attend the conference of an International Scientific Association of which he was one of the office-bearers. Indo-U.S. relations, however, have come a long way under the Bush administration. Since he was going to be in the U.S., Dr. Kakodkar was invited to Washington to have a round of consultations with the officials of the Bush administration, including the Chairman of the Nuclear Regulatory Commission and the Scientific Adviser to the U.S. Secretary of State.

Renewed Indo-U.S. contact on issues relating to civilian nuclear energy follow the understanding reached during the Prime Minister, Atal Behari Vajpayee's visit to Washington last November. But there is some political distance to go before the two sides begin to consider substantive nuclear-energy cooperation.

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It is not often that foreign ministers of friendly countries insult each other in public. But such was the frustration in Europe after the U.S. President, Mr. George W. Bush's ``axis of evil'' speech last month, that many leaders reacted sharply. Leading the charge against the U.S. was France.

The French Foreign Minister, Hubert Vedrine, rubbished the new American formulations on Iraq and Iran as ``simplistic'' - somewhat of a strong formulation from a diplomat. Hitting back was the leading dove of the Bush administration - the Secretary of State, Colin Powell.

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