Thursday, August 21, 2014

How central planning has groomed China

Traveling to China is always a somewhat depressing experience for an Indian of my generation. That is because till my middle-age, both were what was unfashionably called underdeveloped countries and today it would seem that China is another planet.
In 1990, China’s GDP was roughly the same as India’s and parts of its infrastructure, such as its railway system, were considered inferior. Today, China’s GDP is around $9 trillion and India’s is $2 trillion.
Last week when I rode the high speed train travelling at 300 kph from Shanghai to Beijing, the extent to which China had pulled away from India hit home again.

While China is evolving with central planning, the Modi govt is planning to do away with the Planning Commission. Pic/PTIWhile China is evolving with central planning, the Modi govt is planning to do away with the Planning Commission. Pic/PTI

The railway station was little different from the Shanghai Hongqiao International Airport terminal next door. The train was, of course anything beyond what you get in India. On the 1,500 km track from Shanghai to Beijing there were no signs of the distressing poverty an urban squalor you see in India.
This brings me to the main subject of this column which is the talk about how the new Modi government is planning to do away with the Planning Commission. The body is viewed as being archaic talking shop used to park loyalists.
But just what sophisticated central planning can do is visible in China. Despite talk of increasing marketisation of the Chinese economy, there should be no doubt that the Chinese miracle is a product of careful and sophisticated central planning.
The Shanghai-Beijing train or the modern terminal are not a stand-along prestigious project, but part of a system that covers or will cover most of China. Indeed, the ambitious Chinese want to build high-speed trains around the world.
Planning is afoot for trains connecting China with Europe via Central Asia, Iran, Turkey and Bulgaria and to Singapore via Laos, Thailand and Malaysia. A proposal to fund a line in India was turned down by the Planning Commission last year because it would not be economical. Already there is regular freight train service between China and Europe.
The railway technology was acquired in the 1980s and early 1990s from France, Japan and Germany and “indigenised”. Being relatively unsophisticated, the Chinese quickly mastered it and are now major players in the high-speed train markets, displacing those very countries that initially supplied it technology.
But it is not just by the metrics of railway construction that China is defined. With just 2/3 the arable land as compared to India, China is by far the larger agricultural output. China was not an exporter of fruit in 1990, whereas today, it is the largest producer and exporter of apples.
Indeed, the Chinese variety of the Fuji apple is the super-star of Indian markets, outpricing the products coming from the US or New Zealand and our own Himachal and Kashmir. China may not be an innovator in the scale of the US, Germany or Japan, but it is getting there.
In the area of IT, China has produced companies like Alibaba and its rival Tencent which are world class. Alibaba is bigger than Amazon as an online retailer. Indeed, in Internet, the Chinese have created their own universe and are now blocking western companies like Google.
As a result I could neither access Gmail, nor use the search engine in my week in China. Reports are that the next target is Microsoft. Chinese products like instant messaging app WeChat have now gained popularity abroad.
All this has come through central planning, not of the stodgy Soviet/Indian style, but a sophisticated and agile one that China has pioneered. A lot of this has its origins in a plan drawn up based on a letter received by the Chinese supremo, Deng Xiaoping on March 3, 1986. This plan, called 863 Program (in the Chinese style, 86 is for the year and 3 for the date).
The gist of the letter from top nuclear weapons and missile scientists was that China risked being left behind if it allowed its science and technology to be overly focused on military issues. What it needed was a broad thrust across several key science and technology fields.
As a result of this, big money, in terms of billons of dollars was pumped into laboratories, universities and research institutes in fields ranging from biotechnology, information and communications technology, to deep sea research, lasers and robotics. In 2001, clean energy was added to the list.
The programme, reviewed periodically not only by Chinese, but also foreign experts, has provided China with its space capsule Shenzhou, the deep submersible Jiaolong, Longson processor and thousands of patents. In addition to this, there have been important spinoffs for the military like the hyper technology vehicle.
Of course, these efforts have been supplemented by cyber-theft and espionage on a grand scale, but that should not diminish the effort and investment that has gone in projects that aim to make China a high-tech power.
In this period, India also sought to do what China did. In the Rajiv Gandhi government (1984-1989), mission areas were selected and fields like supercomputers and telecom were targeted through agencies like CDAC and C-DOT, and mission areas identified for oilseeds, water, immunisation, literacy and so on. But these programmes imploded with the Rajiv government.
An important difference has been the political stability and continuity provided by the authoritarian Chinese system, and the lack of focus of the Indian one. The difference is actually less with regard to the system, but more the leadership that was provided, both at the political, as well as the mission level.
Most of India’s S&T bureaucrats have proved to be as shoddy as the politicians who led us. I need not take names, some are still around.
There were important exceptions like Verghese Kurian, who enabled India to become a “milk” power. But in most other areas we have lost our way because of the inability of the political system to provide the right kind of leadership to the country.
Mid Day July 8, 2014

Gandhis cannot stabilise the Congress

In the UK, from where we inherited our Westminster parliamentary system, a party chief who leads his or her party to defeat in a general election, routinely resigns from its leadership thereafter.
In the US, a defeated candidate can, very, very rarely, claw his way back to the top, as Richard Nixon famously did in 1968, after having lost to John Kennedy in 1960.

There is no such alternative before the Grand Old Party, the Indian National Congress in India, because the leaders of the party – Sonia and Rahul Gandhi – own it, lock, stock and barrel.

So, a Manmohan Singh must fade away and a P V Narasimha Rao be forgotten. But the Gandhis cannot go away.
As proprietors, the family feel that they have no alternative but to retain control and ride out the current setback. 
But things are no longer what they were in 2004, for three reasons.
One, Ms Sonia Gandhi is not in the best of health.Two, the failure of UPA II has proved that the surrogate model of leadership does not work. And three, the promise that Rahul, the heir, exuded at that time has proved to be an illusion.
We now know that Mr Gandhi is not only a commitment-phobe, but also not particularly good at leading a political party and garnering votes.

Despite some early promise, Rahul Gandhi has proved poor at garnering actual votes
Despite some early promise, Rahul Gandhi has proved poor at garnering actual votes

But this is not what Sonia and Rahul believe. Like the Bourbons of old, they have learnt nothing and forgotten nothing. And probably for the same reasons – they live in a gilded cage dependent for their information of the external world on courtiers who pass off as advisers and party colleagues.
If there were any reasons to think otherwise, they have been put to rest by two post-electoral decisions taken by the high command viz Sonia and Rahul Gandhi.
First, to appoint Mallikarjun Kharge as the leader of the Congress party in the Lok Sabha, and second, to make A K Antony, now reviled as the worst defence minister the country has had, as the head of a two-man committee to review the outcome of the general elections.
Ironically, according to one media report, Rahul Gandhi had based his 2014 election strategy on a report written by the same A K Antony in 1999.
Given his track record, you can be certain that the last people that Antony will find culpable for the 2014 election debacle will be the Gandhis – mère et fils.
Actually, the party's head-in-the-sand attitude became clear the moment it appointed Kharge as the leader of the much-depleted party in the Lok Sabha. He may be a well-known leader and a Dalit, but is he prime minister material? 
After all, the traditional role of a leader of Opposition is to be the prime minister-in-waiting. David Cameron, for example, was elected leader of the Conservative Party in December 2005, and simultaneously took over as the Leader of the Opposition in the British Parliament.
So when the party formed a coalition government in 2010, after winning the majority of the seats in a hung parliament, it was natural that he became prime minister.
It was clear from the statements and comments surrounding the decision, that Kharge had been appointed because Rahul Gandhi was reluctant to assume the leadership of the party.
If there was one clear lesson for the party in the outcome of the general election, it was that the surrogate leader model does not work.
And now once again we have surrogates – Antony for the review, and Kharge for the Lok Sabha.
Given the scale of the disaster which has befallen the GOP, surely the proprietors – the Gandhis – had the duty to tell their stake-holders what went wrong themselves and provide the leadership needed to set things right.
In the last couple of years, the political ineptitude of the party is becoming more and more apparent. One manifestation of this is the attempt to square the circle – make a family proprietorship look like a modern meritocratic corporation.
Rahul Gandhi's half-baked attempts to democratise the party have run up against the reality of the feudal nature of the party. His primary-based selection of candidates flopped because the conditions in which this can happen are simply not available in India.
As for the elections, the failure to stitch up effective alliances with smaller parties like the Apna Dal in UP or the LJP in Bihar have cost the Congress party dearly. 
Advisers like Ahmed Patel, Ghulam Nabi Azad, Digvijaya Singh and Madhusudan Mistry still have the ears of the Gandhis, while current plans seem to suggest that the satraps – Tarun Gogoi in Assam, Prithviraj Chavan in Maharashtra, and Bhupinder Singh Hooda in Haryana – will pay the price.
This is exactly the kind of management style that crates a problem, since it does not allow for the emergence of a credible leadership in the states, and minus this, the Congress can't get regional vote-catchers.
Since their central vote-catchers – Sonia and Rahul – have also proved to be flops, the party faces oblivion.
The incompetence with which the party is being run is in sharp contrast to the Modi machine.
Prior to Modi's ascendancy, both the Congress and the BJP vied with each other on the score of a dysfunctional leadership. But in the past year we have been given a lesson on what a well-oiled and led political machine can achieve.
The Modi victory was not just the victory of the BJP, but a paradigm shift in the manner in which politics are to be conducted in the country.
The Congress party needs to sharply step its game up. But it is showing no signs of doing that.
Mail Today June 24, 2014

Sunday, August 03, 2014

Modi shouldn't do away with EGOMs

Last month, in a bid to break with past practice, the new Narendra Modi government abolished all the Group of Ministers (GoM) and Empowered Group of Ministers (EGoM) because it said there was need “for greater accountability and empowerment” for the government as such.
The reason, probably, was that the previous UPA government had run riot with the GoM and EGoM concept and, what was once seen as a tool for quick decision-making, became, instead, a means of slowing it down, if not choking it up completely.

Prime Minister Narendra Modi feels that he does not need the GoM and EGoM format because he does not head a coalition government. Pic/PTIPrime Minister Narendra Modi feels that he does not need the GoM and EGoM format because he does not head a coalition government. Pic/PTI

During the UPA-I and II, there had been scores of GoMs and EGoMs, most of them headed by Pranab Mukherjee, A K Antony, P Chidambaram and Sharad Pawar. The EGoMs, in particular, were given with the authority to take decisions, making subsequent discussion and approval by any cabinet committee, presided over by the prime minister, a mere formality.
They were a useful device and helped decide many contentious issues, including the plan for restructuring Air India, the amendments to strengthen India’s anti-rape laws following the Delhi gang rape in 2012, the allocation and pricing of natural gas, and so on. However, towards the end of the UPA tenure, they became a means of postponing decisions.
Ironically, the GoM innovation was pioneered by the NDA-I government of Atal Bihari Vajpayee. Among the more successful uses of the format was the report on “Reforming the National Security System” released in May 2001 by a GoM headed by L K Advani, and comprising External Affairs Minister Jaswant Singh, Defence Minister George Fernandes and Finance Minister Yashwant Sinha.
This led to the first comprehensive bid to reform the national security system since the 1960s. Its recommendations were based on the work of four Task Forces, on Intelligence, Internal Security, Border Management and Defence.
The great advantage of the process was that the report passed swiftly through the Cabinet Committee on Security, since it was drafted by three of its four members, the fourth being Prime Minister Vajpayee. In contrast, a report by a specialist Task Force headed by Naresh Chandra in 2012 has gotten lost into the miasma that was the UPA-II government.
Prime Minister Modi should, perhaps, ignore the UPA experience and draw a lesson from the experience of the country whose decision-making prowess he so admires. Recently, for the first time, the Chinese media revealed that there were at least 18 “leading small groups” in their system, which are the equivalent of our EGoMs, and party boss and President Xi Jinping heads four of them.
China watchers have pointed out that this concept of “leading small groups” have been a feature of the Communist Party’s governance of China. Such groups have existed since the mid-1950s, and are featured in the work of the party, the government and the military.
There were some surprises when it was revealed Xi presided over the Leading Small Group for Financial and Economic Affairs and Premier Li Keqiang was the deputy leader, and that the group which also had Vice Premiers Zhang Gaoli (also a Politburo member), Liu Yandong, Wang Yang and Ma Kai; the director of the Central Policy Research Center, Wang Huning; the director of the party’s General Office, Li Zhanshu; central bank governor Zhou Xiaochuan; the ministers of water, housing, land resources, and industry and information technology; and representatives from foreign affairs and the military. Till now, many believed that dealing with the economy was the primary responsibility of the prime minister.
The Third Plenum held last year led to the creation of three more leading small groups which are headed by Xi — one on Internet network security and information technology, the Central Military Commission’s leading group for deepening reform on national defence and army leadership, and the leading group for comprehensively deepening reform. Of course, Xi is also the head of the National Security Commission which was set up earlier this year.
An example of how this works is evidenced by the fact that the key foreign policy player in China is not the Ministry of Foreign Affairs, but the Foreign Affairs Leading Small Group (FALSG), which is chaired by Xi and comprises people like State Councillor Yang Jiechi, who is the special representative for talks on the border issue with India. Wang Yi, the foreign minister, is not a member of this group, whose composition is secret, but it almost certainly includes senior PLA generals and security officials.
All this tells us a great deal about how China is governed and the unprecedented consolidation of authority in the hands of Xi Jinping. Prime Minister Narendra Modi obviously feels that he does not need the GoM and EGoM format because he does not head a coalition government. Unstated is the reality that Modi is clearly the numero uno in the government, and that his word will prevail without much difficulty in the various Cabinet Committees.
But, the Chinese experience points to the usefulness of institutionalised coordination groups within government systems to cut through bureaucratic red-tape that inevitably accumulates in systems of countries as big and complex and China and India.
Mid-Day June 24, 2014

Modi's defence forays

Prime Minister Narendra Modi's visits out of New Delhi last week have emphasised the new government's understanding of India's Grand Strategy. In some ways, it marks a continuity with the policy of past governments, but in important ways it presages a departure.
The visits – to commission the INS Vikramaditya in Karwar and to the kingdom of Bhutan – are connected through an understanding of that strategy.
It has three elements: the need for India to live in conditions of peace and stability in which economic growth can take place and make the life of every Indian better; the importance of establishing India's primacy in its own neighbourhood before making extra-regional commitments; and third, and most important in the current context of flux in the world order – anchoring India's foreign policy in a strong national security posture.


In his remarks at the function, Modi not only called on the Navy to fulfil its traditional role in keeping sea lanes open to commerce, but also promote self-reliance and indigenisation in the defence manufacturing sector.

 Prime Minister Narendra Modi in the cockpit of Mig29 aircraft, aboard the warship INS Vikramaditya

It may be recalled that as Chief Minister of Gujarat Modi has long supported indigenisation and has even offered Gujarat as a platform for defence R&D and manufacturing.
Significantly, Modi added that Indian-made arms and equipment "should also serve as protectors for small nations across the world."
In other words, India must emerge as a net security provider in its immediate region.
As a former Chief Minister of Gujarat, Modi is also familiar with other things maritime and has self-consciously promoted manufacturing based on SEZ's close to ports.
Gujarat's coastline of 1600kms is the longest among Indian states. It also hosts ports, such as Kandla, Mundra, Dahej, as well as smaller ones like Pipavav, Jakhau, Porbander and so on.
Gujarat has also been a pioneer in encouraging industry based on proximity to sea lanes of communications, such as the Jamnagar oil refinery.
If the visit to Bhutan seemed a puzzle, take out a map of India and see it again. Bhutan lies adjacent to two of the most sensitive parts of the country - the Siliguri corridor and the Chumbi Valley.
The former is the narrow neck of Indian territory that lies between Nepal and Bangladesh, with Bhutan on its northwest. It is just about 35kms wide at its narrowest point.
The Chumbi Valley is that part of Tibet that lies between Sikkim and Bhutan and is proximate to the Siliguri Corridor.
China has claims with Bhutan on its eastern, central and western flanks and the two countries have undertaken over 20 rounds of talks to resolve their differences. 


In terms of bare bones, the Navy's 2009 maritime doctrine describes as areas of "primary interest" the immediate waters around India, the littoral reaches of the Arabian Sea and Bay of Bengal, the straits leading into the Indian Ocean and the sea lanes that criss-cross it.
From the purely military point of view, a maritime strategy involves four elements – sea control, power projection ashore, presence and strategic deterrence.
As long as I have spoken to Indian Navy leaders, I have heard the word "balanced Navy" for their vision what the Navy should be all about. Which means a Navy which can exercise sea control through fleets built around aircraft carriers.
Power projection involves the ability to use the sea to make strikes on targets of coastal or land-locked straits as well as in physically taking control of choke points.
The emphasis is on building all four elements of maritime strategy. As the record will show, with mixed results.
India's inefficient public-sector navy yards are unable to keep up to the required pace of construction – the time they take to build a warship is sometimes three or four times longer than those of comparable yards abroad.
For example, most modern Shivalik class, which were contracted to be built within 60 months, took 112 months to be built.
The Scorpene submarine which was to be delivered in 2012 will start arriving in 2016. In the meantime, two of ten Kilo-class submarines we had acquired from Russia are out of commission.
A project to acquire a new class of 75I submarines has been hanging fire for the past decade. The first Indian designed aircraft carrier – the new Vikrant – has been delayed till 2018.
Ironically, India has a number of private sector yards dying to get into business – Pipavav Defence Systems, L&T, ABG shipyards and so on – but they are given the crumbs of the table of naval construction because of an indifferent attitude of an alliance of bureaucrats and public sector unions.


As for presence, India is reasonably well off in the Indian Ocean. It has helped countries like Mauritius, Seychelles and Mozambique in maintaining security. It has a strategic presence in Maldives and Madagascar and ties with almost all the littoral countries.
Presence is important in maritime strategy. But to consolidate yourself, you need something more – a flourishing economy, maritime assets like ports and merchant ships, an open trading system and secure sea lanes.
China is using economic, military and diplomatic tools to gain influence over coastal states and small islands in the Indian Ocean and is using its investments and aid to consolidate its strategic positions and secure the approaches to these positions.
In his initial visits and statements, Modi's footing has been quite sure and firm. The Indian Ocean is as important as the subcontinental land mass for India's security and well being. To secure both, the government has an agenda of reform and restructuring that are needed to enable India to emerge as a security provider for its smaller neighbours. 
Mail Today June 17, 2014

Monday, July 21, 2014

Defence is important, but the economy must come first

After the smart salutes and displays, Union Defence Minister Arun Jaitley must now be snowed under with the long lists of demands from the armed forces. The army wants its mountain strike corps, artillery guns, attack helicopters. The IAF remains fixated on the Rafale fighter, as well as Airbus tankers, Apache attack helicopters and Chinook heavy lift helicopters.
The Navy wants to move faster on the aircraft carrier construction, Project 75 I submarines, Project 17A frigates and 15 B destroyers besides wanting more multi-role helicopters, and corvettes.
It is an irony, of course, but Jaitley's main job - and, indeed, his principal duty as the Union Finance Minister - is to get the country's economy ticking at high speed again.
So my suggestion: The government should freeze all new defence acquisitions for the next six months. This will help stabilise the fiscal situation.
But more importantly, it could provide space to begin a comprehensive and much-delayed reform of the country's national security machinery.
Needless to say, acquisitions required to keep existing systems going should not be affected by the freeze.
The six months should be used to conduct a Strategic Defence Review, which should determine just what the government wants its armed forces to do.
In other words, before arming, the government must clearly define its goals.
In 2010, Stephen Cohen and Sunil Das Gupta outlined India's predicament in their book, "Arming without aiming" which brought out the multiple problems confronting the Indian armed forces, who have functioned without effective joint planning, and political guidance for a long time now.

 Finance Minister Arun Jaitley should freeze defence purchases

Left to themselves, each of the three services cater to each and every eventuality. But being able to fight any and every challenge is a luxury even the US can no longer afford.
To start at the very beginning: India is today a nuclear weapons state with an estimated 100 warheads, sufficient to ensure that no foreign power, not even the US, can militarily bully or overwhelm us.
Though we have serious issues with both Pakistan and China, nuclear weapons capability in each of the three countries makes the chances of an all out war between them low.
In such conditions, what kind of conventional capabilities should the country acquire and over what time frame?
This is an important question, since we are talking about spending hundreds of thousands of crore rupees over the next decade in which we also desperately need to spend the money to enhance India's economic capacity. No one has applied his mind to this issue, since there has been no governmental effort to review the situation.
That is why the first priority of the government is to call for a comprehensive Strategic Defence Review (SDR), which should be steered by the top ministers of the government through the National Security Adviser and the National Security Council machinery, which includes the Strategic Policy Group of key secretaries, and military and intelligence chiefs.
Such an exercise could, for example, come up with the finding that we do not need a mountain strike corps, and that the country's objectives vis-à-vis China could be better and more economically met through other means, which could include a naval strategy, or the enhancing the quality and mobility of existing mountain divisions.
That would straight away lead to a saving of at least Rs 100,000 crore over the next five years.
Likewise, it may result in the finding that the Air Force cannot afford the 126 Rafale fighters, or that India does not really need some of the big ticket items like heavy lift C-17 aircraft right now.
There is need to re-prioritise the expensive items in the services' wish list in a manner that will not strain the economy, without necessarily increasing the vulnerability of the country.
In any case, remember, we are a nuclear-armed state.
Because there has never been an SDR, the armed forces have simply built layer upon layer of capabilities, without any of the layers being particularly effective since India lacks the wherewithal to support them.
Thus, the pre-nuclear age army plan called for massed tank attacks to cut Pakistan in two. But this is not going to happen now.
So, do we need the massive holdings of Main Battle Tanks? The army will say yes, since Pakistan also has them. But wouldn't it be a good idea to negotiate a mutual reduction of such tanks, which are not going to be used anyway?
Then, take the huge armies of paramilitary that we are adding to each year. Is it not time to start putting serious money into enhancing the quality of the state police forces?
Do we need the Rashtriya Rifles now? They were raised in 1993 when we had our backs to the wall in Kashmir. Today, the situation has changed completely. J&K Police officers have repeatedly stated that they no longer need CAPF or the RR.
The SDR exercise is not aimed at reducing defence expenditure. It is to right-size the force structure based on the needs of the country.
For example, the Indian Air Force today is focused on fighters, but it has never had a long range bomber, nor indeed sought one. This SDR could well come up with a different answer. Similarly, the SDR could suggest a stepping up of India's naval capabilities which have been seriously neglected in the past decade.
Conducting a Strategic Defence Review is one aspect of the exercise through which we will take aim at our objectives. The second, and equally vital part of it is to empower our armed forces.
This does not mean better and more equipment and personnel. It means firm political guidance that will clearly set out what the country expects from their armed forces, not in vague sloganeering terms, but through a detailed document worked out through careful study.
Mail Today June 10, 2014

Japan's rise is good for India

In the past week, the Shangri-La Dialogue in Singapore and the Asia-Pacific Roundtable in Kuala Lumpur have focused on the future geopolitics of the Asia Pacific.
Not surprisingly, the key discussions have centered on the rising tensions between Asia’s has-been power, Japan, and rising power China. This is a rivalry poisoned by history, and it is threatening the peace of a region which is the engine of the world’s economic growth.
In the past five years, China has been flexing its muscles in the South and East China Seas raising the hackles of its neighbours. Not only is Beijing undertaking a massive military build up, but the Communist Party of China under the leadership, of Xi Jinping, is taking an active role in promoting a proactive national security posture.

 Japanese Prime Minister Shinzo Abe has said that when  Indian PM Narendra Modi visits Japan, the two sides will work to make the Japan-India cooperation peaceful and prosperous . Pic/AFP

Japanese Prime Minister Shinzo Abe has said that when  Indian PM Narendra Modi visits Japan, the two sides will work to make the Japan-India cooperation peaceful and prosperous. Pic/AFP

A consequence of this has been the US decision to ‘rebalance’ itself towards Asia to reassure key allies like South Korea, Japan and the Philippines. But perhaps more dramatic, and in its own way worrisome, has been the ‘return’ of Japan to the high-stakes table.
This has been evident in the platform of Prime Minister Shinzo Abe, the foundations of whose policy is an economic revival of Japan based on the ‘three arrows’ of Abenomics: A bold monetary policy with a view of easing monetary conditions to encourage an inflation rate of 2 per cent; a flexible fiscal policy which includes an economic stimulus package and fiscal consolidation; and finally a growth strategy dependent on promoting private investment, targeting new markets and working out new trade agreements, including the Trans-Pacific Partnership.
Equally significant has been Japan’s new diplomacy which has sought to, first and foremost, strengthen the US-Japan alliance. A subset of this is the push to work out a modus vivendi with South Korea which retains historical suspicions of Japan.
The second pillar of Japanese diplomacy involves promoting links with the ASEAN, Australia and India. The third is to deepen ties with EU and Russia and finally, take a more active role in global issues such as climate change, millennium development goals etc.
But the most dramatic changes are likely to show up in Tokyo’s security policy, which is based on deep reform of its security infrastructure. In December 2013 Japan set up a National Security Council and within weeks, came up with a new National Security Strategy which sees Japan as a ‘proactive contributor to peace based on the principle of international cooperation’.
This means redefining what self-defence is all about and enhancing the Japanese contribution to it, through stronger ties with the US, strengthening the Japanese military and sharpening its technological edge. The Abe government wants to re-interpret self-defence to mean the ability of Japanese forces to come to the aid of allies, even if Japan itself is not attacked. This is opposed by China, South Korea and by some in Japan.
They are afraid that it could put Japan back on the path of militarisation that led to the catastrophe of World War II. India has been the beneficiary of China-Japan tensions. Prior to the anti-Japanese demonstrations in China in 2005, Tokyo largely ignored New Delhi. China was the foremost recipient of Japanese Overseas Development Assistance (ODA) in the 1980 and 1990s. By 2000, Japan had provided China with some $25 billion in soft loans and grants which went a long way in developing China’s infrastructure. In the 1958-2000 period, Japan’s ODA to India was around $7 billion.
Since then, India has become its largest recipient for successive years and since 2000, it has got some $30 billion worth of ODA. In addition, Japan’s private sector, long leery of India has begun hedging its Chinese bets by investing in India. Among the Japanese projects are long-range ones like the Delhi-Mumbai freight corridor along which there are plans to build new cities and economic zones.
India could also benefit from Tokyo’s shifting stance on exports relating to defence equipment. In April, Japan tweaked its export policy by coming up with a new set of ‘Three Principles’ on defence equipment transfer. But, already, it has offered New Delhi the ShinMaywa US 2 amphibian aircraft for use by the Coast Guard and other non-military agencies.
The rise, if you want to call it that, of another Asian power on the flanks of China, one which also has difficulties with Beijing, is to India’s advantage. New Delhi is not unaware of the geopolitical benefits. For this reason, Abe was the chief guest at the Republic Day parade this year. India and Japan began bilateral naval exercises in 2012, and during the Abe visit, it was announced that Japan would join this year’s Malabar Exercise involving India and the US again.
In his speech at the Shangri-La dialogue, Abe had hailed Modi’s election as Prime Minister and said that when the Indian PM visited Japan, the two sides would confirm that “Japan-India cooperation, as well as trilateral cooperation including our two countries, will make the ‘confluence of the two seas’, that is the Pacific and Indian Oceans, peaceful and more prosperous.” These are public declarations, deliberately couched in generalities, but containing within a host of geopolitical possibilities. 
Mid Day June 10, 2014