China-Pakistan: Beijing to "Further Deepen and Expand" Ties, Support Pak "Financial Stability"

Top Chinese officials have committed to “further deepen and expand” ties with Pakistan at meetings at the highest levels between the military and civilian leaderships of the two nations.  Chinese Prime Minister Li Qiang assured  Prime Minister Shehbaz Sharif of his country's support for Pakistan's "financial stability".  Also in the news this week is a Chinese government commission report recommending the construction of a 3,000 kilometer long railway link between China and Pakistan at an estimated cost of $57.7 billion, making it the most expensive infrastructure project in the Chinese-sponsored Belt and Road Initiative (BRI) to date.  The railroad will connect Pakistan's Gwadar Port on the Arabian Sea with the western Chinese city of Kashgar in Xinjiang province. This appears to be a part of the Chinese response to the US-led Indo-Pacific strategy which Beijing sees threatening its interests in the region. Will India allow itself be used as a US proxy against China? Will the US-China rivalry force India and Pakistan to choose sides as it plays out in South Asia? Will China's assistance now push Pakistan further into the Chinese camp? 

US-India Ties:

US President Joseph R. Biden is pursuing close strategic ties with Indian Prime Minister Modi. The false rhetoric of "democracy" and "shared values" is often used to disguise Washington's true intent to use India to counter China's rise as a global superpower. Meanwhile, China with its long land border with India has warned New Delhi that it "will be the biggest victim" of the US proxy war against China.  In a recent Op Ed in Global Times, considered a mouthpiece of the Beijing government, Professor Guo Bingyun  has wrote as follows: 

"Inducing some countries to become US' proxies has been Washington's tactic to maintain its world hegemony since the end of WWII. It does not care about the gains and losses of these proxies. The Russia-Ukraine conflict is a proxy war instigated by the US. The US ignores Ukraine's ultimate fate, but by doing so, the US can realize the expansion of NATO, further control the EU, erode the strategic advantages of Western European countries in climate politics and safeguard the interests of US energy groups. It is killing four birds with one stone......If another armed conflict between China and India over the border issue breaks out, the US and its allies will be the biggest beneficiaries, while India will be the biggest victim. Since the Cold War, proxies have always been the biggest victims in the end". 

US-Pakistan Ties: 

After assuming office as President of the United States, Joe Biden called many world leaders. But he did not bother to call then Pakistani Prime Minister Imran Khan, nor has he made a call to the current Prime Minister Shehbaz Sharif. This has sent a clear signal to Islamabad that Washington doesn't see it as important.  This prompted Brookings' Bruce Reidel and Madiha Afzal to write: "Biden did not call Khan while he was prime minister. Last fall, we argued he should. Khan in turn declined to attend Biden’s Summit for Democracy. The White House should call Shahbaz Sharif". 

Madiha Afzal of Brookings Institution again reminded Biden this year that "Pakistan, the fifth-largest country in the world and a nuclear-armed nation, ought to be seen by the United States on its own terms and not through the prism of its neighbors. A cold shoulder risks pushing Pakistan further toward China — which is neither an inevitable nor desirable outcome for the United States".  


CPEC Transforming Pakistan: 

Back in 2018, former US Ambassador to Pakistan Richard G. Olson wrote in  a New York Times Op Ed titled "How Not to Engage With Pakistan" that "(CPEC's) magnitude and its transformation of parts of Pakistan dwarf anything the United States has ever undertaken".  Olson went on to warn the Trump Administration that "Without Pakistani cooperation, our (US) army in Afghanistan risks becoming a beached whale". Among the parts of Pakistan transformed by China Pakistan Economic Corridor (CPEC) are some of the least developed regions in Balochistan and Sindh, specifically Gwadar and Thar Desert. 

Source: China Daily

Pakistan's Economic Crisis:

Some blame Pakistan's current balance of payments crisis on Chinese debt taken on to fund CPEC projects. The evidence does not support this. The fact is that Pakistan failed to grow its exports while its imports boomed for over 5 years on Prime Minister Nawaz Sharif's watch from 2013-2018. It forced Pakistan to seek an IMF bailout which came with its own tough conditions to compel economic reforms and greater fiscal discipline. Geopolitics has also played a role in it. The Ukraine War pushed the energy and other commodity prices higher, exacerbating Pakistan's trade deficits. At the same time, the Biden administration has shown little support for Pakistan's bailout by the IMF.  China's latest commitment to support "Pakistan's financial stability" will help, pushing Pakistan further into the Chinese camp. 

Here's a Wall Street Journal video on US-China Rivalry and Pakistan:

Related Links:

Haq's Musings

South Asia Investor Review

India Emerges the Biggest Winner of Ukraine War, US-China Rivalry

Can Washington Trust Modi as a Key Ally Against China?

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

US-China Battle For Influence in Pakistan

Russia Sanction: India Profiting From Selling Russian Oil

Indian Diplomat on Pakistan's "Resilience", "Strategic CPEC"

Vast Majority of Indians Believe Nuclear War Against Pakistan is "Winnable"


Riaz Haq said…
Key nations sit out U.S. standoff with Russia, China, leaks show - The Washington Post

THE DISCORD LEAKS | Documents illustrate how emerging nations’ bid to duck the great power showdown have put Biden’s global agenda at risk

The documents, among a trove of U.S. secrets leaked online through the Discord messaging platform, provide a rare glimpse into the private calculations by key emerging powers, including India, Brazil, Pakistan and Egypt, as they attempt to straddle allegiances in an era when America is no longer the world’s unchallenged superpower.

This is apparent in Pakistan, which received billions of dollars in U.S. economic and security aid following 9/11 but now is heavily reliant on Chinese investment and loans. According to one of the leaked documents, Hina Rabbani Khar, Pakistan’s minister of state for foreign affairs, argued in March that her country can “no longer try to maintain a middle ground between China and the United States.”

In an internal memo she titled “Pakistan’s Difficult Choices,” Khar, who previously served as Pakistan’s foreign minister, cautioned that Islamabad should avoid giving the appearance of appeasing the West, and said the instinct to preserve Pakistan’s partnership with the United States would ultimately sacrifice the full benefits of what she deemed the country’s “real strategic” partnership with China. The undated intelligence document does not detail how the United States gained access to Khar’s memo.

Another document, dated Feb. 17, describes Pakistani Prime Minister Shehbaz Sharif’s deliberations with a subordinate about an upcoming U.N. vote on the Ukraine conflict, and what the government anticipated would be renewed Western pressure to back a resolution condemning Russia’s invasion.

The aide advised Sharif that support for the measure would signal a shift in Pakistan’s position following its earlier abstention on a similar resolution, the intelligence document says. Pakistan had the ability to negotiate trade and energy deals with Russia, and backing the Western-backed resolution could jeopardize those ties, the aide noted.

When the U.N. General Assembly voted Feb. 23, Pakistan was among 32 countries that abstained.

Pakistani officials and those from other countries named in the leaked documents declined to comment.

While core U.S. allies in Europe and East Asia have come together to back Biden’s Ukraine campaign, providing an ever-increasing array of weapons and weaning themselves off Russian energy, Washington has encountered resistance elsewhere.

The Biden administration has told those countries that it is not asking them to pick sides between the United States on one hand and China and Russia on the other, a message that Secretary of State Antony Blinken has stressed in his travels. But nations including South Africa and Colombia bridle at what they see as an implicit choice.
Riaz Haq said…
India is sliding into Putin’s hands
Story by Angela Barnes

India is now the largest country in the world by population, having surpassed China in the latest UN figures. It’s also now the biggest buyer of Russian crude oil in the world, and its armed forces are largely equipped with Russian weapons.

The West has traditionally seen India as a friend, but when it comes to actions rather than words the world’s fifth biggest economy pays more attention to what Vladimir Putin wants than it does to the desires of Washington or London.

Karan Mehrishi, Indian economics commentator, tells the Telegraph that Russian imports have saved India around $3bn in the past year, compared to its total annual oil import bill of nearly $120bn. Russia has even knocked the Organization of the Petroleum Exporting Countries (OPEC) off the top spot for supplying India, since Western nations rejected Kremlin-supplied black gold following Putin’s invasion of Ukraine.

India will probably find, like Germany and other European nations before it, that becoming dependent on Putin for critical energy supplies is to place oneself far too much under his control. Indian Prime Minister Narendra Modi, however, seems to believe that India is simply seizing the opportunity to snap up cheap crude to meet its rising demand.

In March, for example, Indian fuel requirements jumped by 5 per cent year-on-year to 4.83 million barrels per day (bpd).

“The Indian economy is the fastest growing on Earth and is expected to become the world’s third largest by 2025. It will attain the $10tn GDP threshold by 2031,” says Mehrishi.

An economy that big needs huge amounts of energy, and India is heavily dependent on imports.

“Inflation worries rather than geopolitical concerns have taken centre stage, leading New Delhi to brush away Western reprobation about increasing economic ties with Moscow,” comments Susannah Streeter, head of money and markets at Hargreaves Lansdown. “The approach appears to be working, with India’s headline inflation rate going in the right direction, helped also by lower food prices. But the price spiral is still not unwinding fast enough to meet the central bank’s target.”

Osama Rizvi, energy analyst at Primary Vision, describes the relationship between Russia and India as a marriage of convenience.

“They are interdependent: India, which imports more than 85 per cent of its oil, and Russia, which depends on the proceeds from oil and gas for almost 50 per cent of its revenue,” he told the Telegraph.

India’s appetite for Russian crude has resulted in Moscow overtaking Iraq for the first time to emerge as its top oil supplier, pushing Saudi Arabia down to third place in the last fiscal year.

“Refinitiv Oil Research analysis forecasts that India will import 1.94 million barrels per day from Russia, more than doubling since last July and exceeding total imports from the Middle East region,” Streeter says.

As a result, Russia has been able to escape the worst effect of the penalties imposed by the West to isolate it. Non-sanctioning countries like India have propped up the crude oil export sales which are one of the main factors preventing Russia from going bankrupt.

India’s close ties to Russia might seem more obvious since the war in Ukraine started in February last year, but good relations between the two countries go back a long way. A positive relationship between the two countries has existed since the 18th century reign of Tsar Paul – albeit interrupted by the period of British rule, when Russia was seen as a threat by the colonial government. Following independence from Britain, India once again established firm diplomatic ties, beginning with Nehru’s 1955 visit to the Soviet Union.

“Apart from getting oil at below market rates, India could have also been obligated to buy Russian oil to help a friend,” Mehrishi says.

Riaz Haq said…
India is sliding into Putin’s hands
Story by Angela Barnes

Since the 1960s, the Soviet Union has supplied the Indian military with advanced weaponry that it would have had difficulty obtaining elsewhere: and India has in fact often looked to the Soviets and then Russia as a potential ally against the West. Perhaps the strongest example of Soviet Union military support came during the 1971 Bangladesh Liberation War, when the Kremlin deployed nuclear submarines to the Indian Ocean to ward off any Western meddling with Indian interests.

That long-standing supply of weapons to India continues. Russian state news agencies in February set arms exports to India at around $13bn over the past five years. New Delhi has placed further orders with Moscow for military equipment and weapons exceeding $10bn.

Tellingly, prime minister Narendra Modi has never condemned Russia's invasion of Ukraine. Meanwhile, relations between India and Russia are only set to strengthen with the two countries in advanced negotiations on establishing a free trade agreement – a move that will further stoke tensions with the West.

“Pushing down energy prices will be the priority of the Modi administration, so maintaining good trade relations with Moscow will continue to be seen as in the national interest, despite sharp disapproval behind diplomatic doors,” Streeter adds.

A lot of Westerners think of India as a benign, neutral democracy which should naturally align with liberal values against the bloody-handed tyranny of modern Russia. But the Indians don’t see it that way: and the blunt truth is, they are keeping Vladimir Putin in business for no better reason than slightly cheaper oil.
Riaz Haq said…
#UNSC says #Taliban Foreign Minister can meet #Pakistan, #China ministers. #Chinese & #Pakistani officials have said in the past that they would welcome Taliban-led #Afghanistan into the multibillion-dollar China-Pakistan Economic Corridor (#CPEC).

Afghanistan sits as a key geographical trade and transit route between South and Central Asia and has billions of dollars of untapped mineral resources. The Taliban seized power in August 2021 as U.S.-led forces withdrew after 20 years of war.


UNITED NATIONS, May 1 (Reuters) - A U.N. Security Council committee on Monday agreed to allow the Taliban administration's foreign minister Amir Khan Muttaqi to travel to Pakistan from Afghanistan next week to meet with the foreign ministers of Pakistan and China, diplomats said.

Muttaqi has long been subjected to a travel ban, asset freeze and arms embargo under Security Council sanctions.

According to a letter to the 15-member Security Council Taliban sanctions committee, Pakistan's U.N. mission requested an exemption for Muttaqi was to travel between May 6-9 "for a meeting with the foreign ministers of Pakistan and China."

It did not say what the ministers would discuss. It said Pakistan would cover all costs associated with Muttaqi's trip.

Chinese and Pakistani officials have both said in the past that they would welcome Taliban-led Afghanistan into the multibillion-dollar China-Pakistan Economic Corridor (CPEC) infrastructure project, part of the Belt and Road Initiative.

Afghanistan sits as a key geographical trade and transit route between South and Central Asia and has billions of dollars of untapped mineral resources. The Taliban seized power in August 2021 as U.S.-led forces withdrew after 20 years of war.

The Security Council committee allowed Muttaqi to travel to Uzbekistan last month for a meeting of the foreign ministers of neighboring countries of Afghanistan to discuss urgent peace, security, and stability matters.

U.N. Secretary-General Antonio Guterres began a two day meeting on Monday in Doha with special envoys on Afghanistan from various countries that aims "to achieve a common understanding within the international community on how to engage with the Taliban," U.N. spokesman Stephane Dujarric said.

Dujarric said the closed-door meeting would discuss key issues key issues, such as human rights - in particular women's and girls' rights - inclusive governance, countering terrorism and drug trafficking.

Taking part are China, France, Germany, India, Indonesia, Iran, Japan, Kazakhstan, Kyrgyzstan, Norway, Pakistan, Qatar, Russia, Saudi Arabia, Tajikistan, Turkey, Turkmenistan, United Arab Emirates, Britain, the United States, Uzbekistan, the European Union and the Organisation of Islamic Cooperation.

Riaz Haq said…
#America’s Bad Bet on #Modi.
#Delhi Won’t Side With #Washington Against #Beijing. #India’s significant weaknesses versus #China, & its inescapable proximity to it, guarantee that Delhi will never involve itself in any #US confrontation with Beijing. #BJP

by Ashley Tellis

For the past two decades, Washington has made an enormous bet in the Indo-Pacific—that treating India as a key partner will help the United States in its geopolitical rivalry with China. From George W. Bush onward, successive U.S. presidents have bolstered India’s capabilities on the assumption that doing so automatically strengthens the forces that favor freedom in Asia.

The administration of President Joe Biden has enthusiastically embraced this playbook. In fact, it has taken it one step further: the administration has launched an ambitious new initiative to expand India’s access to cutting-edge technologies, further deepened defense cooperation, and made the Quad (Quadrilateral Security Dialogue), which includes Australia, India, Japan, and the United States, a pillar of its regional strategy. It has also overlooked India’s democratic erosion and its unhelpful foreign policy choices, such as its refusal to condemn Moscow’s ongoing aggression in Ukraine. It has done all of this on the presumption that New Delhi will respond favorably when Washington calls in a favor during a regional crisis involving China.


India’s priority has been to receive American assistance in building up its own national capabilities so it can deal with threats independently. The two sides have come a long way on this by, for example, bolstering India’s intelligence capabilities about Chinese military activities along the Himalayan border and in the Indian Ocean region. The existing arrangements for intelligence sharing are formally structured for reciprocity, and New Delhi does share whatever it believes to be useful. But because U.S. collection capabilities are so superior, the flow of usable information often ends up being one way.


The fundamental problem is that the United States and India have divergent ambitions for their security partnership. As it has done with allies across the globe, Washington has sought to strengthen India’s standing within the liberal international order and, when necessary, solicit its contributions toward coalition defense. Yet New Delhi sees things differently. It does not harbor any innate allegiance toward preserving the liberal international order and retains an enduring aversion toward participating in mutual defense. It seeks to acquire advanced technologies from the United States to bolster its own economic and military capabilities and thus facilitate its rise as a great power capable of balancing China independently, but it does not presume that American assistance imposes any further obligations on itself.

As the Biden administration proceeds to expand its investment in India, it should base its policies on a realistic assessment of Indian strategy and not on any delusions of New Delhi becoming a comrade-in-arms during some future crisis with Beijing.

Riaz Haq said…
#India's ties with #Russia remain steady. But #Moscow's tighter embrace of #China makes it wary. It appears “this (#Delhi-Moscow) relationship is going down from being a very high-value strategic partnership to a transactional one" #Modi #US #Ukraine

India’s relationship with Russia remains steadfast as both sides seek to deepen their economic engagements.

But Moscow has also grown close to Beijing since invading Ukraine, and that raises critical national security concerns for New Delhi, say observers.

India’s leaders are “carefully watching” as Russia becomes more isolated and moves closer to “China’s corner,” said Harsh V. Pant, vice president for studies and foreign policy at Observer Research Foundation, a New Delhi-based think tank.

It appears “this relationship is going down from being a very high-value strategic partnership to a transactional one,” said Sreeram Chaulia, dean of the Jindal School of International Affairs, adding Moscow’s “tighter embrace of China” doesn’t bode well for India’s national security needs.

India’s relationship with Russia remains steadfast as both sides seek to deepen their economic ties. But Moscow has also grown close to Beijing since invading Ukraine, and that raises critical national security concerns for New Delhi.

Indian external affairs minister S. Jaishankar recently said the country was ready to restart free trade negotiations with Russia.

“Our partnership today is a subject of attention and comment, not because it has changed, but because it has not,” he said, describing the relationship as “among the steadiest” in the world.

Russia also wants to “intensify” free trade discussions with India, Deputy Prime Minister Denis Manturov said during a visit to Delhi. Manturov is also Moscow’s trade minister.

Despite the display of economic cooperation, India’s leaders are “carefully watching” as Russia becomes more isolated and moves closer to “China’s corner,” said Harsh V. Pant, vice president for studies and foreign policy at Observer Research Foundation, a New Delhi-based think tank.

Russia’s “weak and vulnerable position” and growing reliance on China for economic and strategic reasons, will definitely be worrying for India, he told CNBC.

It’s becoming “more difficult with every passing day because of the closeness that we are witnessing between Beijing and Moscow,” Pant noted. “The pressure on India is increasing, it certainly would not like to see that happen.”

New Delhi will try as much as possible to avoid a potential “Russia-China alliance or axis,” Pant added. “As that will have far reaching consequences and will fundamentally alter India’s foreign policy and strategic calculation.”

There are national interest reasons “why India continues to buy cheap Russian oil and trade with them, this FTA is part of that,” said Sreeram Chaulia, dean of the Jindal School of International Affairs in New Delhi.

But it appears “this relationship is going down from being a very high-value strategic partnership to a transactional one,” he noted, adding Moscow’s “tighter embrace of China” doesn’t bode well for India’s national security needs.

India, which holds the current G-20 presidency, still hasn’t condemned Russia over its invasion of Ukraine.
Riaz Haq said…
#China's Role Growing in #SouthAsia Region as Foreign Minister Qin Gang heads to #Pakistan with #Afghanistan talks high on agenda. China also hopes to use the visit to further strengthen ties with Pakistan, one of its most important strategic partners.

Chinese Foreign Minister Qin Gang will visit Pakistan on Friday with efforts to resolve the crisis in Afghanistan high on the agenda.
During his two-day stopover, Qin will meet Prime Minister Shehbaz Sharif and Foreign Minister Bilawal Bhutto Zardari, and will also join in three-way talks with the Taliban’s interim foreign minister, Amir Khan Mutaqi.
Mutaqi, who is the subject of a travel ban under United Nations Security Council sanctions, was granted an exemption to travel to Pakistan for the meeting.
“China hopes that this visit will follow through on the important common understandings between the leaders of the two countries,” the Chinese foreign ministry said on Thursday, referring to a phone call between Sharif and Premier Li Qiang last week, as well as the Pakistani leader’s meeting with President Xi Jinping in Beijing in November.
During the November visit, Xi pledged further collaboration in the development of the China-Pakistan Economic Corridor – a US$60 billion transport infrastructure project – and support for efforts to stabilise the Pakistani economy.

Qin’s trip also aims to “further deepen strategic communication and practical cooperation, promote the building of an ever closer China-Pakistan community with a shared future in the new era, and contribute positive energy to the region and the wider world”, according to the Chinese statement.
The statement also used Beijing’s preferred formulations to describe the relationship between the two countries, alluding to their “ironclad friendship” and “all-weather strategic partnership”.
Qin will travel to Pakistan after attending the Shanghai Cooperation Organisation’s (SCO) foreign ministers’ meeting in Panaji, the capital of the Indian state of Goa. His tour also included two days in Myanmar where he became the most senior Chinese official to meet junta leader Min Aung Hlaing since the 2021 coup that brought him to power.
Riaz Haq said…
#India-#Russia Ties ‘Nose Dive’; After S-400 Shipments, Russia Could Now Suspend #Oil #Exports To India. @vkthakur. In Goa at #SCO2023 , Lavrov bluntly implied that in its dealings with Russia, India wants to eat the cake and have it too. #China #US

India, which has been lapping up cheap Russian oil for domestic consumption as well as export as refined commodities, hasn’t been compensating Russia for its oil imports.

Lavrov pointed out that Russia has accumulated billions of rupees in Indian banks that Russia cannot use.

“This is a problem. We need to use this money. But for this, Rupees must be converted to another currency, and this is now being discussed.”

India and Russia have been exploring options for settling their trade in rupees or rubles since the start of the Russian Special Operation (SMO) in Ukraine in February 2022, but they have made little headway even after more than a year.

Trade Imbalance Between India & Russia
The problem is – India’s imports from Russia far exceed its exports. As a result, Indian rupee payments to Russian bank Vostro accounts in Indian banks are of no use to Russia.

The obvious solution is for India to step up its exports to Russia. Unfortunately, Indian exports are severely constrained by the lackluster quality of Indian goods. Also, Russia is a resource-rich country, so India doesn’t have the option to export commodities to Russia.

India could pay the accumulated billions of rupees to Russia by converting them to a currency like the Chinese Yuan, however, that would entail bearing the cost of conversion. China’s massive trade surplus with India makes the rupee particularly weak against the Yuan.

Suspension of Rupee-Rouble Trade
According to Reuters, rupee-rouble trade between India and Russia has now been suspended. The suspension will likely restrict, if not end, the import of cheap Russian oil since the start of the Ukraine war.

The Imperative To Increase Exports
Nations become economic powerhouses by increasing their exports. To do so, they need to manufacture quality goods in demand across the world.

For example, Russia has the ability to make for itself just about everything that it needs, but that doesn’t make Russia an economic powerhouse. Russian exports are also constrained by quality when compared to goods manufactured by China, Japan, and many European countries.

Russia’s pivot towards Asia is a historic opportunity for the Indian private sector to increase exports to Russia. Our response to the crisis in Ukraine so far has been akin to a trader’s response, not the response of an entrepreneur. India can easily carve a niche for itself with the export of consumer goods to Russia.

Impact On Defence Relationship
India’s deep-rooted defense relationship with Russia, which has stood India in good stead for decades, has been threatened for some years now by US CAATSA sanctions. The suspension of Rupee trade with Russia will seriously impact India’s defense capability, possibly at a time when India can least afford enfeeblement.

It’s likely that Russia held back the supply of an additional two S-400 regiments to India earlier because of India’s inability to compensate Moscow. Russia could continue to supply oil to India because Russia has surplus oil, but it couldn’t continue supplying S-400 because it doesn’t have surplus S-400 regiments. Not now, at least, when it’s fighting a war.

Willing Make-In-India Partner
Russia has expressed its enthusiasm for participating in Make-in-India defense projects through industry-to-industry collaboration.

India’s defense minister Rajnath Singh held a bilateral meeting with the Minister of Defence of Russia, Army General Sergei K Shoigu, on the sidelines of the Shanghai Cooperation Organisation (SCO) Defence Ministers’ meeting in New Delhi on April 28, 2023.
Riaz Haq said…
#India-#Russia Ties ‘Nose Dive’; After S-400 Shipments, Russia Could Now Suspend #Oil #Exports To India. @vkthakur. In Goa at #SCO2023 , Lavrov bluntly implied that in its dealings with Russia, India wants to eat the cake and have it too. #China #US

The two Ministers discussed wide-ranging issues of bilateral defense cooperation, including military-to-military ties as well as industrial partnership. They expressed satisfaction over the continued trust and mutual respect between the two countries, particularly in defense, and reiterated their commitment to strengthening the partnership.

Wary of US CAATSA sanctions, India is seeking joint venture development and local manufacture of weapon systems from Russia, and Russia has been forthcoming.

India and Russia have discussed technical collaboration for local production of S-400 systems in India. In September 2019, Russia’s state corporation Rostec CEO, Sergey Chemezov, said that both India and Russia are currently in talks to launch a local S-400 production line in India.

“Yes, we are discussing the localization [of S-400 production] with India as well”, Chemezov reportedly told Russia’s RBK TV.

Russia is participating in the competitive bid for the local manufacture of P-75I submarines in India. Russia is ready to transfer its Amur 1650 submarine technology to India, and it’s ready to collaborate with the DRDO in fitting the submarine with an AIP system

Russia is ready to provide technology for India’s new tanks. The Russian Federal Service of Military-Technical Cooperation (FSVTS) said that Moscow can share its advanced Armata modular tracked platform with India. Vladimir Drozhzhov, the deputy director of FSVTS, told Russian media that Moscow is keen on jointly developing India’s main battle tank with modern Russian technology.

Other JV development offers from Russia include the Su-75 Checkmate stealth fighter.

Disconcerting Lack Of Urgency On The Part Of India
The lack of urgency on the part of our negotiators to work out a trade mechanism is disconcerting. As Lavrov said, Russia, which is fighting a war, needs to use the money that India owes to Russia. As a strategic partner with special privileges, you would expect India to be sensitive to Russia’s concerns.

It will indeed be deeply ironic if Indian tardiness (Or perhaps Western pressures?) derail a deep-rooted mutually beneficial relationship that has stood the test of time.

The indirect impact of the derailing – Russia would likely be forced to lean more heavily on China – could have a more ominous negative impact on India’s long-term security.

Cost Competitiveness of Russian Weapons
There is a good reason why India continues to seek Russian defense technology despite its access to Western arms manufacturers in Israel, France, the UK, and the US; Russian defense technology is more cost-effective than Western technology in certain areas, such as submarines, hypersonics, and armor.

India has been a good market for Russian defense OEMs. However, if Russian defense OEMs are unable to operate in India, the loss will be India’s more than Russia’s. Russian OEMs will easily find alternative markets – in the Middle East, South America, and Africa – as this world inexorably moves towards multipolarity.

India, on the other hand, would slip from being a regional power to being a regional US vassal.

Riaz Haq said…
#China backs #Pakistan on #Kashmir post #Jaishankar-#BilawalBhuttoZardari meet. 2 sides issued a joint statement saying they oppose “unilateral actions” that could “further complicate the already volatile situation” #SCO2023 #Article370 @deccanherald

Beijing has joined Islamabad in seeking the settlement of the row over Kashmir according to the United Nations Security Council (UNSC) resolutions – a day after a meeting of the Shanghai Cooperation Organisation (SCO) in Goa witnessed a war of words between the foreign ministers of India and Pakistan over bilateral disputes.

After a meeting between Chinese and Pakistani foreign ministers, Qin Gang and Bilawal Bhutto Zardari, in Islamabad on Saturday, the two sides issued a joint statement, taking a veiled swipe at New Delhi on the issue of Kashmir and opposing what they called “unilateral actions” that could “further complicate the already volatile situation”. China and Pakistan also underscored the importance of maintaining peace and stability in South Asia and the need for the resolution of all outstanding disputes the resolution of all outstanding disputes. “The Pakistani side briefed the Chinese side on the latest developments of the situation in Jammu & Kashmir. The Chinese side reiterated that the Kashmir dispute was left over from history between India and Pakistan and should be properly and peacefully resolved in accordance with the UN Charter, relevant Security Council resolutions and bilateral agreements,” noted the joint statement released in Beijing and Islamabad.

India has been maintaining that the 1972 Simla Agreement between India and Pakistan and the 1999 Lahore Declaration had left no scope for the UN or any other third party to play any role in resolving the “outstanding issues” between the two South Asian neighbours. Ever since Prime Minister Narendra Modi’s government in August 2019 moved to abrogate Article 370 of the Constitution of India to strip Jammu and Kashmir of its special status and to reorganise the state into two union territories, Beijing and Islamabad have been running an international campaign, opposing what they called a unilateral move by New Delhi on a disputed territory.

Both Qin and Bilawal were in Goa on Thursday and Friday for the SCO meeting, which was hosted by External Affairs Minister, S Jaishankar, at a beach resort in the coastal state. They were joined by the foreign ministers of the other member nations of of the bloc. The meeting of the SCO Council of Foreign Ministers was however overshadowed by the war of words between Jaishankar and Bilawal.

Bilawal accused New Delhi of causing a setback to the India-Pakistan peace process with its August 2019 move on Kashmir. “Wake up and smell the coffee. (Article) 370 is history. The sooner people realise it, the better it is,” responded Jaishankar, adding that the only issue New Delhi would like to discuss with Islamabad about J&K was when Pakistan would vacate India’s territory it had been illegally occupying. His remark was in response to Bilawal’s comment that the onus to create a conducive atmosphere for restarting the stalled India-Pakistan dialogue was on New Delhi.

Jaishankar also dismissed Pakistan’s claim over J&K stating that the territory had been, was and would always remain an integral part of India. Bilawal returned to Islamabad from Goa on Friday. Qin also arrived in the capital of Pakistan on Friday for a pre-scheduled visit

Qin also arrived in the capital of Pakistan on Friday for a pre-scheduled visit. They on Saturday chaired the fourth round of Pakistan-China Foreign Ministers’ Strategic Dialogue. Addressing media-persons jointly with Qin, Bilawal lauded China’s “steadfast support” on all of issues of core national interests of Pakistan “including its principled position on the Jammu and Kashmir dispute”.
Riaz Haq said…
The Contrarian Case for Pakistan's Upside

Opinion by Zachary Karabell

“Pakistan in on a cusp. We should honor the fact that whichever way the consensus believes it will go, the country is also poised to breakout on the upside. Which path will only be clear in retrospect, but we should pay more attention to the potential of things going right along with the legitimate focus on all that is going wrong.”


Yet, underneath the grim macro and political realities, there is another dynamic at play. Pakistan is the fifth most populous country in the world with 230 million souls, a median age of barely 22 and two-thirds of the population under the age of 30. That means unlike most of the world, it has a favorable demographic future. That is, if it manages to navigate through its macro and political morass. It has multiple urban centers but is not yet truly urbanized, ranging from the chaotic and decaying megalopolis of Karachi to the more sedate boulevards of the capital city Islamabad. And unlike, say, Nigeria, where the ethnic divisions and decades of corruption mean that it well-nigh impossible to treat the country as one unified market for goods and services, Pakistan is one common market even with its various tribal divisions.

Pakistan also has a real private sector, one that has not been fully crowded out by the military as in, say, Egypt, and an informal economy that doesn’t flow through either the government or the state banks. That is a negative for a government that can barely collect taxes and is starved for foreign reserves, but it means that the country is more functionally dysfunctional than at first glance it appears. That informal economy (which by many estimates accounts for 75% of the jobs in the country and would add more than 50% to official GDP) is creating a growing ecosystem of financing that does not involve state banks, and creating a burgeoning e-commerce system that will reach more than $6 billion this year, making it one of the top 50 e-commerce countries in the world. Much of that activity isn’t captured by official statistics.

One area that is especially intriguing is that most of e-commerce is Pakistan is now settled by cash on demand rather than digital payments. Even with that massive headwind, it is a multibillion dollar market. Now, with smartphone usage surging off a low base, there is the opportunity to replace cash on demand with digital payments that are managed not by banks but by nimble fintech applications. Other countries such as Kenya have already shown the power of smartphone digital payment systems that are not centered on banks, and that can unlock material benefits for millions without any of that showing up in official data. That is true as well for digital delivery of education and learning for young people without that showing in official education statistics.

In a world where capital seeks opportunity, it is entirely appropriate to compare and contrast various countries. And at least in terms of opportunities for growth and change, Pakistan has more potential than many, and significantly more than its negative global reputation would suggest. To be clear, I am not writing this as an entirely neutral party. I have a handful of investments in Pakistani start-up companies (mostly in consumer and financial technologies) and have clearly acted on the thesis that there is unmined potential. But I’ve done that because I honestly believe in that opportunity. Either that will prove accurate or not. Until now, to be fair, very few investors have made much money from Pakistan, and many have lost quite a bit.
Riaz Haq said…
The Contrarian Case for Pakistan's Upside

Opinion by Zachary Karabell

Karabell is an author, investor, and commentator. His latest book is Inside Money: Brown Brothers Harriman and the American Way of Power.

But the idea that Pakistan is uniquely messed up should be challenged. Yes, it has a multi-decade legacy of the military ruling both behind the scenes and directly. But it also has that real and dynamic private sphere that is not only seeing a start-up and new business ecosystem that has attracted hundreds of millions of dollars a year for the past few years but operates freely in a way that would be inconceivable in many other countries. Again, take Egypt, which receives far less negative attention and more foreign money yet is almost entirely dominated by a military dictatorship. Or Algeria. And then there are countries which barely function at all, dominating a whole swath of Sub-Saharan Africa but also dot central Asia (Tajikistan anyone?)

Yet, Pakistan is usually lumped in the word of global basket cases, sharing reputational space with Somalia and Mali and Venezuela. That is not the case on the ground. Even Lebanon, a country whose non-functional government cannot even supply power and water, has boosters for the liveliness of Beirut. Argentina, which has defaulted on its debts nine times in total and three times since 2000, is seen as a dynamic hub for everything from the nightlife of Buenos Aires to the tourism and natural wonders of Patagonia. South Africa, Bangladesh, Cambodia, Peru, all suffer from extraordinary macro and political problems, yet also attract more constructive foreign interest and investment.

To some degree, this is an argument of “well, it’s not as bad as they say.” But it’s also a way of highlighting that Pakistan today may be a case of darkest before the dawn. With elections schedule for the fall, and with Imran Khan the most likely victor of said elections unless is his arrest leads to his disqualification as a candidate, Pakistan is in a very similar position to where Turkey was in 2001-2003, when a series of elections brought Recep Erdogan to power even as he was repeatedly disqualified by a military that was determined to retain control. Imran Khan has many of the same strengths and weaknesses of Erdogan, who after championing Turkish democracy and economic reform, then turned into the very type of corrupt autocrat that he had once fought against. But he nonetheless unleashed massive economic potential in Turkey and has left its 80 million people materially better off over the past 20 years, even as hyperinflation and Erdogan’s recent economic ineptitude is now eroding that. Should Imran Khan return to the head the government, he may well usher in a similar period in Pakistan, even as he has his own authoritarian and demagogic tendencies.

We are globally in such an intensely negative period that we have, almost everywhere, succumbed to the tendency that to assume that the future will likely be grimmer than not. Pakistan is a prime example of that reputational spiral. It is, of course, entirely possible that the next months will see a government external debt default followed by a military coup and chaos on the streets. In fact, that scenario would surprise no one. But what if things suddenly went not predictably wrong but unexpectedly right? That has happened elsewhere, and not just in Turkey, yet in moments of global grimness, we tend to forget that possibility. Pakistan in on a cusp. We should honor the fact that whichever way the consensus believes it will go, the country is also poised to breakout on the upside. Which path will only be clear in retrospect, but we should pay more attention to the potential of things going right along with the legitimate focus on all that is going wrong.
Riaz Haq said…
India just passed China in population. That’s good news for America.

By Max Boot

Smith argues that, thanks to recent investments in infrastructure, “India has most of the raw ingredients necessary to industrialize.” India should receive a major boost from Western firms eager to move supply chains out of China amid U.S.-China tensions. “In 2021,” Smith notes, “only 1% of iPhones were made in India; two years later, it’s approaching 7%, with a planned increase to 40-45%.” Already more than 750 million Indians use the internet — more than twice the total U.S. population — and those numbers will only continue to grow. “When a country has 1.4 billion people, a booming economy, and an open society,” Smith concludes, “there’s really very little limit to its potential influence.”

Not so fast, counters Sadanand Dhume of the American Enterprise Institute. During an interview with me (and in an op-ed in the Wall Street Journal), he points out that India faces major obstacles to realize its potential.

India’s education system, Dhume notes, lags far behind China’s. Only about three-quarters of Indians are literate, compared with nearly all Chinese. India does even worse at utilizing women in the workforce: At just 19 percent, its female labor-force participation rate is one of the lowest in the world — and far behind China’s 61 percent. Manufacturing’s share of India’s economy actually declined between 2000 and 2021. Dhume writes: “Almost half of the Indian workforce makes subsistence livings on small family farms, compared with only about 25% of Chinese and 1% of Americans.”

To his credit, Narendra Modi is the most pro-business prime minister India has ever had. He has been building infrastructure at a breakneck pace and trying to simplify the mind-boggling regulations known as the “license raj” that impede the private sector — and fuel corruption. But, as a Hindu nationalist, Modi has favored domestic firms (“national champions”) and boosted tariffs as part of his “Make in India” campaign. That makes India less attractive as a destination for multinational companies that want to assemble high-tech goods with parts from all over the world.

Modi is also undermining Indian democracy — his party just expelled the opposition leader from Parliament — and turning India’s 200 million Muslims into second-class citizens. No country can afford to sideline so much potential talent, especially given the discrimination already suffered by 200 million low-caste Hindus (the Dalits or “untouchables”).


Tellis told me that “India’s population ‘achievement’ suggests that it still remains the only Asian power with the natural capacity to balance China, if — and it is a big if — it can get its act together.” But, he added, “Although the U.S. should continue to partner with India to balance China in the Indo-Pacific, it will inevitably have to bear a disproportionate responsibility for successfully maintaining an Asian balance of power.”

Riaz Haq said…
The Budding Arms Race Among China, India, and Pakistan
By Andrew F. Krepinevich, Jr.
May 26, 2023

Security experts are only beginning to sort through the implications of China’s nuclear breakout. They would do well to consider Ashley Tellis’s new book, Striking Asymmetries, which assesses the implications of Beijing’s actions from the vantage point of the rivalries between South Asia’s three nuclear powers: China, India, and Pakistan. In a work that should be required reading for senior political and military leaders, Tellis presents a compelling case why this tripolar nuclear system, which has for decades remained remarkably stable, may be on the verge of becoming far more dangerous.

Tellis draws upon decades of experience in South Asian security affairs, unique access to senior policymakers and military leaders in the three rivals’ defense establishments, and a remarkable ability to make seemingly abstract technical concepts readily understood by those with even a passing interest in the subject matter. The result is the most comprehensive, informed, and accessible assessment to date of this nuclear rivalry—and one that cannot be ignored.

China and Pakistan have a long and close relationship, in part built around their mutual view of India as a rival. India finds itself sandwiched between these two often hostile powers. Yet despite a history of wars and persistent low-grade conflict between India and its two rivals, a general war has been averted since India and Pakistan became nuclear powers a quarter century ago. Moreover, the three countries have not found themselves caught up in a nuclear arms race. Until recently, they viewed their nuclear weapons primarily as political instruments, not as tools for actual warfighting. All three adopted a “minimum deterrent” nuclear posture, maintaining the lowest number of nuclear weapons necessary to inflict unacceptable damage to their adversaries’ key cities even after suffering a nuclear attack.

In keeping with this strategy, the three Asian rivals avoided maintaining a significant portion of their arsenals on high alert. Instead, they stored their weapons in caves, in deep underground facilities, or in other concealed locations. Rejecting American and Russian notions that “retaliation delayed is retaliation denied,” the three countries, especially China and India, forswore the need for a swift response to a nuclear attack. To be sure, they would respond eventually—in days, weeks, or even months—but they did not accept the imperative of immediacy. As a result, these countries have avoided making heavy investments in early warning systems while retaining centralized control over their arsenals.

But the prospects for sustaining this era of minimum deterrence appear increasingly shaky. The tripolar rivalry has not been locked in amber: Tellis describes strongly held beliefs among top security officials in China, India, and Pakistan that their nuclear postures are inadequate. Led by China and Pakistan, with India following in their wake, the three rivals are now on a course that will result in a dramatic expansion of their nuclear arsenals, even if Russia and the United States pursue substantial cuts to theirs.

At the core of Tellis’s assessment are the differences—“asymmetries”— driving the tripolar rivalry. One fundamental difference is that China and Pakistan are revisionist powers seeking to alter the existing order, while India remains content with the status quo. China possesses the most formidable nuclear arsenal of the three, followed by Pakistan, with India trailing.

Riaz Haq said…
The Budding Arms Race Among China, India, and Pakistan
By Andrew F. Krepinevich, Jr.
May 26, 2023

There is also an asymmetry in the three powers’ strategic focus. Pakistani security officials are obsessed with India, while India’s focus is overwhelmingly on China. China’s sights, however, have shifted beyond regional to global rivalries, principally with the United States. It is this competition with Washington that is driving Beijing’s nuclear breakout. For China, India’s deterrent is rapidly assuming a peripheral role, similar to that played by China in American nuclear planning during the Cold War.

Beijing’s support for Pakistan’s nuclear weapons program, which includes providing Islamabad with blueprints for a bomb and fissile material, has further complicated India’s position. Pakistan’s leaders are looking to abandon minimum deterrence in favor of “full-spectrum deterrence,” where their nuclear forces cover multiple contingencies in the event of war with India. There are three central factors spurring Pakistani officials to adopt this more aggressive posture. First, Islamabad is aware that its conventional forces are weaker than India’s and believes it has no alternative but to employ, if need be, its nuclear forces to offset this asymmetry. Second, given that India is far larger than Pakistan, Islamabad believes it must be able to inflict greater destruction on India in a retaliatory strike than India will inflict on it. This requires Pakistan to maintain a larger nuclear arsenal to target India’s population and economic hubs in the event of war. Third, Pakistan also hopes that its nuclear forces prevent India from undertaking large-scale military action against it in response to Islamabad’s ongoing support for militant groups in the disputed region of Kashmir.

Tellis shows that accomplishing full-spectrum deterrence will require Pakistan to expand its arsenal substantially. For instance, he notes that stopping a major advance of Indian conventional forces into Pakistani territory would require scores of so-called tactical nuclear weapons, weapons that Islamabad currently lacks.

Although Tellis argues that Beijing’s and Islamabad’s nuclear provocations do not automatically portend growing instability in the region, the evidence he presents suggests otherwise. He finds that Beijing’s growing arsenal will not necessarily place India’s security at greater risk—but describes a set of highly plausible Chinese actions that, in combination with a superpower-sized arsenal, risk undermining India’s confidence in its own nuclear deterrent.

To begin with, Beijing is seeking the capability to launch nuclear reprisals far more quickly than ever before. This requires China to maintain a portion of its force on heightened alert, which may not have posed a threat to India when China possessed a few hundred weapons. But if Beijing placed a significant percentage of its expanded arsenal of 1,000 or more warheads on high alert, the strategic ground would shift considerably. India would now face a neighbor capable of launching a large-scale attack with little or no warning.

India’s ability to withstand a nuclear strike and retain the capacity to inflict catastrophic destruction in response is closely tied to the security of its underground nuclear storage sites. China currently lacks the ability to destroy them—even assuming it knows their locations. That could change, however, once China’s arsenal has more than 1,000 warheads, especially if China improves the accuracy of its weapons. Such a development, combined with Beijing’s adoption of increased alert levels for its nuclear forces, would set alarm bells ringing in New Delhi; Indian officials could conclude that China has the capacity to disarm India’s nuclear weapons arsenal.

Riaz Haq said…
The Budding Arms Race Among China, India, and Pakistan
By Andrew F. Krepinevich, Jr.
May 26, 2023

India’s ability to withstand a nuclear strike and retain the capacity to inflict catastrophic destruction in response is closely tied to the security of its underground nuclear storage sites. China currently lacks the ability to destroy them—even assuming it knows their locations. That could change, however, once China’s arsenal has more than 1,000 warheads, especially if China improves the accuracy of its weapons. Such a development, combined with Beijing’s adoption of increased alert levels for its nuclear forces, would set alarm bells ringing in New Delhi; Indian officials could conclude that China has the capacity to disarm India’s nuclear weapons arsenal.

China may also enhance its air and missile defenses, making matters even more precarious for India. These defenses would minimize the threat posed by any “broken-back” Indian nuclear retaliation—in other words, an attack that uses whatever weapons survive a disarming Chinese strike. But New Delhi would surely know that employing the remnants of its arsenal to retaliate against China would leave it vulnerable to Pakistani nuclear blackmail. Put simply, India would risk being left with no credible nuclear deterrent to resist coercion by Islamabad.

Tellis is correct to note that China’s development of these capabilities is not assured. Yet during Beijing’s decades-old conventional military buildup, it has sought to match every significant U.S. capability, including stealth fighters, military satellite constellations, aircraft carriers, and cyberweaponry. Tellis recognizes that even if China creates such a set of capabilities, it must still know the location of India’s storage sites in order to target them—and have high confidence that its intelligence is accurate and comprehensive. This uncertainty could restrain Beijing. But at the same time, New Delhi may not feel comfortable simply trusting that its nuclear sites have not yet been unearthed by Chinese intelligence or presuming that Chinese leaders are wary of taking big risks.

How might India respond to China’s and Pakistan’s nuclear provocations? Tellis points out that India is not without options—but that each path has its pitfalls.

First, he shows that if India wanted to, it could easily match China weapon for weapon. Yet he believes New Delhi would prefer to maintain its minimum deterrent strategy, emphasizing its ability to inflict severe damage on its adversaries’ cities. This stems in no small part from the expense India would incur by following Beijing in its quest to match America’s nuclear arsenal. Still, Tellis acknowledges that India’s arsenal will have to expand its nuclear holdings to possess the warheads needed to inflict unacceptable damage on both China and Pakistan. And as India increases its arsenal, Pakistan is sure to do the same—completing the regional chain reaction triggered by China’s nuclear expansion.

Tellis rejects the “more of the same” option of expanding India’s underground storage facilities, showing persuasively that it would prove costlier to accomplish than it would for China to simply expand the number of weapons needed to destroy them. Rather, he argues, India’s solution is to be found in stealth and mobility. This could be achieved by creating a nuclear ballistic missile submarine force and by shifting more of India’s arsenal to mobile road and rail missile launchers.

Riaz Haq said…
The Budding Arms Race Among China, India, and Pakistan
By Andrew F. Krepinevich, Jr.
May 26, 2023

As for China’s air and missile defenses, Tellis points out that India might address the problem by deploying penetration aid decoys on its missiles. These decoys are designed to present themselves as actual warheads to missile defense radars, thereby inducing the defender to expend precious interceptor missiles engaging false targets. This would offset, if only partially, New Delhi’s need to expand its nuclear arsenal.

The United States could provide India with a reliable thermonuclear weapon design.
Yet even if India were to pursue these actions, it would still face significant challenges. The threat of a Chinese preemptive strike may compel India to develop an effective early warning system to enable it to reduce its arsenal’s vulnerability by sending its weapons out to sea and flushing its land-based missiles from their silos. New Delhi would also have to establish a new command-and-control system to direct the actions of its nuclear submarines. Yet while India is in the process of constructing nuclear-powered ballistic submarines, it still has a long way to go in building a significant force and overcoming the technological hurdles necessary to create a credible seaborne nuclear deterrent. Tellis notes that among these challenges, New Delhi is experiencing problems with its naval nuclear reactor designs.

Then there are India’s nuclear weapons. New Delhi has only conducted a handful of nuclear tests—not enough to validate its thermonuclear designs to offer high confidence that these weapons will perform as designed. Its most reliable weapon has a yield of 12 kilotons, whereas China’s weapons have yields as much as 100 times greater. Addressing these shortfalls may require India to resume testing—and risk incurring sanctions from the United States and other nations.

Tellis hints at a tantalizing solution to India’s problems. The United States could provide India with a reliable thermonuclear weapon design. The trilateral security pact among Australia, the United Kingdom, and the United States that is known as AUKUS, which will assist Australia in acquiring nuclear-powered submarines, could be expanded to include India. Might the Americans also share their nuclear reactor designs with New Delhi? But for this to happen, India, which has kept the United States at arm’s length practically since its birth, would have to finally and firmly close ranks with the leading Indo-Pacific democracies and formally forsake the nonaligned strategic autonomy it has long enshrined at the heart of its foreign policy.

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