Round up of regional news

REGION
Pipeline ahoy!

Sanctions are not supposed to work this way. After seemingly endless stops and starts, India, Pakistan and Iran decided during the second week of March to begin construction on the long-discussed gas pipeline between the three countries – and on a strict deadline, too. Ironically, it was the threat of possible future US sanctions against oil companies involved with Tehran that ultimately pushed through the agreement. Construction is now slated to begin no later than September 2009.

Each country will be responsible to lay pipes in its own territory – a project that Iran has already begun, and now needs only to extend another 200 km to its eastern border. Pakistani officials say that they will be appointing private-sector contractors to put down the 655 km of pipe in Pakistani territory immediately after purchase agreements are signed in June.

The total estimated pipeline costs for each country are: Iran, USD 4.0 billion; Pakistan, USD 2.6 billion; India USD 600 million. At the moment, involved officials are very tentatively putting an end date for the project at around mid-2014. Better late than never, it seems the Iranian gas will flow, to energise the Southasian economy and politically stabilise the region.

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REGION
Through Bangladesh?

Just before leaving for a recent meeting of SAARC energy ministers in New Delhi, officials in Dhaka announced an abrupt about-face: they were keen to return to the negotiating table with regards to a long-proposed pipeline from offshore gas fields in Burma to India through Bangladeshi territory. Although India desperately wants to come to a deal with Burma (in fear that that gas will otherwise go to China), for the past year, Bangladesh has been pushing three preconditions to any such arrangement, including a stepdown in the trade gap between the two countries. Dhaka's position has stalled discussions, and India has been exploring more circuitous options for transporting the fuel.

The apparent change of policy was announced by Bangladeshi Interim Energy Adviser (essentially, 'Minister') Tapan Chowdhury, who said that, "There will be no conditions tagged to the pipeline." One of those conditions remains, however, as Dhaka is concurrently intensifying its appeals to Indian lawmakers to allow a power-starved Bangladesh to import hydroelectric power from Bhutan and Nepal across Indian territory.

And, with a proposal for two studies on Southasian energy trading currently in the offing – one by the Asian Development Bank and one by the SAARC organisation itself – Indian power-keepers may be more interested in hearing the Bangladeshi appeals.

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INDIA/SRI LANKA
Kuppi okayed

Right in time for the 16-year anniversary of Rajiv Gandhi's assassination, a Tamil-language film on the event is all set for widespread release in Tamil Nadu – and has reportedly received not only the go-ahead, but also some stylistic critiques from LTTE leader Velupillai Prabhakaran.

Evidently a pre-release copy of Kuppi (which means 'cyanide') was made available to the secretive insurgent chief in his hideout. According to the film's producer, Viswas Sundar, while Prabhakaran seemed to have been "very appreciative" of the new movie, he suggested a couple of changes "to suit the sensitivities" of his cadre. For instance, when the main protagonist discusses how the LTTE thirudinom (stole) a government military stockpile some years ago, Prabhakaran wanted the word changed to kaipotrinom (seized).

Kuppi is actually a remake of an older film, originally in Kannada. The film's producers are now at work on a Hindi version, which they say will "include the assassination scene" – although they did not elaborate as to why the scene was not included in the Tamil version. Several additional attempts have been made in the past to release a film depicting Gandhi's 21 May 1991 assassination, but have run into longstanding legal obstacles. One of these, Kutrapatrikai, finally hit theatres in mid-March after 14 years of legal wrangling.

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PAKISTAN
China-only zone

Following up on the bilateral free trade agreement inked last November, the Pakistani government in late February agreed to set up special economic zones (SEZs) that would accept investments only from China. Finance Ministry adviser Ashfaq H Khan said that the new deal would include a 3000-acre parcel of land outside of Lahore, as well as a host of lucrative incentives, including five-year tax holidays for investors. Islamabad will also provide the SEZ area with water and electricity. Beijing has announced its intention to set up eight such SEZs throughout the world, and the Pakistani one will now be the first.

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NEPAL/BHUTAN
Settling in for resettlement

The United States government has now officially proposed to set up a so-called 'overseas processing entity' (OPE) in Kathmandu, which would begin the process of going through applications from Bhutani refugees for eventual resettlement in the US. This is the first official movement towards resettlement in the 16 years that the roughly 106,000 Bhutani refugees have lived in UNHCR-overseen camps in southeastern Nepal.

One US embassy official in Kathmandu said that the new office would aim to process around 60,000 refugees over the next five years. This is the number that Washington DC has agreed to take in to the US, also with the hope that other countries would take in the Lhotshampa. The OPE office is to open for business in early July.

There is also speculation that the new office will be used to process applications from other refugees living in Nepal, particularly from some of the 25,000 Tibetans in the country. Last year, news broke that the US was quietly planning on resettling around 5000 Tibetans from Nepal, starting this year.

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SRI LANKA
Mihin almost off the ground

Just prior to its maiden flight in early March, Sri Lanka's first budget airline (and second national carrier), Mihin Lanka, ran into technical difficulties. The airline had chartered a Fokker-27 aircraft from another private operator in Colombo to prove to regulators that it was able to utilise that type of plane for a passenger service.

Although the plan was to fly a crew and 58 guest passengers from Colombo to Trivandrum, two and a half hours later the plane was still on the ground due to unspecified problems, and officials announced that no further flight tests were planned. Once it is certified, however, the government-floated Mihin Lanka plans to tap into both the Indian and Gulf markets. At the moment, the airline does not own any plane of its own, but it will soon have a spanking new airport to fill in Hambantota in the country's south.

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REGION
India sets the dole

When Indian Finance Minister P Chidambaram unveiled his country's new budget on 27 February, an observer could have been forgiven for thinking he had exchanged his portfolio for Minister for Donor Assistance. For fiscal year 2007-08, Chidambaram announced that he would double India's development aid to Burma, from INR 446 million to INR 804 million. Bilateral assistance to Bangladesh, meanwhile, will plummet significantly – from INR 500 million to INR 150 million, a 70 percent drop.

Despite the recent renegotiation of the Indo-Bhutan Friendship Treaty, Thimphu should have liked the news: New Delhi will be increasing its aid from INR 5.6 billion to INR 6.7 billion. So too should Male – aid to the Maldives is set to triple in the upcoming year from INR 44 million to INR 133 million. (Aid to Sri Lanka will remain the same in the coming year, while information for Afghanistan was unavailable.)

Meanwhile, there was some confusion over how this neighbourhood largesse would treat Nepal. Initial media reports in Kathmandu had Chidambaram cutting India's aid to Nepal from INR 2.1 billion to INR 1.4 billion. The Indian embassy in Kathmandu quickly issued a statement, however, explaining that India's assistance to Nepal is not confined to Foreign Ministry allocations, but includes a plethora of other aid mechanisms – including the promise of INR 10 billion made during Girija Prasad Koirala's June 2006 visit to New Delhi.

This is undoubtedly true, but we are still confused as to what all of the neighbourhood autocrats (Than Shwe, Maumoon Abdul Gayoom, King Jigme) have done to make New Delhi so happy as to want to open the spigot all the way.

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REGION
Peaceful Ocean

Addressing the first Pakistani conference on the Indian Ocean, Prime Minister Shaukat Aziz in early March emphasised the need to put in motion bilateral and regional joint efforts with regards to that watery expanse. In order to work against the possibility of the Indian Ocean becoming a space of competition or power-grabbing, Aziz said: "We in Pakistan are of the view that the Indian Ocean should become a zone of peace and cooperation."

The conference, held at Bahria University in Karachi, was dubbed 'Maritime Threats and Opportunities in the 21st century: A global perspective on the Indian Ocean'. Aziz noted that the body of water could well be considered the most important of the world's oceans, in that it connects the traditional 'seven seas', as well as four of the most important waterways – the Suez Canal, and the straits of Malacca, Hormuz and Mandeb.

Meanwhile, within days after Aziz made his remarks, warships from 27 navies around the world arrived in the Karachi port to participate in the AMAN 07, a joint training exercise in the North Arabian Sea organised by the Pakistan Navy. Hey, weren't we talking zones of peace here?

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BURMA/INDIA
Antsy traders

A Burmese trade delegation headed across the border into India recently, making the first such visit in the dozen years of bilateral trade between the two countries. Indian trade delegations have made several trips into Burma in recent times. The impetus for the westward trip was the continually declining levels of crossborder trade through Moreh, in Manipur – the only official trade point currently open for international trade.

The secretary of the Union of Myanmar Border Traders Chamber of Commerce, U Aye Ko, noted that the environment in Moreh itself has been increasingly less conducive to traders, with 76 days of 'disruption' in the city between April 2006 and January 2007 disallowing trade of any kind. He also noted that such a situation would only increase traders' desires to set up shop elsewhere – particularly once planned trading centres in Mizoram and Nagaland come into being.

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INDIA/PAKISTAN
No 'joint management'

In a not unforeseen rejection, Indian Foreign Minister Pranab Mukherjee recently definitively stated that Pervez Musharraf's proposal of 'joint management' of Kashmir by India and Pakistan "cannot be the basis of a settlement of the issue of Jammu & Kashmir". Mukherjee delivered the pronouncement in response to a question in the Rajya Sabha, stating that such an option was not workable because J & K constitutes an 'integral' part of India.

General Musharraf had earlier emphasised his personal desire to see an end to the conflict over Kashmir, and proposed a four-point proposal that could make it acceptable to the Islamabad establishment – including the joint Indo-Pakistani management of Kashmir. Although the proposal was lauded at the time as indicative of a potential sea change in Islamabad, most observers warned that New Delhi would have a hard time accepting the idea. Well, it has come to pass.

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INDIA/TIBET
Parliamentary support

For the first time, members of Parliament from New Delhi attended the annual 10 March Uprising Day, held in Dharamsala. It was on that date in 1959 that thousands of Tibetans rose up against Chinese security forces, after which tens of thousands died at the hands of the People's Liberation Army.

The members of a new all-party parliamentary forum on Tibet also pledged to push for a resolution that would press for New Delhi's official commitment to "initiate talks and engage with China" to address the demands of the Tibetan refugee community in India. The move seems to be the result of a string of stepped-up actions by pro-Tibetan activists following last November's visit by President Hu Jintao to India. During that trip, Manmohan Singh's administration reiterated its view that Tibet was a "part of China" – a policy change first put forth in 2003 following Beijing's recognition of Sikkim as a part of India.

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REGION
Ringing the region

Representatives attending the second SAARC Energy Ministers Forum in Delhi on 7 March approved an Indian proposal that would create a regional 'energy ring'. Such a plan would mean dramatically stepping up the establishment of crossborder and transnational transmission lines, with an eye towards increasing bilateral and multilateral cooperation on trading electricity and petroleum energy and products. Addressing the opening of the meet, Indian Power Minister Sushil Kumar Shinde noted that north-south crossborder connections have been set up between India, Nepal and Bhutan, and that technical studies are currently in the offing to extend the grid to Bangladesh and Sri Lanka. The ministers agreed to commission the Asian Development Bank to do a feasibility study for a "common energy grid", for which USD 1 million has been earmarked.

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BANGLADESH/INDIA
The ULFA bankroll

According to a report released in late February by the US think tank Strategic Foresight Group, the separatist United Liberation Front of Asom (ULFA) is financially supporting political contenders in Bangladesh's temporarily suspended national elections. The report alleges that roughly USD 6 million – part of the estimated USD 100 million fortune in the control of ULFA's chief, Paresh Barua – is being used to bankroll at least 15 candidates, belonging to both the Awami League and the Bangladesh Nationalist Party.

Strategic Foresight researchers say that the move is an attempt on the part of ULFA to "hedge its bets" regarding the eventual election's impact on its business and militancy operations. "As long as ULFA can continue funding the appropriate candidates, it can ensure that the Bangladesh government will resist caving in to Indian demands to crack down on the militant group," the report suggests.

Barua is alleged to control extensive business operations throughout Southasia and the Gulf, including hotels, stores, factories, investment firms and driving schools.

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REGION
Rally for regionalism

The first SAARC Car Rally kicked off on 15 March from Cox's Bazaar in Bangladesh. The rally will cover a distance of 8000 km across seven countries and will conclude – hold your breath – in the Maldives exactly a month later.

Bhutani Foreign Secretary Yeshey Dorji, at a late-February inauguration of the event, clarified that the race was not a competitive one. Rather, he said, the rally's objective was to strengthen people-to-people contact; promote goodwill; identify the need to improve regional transport, road infrastructure and connectivity; and encourage intra-SAARC trade and economic cooperation. Around 120 participants in 30 vehicles provided by the Indian government are taking part in the event.

A significant portion of the trip will actually be by boat – the jeeps have to make it to Male, where they are sure to create the greatest traffic jam the city has ever seen in its handful of kilometres of roads.  

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REGION
Flag follows trade

On 18 February, at the end of the second SAARC Business Leaders Conclave, regional leaders agreed on the so-called Mumbai Declaration, which states that SAARC countries must implement a 13-point policy reform agenda to raise intra-regional trade to USD 20 billion by 2010.

In addition to resolving to build new infrastructure at land border ports between all countries, the declaration asks Southasian capitals to implement the South Asia Free Trade Agreement (SAFTA, which came into effect in July 2006), reduce the number of items on the various 'sensitive lists' and remove non-trade barriers, while regularising and liberalising trade in services.

Member countries were also urged to promote energy trade and cooperation, adopt an 'open-sky policy' to improve connectivity between all capitals and major cities, facilitate tariffs and customs procedures, and reduce the cost of doing business in Southasia. Finally, the declaration suggests that, in order to simplify migration within the region, simple and long-term multiple visas must be issued to businesspeople and tourists.

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NEPAL/INDIA
Nepali trade hubs

As part of an INR 3.2 billion project to enhance the efficiency of trade across the India-Nepal border, New Delhi has decided to invest INR 1.2 billion in the development of Nepal's trade infrastructure. While the construction of facilities at four border points – Raxaul and Jogbani in Bihar, Sunauli and Rupaidiha/Nepalganj Road – has already begun, a formal inauguration of the scheme will take place only when Minister of State for Commerce Jairam Ramesh visits Nepal. A recent planned visit by Ramesh to the northern neighbour was cancelled due to unrest in Nepal's southern regions.

Ramesh said that the new facilities "would house all regulatory agencies, like immigration, customs, border security, together with support facilities like parking, warehousing, banking and hotels in a single complex equipped with modern amenities." Altogether, as part of India's larger scheme to upgrade border infrastructure, 13 points along India's border with Pakistan, Bangladesh and Burma are said to be in the offing, amounting to a total estimated cost of INR 8.5 billion.

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REGION
Businessman blues

Despite the much ballyhooed economic reforms in India and Pakistan, a recent World Bank study warned that Southasia as a whole and India in particular remain weak in eliminating obstacles to business growth and job creation. The worldwide study used indicators such as ease over starting or closing businesses, dealing with licenses, employing workers, paying taxes, getting credit and enforcing contracts.

At the 134th spot, India was above only Bhutan and Afghanistan in Southasia, and was significantly lower than both Pakistan (74) and China (93). Sri Lanka (89) narrowly trailed Bangladesh (88), while Nepal (100), Bhutan (138) and Afghanistan (162) rounded off the Southasian list.

Caralee McLiesh, the study's principle author, put down India's poor showing partly to the country's massive populace. With a billion-plus population and a work force of 458 million, McLiesh said, India has only eight million workers with formal jobs in the private sector, and an alarmingly large section still lacking worker rights, protections and benefits. Yet five rounds of formal reforms in India and two in Pakistan have succeeded in reducing the time, cost and difficulty for businesses to comply with legal and administrative requirements. "India and Pakistan are reforming very aggressively in many areas that we measure in doing business," McLiesh conceded.

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INDIA
Gas-guzzling competition

The Indian government recently moved to set up a cabinet-level panel on energy and energy security. The new body will be tasked specifically with countering Beijing's use of various types of aid to convince foreign governments, mostly in Africa and Latin America, to award it rights to offshore oil fields.

Energy-crunched India currently imports 75 percent of its petroleum usage, and many policymakers are worried that such continued dependence, coupled with China's increasingly aggressive manoeuvring, will have a drastic impact on India's long-term economic and military interests.

India's oil usage is estimated at 115 million tonnes for 2006-07, when 104 million tonnes will be imported; this use is calculated to rise roughly four percent per year in the foreseeable future. By 2030, International Energy Agency head Claude Mandil says, India will be importing around five million barrels of oil per day; at that time, China will be importing more than twice that, at around 12 million per day.

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NEPAL/BHUTAN
Resource clash

For the first time in more than a decade and a half, Bhutani refugees housed in several UNHCR-overseen camps in southeastern Nepal recently clashed with locals. The confrontation took place near the Sanischare refugee camp, when Nepalis from the area attempted to stop refugees from collecting firewood in a nearby forest. During the skirmish, one refugee was killed and several more were wounded. Local communities subsequently instituted an 'indefinite' strike, calling on authorities to close down the camp. Around 16,000 refugees live at Sanischare alone.

Refugee leaders claim that the current trouble began in January 2006, when the UN's refugee agency decided to eliminate longstanding rations of kerosene to the camp residents. Although cheaper charcoal bio-briquettes were substituted for the gas, many refugees have said that the allotment is not enough, and that they have been forced to scavenge firewood from the surrounding area.