Wednesday, April 23, 2008



"A puzzling question for the Chinese is: How can India put all its strategic policy eggs in the baskets of three sunset leaders, namely, President George Bush, who will be out next year, Mr. John Howard of Australia, who may be out by the end of this year, and Mr. Shinzo Abe of Japan (he is already out) ? A convergence of views and interests with these sunset leaders will be ephemeral and of uncertain benefit to India and its people, whereas any convergence with the Chinese leadership would be durable and of definite benefit to India and its people. So, it is said. " ---Extract from my article titled "Seeing China From Chengdu" of September 19,2007, available at

Mr.John Howard, the previous Australian Prime Minister, is out after he and his Liberal/National coalition were defeated in the elections held on November 24,2007 . The policy-makers of other countries, including China, knew that Mr.Howard's days were numbered and that they should not put their policy eggs in his basket. They waited for the Australian elections before undertaking any major policy initiative. When Mr.Kevin Rudd of the Australian Labour Party, succeeded Mr.Howard as the Prime Minister and changed the main contours of Australia's foreign policy, they were not taken by surprise.

2. Indian policy-makers, whose decisions are influenced more by wishful thinking than by hard ground realities, rushed into one initiative after another without waiting for new leaders to emerge in the US, Japan and Australia. They embraced the proposal for a so-called concert of democracies involving India, the US, Japan and Mr.Howard's Australia. They engaged in nuclear castle-building in the air in the fond expectation that Mr.Howard's Australia will support the lifting of restrictions on nuclear trade with India by the Nuclear Suppliers' Group (NSG) when the Indo-US agreement on civilian nuclear co-operation comes up before it and that it would sell uranium to India as it has been selling to China. They joined the five-power naval exercise in the Bay of Bengal in September,2007, involving the navies of India, the US, Howard's Australia, Singapore and Japan.

3. All their big-power castle-building in the air has come down with a crash after Mr.Kevin Rudd took over as the new Australian Prime Minister. One of his first decisions after taking over as the Prime Minister was that Australia would not sell uranium to India. This decision was publicly announced. Another decision being talked about, but not yet publicly announced was that Australia would not support India in the NSG.

4. His second major decision was that Australia would not participate in the concert of democracies and in any other arrangement which might create in China concerns that it was being encircled. That means, no more Australian participation in joint naval exercises which might cause concern in Beijing.

5. His third major decision was to undertake an 18-day visit to countries considered by him as important to Australian interests in order to explain the policies of his Government. Japan and India were not in the list of countries chosen by him. Subsequently, he and his advisers tried to soothen Japanese sensitivities by stressing that the exclusion of Japan from this list did not mean any down-grading of Japan's importance for Australia.

6.China, China, China, China and more of China was the recurring theme of his speeches in the countries visited by Mr.Rudd, who had spent nearly eight years as an Australian diplomat in Beijing and reportedly speaks the Chinese language fluently. The joke in the English-speaking countries visited by him was that he seemed to be more confident in the Chinese language than in English. His English language is as incomprehensible as the sudden turns in Australian foreign policy introduced by him.

7. The only country not surprised by the Australian foreign policy volte face caused by him is China. It had closely studied him during his long years in Beijing. It had correctly assessed his fascination for China and his seeming contempt for India. His indifference to India was apparent during his first overseas tour. Wherever he spoke, his preoccupation was with Australia's relations with the US and China. Hardly any reference to India.

8. Though there are indications that he would favour India becoming a permanent member of the UN Security Council and joining the Asia-Pacific Economic Co-operation (APEC) organisation and that he might visit India later this year, he does not envisage any role for India in any new security infrastructure for the Asia-Pacific region. His poor opinion of the ASEAN, the ASEAN Regional Forum,the ASEAN plus three, the East Asia Summit and the APEC was obvious. During his interaction with a select audience in the Brookings Institution of Washington DC on March 31,2008, he indicated his preference for the six-power group----of which China is a member and India is not--- which has been negotiating with North Korea on the nuclear issue being expanded to constitute the hard core of any new security infrastructure for the region.

9. In his interactions at the Brookings,he sought "common ground" between China and the international community in a bid to make the Asian giant a "responsible stakeholder" contributing to a "harmonious" global and regional order. China has always welcomed the emergence of India as a major Asian power, but one rung below it---- not on par with China. Bejing looks upon China as an emerging world power on par with the US and India only as an emerging Asian power on par with Japan. Mr.Rudd seems to agree with this perspective.

10. It has been reported that during his visit to Washington DC, President Bush could not succeed in making Mr.Rudd agree to support the nuclear agreement with India in the NSG. If true, this would put an end to India's hopes of having the NSG restrictions on nuclear trade with India lifted before the end of the term of Mr.Bush.

11. India's action in welcoming a stop-over by the Iranian President Mr.Mahmud Ahmadinejad at New Delhi on his way back to Teheran after a visit to Colombo later this month and New Delhi's strong rebuttal of the remarks of a US State Department spokesperson on the stop-over are a clear indication that New Delhi has come to terms with the ground realities and is trying to restore the status quo ante in India's foreign policy making before the Prime Minister Dr.Manmohan Singh's visit to the US in July,2005, when the nuclear deal was signed. Since then, there have been major distortions in our foreign policy in favour of the US. Are we seeing the beginning of the end of at least some of these distortions? (24-4-08)

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. He is also associated with the Chennai Centre For China Studies. E-mail: )



(This may please be read in continuation of my earlier article of November 13,2007, titled "Iran to Fund Sri Lankan Arms Purchases" at )

President Mahmud Ahmadinejad of Iran is to visit Sri Lanka for two days from April 28,2008, in response to an invitation from President Mahinda Rajapaksa, who had visited Iran in November,2007. His engagements will include the inauguration of the construction of the Iranian-funded ( US $ 450 million) Uma Oya hydroelectricity project at Wellawaya in the Monaragala district. When completed, the project is expected to produce 100 megawatts of electricity. The visit is also expected to result in the finalisation of an agreement for Iranian financial and technical assistance for enabling the Sapugaskanda oil refinery to handle Iran’s light crude. This project is expected to result in a further Iranian investment of US $ one billion.

2. In this connection, quoting Sri Lankan media, the "Teheran Times" of April 20,2008, reported as follows: "Iran will increase its investment in the expansion project of an oil refinery in Sri Lanka up to US$ one billion, Petroleum and Petroleum Resources Development Minister A.H.M. Fowzie said. According to the IRNA office in Tokyo, Fowzie in an interview with Kyodo on Wednesday said: "Iran's President Mahmoud Ahmadinejad has allocated this amount which would cover 70 per cent of the required investment for the refinery's expansion, in the form of a 10 year loan, with a five year exemption period from payment of the loan's instalments." Fowzie added: "Iran had earlier too provided the oil we need free from interest for four months." According to the report, Iran is the largest provider of crude oil to Sri Lanka. According to the Kyodo report, Managing Director Ceylon Petroleum Corporation (CPC) Ashantha De Mel has said that the pilot study for increasing the production of Sri Lanka's only refinery from 50,000 to 100,000 barrels per day has been completed by Iranian oil engineers. De Mel added: "Iran would make the major part of the required investment for expansion of this oil refinery (70 per cent) and the CPC would cover the rest (30 per cent)." Fowzie said the project would yield noticeable benefits for its investors. He said: "From the economic point of view my affiliated ministry too is interested in making investments there." According to Kyodo, De Mel who visited Iran in early April 2008, expects the project's executive phase to begin within the next three to four months. Oil experts predict that Sri Lanka's oil refinery would increase its production after the Iranian oil engineers would end their work within the next two to three years."

3. Iran has also agreed to provide low-interest credit to Sri Lanka to enable it to purchase military equipment from Pakistan and China and to train a small group of Sri Lankan Army and intelligence officers in Iran. A team of about 10 officers has already proceeded to Iran for training after a clandestine visit to Sri Lanka by Brigadier Gen. Qassem Suleimani, the Director-General of Iran’s Quds Force, or the Jerusalem Brigade, which is, inter alia, responsible for covert actions against Israel and for liaison with friendly foreign intelligence agencies. He is expected to come again as a member of the entourage of the Iranian President for further discussions on intelligence co-operation between the two countries.

4.According to reliable sources, Israel is reported to have expressed to Colombo its concern over the developing relations between Sri Lanka and Iran and warned that this could come in the way of supply and sale of Israeli military equipment to Sri Lanka in future. It has been reported by these sources that Sri Lanka has already shared with the Iranian intelligence copies of the instructions, training and maintenance manuals of the Israeli equipment purchased by it in the past and allowed some officers of the Quds Force to inspect the Israeli equipment. (23-4-08)

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: )