When The Small Dragon Met The Big One

Part I

The meeting between Prime Minister Jigmi Y. Thinley of Bhutan and Premier Wen Jiabao of China on 21 June 2012, on the sidelines of the Rio+20 Summit in Brazil, sprung a surprise for most India-Bhutan-China watchers.  It stirred the calm waters of Bhutan-India relations.

With headlines like ‘China’s coziness with Bhutan rings security alarm for India’, the Indian media spread such panic that many Indians thought Bhutan was on the verge of severing its old ties with India for a new romance with China.  Security analysts and strategists reviewed the Chumbi Valley triangle, saying this was the first bold move by the Bhutanese government after the signing of the revised Indo-Bhutan Friendship Treaty in February 2007.

This write-up tries to analyze the meeting of the two dragons in a broader perspective of India-Bhutan-China relationship.

What did the two leaders discuss?

Bhutan shares about 470km of border with China in the north.  Therefore, the only reason Bhutan and China occasionally met in the past had been the border talks.  This was the first meeting between the heads of the two governments.

The most reliable sources, regarding what the two leaders discussed, are the websites of Ministry of Foreign Affairs (MoFA) of the People’s Republic of China and Bhutan’s Cabinet Secretariat.

The Chinese MoFA site states that Premier Wen Jiabao told Prime Minister Jigmi Y. Thinley that China was ready to forge formal diplomatic relations with Bhutan, complete border demarcation at an early date, and strengthen exchanges in various fields.

The site notes that PM Jigmi Y. Thinley said his meeting with Premier Wen carries “great historic significance, as it marks the first meeting between the heads of the two governments. (…) Bhutan firmly sticks to the one-China policy, and has strong desire to strengthen understanding of and friendship with China. Bhutan wishes to forge formal diplomatic ties with China as soon as possible, and is willing to settle border issues with China in a cooperative manner, enhance bilateral economic and trade cooperation….”

On the other hand, Bhutan’s Cabinet Secretariat website notes: “Prime Minister Lyonchhen Jigmi Y. Thinley met Chinese Premier Wen Jiabao in Rio De Janeiro today (June 21) on the sidelines of the Rio+20 Summit. (…) They discussed bilateral issues of mutual interest and multilateral cooperation, including Bhutan’s bid for a non-permanent seat on UN Security Council for the term 2013-2014, elections for which are to be held in fall this year.”

In the wake of the meeting, New Delhi is supposed to have called up Thimphu for details of the discussion. A Chinese delegation had also reportedly visited Bhutan before the Rio+20 Summit.

Reaction in India

Now read this dramatic introduction to an article by Indrani Bagchi, diplomatic editor of the Times of India: “India confronts a new strategic situation in its neighborhood, as its staunchest ally Bhutan prepares to establish full diplomatic ties with China. Until now, Bhutan had been the only South Asian country, where China did not have a presence. That is about to change.”

In plain language, the elephant was not terrifically happy about Prime Minister Jigmi Y. Thinley’s hobnobbing with Premier Wen Jiabao.  It augured new twists in India-Bhutan-China diplomacy.

While many Indian citizens thought the move was a snub from an “an Indian territory/protectorate country”, others blamed the naiveté on the part of the Indian foreign policymakers, who thought Bhutan would “remain strapped to India’s coattails forever”.  Some cautioned that the Rio meeting of Bhutan and China revealed the longstanding fissure in India’s South Asia policy.  Some believed there are “nuclear weapons and Agni missiles all over Bhutan, and China can do nothing to Bhutan”.

Most of these reactions came from people outside the corridor of powers, people from outside the South Block.  For them, it was an open interpretation – a change of policy on the part of Bhutan.

Reaction in Bhutan

Bhutan’s new dreams are based on the pervasive belief among its educated citizenry that the country has come of age and that, as an independent sovereign state, the country is ready for self-determination.  Further, the revised Indo-Bhutan Friendship Treaty opens up new possibilities for Bhutan.  The mood before the revision of the treaty was summed up as: “Bhutan is not only landlocked but, more importantly, it is India-locked.”  Therefore, the revised treaty was seen as a release from an iron clutch.  Suddenly, Bhutan need not seek India’s consensus to forge new diplomatic ties.

Article 2 of the 1949 treaty, in effect until February 2007, states: “The Government of India undertakes to exercise no interference in the internal administration of Bhutan. On its part, the Government of Bhutan agrees to be guided by the advice of the Government of India in regard to its external relations.”

In the February 2007 Treaty, Article 2 was revised as:  “In keeping with the abiding ties of close friendship and cooperation between Bhutan and India, the Government of the Kingdom of Bhutan and the Government of the Republic of India shall cooperate closely with each other on issues relating to their national interests. Neither Government shall allow the use of its territory for activities harmful to the national security and interest of the other.”

Within Bhutan, resentment had been building among the educated lot about Article 2 of the 1949 treaty, and the country’s economic vulnerabilities, given that India dictates everything about its gateways in the south, and up north, along its 470km or so border, is a cold wall of silence.  Thus, at least in the last 10 years or so, many Bhutanese had expressed the necessity for the country to open up to China.  An Indian citizen probably best sums up what Bhutanese are increasingly feeling: “Bhutan has long lived in India’s shadow, and you can’t blame them for stepping out and exploring other avenues of trade and political ties.”

Today, Bhutanese feel the country must diversify its engagements, while continuing to maintain its strong ties with India.  Many see economic opportunities, especially in terms of FDI inflows and infrastructure development.  Some even say that Bhutan, like many other developing countries in Asia and Africa, must also benefit from the rise of China.  Moreover, Bhutan’s new economic dreams have been made clearer with the establishment of its sovereign investment institution, Druk Holding & Investments, and the launching of its new and liberal FDI policy.

In fact, could Bhutan’s opening up to China be another of its just-in-time response to the developments already taking place up north?  The economic importance of the railroad – that China has long announced it is building – from Gyantse to Phari (in the sensitive Yadong county, where Chumbi valley is located) cannot be underestimated.  It may be noted that Phari was a traditional trading hub for Bhutan, and is about an eight-hour walk from the Bhutan-China border.

According to the Tourism Council of Bhutan records, Chinese citizens visiting Bhutan increased to 2,896 in 2011 from 25 in 2002.  Bhutan’s trade with China has also seen a steady increase.  According to Bhutan trade statistics, Bhutan’s import from China stood at Nu 611M in 2010.

However, longtime Bhutan watchers say the country must first settle its border disputes with China, and then think about exchanging diplomatic missions.

“Still, should Bhutan ‘trade’ (or be seen to trade) diplomatic recognition with China, as a perquisite or concurrent factor affecting the border settlement with that country?” asks Dr Brian Shaw, retired international relations professor at the University of Hong Kong, who has been keeping an eye on Bhutan since 1980. “Regardless, Bhutan’s ‘peaceful existence’ must consist in resolutely maintaining a strong sovereign state presence, not totally beholden to any neighbouring power.”

An Indo-China expert and international relations professor at Westminster University in England, Dr. Dibyesh Anand, told a local newspaper in 2010: “…As a matter of principle, Bhutan should work toward a full diplomatic relations with its northern neighbour. In an international scenario, where China is a major global power and the key player in Asia, it will be rather shortsighted for Bhutan not to consider this option earnestly. A formal full diplomatic relations will facilitate Bhutan in fixing the border with China….”

If some semblance of diplomatic exchange takes place between the two countries, Bhutan would then become the last South Asian country to open up to China.

Part II

Even as the new chapter of Bhutan-China relations was opened in Rio, theories on who took the lead for the meet and who is set to gain what abound. Does China want diplomatic relations with Bhutan as a ‘quid pro quo’ for border settlement? Does PM Jigmi Y. Thinley think China’s support would be crucial for Bhutan’s bid for the United Nations Security Council non-permanent seat? Or was the meeting spurred by India’s new shift in South Asia policy?

Was India behind the Rio move?

A few South Asia think tanks asked if the Rio meeting was Bhutan’s unilateral decision or one backed by India. One of India’s most respected newspapers the Hindu believed the initiative had New Delhi’s support, and that the move meant “a new approach to regional diplomacy”.

The Hindu quotes Chinese experts with Beijing-based think tanks like the China Institute of Contemporary International Relations (CICIR) and Chinese Academy of Social Sciences (CASS) saying the move would not have been possible without India’s backing.  “Without Indian permission, Bhutan would not take this step,” says Li Li, a South Asia scholar at CICIR, a state-run Beijing think-tank.

Experts like Li Li could be right if looked from the prism of recent positive developments between India and China. For example, as Bhutan was preparing for its first-ever democratic elections in January 2008, Prime Minister Manmohan Singh was in Beijing reaffirming President Hu Jintao and Premier Wen Jiabao about “a shared vision on the 21st Century”. And then in May 2010, former President Pratibha Patil visited China. In fact, it could be said that the last 10 years have been one of the best periods in the history of India-China relations. By the way, India also follows ‘one-China’ policy, favoring the People’s Republic of China over Taiwan.

Is this, therefore, the dawn of India’s new regional diplomacy? Is this the beginning of a new political discourse for Bhutan?

India’s Bhutan policy

In her essay ‘Political Economy of South Asia’, Edelgard Mahant, a Canadian academic who teaches political science in York University, describes Bhutan as India’s only ‘client state’ in South Asia.

For a long time India’s neighborhood policy hinged on political imperatives, chiefly based on its perceived threat of China. However, that changed with its economic liberalization and subsequent launch of ‘Look East Policy’ in 1992. Now, its South Asia policy hinges more on economic imperatives and cultural diplomacy, what is today known as ‘soft power’ approach.

Bhutan’s friendship with India, to be precise, started with the visit of Prime Minister Jawaharlal Nehru in 1958, and formal diplomatic ties were established in 1968. From then on, writes David M. Malone, a scholar-diplomat and Canada’s High Commissioner to India and non-resident ambassador to Bhutan and Nepal from 2006 to 2008, “…the essential bargain between India and Bhutan involved considerable Indian assistance in exchange for Bhutanese deference to India’s foreign policy and defence concerns, notable as related to China. (…) Indian troops remain stationed in strategic parts of northern Bhutan.”

Therefore, India’s policy on Bhutan is an uneven mix of old ‘reciprocity’ approach and the contemporary ‘soft power’ approach. The ‘reciprocity’ approach expects Bhutan to be sensitive to India’s security concerns even as it reaps huge benefits from its relation with India; the ‘soft power’ approach is seen in the establishment of Nehru-Wangchuck Cultural Center and the annual India-Bhutan literary festival called ‘Mountain Echoes’, among many others. And of course, one shouldn’t forget the substantial financial support to Bhutan’s five-year plans.

Indian presence in Bhutan is even more pervasive with construction workers, traders, teachers and hundreds of other occupational workers. Add to this its sprawling embassy (dubbed the ‘India House Estate’) in Thimphu, a consulate in Phuentsholing and several Dantak and IMTRAT premises across the country.

On its part, the Bhutanese government has made it clear that its relation with India is integral to its national interest. Therefore, the local media tries its best not to hurt the Indian sentiments. News on Indo-Bhutan relations is handled sensitively, and India and its policies are not questioned or criticized publicly. Only on online forums will one see some criticisms of India.

Time for a new South Asia policy?

Many Indian foreign policy analysts have pointed out that India has failed to lead South Asia. It has also fiercely resisted China’s membership to South Asian Association for Regional Cooperation (SAARC), although the country has been granted the observer status. The request for China’s observer status was made by Pakistan, following which New Delhi invited U.S. to participate as an observer.

In his book Does The Elephant Dance?: Contemporary Indian Foreign Policy, David M. Malone notes that “the challenge for Indian diplomacy lies in convincing its neighbors that India is an opportunity, not a threat. (…) But has India done enough to make this option attractive? Judging from (….) its lackluster leadership of SAARC, the answer would have to be not yet.”

Reviewing Malone’s book, the Economist writes: “India’s biggest weakness…is in its own region. (…) As the local hegemon it should be doing much more to foster economic ties and stability all over its back yard. Instead relations with all its neighbours, with the exception of a couple of minnows like Bhutan and the Maldives, are mostly sour….”

With its often-dismissive attitude towards its smaller neighbors, anti-India sentiments have never been clearer in the region. David M. Malone recalls his conversation with one senior member of India’s security and foreign policy establishment who tells him that India’s neighbors are mere “thugs and crooks”.

In his recent opinion piece, the diplomat-politician, Shashi Tharoor, says New Delhi can no longer turn a deaf ear to the claims that India’s relations with its neighbors have been ill managed. Using two negatives, Tharoor writes: “The charge that relations with most of them have been generally unsatisfactory is not untrue.”

Many South Asia analysts have called on India for renewed engagement with its neighbors. They say India’s prioritization of relations with the United States and other global powers has led to increasingly conspicuous fissures in its relations with the South Asian neighbors.

Look East Policy vs. String-of-Pearls Strategy 

India looks at South Asia as its sphere of influence, while China more or less sees Southeast Asia as its sphere of influence. However, both have tried to test the uncharted waters and spread their sphere of influence further. Therefore, by the time the rising China spread its feelers to South Asia, mostly through economic investments and infrastructure development, India had already launched its ‘Look East Policy’.

What would eventually result from China’s forays into South Asia is what the classified Booz-Allen report revealed in 2005 as China’s so-called “string-of-pearls” or “encirclement” strategy. Today, the “string-of-pearls” strategy is generally understood as China’s attempt to establish naval bases and intelligence stations throughout littoral South Asia thereby encircling the subcontinent. For example, Chinese state-owned corporations have financed commercial ports in Pakistan (Gwadar), Sri Lanka (Hambantota and Colombo), Bangladesh (Chittagong) and Burma (Sittwe and Kyaukpyu).

As a result, India has pursued its ‘Look East Policy’ with new energy and vigor. China recently appeared provoked as the military dimension of the ‘Look East Policy’ became more pronounced with India seeking closer military ties with Vietnam and Japan. China, however, at least publicly, continues to maintain a rather dismissive air towards the ‘Look East Policy’ and the Chinese media have labeled the ‘Policy’ a failure. However, the Chinese government understands that the ‘Look East Policy’ has both economic and military dimensions, and that one of its primary objectives is to secure India’s position in South Asia.

More recently, Prime Minister Manmohan Singh has asserted that “India’s Look East Policy is not merely an external economic policy, it is also a strategic shift in India’s vision of the world and India’s place in the evolving global economy. Most of all it is about reaching out to our civilizational neighbors in South East Asia and East Asia.”

However, some have argued that China’s foray into South Asia will ultimately force India to seek new avenues of cooperation with its neighbors and redefine its relations with each of these countries on a more equal term.

The Sino-Indian relationship, what analysts have called the “contest of the 21st century”, will continue to rock on a fragile cradle as one seeks to counter or balance the other’s growing geo-economic and geopolitical influence in the region.

Last word

As a rookie reporter with Kuensel, I remember attending an official dinner hosted on behalf of the visiting Chinese delegation by a foreign ministry director. “You must come to China,” they told me over the dinner, nodding their heads and grinning. “Sure,” I said. “I would love to see the Great Wall.” They grinned more. And then, one of them asked the question the foreign ministry official was probably dreading all evening long: “Why is your government reluctant to establish formal diplomatic ties with the Chinese government?” The director played with his spoon and fork, thought for a while, and said with a beaming smile: “We are already good neighbors even without formal diplomatic ties.” The Chinese officials looked at him and nodded their heads in earnest. Only that this time they had no grins on their stone-like faces.

Note:

This write-up appeared in the Kuensel edition of 28 and 30 July 2012. See links: www.kuenselonline.com/2011/?p=34432 and www.kuenselonline.com/2011/?p=34514