Foreign Policy In Focus

(Pictured: AQ Khan, the founder of Pakistan's nuclear weapons program.)

"Washington — New American intelligence assessments have concluded that Pakistan has steadily expanded its nuclear arsenal since President Obama came to office . . . for the Obama administration the assessment poses a direct challenge to a central element of the President’s national security strategy, the reduction of nuclear stockpiles around the world."
— New York Times

The above words, written this past February, were followed by a Times editorial, titled “Pakistan’s Nuclear Folly,” decrying that “the weapons buildup has gotten too little attention,” and calling on Washington to “look for points of leverage” to stop it.

Well, the administration and the Times may be unhappy about Pakistan’s nuclear buildup, but it certainly should not have come as a surprise, nor is there much of a secret to the “points of leverage” that would almost certainly put a stopper on it: scupper the so-called 1-2-3 Agreement between the U.S. and India.

Back in 2003, Douglas Feith, then Under Secretary of Defense for Policy in the Bush Administration, pulled together a meeting of the U.S.-India Defense Policy Group to map out a blueprint for pulling New Delhi into an alliance against China. The code word used during the discussions was “stability,” but as P.R. Chari of the Institute for Peace and Conflict Studies noted, “What they really mean is how to deal with China.”

The Bush administration changed the Clinton Administration’s designation of China as a “strategic partner” to “strategic competitor,” and in its U.S.-China Security Review concluded that Beijing is “in direct competition with us for influence in Asia and beyond” and that in “the worst case this could lead to war.” Another Pentagon document revealed by Jane’s Foreign Report argued that both India and the U.S. were threatened by China, and that “India should emerge as a vital component of US strategy.”

One of the obstacles to that alliance was the Nuclear Non-Proliferation Treaty (NPT), which blocks any country that is not a signer from buying nuclear fuel on the world market. Since neither India nor Pakistan has signed the Treaty, they can’t buy fuel from the 45-member Nuclear Suppliers Group. That has been particularly hard on India because it has few native uranium sources and has to split those between nuclear energy and nuclear weapons. The ban, however, is central to the NPT, and one of the few checks on nuclear proliferation.

But the Bush administration proposed bypassing the NPT with the so-called 1-2-3 Agreement that permitted India to purchase nuclear materials even though New Delhi refused to sign the Treaty. India would agree to use the nuclear fuel only in its civilian plants and open those plants for inspection by the International Atomic Energy Agency (IAEA). But the Agreement also allowed India to divert its own domestic supplies to its weapons program, and those plants would remain off the inspection grid. In short, India would no longer have to choose between nuclear power and nuclear weapons: it could have both.

In July 2008, Pakistan’s then Foreign Minister Khurshid Kusuri predicted that if the 1-2-3 Agreement went through, “The whole Nuclear Non-Proliferation Treaty will unravel,” and, in a letter to the IAEA, Pakistan warned that the pact “threatens to increase the chances of a nuclear arms race in the subcontinent.”

However, neither the Bush administration nor the Obama administration paid any attention to Pakistan’s complaints. The results were predictable. Pakistan ramped up its nuclear weapons program and may soon pass Britain as the fifth largest nuclear weapons nation in the world.

It also dug in its heels at the 65-nation 2011 Conference on Disarmament in Geneva and blocked a proposal to halt the production of nuclear weapons-making material. The 1-2-3 Agreement and the push to bring India into the Nuclear Suppliers group, warned Ambassador Zamir Akram, were “undermining the validity and sanctity of the international non-proliferation regime” and would “further destabilize security in South Asia.” The Fissile Material Cut-Off Treaty (FMCT) is a priority for the Obama administration.

Islamabad is not alone in its criticism of the 1-2-3 Agreement or the FMCT. A number of nations are challenging NPT signers, including the U.S., China, Russia, Britain and France, to fulfill Article VI of the NPT that requires the elimination of nuclear weapons. While the U.S. and Russia have reduced their arsenals, both still have thousands of weapons, and the Americans are in the process of modernizing their current warheads.

Pakistan is a far smaller country than India, and would likely face defeat in a conventional conflict. It has already lost three wars to India. Its ace in the hole is nuclear weapons, and some Pakistanis have a distressingly casual view of nuclear war. “You can die crossing the street, or you could die in a nuclear war,” remarked former Pakistan army chief Gen. Mirza Aslem Beg. A BBC poll found that the Pakistani public has an “abysmally low” understanding of the threat.

Many Indians are not much better. Former Indian Defense Minister Georges Fernandes commented that “India can survive a nuclear attack, but Pakistan cannot.” And that same BBC poll found that for most Indians “the terror of a nuclear conflict is hard to imagine.”

Both countries have recently rolled out cruise missiles that are capable of carrying nuclear warheads. The Pakistani Hatf-7, or “Babur,” has a range of almost 500 miles and a speed of 550 miles per hour. It appears to have been copied from the U.S. BGM-109 “Tomahawk,” several of which crashed in Pakistan during 1998 air strikes against Afghanistan. The Indian PJ-10 BrahMos cruise has a shorter range—180 miles—but a top speed of 2,100 mph. India and Pakistan also have ballistic missiles capable of striking major cities in both countries. 

In its editorial declaiming Pakistan as guilty of “nuclear folly,” the Times pointed out that “Pakistan cannot feed its people [or] educate its children.” Neither can India. As a 2010 United Nations Development Program report discovered, as bad as things are in Pakistan, life expectancy is lower in India, and the gap between rich and poor is greater. In fact, neither country can afford large militaries—Pakistan spends 35 percent of its budget on arms, and India is in the middle of a $40 billion military spending spree—and a nuclear war would not only destroy both countries, but also profoundly affect the entire globe.

Nuclear weapons are always folly, but what is sauce for the goose is sauce for the gander. The U.S. currently spends in excess of $1 trillion a year on all defense and security related items, while our education system is starving, our infrastructure is collapsing, and hunger and illiteracy are spreading. If the Times wants to ratchet down tensions in South Asia, let it call for dumping the 1-2-3 Agreement and beginning the process called for in Article VI of the Nuclear Non-Proliferation Treaty: “Each of the Parties to the Treaty undertakes to pursue negotiations in good faith on effective measure relating to the cessation of the nuclear arms race at an early date and to nuclear disarmament, and on a Treaty of general and complete disarmament under strict and effective international control.”

More of Conn Hallinan's work can be found at Dispatches From the Edge.

"'People are struck by the magnitude of the scandal,' said political analyst Praful Bidwai. 'This is pretty outrageous.'"

. . . writes Jason Overdorf at Global Post about the corruption cases that have been rocking India. Wikipedia explains that what's known as the 2G spectrum "involved officials in the government of India illegally undercharging mobile telephony companies for frequency allocation licenses, which they would use to create 2G [second generation] subscriptions for cell phones. The shortfall between the money collected and the money which the law mandated to be collected is 1,76,379 crore rupees or USD 39 billion."

Meanwhile, writes Overdorf, "Every day, new revelations hit the headlines from leaked transcripts of tapped telephone conversations between an influential lobbyist and top politicians, billionaire tycoons and (formerly) respected journalists." While Prime Minister Manmohan Singh isn't implicated, "the opposition Bharatiya Janata Party [the right-wing, vehemently Hindu BJP -- RW] . . . said he was asleep at the switch." However Singh's National Congress party retaliated via its "general secretary, Digvijay Singh, in the role of hatchet man as he defended the 40-year-old prime minister-in-waiting, Rahul Gandhi."

Embracing Rahul's trepidations about "Hindu terror" — WikiLeaks' diplomatic cables revealed that Rahul told the U.S. ambassador that he feared Hindu terrorist groups more than Islamic ones — the general secretary attacked the BJP's Hindu nationalist parent, the Rashtriya Swayamsevak Sangh (RSS). And by amplifying Rahul's rhetoric — [Digvijay Singh] apparently sought to shift the focus from corruption to communalism, the word India uses to discuss its religious divides.

"The RSS in the garb of its nationalist ideology is targeting Muslims the same way Nazis targeted Jews in the 1930s," Digvijay told plenary attendees. 

Meanwhile, will the 2G spectrum scam bring down the Manmohan Singh administration? Overdorf again:

. . . in scam central, questions remain whether corruption allegations alone — or even a smoking gun — is enough to engineer a change in government. One need look no further than the last election results to see that Indians — who by and large believe that all their politicians are equally corrupt — suffer from scam fatigue.

We can commiserate. Americans too have an almost endless capacity to overlook corruption.

(Pictured: Kashmir in simpler times.)

We're honored to have Michael Busch dissecting the latest WikiLeaks document dump for Focal Points. This is the twenty-third in the series.

As the balance of world power shifts east, and the battle for regional supremacy begins to take shape between India and China, New Delhi has positioned itself against the Eastphalian realpolitik of Beijing by promoting its commitment to liberal values as the world’s largest democracy.

But as a new cable released by WikiLeaks demonstrates, its liberal bona fides aren’t quite as impeccable as India may wish the world to believe. As an embassy dispatch dating from April 2005 makes clear, the International Committee of the Red Cross (ICRC) concluded that the Indian government condoned torture in its efforts to gain control of Kashmir.

According to ICRC officials briefing American diplomats, the organization had

made 177 visits to detention centers in J&K [Jammu and Kashmir] and elsewhere (primarily the Northeast) between 2002-2004, meeting with 1491 detainees, 1296 of which were private interviews. XXXXXXXXXXXX considered this group a representative sample of detainees in Kashmir, but stressed that they had not been allowed access to all detainees. In 852 cases, detainees reported what ICRC refers to as "IT" (ill-treatment): 171 persons were beaten, the remaining 681 subjected to one or more of six forms of torture: electricity (498 cases), suspension from ceiling (381), "roller" (a round metal object put on the thighs of sitting person, which prison personnel then sit on, crushing muscles -- 294); stretching (legs split 180 degrees -- 181), water (various forms -- 234), or sexual (302). Numbers add up to more than 681, as many detainees were subjected to more than one form of IT. ICRC stressed that all the branches of the security forces used these forms of IT and torture. 

Strangely, New Delhi did not respond to the allegations with denials of wrongdoing, but argued that this dismal state of affairs amounted to progress. The unidentified source told embassy staff that government representatives answered the charges by noting

that the human rights situation in Kashmir is "much better than it was in the 1990s," a view he also agreed with. Security forces no longer roused entire villages in the middle of the night and detained inhabitants indiscriminately, as they had as recently as the late 1990s. There is "more openness from medical doctors and the police," who have conceded that 95 percent of the information on particular cases is accurate. Ten years ago, there were some 300 detention centers; now there are "a lot fewer," he stated.

Whether this particular rubric for measuring human rights progress in India should be accepted or not, the cable notes that persistent problems remain. Among other things,

There is a regular and widespread use of IT and torture by the security forces during interrogation; -- This always takes place in the presence of officers; -- ICRC has raised these issues with the GOI for more than 10 years; -- Because practice continues, ICRC is forced to conclude that GOI condones torture; -- Dialogue on prison conditions is OK, dialogue on treatment of detainees is not; -- Security forces were rougher on detainees in the past; -- Detainees were rarely militants (they are routinely killed), but persons connected to or believed to have information about the insurgency; -- ICRC has never obtained access to the "Cargo Building," the most notorious detention center in Srinagar; and -- Current practices continue because "security forces need promotions," while for militants, "the insurgency has become a business."

At the same time, the cable reports that New Delhi had made important advancements in cleaning up their spotty record on torture in recent years. In particular, the ICRC had

conducted more than 300 sessions with SF on IHL in Kashmir and elsewhere, which have touched an estimated 20,000 junior grade officers in one way or another. Discussions are underway for further sessions with officers at the headquarters of the Southern Command in Pune (Maharashtra) and Northern Command in Udhampur (J&K).

And perhaps more importantly, the issue of military discipline had taken center stage in the minds of senior policy makers, prompting the convening of at least one conference on the subject

following reports that Defense Minister Mukherjee was disturbed by continued reports of human rights violations by the security forces. Addressing the conference, Mukherkee observed that "we must realize that while dealing with insurgents, we are operating within our own territory and allegations of human rights violations will not only sully the image of the army, but also reduce our effectiveness in tackling militancy." As part of his "velvet glove, iron fist" approach, Singh has repeatedly stipulated that his officers should use "minimum force" and avoid "collateral damage" in their units in order to reverse declining standards in discipline.

Nevertheless, as another cable demonstrates two years later, the torture issue continued to surface as a key roadblock to closer, more effective bilateral relations between Washington and New Delhi. Lamenting the various issues hampering US-Indian cooperation and coordination on issues of counter-terrorism, the dispatch focuses on

India's lack of capacity to manage these issues bureaucratically...[The country’s] police and security forces are overworked and hampered by bad police practices, including the wide-spread use of torture in interrogations, rampant corruption, poor training, and a general inability to conduct solid forensic investigations. India's most elite security forces also regularly cut corners to avoid working through India's lagging justice system, which has approximately 13 judges per million people. Thus Indian police officials often do not respond to our requests for information about attacks or our offers of support because they are covering up poor practices, rather than rejecting our help outright. 

These cables appear at an inconvenient moment for the Indian government, which this week dispatched a high-profile group to Kashmir on the final leg of its fact-finding mission designed to help resolve the decades-old conflict in the region. While the latest WikiLeaks revelations will likely have no effect on the group’s ten-day trip to Kashmir, they certainly will complicate New Delhi’s hopes at being seen as a positive force for peace in the region. More so if even its strongest backer, the United States, is perceived to be uncomfortable with India’s approach to handling “terrorist” sympathizers.  

Just as a new round of existential self-flagellation seemed primed to capture the time and attention of the foreign aid Twitterverse, news broke that reoriented the discussion from retrospective hand-wringing to forward looking action. Margaret Wente's weekend essay—"Is Humanitarian Aid Bad for Africa?”—provoked a flurry of debate (though none of it so far as I could tell took issue with the Palin-esque categorization of "Africa"as a homogenous giganta-country) and attracted the attention of aid luminaries Dambisa Moyo and William Easterly.  Then everything changed.

On Tuesday, the Bill and Melinda Gates Foundation announced a major strategic sea-change in its approach to combating poverty around the world. Melinda Gates, speaking at a media roundtable event in Seattle, made known her foundation's commitment to

spend $500 million over the next five years to spur savings among the world's poorest workers who live on less than $2 a day. As part of the pledge…Gates announced $40 million in new grants to six recipients that will start or expand savings programs, test new approaches such as mobile banking and research how such programs improve the lives of the poor.

The move marks an important move away from support for microcredit ventures.  The Puget Sound Business Journal inquired whether

microlenders—which have an established network of locations to serve borrowers, unlike microsavings institutions—would play an important role in the foundation's new strategy. The answer is no.

And good thing, too! The New York Times reports that microcredit is in huge trouble in the very place where it has been hailed the greatest success: India. The Times notes also that:

The crisis has been building for weeks, but has now reached a critical stage. Indian banks, which put up about 80 percent of the money that the companies lent to poor consumers, are increasingly worried that after surviving the global financial crisis mostly unscathed, they could now face serious losses. Indian banks have about $4 billion tied up in the industry, banking officials say.

Why the sudden problems? The roots may be found in some of the early criticisms of leveled against the microfinance industry. Chief among them, skeptics of microlending argue that the exorbitant interest rates that often attend loans reduce the practice to little more than formalized loan sharking. As the Times itself reported this past spring,

the phenomenon has grown so popular that some of its biggest proponents are now wringing their hands over the direction it has taken. Drawn by the prospect of hefty profits from even the smallest of loans, a raft of banks and financial institutions now dominate the field, with some charging interest rates of 100 percent or more.

The phenomenon is especially acute in countries like India, Mexico, and Nigeria, where the demand for small-market loans has completely outstripped local supply, opening the door for institutions to begin charging usurious interest rates to vulnerable borrowers. 

In the case of India, officials

fear that microfinance could become India's version of the United States' subprime mortgage debacle, in which the seemingly noble idea of extending home ownership to low-income households threatened to collapse the global banking system because of a reckless, grow-at-any-cost strategy.

Responding to public anger over abuses in the microcredit industry — and growing reports of suicides among people unable to pay mounting debts — legislators in the state of Andhra Pradesh last month passed a stringent new law restricting how the companies can lend and collect money.

Even as the new legislation was being passed, local leaders urged people to renege on their loans, and repayments on nearly $2 billion in loans in the state have virtually ceased. Lenders say that less than 10 percent of borrowers have made payments in the past couple of weeks.

The lion's share of public resentment surrounding microcredit institutions in India seems directed at the country's largest provider of microloans to the poor, SKS Microfinance. The firm recently took its venture public, with its CEO Vikram Akula personally pocketing a crisp $13 million from the sale of his shares.

For his part, Akula defended his group, pinning blame on "rogue"actors who undermined the integrity of the microcredit structure though "errant practices." The Wall Street Journal notes that

Mr. Akula said SKS's lending rates had dropped consistently, to 24 percent, from 31 percent as the lender was able to take advantage of economies of scale. Within that, the company's cost of funds was 9 percent and the cost of delivering a loan was 9 percent, he said. In addition, there was a 3 percent corporate tax, and another 1.5 percent was set aside for loan-loss provisions. "From a microfinance perspective, we have some of the lowest cost structures in the world,"he said.

This may be, but Alula's suggested remedy for the crisis—"enlightened regulation"by the Indian state—would do nothing for micro borrowers such as K. Shivamma, a 38-year-old farmer profiled by the Times, who

took her first loan hoping to reverse several years of crop failure brought on by drought.  "When you take the loan they say, 'Don't worry, it is easy to pay back,' "Ms. Shivamma said. The man from Share, the company that made her first loan, did not ask about her income, Ms. Shivamma said. She soon ran into trouble paying back the $400 loan, and took out another loan, and then another. Now she owes nearly $2,000 and has no idea how she will repay it. The television, the mobile phone and the two buffaloes she bought with one loan were sold long ago. "I know it is a vicious circle," she said. "But there is no choice but to go on.”

All of which seems to suggest that the microcredit crisis threatening the Indian economy offers initial support to William Easterly's quick takeaway from Wente's article, namely that "the viable arguments are that (1) aid's record is sufficiently disappointing that it is unlikely to ever be the main driver of successful development, [and] (2) if aid were more accountable it would do less ill and more good."But if the fears of some observers are realized in this particular case, "more good"will be completely off the table moving forward, and "ill"a mild understatement of the consequences.      

Michael Busch, a Foreign Policy In Focus contributor, teaches international relations at the City College of New York and serves as research associate at the Ralph Bunche Institute for International Studies. He is currently working on a doctorate in political science at the Graduate Center, City University of New York.

"As the United States and China become great power rivals, the direction in which India tilts could determine the course of geopolitics in Eurasia in the 21st century," writes renowned journalist Robert Kaplan in a paper titled South Asia's Geography of Conflict. It was commissioned by the Center for a New American Security, for which he serves as a senior fellow. CNAS, of course, is known for its advocacy of COIN, the "counterinsurgency" or ostensible nation-building strategy followed by the United States in Afghanistan. Kaplan continues.

But even as the Indian political class understands at a very intimate level America's own historical and geo­graphical situation, the American political class has no such understanding of India's.

Kaplan then details how critical geography has been in determining the course of history for India, as well as Pakistan and Afghanistan. As a result . . .

Only in the Western view is Afghanistan part of Central Asia; to Indians it is very much part of the subcontinent. Afghanistan's geography makes it central not only as a principal invasion route into India for terror­ists in our day as for armies in days past, but also as a strategically vital rear base for . . .

. . . Pakistan, which . . .

. . . from the historical perspective of India . . . constitutes much more than a nuclear-armed adversary, a state sponsor of terrorism and a large, conventional army breathing down its neck on the border. [In fact, its location makes it] the very geographical and national embodiment of all the Muslim invasions that have swept down into India throughout its history.

Worse, according to Kaplan . . .

. . . an Afghanistan that falls under Taliban sway. . . . would be, in effect, a greater Pakistan, giving Pakistan's Inter-Services Intelligence Directorate (ISI) the ability to create a clandestine empire composed of the likes of Jallaluddin Haqqani, Gulbuddin Hekmatyar and Lashkar-e-Taiba. . . .

The quickest way to undermine U.S.-India relations is for the United States to withdraw precipitously from Afghanistan. [It] would sig­nal to Indian policy elites that the United States is surely a declining power on which they cannot depend. Detente with China might then seem to be in India's interest. . . . Put simply, if the United States deserts Afghanistan, it deserts India.

Kaplan's use of the word "deserts" may confirm your worst suspicions about this "ex-travel writer who has been transformed into a geo-political thinker and amateur imperialist," as respected libertarian commentator Leon Hadar once called him. After all, in 2006 Kaplan wrote, "I was once a supporter of the invasion to overthrow Saddam Hussein. . . . I cannot disavow my earlier support, because it was also based on firsthand experiences in Iraq. To know a totalitarian regime abstractly is different from knowing it intimately." If he can't be blamed for seeking to bring down Saddam, he and others like him can be for their failure to understand that, to the Bush administration, that was just a pretext to assert its wider Middle-East agenda.

The reader, then, can't be faulted for his or her concern that, for his part, Kaplan is using the geography and history of the Asian subcontinent as a justification for the United States to remain in Afghanistan. In fact, though, he doesn't argue for a particular course of action. Instead, he writes:

I do not suggest that we should commit so much money and national treasure to Afghanistan merely for the sake of impressing India. But I am suggesting that the deleterious effect on U.S.-India bilateral relations of giving up on Afghanistan should be part of our national debate on the war effort there, for at the moment it is not.

One would like to think that a solution exists which doesn't require the presence of our military in Afghanistan. Ideally, too, it would include discontinuing, rather than compounding, U.S. triangulation (or a zero-sum game -- take your pick of clichés) with India and China.