The Israel UAE Accord

 

The geopolitical world is in a turmoil in the middle of the pandemic that has entered its eighth month and has left humanity on earth clueless about any solution to end it. Its raining events, leaving analysts with a backlog of work. The crisis in Syria and the US Iran row are still a work in progress. To those add the events in the South China Sea, then the Chinese transgression of the Indian border. Potentially these events can spark hostilities among the various players involved.  However the accord between the Arabs and Israel can be said to be a positive development in the complex politics of the Middle East. Never the most stable of regions, the Middle East sometimes has bordered on being a tinder box. Notwithstanding the opposition of Iran and Turkey the accord could turn out to be a harbinger of peace.

This accord was many years in the making. As early as 2010 the UAE decided to align itself with the policies of the US in the gulf, though this also meant throwing the Palestinians under the bus. In 2010 Israeli Mossad agents killed a Palestinian leader in Abu  Dhabi. The agents were not pursued by UAE. After the oil prices fell as a result of reduction in US off take from the gulf region in 2014-15, the rulers of the oil-rich countries realized that the days of subsidizing their economies with petro-dollars was over. After the Arab spring movement the writing was on the wall for family ruled Sheikhdoms. Rulers in Egypt, Libya and Syria succumbed to this revolution.

The prominent ruling families in the gulf region realized that in the future, with oil no more a bargaining commodity, other resources would be a key for economic development which will guarantee political stability. Iran and Turkey were destabilizing the elements which needed to be countered. Iran being Shia is opposed to Saudi Arabia and the UAE which are Sunni. Turkey under Erdogan has made no secret of its ambition of establishing a Caliphate to dominate the Arabs harking back to the Ottoman Empire.  

Surprisingly, in this situation, Israel suddenly becomes a stabilizing factor. Israel can help the Arabs (south of the strait of Hormuz) in their endeavor to develop rapidly. The UAE and Saudi Arabia have always coordinated their policies. In 2019 Saudi Arabia gave over-flight permission to international airlines (incidentally, Air India was the first) for their flights to Israel. That was an indicator that a thaw was imminent in the Arab Israeli relations.

The countries opposed to the treaty are not unanimous in their stand. Like Iran and Turkey Pakistan did not reject the treaty outright as it finds itself in a quandary. It regards Israel as its traditional enemy, not just on religious grounds but also because of Israeli occupation of Palestine. But the deal is brokered by the US which Pakistan cannot afford to antagonize. Also, Saudi Arabia is the largest donor to the cash strapped Pakistani economy. This makes its position unenviable. The accord will see Israel stop making any additional claims on Gaza and the west bank in return for full recognition by the UAE. Pakistan could latch on to this if it decides on normalizing its relations with Israel.  Iran and Turkey are the only important countries in the region which could potentially cause trouble. But how far would they go to disrupt this historic treaty is a matter of conjecture. The other interested party, China, has not opened its cards as yet. Its response will depend on how this accord affects its trade deal with Iran and the CPEC project in Pakistan.  

This accord will be quickly scaled up and deepened as there are a multitude of areas which both the signatories can collaborate on. Other countries in the region will jump on this bandwagon as the economic implications are realized. Exchange of visits by the leaders are already being planned and opening of missions will follow.

There is a Sunni Shia taint to this accord which is unmistakable. Looking at the political fissures, the OIC’s future looks bleak too. Israelis settled on the west bank are not happy at this decision of their government. Also, Israel may object to sale of high tech weapons by the US to the UAE.  All these factors cast some doubts on the success of the accord.  Be that as it may, there is no denying that middle east politics is on an important cusp of change.

The Lancet Report

The world population survey published by the Lancet journal recently has revealed some interesting data. The study was undertaken by the Lancet journal involving lot of experts in various fields. Lancet is respected the world over for its competence and unbiased reporting.

Some of the interesting data that immediately comes to attention is that India’s population will peak by the year 2048 to 1.6 billion and will decline to about 1.09 billion by the year 2100. Even with this decline in total population, India will be the world’s most populous country.  China would have declined from 1.4b in 2017 to about 0.72 billion in 2100. The below table will give the reader an idea of the interesting and unexpected trends in world population growth.  The study covers 195 countries and the data highlighted here is limited by the scope of this article.

Population dynamics up to 2100 

2107	Country	2100
1.3 b	India	1.09 b
1.4 b	China	732 m
157 m	Bangladesh	87 m
206 m	Nigeria	791 m

We can see in the above table that Nigeria will overtake China by 2100. Bangladesh which today is considered overpopulated and backward will decline population wise and stabilize at a much lower level. At that level, experts say, Bangladesh could become the next Singapore. Even before this study came out, it was known that India’s population growth rate was declining. So at some point of time logic would dictate that its overall population would start reducing. The Lancet study puts this trend into perspective and quantifies it to the extent that it can be taken as a guideline for national planning.

What does this study mean for India? That is something our planners have to take into consideration for the future. In 2017 India was the 7^th economy globally in GDP terms. The country will be 3^rd highest in 2100. The Total Fertility Rate of 2.1 in 2019 will decline to 1.29 in 2100. The working age population in India will fall from 762 m in 2017 to 578 m in 2100. With this figure India will have the largest working age population in the world in 2100.

If India’s population is going to peak by 2048, then the demographic dividend has a run of about 28 years only. In this time frame the overall economic reforms have to take a hold. Economic planners have to hit the ground running as there are not even three full decades for the benefits to accrue. India’s economic reforms have been an on and off affair as successive governments backtracked on the reforms and introduced populist schemes which drained public resources.  If this survey is to be taken as a guideline, the government has to align the policies with the given time frame.

Educating the people, imparting the right skills, developing urban infrastructure will have to be undertaken on a war footing. Investing in human capital will be of utmost importance.  Urban infrastructure will entail transportation network, healthcare, sanitation and other facilities. This development will be necessary as there will be mass migrations as new jobs become available at industrial centers. The development will feed on itself with the result that national income will increase exponentially if the dividend is reaped successfully. The New Education Policy (NEP) which was revealed a few days ago, could not have come at a better time. The GST system, the Bankruptcy Code Bill too were steps in the right direction. But new labour laws have to be introduced and privatization of the public sector has to be fast tracked. Thus, a lot needs to be done yet.

Time is of utmost importance. 28 years is not a long time in the life of a nation and plans will have to be expedited on a war footing. India cannot afford to miss this bus as it could then be staring at a demographic disaster.  

The Pendulum is Swinging

It has been more than four months since the start of the corona pandemic and there are no signs that it will go away any time soon. The world economy is expected to shrink 3% – 4% percent by next year.  Loss of production and massive supply chain disruptions have become the norm. This crisis is unprecedented. To top it all, the horizon for economic recovery cannot be seen as yet. The WHO has said the pandemic will continue for the rest of this year and may get worse within that time. But the corona crisis however bad it may seem to be at the outset, comes with a silver lining.

Experts say that once the pandemic so much as shows signs of receding even partially, the global economy is going to pick up steam. The next boom in business is going to be unprecedented.   It is now obvious that business norms will have to change which will entail use of new technology. The way we live, work and play will change fundamentally. The new norms will be business as usual. The pandemic may have accelerated the pace of human evolution.

With China taking an aggressive and dictatorial stance, the nations in the immediate strategic area around her are feeling the heat. Also other countries further afield like the US, UK and those of the European Union are apprehensive as well. India has already borne the brunt of unprovoked Chinese aggression. It has retaliated on the trade frontier by banning some popular Chinese smartphone applications from its market citing data security concerns.

In the last three decades or so, China had developed itself into an export driven economy and become an important part of the global supply chains. That may now change. The world is becoming wary of the way China does business. Amid this situation the Iran - China deal which is now in the offing will turn out to be a big disruptor in the region with global implications. It directly challenges US dominance in the gulf region post the World War II. Two distinct camps now seem to be emerging and a cold war may start all over again. China still can wield a lot of influence on middle income countries, in Africa, South America and the Indo Pacific.  India too seems to be getting its act together with regional connectivity. Projects in Maldives, Bangladesh and Bhutan are being executed speedily and nearing completion.    

Post pandemic, global supply chains could shift away from China because of its handling of the pandemic, aggressive behavior in its neighbourhood and because of what it is doing in Hong Kong and Xinjiang. How exactly this will play out cannot be predicted today, but there are enough indicators that it will not be business as usual with China. Countries like India, Vietnam and others will vie for economic opportunities as they become available. China’s decline will be their gain. The geopolitical implications will be profound and will be felt in all corners of the world.

After the US, the UK has banned Huawei from its 5G rollout. Apart from American pressure on the UK, there are genuine concerns about how Chinese companies handle data. Chinese scientists and students are also facing the heat in US. Two geostrategic focal points are emerging. One in South Pacific and the other in the gulf region. Whatever happens at these points will have consequences elsewhere. 

A subtle but significant shift in how the world views China is that in its public addresses the US has distanced China from the CCP and President Xi Jinping is now being addressed as the Chairman of the CCP. Another indication of this changing view is that Russia has put off the sale of the S-400 missile defence system citing Chinese theft of technology. China also claimed the Russian city of Vladivostok as its own. As a consequence, India has asked Russia to play a more active role in the East and South China Seas.   

The last time a big upheaval of this scale took place, it was due to World War II. This time too, a global catastrophe (read pandemic) threatens to do the same. The situation is going to be fluid for some time to come and political commentators and economists are going to be hard pressed to make any predictions. One thing has become very clear. The geo-economic pendulum may be swinging to a different position in the near future.

Continued... Page Three

 

 The topics continued...

 

Tittle Page...

The ClimateEmergency Report -  a wakeup call – Part II 

The ClimateEmergency Report - a wakeup call – Part I

Human Progress – Real Progress?

Indian Economy –No Passing the Buck

Kashmir Article 370– A Paradigm Shift 

Maharashtra Floods – The Small and Big of it

Chandrayaan 2 & US-Af Talks

Electric Cars - The Real Future?

Flight Safety – The Future

Chinese Politics - The Achilles Heel

Aliens - First Contact

Manufacturing in Space – will be Routine?

Mars could be Different

Robotic Process Automation - A Disruptor

Galactic Neighbours

Mars – Compulsion not Choice

US-Russia Relations – The Great Game

Belt and Road Project – Chinese Checkers

Algorithms –They Rule us 

Title page 

Opportunity in a Crisis

There has been some good news amid the India-China standoff which did not get the attention it should have. ISRO will now involve private industry in India’s space program. While this is not a new development in itself, it is a significant step forward as the government now wants Indian industry to benefit from its space program. This shift in policy will immensely benefit the private industry. The technological ecosystem will get a boost due to this. Of course. making a policy and implementing it are two different things in India. And never the twain shall meet has been the adage which has been followed. The Indian space industry is as old as independent India, but the government has been reluctant to involve the private players. Earlier It was due to the stated policy of socialism which made the government and the bureaucracy suspicious of private industry. Profit making was considered a necessary evil.

Much the same has happened in the defense sector. The defense procurement procedure has been muddling along with frequent change in directions and directives. There has been and still is a reluctance in the bureaucracy to promote indigenous defence production, All the governments till now have said that self sufficiency in defence production is their stated goal but there is no action on the ground. Seventy years after independence India still imports most of its defence equipment.

The current stand off against the Chinese has served to emphasize these lacunae. India has gone for a slew of emergency purchases from the US, Russia and Israel. Artillery shells, anti-missile defense systems, air to air missiles and others. The status quo has not changed at all.

As is the case in our civil industry, there is a serious lack of research in the defense industry as well.  Only now the DRDO, GTRE, HAL the OFB and other government establishments have started applied research for defence equipment. Some encouraging green shoots can be seen. The AESA radar for the Tejas, the Astra air to air missile, the different ballistic missiles, NETRA AWACS, the LCH etc.  Today the need is to have an ecosystem where technology is perfected for specific applications. But technology does not get developed in a vacuum. The forces should  use the equipment that is currently manufactured by our industry. This may not be one hundred percent up to the specifications demanded by them, but once the equipment is used and the feedback from the forces is taken and worked upon, within a few years India will have an ecosystem which will nurture development of advanced technology. Refusing to use indigenous technology and demanding perfection does not go together. In the current spat between India and China there is an opportunity for our forces to use all the equipment available and start the process of perfecting it for their future use. The LCH, LUH, various ICVs and armoured vehicles right down to the assault rifles made by domestic manufacturers should be bought by the forces and used as frontline equipment.  These may not be the most ideal technically and will be a compromise at best, but perfection in defence manufacturing will never be achieved unless the industry, the forces and the government are fully and equally committed to it.

Deciphering the Dragon

I was going to write on a topic which is on everybody’s mind. That of a road for post pandemic recovery of the world. But events closer to home concerning India’s security, especially relating to China, have now prompted me to take up this subject for this write-up.

After almost two months facing each other off, Chinese and Indian troops in eastern Ladakh, are now standing down and pulling back.  However two months is a long time to decipher Chinese actions and things seem to have become clearer now. 

The world is still preoccupied with the corona pandemic and most of the countries are just beginning to ease their months old lock downs. Even during the lock down Chinese territorial ambitions were quite evident in the South China Sea area. So much so that President Rodrigo Duterte of Philippines who was pandering to the Chinese wishes, has now suspended his anti-America policies which were about to be implemented. Recently China  had claimed that it had exclusive economic rights over the Natuna Sea which is a part of the South China Sea region. Of late, taking advantage of the preoccupation of the littoral countries with the pandemic, China sent its fishing vessels in these waters. One Chinese vessel was sunk with a warning. This has served to heighten tensions in the region. Indonesia has gone to the UN with a protest against unilateral Chinese actions.

One needs to look at the larger picture if one is to understand China’s current military adventurism. China has been growing steadily for the last three decades. Today the country is the workshop of the world.  The result is that China has become economically the number two power in the world after the USA. With this kind economic power, military power is a given. Now China thinks the balance of power in Asia is sufficiently skewed in its favor for it to alter status quo on the ground unilaterally. No country in Asia can match the Chinese in military strength going by its defense budget. Theoretically, if push comes to shove, the countries on the Pacific rim can give a good account of themselves collectively, but that is in the realm of theory. In reality nobody is going to test China’s military strength.  

One other reason for rising Chinese confidence is the retreat of America. Since Trump came to power, the USA has been busy disengaging from its commitments all over the world. From its NATO allies to its friends in the Pacific, the transactional administration of the country is now shirking its responsibilities as a superpower.  The USA was a bulwark against aggressive powers like China which try to coerce smaller and weaker nations. President Trump with his obsession to make America great again has in fact weakened the country strategically in the short term. Politically speaking, power vacuums last for a short time. China, which had made no secret of its superpower ambitions is now trying to make inroads into the space opened up due to the US retreat from its traditional spheres of influence. In Ladakh on the Indian border, China has been testing waters all the time. In the Doklam standoff in 2017 China tried to bully its way into the chicken neck area at the tri-junction border. This was thwarted by the Indian troops by standing firmly despite Chinese government and media throwing threats and tantrums. The Chinese never tire of these salami slicing tactics. President Obama once said that it was due to lack of American vigilance that the Chinese could come into the South China Sea.

The Chinese follow the teachings of Sun Tzu to the letter. Many a times their actions can be explained by taking a page from his teachings. Keeping your enemy off balance is one of the tactics they follow. Being unpredictable is another. For e.g. in a bizarre claim the Chinese have also said that Azerbaijan which shares a boundary with China should become a part of China. Such actions keep your enemy guessing helping you to retain the initiative.

The Indian Army and the government are also aware of how the Chinese mind works. Chinese transgressions are becoming a routine on the border. This could also be a tactic by the Chinese Communist party and the government to divert the people’s mind away from the problems at home, like a slowing economy with the resultant job loss. Today national fervor is at its highest on Chinese social media. The Chinese leadership is also used to making political statements by its actions. By their incursions into South China Sea and Ladakh, the Chinese may be saying  that they can go anywhere and do anything with impunity.

India is a part of the Quad group which was formed to counter Chinese aggressive behavior in Asia. India also joined other countries to demand accountability for the pandemic from China. In the last few years India has been building up its infrastructure along the LAC which was long neglected. It also recently changed its foreign investment policy with an obvious focus on China. Experts say the Chinese actions are a subtle warning to India not to add its voice to the growing anti-China rhetoric. There was also talk of the knives being out for President Xi Jinping due to China loosing face over the pandemic. China sees India as a future threat to its position as the leading power in Asia and perhaps the world.  

However the question remains as to what Beijing expects to gain by making aggressive moves against its neighbors. By riding roughshod over its neighboring countries China is forcing them to re-calibrate their security policies. The India Australia virtual summit is a direct result of Chinese aggressive behavior. One thing is very clear from Chinese behavior, that any agreement with them should be taken with a pinch of salt.

How far will China push to achieve its objectives is a matter of conjecture . We may get an answer to that as more and more countries begin to resist the Chinese juggernaut. 

A Pandemic Induced Hiccup

The current posturing by China in the border area in Ladakh has to be seen against the background of the ongoing COVID-19 pandemic. For the last three months the world has been battered by this single virus. The origins are by and large clear now. It originated in China and spread around the globe. It is now generally assumed that China was careless and even downright negligent in controlling the virus, whether by accident or design is a matter of speculation. It is also alleged that the virus originated in a Chinese bio-weapons laboratory. Whatever may be the origins, China is facing a lot of heat over the pandemic. Most of the countries in the world are blaming it for this crisis.

In the current scenario China is responding like a typical or classical dictatorial state. It has to create incidents which take away world attention and that of its people from itself. The people of China were not impressed with their government’s handling of the crisis. At the best of times the Chinese people hardly get any personal freedom. This crisis took away its remaining vestiges. Being the sole authority in the country the Communist party and its government cannot shirk from taking the responsibility for handling the crisis, so they did the next best thing a dictator does. Divert the attention of the people. Whip up nationalist sentiments to show that the government is fighting for the people. Since the government controls the media, the Chinese population gets almost no access to foreign media sources and have to consume the fare dished out by the government. Hence, manipulating public opinion becomes easy.   

This time the difference is that Nepal has been roped in to add some pressure. The Nepalese PM was known to be favoring the Chinese and they have probably asked him to ratchet up tensions.  It is believed that the current dispensation in Nepal (which is a leftist one) is facing domestic issues. India bashing helps to take the pressure off temporarily. The world has been demanding an investigation into the root of this pandemic and the Communist party in China hopes that this posturing on the border may divert the attention of its restive people to a different crisis which can be better controlled.  India has shown itself to be in favor of an independent and impartial probe of the pandemic. It has also revised its FDI policy to better scrutinise Chinese investments in India.
This sudden flare-up could be a subtle message from China that India should not add its voice to the clamor that the world is making for the probe, as well as for its China specific policies. The US move to bring in a bill in the Congress to delist eight hundred Chinese companies from the stock market and the deteriorating situation in Hong Kong has only added to the headaches the communist party is suffering from.

It does not look as though much needs be read into these current border incidents at least for now. It is probably a fallout of the COVID-19 pandemic. (China was also seen to be more aggressive in the South China Sea recently.) Whether these bouts of aggression will subside or increase will depend on how much heat the Chinese take, post this crisis.