Monday, February 18, 2013

Turkey as a Global Player

By Sagar Rijal
On Tuesday, February 5th, at the Young Scholars on Turkey Conference, it was a grizzled veteran who stole the show. In his keynote address, the former finance minister of Turkey, Dr. Kemal Dervis, spoke on the current state of Turkish economy and presented a forceful case of Turkey as a global player.
Having spent a long and illustrious career as an economist in various leadership positions at the Word Bank and the UNDP, Mr. Dervis currently serves as the director of Global Economy and Development Program at the Brookings Institution. Drawing on his vast international experience, Mr. Dervis spoke with authority on Turkey’s global role. Geographically, historically and culturally Turkey has been a bridge between the East and the West, between Asia and Europe. As the progeny of the Ottoman Empire and the children of the modernizing policies of Kemal Atatürk, the Turkish people are largely cosmopolitan in their worldview. In the present context, the Turkish state is proud of its ability to manage political Islam with a democratic republic and harbors ambitions to be a role model as well as a regional leader. All these aspirations and opportunities are based on the foundation of a booming economy.
On economic matters, Mr. Dervis’ views are sacrosanct. After all, he was the main architect of the far-reaching economic liberalization policies that lifted Turkey out the deepest financial collapse in its history. In February 2001, owing to decades of political instability and an economic ideology that favored high levels of state intervention in its markets and banks given to an over-reliance on foreign capital, Turkey experienced a massive economic crisis. The stock market crashed, threatening bank failures, massive bailouts and even the possibility of state default. Arriving at the scene from a long career at the World Bank, Mr. Dervis was able to convince the IMF for enough loans to see the crisis through. In the meantime, he passed tough, long-term and market-friendly reform policies, which has led to a decade’s worth of historically unprecedented growth.
Mr. Dervis took obvious satisfaction in recounting all the ways that Turkish economy has boomed since the crisis. The GDP has grown by more than 5% per year leading to a massive uplift in the living standards of ordinary Turks. The aggregate GDP has almost quadrupled and many Turkish companies have grown to regional and even global prominence. While he remained sanguine about the continuing vigor of Turkish economic trends, Mr. Dervis cautioned about the low savings rate and very low educational attainment rate in Turkey. With its newfound budget surpluses, he hoped that expanding educational opportunity, especially female participation in secondary and higher education, would become a priority.
Yet, the larger aspiration of Turkey as an economic power and a global player was front and center. In these times of budget crisis and austerity measures in Europe and myriad political crises in the Middle East, Turkey’s role as the stable and prospering democracy might indeed be to serve both as a model and the bridge. 
~Sagar Rijal, ABD, is spending the final semester of his graduate assistantship doing research for his dissertation in Washington, D.C. Every week he will attend meetings, seminars, or presentations at think tanks and develop a column for the Bulletin community.

Central Asia After U.S. Leaves

By Sagar Rijal
Given the planned drawdown of American forces from Afghanistan in 2014, the issues relating to Afghanistan’s future, political instability, and the role of the Taliban are of pressing urgency. But the Afghan problem tends to overshadow the fallout in Central Asia. To address that question, Center for Strategic & International Studies has published a policy report titled “The United States and Central Asia after 2014” written by the Center Fellow Dr. Jeffrey Mankoff. On February 4, a public meeting was held where Dr. Mankoff presented the major findings of his report.
Compiled after extensive fieldwork and interviews with local stakeholders, Dr. Mankoff’s report offered a complex picture of American dealings with each of the states of Central Asia in the decade since 9/11 and the 2001 invasion of Afghanistan. Seeking cheap and safe supply routes as alternatives to the treacherous path through Pakistan, the U.S. sought out airspace, logistical transit points and military cooperation in the five “Stans” of Central Asia: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Riven with their internal political troubles and post-Soviet economic malaise these states were eager to cash in on the bounty of the U.S. and ISAF dollars. At the same time, these five states were in sensitive strategic situation because their bilateral relations were often contentious and each of them felt the constant tug of reprimand from Moscow, which was growing increasingly suspicious of larger American designs in its backyard. One astonishing data point leapt out: four of the five Central Asian states that allowed land supply and transit routes for ISAF forces into Afghanistan, each have received payment of more than $500 million per year since the war started. Cooperation was bought at a high price.
After 2014 when the US and NATO forces leave, the effect of the lost economic activity and monetary transfusion might be catastrophic. Dr. Mankoff highlighted the complex regional rivalries among these states based on historical squabbles, political and economic competition and strategic considerations. Their internal challenges of poverty as well as political upheavals might lead to instability. Furthermore, strategic and economic interests would surely compel Russia’s footprint to be magnified, which may not be accepted politely by the Chinese who have made massive economic and infrastructure investments there in the last decade. Given these possible dynamics in this volatile region, the question of American strategic interests and long-term plans for the region is imperative.
Just what the U.S. can or should do produced heated debate in the panel but little clarity. Dr. Mankoff recommended deep, strategic and all-spectrum engagement so that the region does not veer into chaos. Some limited variation of such a plan seems to be official American policy as well: to try create a “New Silk Road” of trade and commerce. But the discussants and the audience were wary of a deep and long American commitment due not just to budgetary concerns but also concerns about the possible response from Russia and China of sustained U.S. presence in Central Asia. What course the U.S. ends up taking, of course, only time will tell.    
~Sagar Rijal, ABD, is spending the final semester of his graduate assistantship doing research for his dissertation in Washington, D.C. Every week he will attend meetings, seminars, or presentations at think tanks and develop a column for the Bulletin community.

Tuesday, February 12, 2013

Strategic Security in South Asia


By Sagar Rijal
The strategic security context in South Asia is centered on India’s complex relationship with its two nuclear-powered neighbors, Pakistan and China. The long-simmering historical conundrum of Kashmir, which has provoked three major wars and a perpetual state of impasse between India-Pakistan, has for long been at the forefront of the regional security picture. However, the economic rise of China in the last three decades coupled with its growing security ambitions in the entire Asian region portends a major shift. The Sino-Indian challenge—given the two nations’ unsorted boundary issues and dueling strategic ambitions—has turned into the salient feature of South Asian transformation in the last twenty years. At a recent conference held at the Carnegie Endowment for International Peace, a panel of analysts presented their views on the these twin relationships, which have the potential to affect regional and global security in the 21st century.
Ashley J. Tellis of the Carnegie Endowment began with a startling argument: the general impression that India is weaker than China is wrong. Since its shocking defeat at the 1962 war against China, India had spent a great deal of resources to avoid another such failure, deploying “forward defense” in its long mountainous border regions with China. On the other hand, China had stationed only paramilitary troops near the difficult border terrain, while keeping the larger PLA forces farther back. Thus, Tellis argued that in the greater Tibetan frontier region India had maintained operational superiority since the 1970s.
However, in the last 20 years Chinese capacity has grown in all areas including the resources devoted the border areas but also extending to its capacity in the oceans and air. China has made huge investments in infrastructure in the Tibetan region so that now it is possible to transport large number of outside forces in case of necessity. The modernization of PLA forces as well as logistical systems of the Chinese military has closed that gap in the border regions. More dramatically, the PRC has made improvements and investments to modernize its Air Force and Navy. While traditionally, Indian Air Force and Indian Navy were well prepared and slightly superior, that gap has also been closed.
What has been the Indian response to the growing military modernization campaign of China? While India has made significant infrastructure and resource investments of its own, and forged tighter security arrangement with neighboring nations, in terms of matching Chinese capacity India is slowly falling behind. Tellis argued that, like with everything else concerning India, domestic politics and strategic myopia of its politicians are to blame.
The India–Pakistan conflict also suffers from malign domestic politics in both the countries. Jack Gill of the Near East and South Asia Center, offered further pessimism about any forward progress on that front. Gill argued that in the short term the Kashmir issue is going to be held hostage to the upcoming domestic elections in both Pakistan and then in India. So until after the mid-2014 he sees no further progress on that front.    
           
   ~Sagar Rijal, ABD, is spending the final semester of his graduate assistantship doing research for his dissertation in Washington, D.C. Every week he will attend meetings, seminars, or presentations at think tanks and develop a column for the Bulletin community.

Thursday, February 7, 2013

Twenty Years of Indian Transformation

By Sagar Rijal
For a daylong conference entitled “Twenty Years of Transformation in South Asia,” the panels were predictably dominated by the concerns of the largest South Asian state, India. Hosted by the Carnegie Endowment for International Peace on Thursday, January 31, the broad themes of the gathering could be divided into “the economic issues facing India” and “the security context of the Indian sub-continent.” I will present a follow-up column devoted to the security issues. Here I consider a panel discussion on some aspects of the Indian economy.
Since the economic liberalization policies of 1991-1992, India has averaged unprecedented GDP growth rates of more than 6% per year. Observers and boosters view India’s growth as corresponding to that of the much steeper and longer trajectory experienced by China. If there is a concern, it is that of continuity of reforms and growth. Where is Indian economy headed? The panel looked for answers in a few interesting directions.
Dr. Devesh Kapur from University of Pennsylvania presented data about mass education, the demand for which has skyrocketed in the past two decades. Since human resource is the one resource that India has in abundance, Dr. Kapur argued that the quality of its educational system would strongly determine the trajectory of its economy. However, the data he presented is not very sanguine. There is a lack of adequate supply of higher education opportunities as well as concerns about the quality of education. He reported that 3700 new colleges opened in India in a recent five-year period – a rate of more than ten new colleges every single day, raising questions about quality. The massive explosion in enrollment in higher education has left many institutions with an acute shortage of trained faculty.
After such pessimistic picture on education, Dr. Milan Vaishnav aroused hope in the most unlikely issue: corruption. The conventional wisdom is that corruption is rampant and impossible to solve in India. However, Dr. Vaishnav argued that there is a “great cleansing” taking place right now due to voter movements and Right to Information laws. He attributed the recent spate of high-profile corruption cases to increased transparency, which has only led to more exposure of corruption, especially amid a booming economy that expanded the corruption frontier.
Vikram Nehru, a former World Bank analyst, drew attention to the external angle, to and area of immense opportunity for the Indian economy. He argued that strengthening the trade and investment relationship with the nations of East and Southeast Asia would provide unparalleled opportunities for Indian economy to keep its growth trajectory. The ASEAN nations already seek an economic hedge against China, which India could successfully leverage into long-term growth. 
However, Mr. Nehru offered wise caution. India’s constraints are not external but mostly internal, meeting the challenges of human capital development, getting a handle on corruption, reforming the labor laws and achieving a modicum of political accountability. A fine list to keep India busy for another twenty-year transformation.

~Sagar Rijal, ABD, is spending the final semester of his graduate assistantship doing research for his dissertation in Washington, D.C. Every week he will attend meetings, seminars, or presentations at think tanks and develop a column for the Bulletin community.