Kochi: Prime Minister Narendra Modi on Tuesday said India has a “difficult neighbourhood”, and that several countries have reached out to India to deal with the rising threat of terror and radicalization across regions “including the Islamic world”.
Addressing top commanders of the country’s three armed forces at the Combined Commanders’ Conference onboard INS Vikramaditya, the Prime Minister said India is seen as a “new bright spot” of the world economy, and also as “an anchor for regional and global peace, security and stability”.
Modi emphasised on India’s attempt to establish good relations with its neighbours, including Pakistan.
“And, as the world seeks to deal with the rising threat of terrorism and radicalism, countries across all regions, including in the Islamic world, have reached out to seek cooperation with India,” Modi said.
“Above all, it is our neighbourhood that is most critical for our future and for our place in the world. But ours is a difficult neighbourhood with the full spectrum of security challenges,” he said at the conference attended by the three service chiefs, the defence secretary and Defence Minister Manohar Parrikar.
Modi also expressed concern over the instability in West Asia.
“We see terrorism and ceasefire violations, reckless nuclear build-up and threats, border transgressions and, continuing military modernization and expansion.
“The shadow of West Asian instability is becoming longer,” he said.
The Prime Minister said, “our region” is marked by uncertain political transitions, weak institutions and internal conflicts and, “major powers” have increased their engagement in India’s land and maritime neighbourhood.
On Pakistan, Modi said India was trying to “turn the course of history” and “bring an end to terrorism”.
“We are engaging Pakistan to try and turn the course of history, bring an end to terrorism, build peaceful relations, advance cooperation and promote stability and prosperity in our region.
“There are many challenges and barriers on the path. But the effort is worth it because the peace dividends are huge and the future of our children is at stake,” the prime minister said.
“So, we will test their intentions to define the path ahead. For this, we have started a new NSA-level dialogue to bring security experts face to face with each other. But, we will never drop our guard on security and we will continue to judge progress on their commitments on terrorism,” he said.
Modi also mentioned China and said India was pursuing “closer relations” to harness the full potential of the economic partnership.
“We will aim to address outstanding issues, maintain stability on the border, and develop greater mutual understanding and trust in our overlapping neighbourhood.
“I believe that India and China can engage constructively across the complexity of their relationship as two self-assured and confident nations, aware of their interests and responsibilities,” he said.
“From Maldives and Sri Lanka in the seas to Nepal and Bhutan in the mountains, we are working to safeguard our interests and our relationships,” Modi said.
The land boundary agreement with Bangladesh has strengthened relations, and India was also committed to peace in Afghanistan, he added.
This was the first time the Combined Commanders Conference was held onboard an aircraft carrier.
Modi inspected a Tri-services Guard of Honour in the morning at INS Garuda in Kochi, before arriving onboard INS Vikramaditya, where he was received by the three service chiefs.(IANS)
After lengthy delays, an $8.2 billion revamp of a colonial-era rail line snaking from the Arabian Sea to the foothills of the Hindu Kush has become a test of Pakistan ’s ability to rethink signature Chinese “Silk Road” projects because of debt concerns.
The rail megaproject linking the coastal metropolis of Karachi to the northwestern city of Peshawar is China’s biggest Belt and Road Initiative (BRI) project in Pakistan, but Islamabad has balked at the cost and financing terms.
Resistance has stiffened under the new government of populist Prime Minister Imran Khan, who has voiced alarm about rising debt levels and says the country must wean itself off foreign loans.
“We are seeing how to develop a model so the government of Pakistan wouldn’t have all the risk,” Khusro Bakhtyar, minister in Pakistan’s planning ministry, told reporters recently.
The cooling of enthusiasm for China’s investments mirrors the unease of incoming governments in Sri Lanka, Malaysia and Maldives, where new administrations have come to power wary of Chinese deals struck by their predecessors.
Pakistan’s new government had wanted to review all BRI contracts. Officials say there are concerns the deals were badly negotiated, too expensive or overly favored China.
But to Islamabad’s frustration, Beijing is only willing to review projects that have not yet begun, three senior government officials have told Reuters.
China’s Foreign Ministry said, in a statement in response to questions faxed by Reuters, that both sides were committed to pressing forward with BRI projects, “to ensure those projects that are already built operate as normal, and those which are being built proceed smoothly.”
Pakistani officials say they remain committed to Chinese investment but want to push harder on price and affordability, while re-orientating the China-Pakistan Economic Corridor (CPEC), for which Beijing has pledged about $60 billion in infrastructure funds, to focus on projects that deliver social development in line with Khan’s election platform.
China’s Ambassador to Pakistan, Yao Jing, told Reuters that Beijing was open to changes proposed by the new government and “we will definitely follow their agenda” to work out a roadmap for BRI projects based on “mutual consultation.”
“It constitutes a process of discussion with each other about this kind of model, about this kind of roadmap for the future,” Yao said.
Beijing would only proceed with projects that Pakistan wanted, he added.
“This is Pakistan’s economy, this is their society,” Yao said.
IMF bailout likely
Islamabad’s efforts to recalibrate CPEC are made trickier by its dependence on Chinese loans to prop up its vulnerable economy.
Growing fissures in relations with the United States, Pakistan’s historic ally, have also weakened the country’s negotiating hand, as has a current account crisis likely to lead to a bailout by the International Monetary Fund, which may demand spending cuts.
“We have reservations, but no other country is investing in Pakistan. What can we do?” one Pakistani minister told Reuters.
The ML-1 rail line is the spine of country’s dilapidated rail network, which has in recent years been edging toward collapse as passenger numbers plunge, train lines close and the vital freight business nosedives.
Khan’s government has vowed to make the 1,872 km (1,163 mile) line a priority CPEC project, saying it will help the poor travel across the vast South Asian nation.
But Islamabad is exploring funding options for CPEC projects that depart from the traditional BRI lending model, whereby host nations take on Chinese debt to finance construction of infrastructure, and has invited Saudi Arabia and other countries to invest.
One option for ML-1, according to Pakistani officials, is the build-operate-transfer (BOT) model, which would see investors or companies finance and build the project and recoup their investment from cash flows generated mainly by the rail freight business, before returning it to Pakistan in a few decades time.
Yao, the Chinese envoy, said Beijing was open to BOT and would “encourage” its companies to invest.
Large rail projects, problems
Rail mega-projects under China’s BRI umbrella have run into problems elsewhere in Asia. A line linking Thailand and Laos has been beset by delays over financing, while Malaysia’s new Prime Minister Mahathir Mohamad outright canceled the Chinese-funded $20 billion East Coast Rail Link (ECRL).
Beijing is happy to offer loans, but reticent to invest in the Pakistan venture as such projects are seldom profitable, according to Andrew Small, author of a book on China-Pakistan relations.
“The problem is that the Chinese don’t think they can make money on this project and are not keen on BOT,” Small said.
During President Xi Jinping’s visit to Pakistan in 2015, the ML-1 line was placed among a list of “early harvest” CPEC projects that would be prioritized, along with power plants urgently needed to end crippling electricity shortages.
But while many other projects from that list have now been completed, the rail scheme has been stuck.
Pakistani officials say they became wary of how early BRI contracts were awarded to Chinese firms, and are pushing for a public tender for ML-1.
Partly to help with price discovery, Pakistan asked the Asian Development Bank (ADB) to finance a chunk of the rail project through tendering. The ADB began discussions on a $1.5-$2 billion loan, but China insisted the project was “too strategic,” and Islamabad kicked out the ADB under pressure from Beijing in early 2017, according to Pakistani and ADB officials.
“If it’s such a strategic project then it should be a viable project for them to finance on very concessional terms or invest in?” said one senior Pakistani official familiar with the project, referring to the BOT model.
China’s foreign ministry said Beijing was engaged in “friendly consultations” with Pakistan on the rail project.
Chinese companies participated in BRI projects in an open and transparent way, “pooling benefits and sharing risks,” it said.
Chinese debt or no project
Analysts say Pakistan will struggle to attract non-Chinese investors into the project, which may force it to choose between piling on Chinese debt or walking away from the project.
In 2017, Pakistan turned down Chinese funding for a $14 billion mega-dam project in the Himalayas because of cost concerns and worries Beijing could end up owning a vital national asset if Pakistan could not repay loans, as occurred with a Sri Lankan port.
Khan’s government chafes at several Chinese intercity mass transport projects in Punjab, the voter heartland of the previous government, which now need hundreds of millions of dollars in subsidies every year.
They also fume about the risk of accumulating off-books sovereign debt through power contracts, where annual profits of above 20 percent, in dollar terms, were guaranteed by the previous administration.
With the ML-1 line, there are also those who harbor doubts closer to home, including the previous government’s finance minister, Miftah Ismail, who said his ministry had always had concerns about its viability.
“When people say it’s a project of national importance, that usually means it makes no sense financially,” he said. (VOA)