Big ticket foreign initiatives
1. MEA's Development Partnership Administration
2. Asia Africa Growth Corridor
3. Spotlight on OBOR—where it goes wrong
4. More on AAGC
5. North-South Corridor has great potential
6. More on NSTC and other Asian projects
7. Chabahar port finally gets going
8. Rivalry with India will likely spillover to bloody hostility
9. Routes through Myanmar, with more to come
10. Big socio-economic projects for Rakhine, Myanmar
11. India's South Asian energy security matrix
12. Why develop a sea route from Chennai to Vladivostok?
13. High impact Afghanistan projects
14. Africa prefers India's non-interference development model over China
15. Why India is paying to dredge rivers in Bangladesh
1. MEA's Development Partnership Administration
2. Asia Africa Growth Corridor
3. Spotlight on OBOR—where it goes wrong
4. More on AAGC
5. North-South Corridor has great potential
6. More on NSTC and other Asian projects
7. Chabahar port finally gets going
8. Rivalry with India will likely spillover to bloody hostility
9. Routes through Myanmar, with more to come
10. Big socio-economic projects for Rakhine, Myanmar
11. India's South Asian energy security matrix
12. Why develop a sea route from Chennai to Vladivostok?
13. High impact Afghanistan projects
14. Africa prefers India's non-interference development model over China
15. Why India is paying to dredge rivers in Bangladesh
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MEA's Development Partnership Administration wing
DPA is doing fantastic work. A very good way to build close and enduring ties. Prospects for not only infrastructure but for trade, minerals, defence, industry, space etc. Lets hope there is no sleaze, everything is above board and both parties benefit.
Story under NDA
Govt has extended $ 14B lines of credit in 3 years, a significant jump from earlier. 20 major ventures were completed in past 2 years.
What is Development Partnership about?
1. India's approach is consultative keeping sentiments in that country topmost.
2. Iconic buildings like construct of parliaments help to reach out politically and emotionally. Likewise dams, power, water supply projects.
3. Lines of Credit are done on concessionary terms.
4. Recently approved LOC for defence equipment sales to Vietnam, Bangladesh, Sri Lanka and Mauritius, and many other requests have come from Africa, SE Asia and Latin America.
5. New IDEAS guidelines are aimed at stopping malpractice and improving outcomes.
6. Under IDEAS, an oversight mechanism requires a detailed project report, and pre-qualification of companies ensures only those with expertise are chosen.
7. Under IDEAS all documents are scrutinized incl feasibility report, DPR, tender documents and bids.
REPLY Aug 8, 2017 - Asia Africa Growth Corridor
India and Japan (principle partners) wish to jointly intensify their engagement with Africa. AAGC is designed to further facilitate trade, infra, credit and tech transfer.
For example a new report, prepared by think tanks of India, Japan and Indonesia, will lay out detailed projects in specific sectors involving interested companies.
Earlier 'Vision Document' had identified 4 themes. It involves setting up research in Africa, boosting skills and capacity building (infra and institutions).
1. Development —in sectors like agriculture, health, tech, disaster Mx
2. Quality infra and institutions
3. Skills
4. People-to-people
Comparing AAGC vs OBOR
OBOR is building connectivity or "roads" to ease movement of goods and for building infra en-route. Industrial zones incl mines will come up along the corridors.
$2000B is proposed for linking Europe, Asia and Africa. Host is provided huge loans from China, and Chinese companies & labour are heavily involved in project implementation. This is what China currently does but OBOR is on a massive scale, themed on connectivity and over a much longer time-scale.
AAGC is proposing to integrate the economies of Africa, India, South Asia, SE Asia, E Asia and Oceania. Japan proposes to spend $200B.
Current engagements in Africa
China - Africa : $ 188B and growing at 20%pa
India - Africa : $ 59B
REPLY Jul 31, 2017
Spotlight on OBOR: where it goes wrong
Case of Sri Lankan woes
======================
➥ Chinese loans are so huge v-v host GDP that they risk national crisis should projects fail
➥ Borrower usually was under dictatorial regimes, desperate or willing to indulge in corruption or a military regime that wants exorbitant military deals.
➥ Loans were given without due diligence on project viability
➥ Chinese were mostly interested in securing lucrative contracts (no bidding was allowed)
➥ Bully boy tactics and hard bargaining to recover the money
☔ Chinese loans charged exorbitant rates @ 6.3% (in US$ or Libor+). In contrast, India's charges 1% or less in many case, and WB & ADB charge only 0.25-0.3%.
☔ Created White Elephants like Mattala Airport, sports stadium, Colombo port city and Hambantota port. Chinese were mostly interested in contracts.
☔ Chinese bargained for and obtained land swap deal that may pose future problems, through confiscation of land, Chinese colonies in those lands or taking over economic rights.
REPLY Aug 4, 2017
MORE on AAGC
Thinking behind AAGC
❈ Indian diplomacy with 54 African nations strives for substantive engagement and to maintain historic ties
❈ Alternative to OBOR as India will not be part of Chinese initiative
❈ Enhance collaboration between India and Japan (policy makers, companies, think tanks) for project implementation (also relevant to Chabahar port/ Afghanistan)
❈ Genuine attempt to bring African empowerment eg. to bring benefits of good institutions, connectivity, people movement, development, industrial growth and self-sufficiency
❈ G4 wants early implementation of UNSC reforms
Establishment of AAGC
❈ India and Japan instituted a "dialogue" on Africa in 2010
❈ AAGC was crystallized in PM Modi visit to Japan in 2016
❈ A "Vision Document" was jointly prepared by think tanks of India & Japan after wide consultation
INDIA in Africa
❈ Trade has grown from $11.9B (FY06) to $56.7B (FY16)
❈ Indian PSUs and private sector are expanding stake in Africa
❈ New $ 10B LOC pledged on concessionary terms
❈ Work in partnership & help in Africa's long-term agenda
❈ India-Africa relationship is mostly bilateral, though
▬ India collaborates with US in agriculture, energy security, health, women's empowerment and peacekeeping training
▬ AAGC initiative
JAPAN in Africa
❈ Long-standing relationship that supports African ownership
❈ Japan has promoted development and security through multilateral platforms
❈ Tokyo International Conference on African Development (TICAD) was established in early 1990s when end of Cold War meant grants to Africa had been scaled back.
❈ Japan has pledged $30B to Africa
REPLY Aug 14, 2017 - North-South Corridor has great potential
India is partnering Iran and Russia to develop the North-South transport corridor with an separate link from Chabahar to Afghanistan. Road/ rail will be built from Iran ports on Arabian Sea (Bandar Abbas and Chabahar) to Iran ports on Caspian Sea or to cities in Afghanistan & CAR. NSTC has the potential to reduce time and costs by 30%.
❈ Chabahar port is the gateway for India - Afghanistan - CAR trade. It completely eliminates dependency on Pakistan.
❈ North-South corridor from Bandar Abbas is the shortest route from Arabian Sea to Russia and Eastern Europe.
REPLY Sep 1, 2017
More on NSTC, Chabahar corridor and other Asian projects
⟞ ❡ By some estimates, North-South route is even more economically promising than some emerging East-West overland routes of China's Belt and Road Initiative ❡ ⟝ but,
⟞ ❡ The two initiatives overlap and feed into each other. So it is extremely difficult to separate one from the other ❡ ⟝
❈ NSTC started some 15 years ago when Russia, India, and Iran formally signed an agreement to initialize the project.
❈ NSTC primarily benefits countries en-route from Iran to Russia or from Iran to CAR. New rails and roads help inter-connect and integrate this region.
❈ Road, rail and port facilities of Iran need to be upgraded. Iran serves as a gateway as it offers the shortest route to the Indian Ocean for these land locked hinterland countries.
❈ NSTC is around 7500 km but new routes are being created, eg. railway link is coming up east of Caspian Sea from Iran to Kazakhstan via Turkmenistan. The main route goes to Russia via Azerbaijan.
❈ India neatly bypasses Pakistan and achieves time and cost reductions in transporting good to these hinterland countries.
❈ NSTC offers a direct route from India to Russia. It is expected to propel India-Russia trade. Dry runs like 2 in 2014 have demonstrated 30% cost reduction and 40% time reduction over existing sea route. Journey times from India to St Petersburg will be halved !!
❈ India is trying to interweave itself with economic ways of Eurasia. Connect Central Asia policy provides means to support its international development projects in Central Asia.
❈ India is particularly interested in energy and minerals that can be gotten from these Central Asian Countries incl Afghanistan and Russia.
❈ India is making a big thrust for enhancing Iran's Chabahar port (from 2.5mT to 12mT) and building 218 km road from Afghanistan to Iran.
❈ Other international projects of India are: Kaladan multimodal project (with Myanmar), India-Myanmar-Thailand highway, Trincomalee port development (Sri Lanka) and Trans-Asian Railways (Bangladesh to Turkey - unlikely to happen)
Diplomatic efforts:
+ Shanghai Co-operation Organization
+ TIR convention (international shipment of goods protocol)
+ BBIN Motor Vehicles Agreement
+ Eurasian Economic Union (discussions underway) involves Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia
+ Support for Afghanistan's armed struggle with Taliban.
REPLY Sep 1, 2017 - Chabahar port finally gets going
Shipments have started---------------------------------------
⚡ India has sent 1.3 lakh tonnes wheat to Afghanistan via Chabahar on 29/10/2017. 1.1million tonnes consignments will be done over next few months, all on grant basis.
➥ India's use of Chabahar corridor will attract businesses to set up shop and provide logistic support
➥ Improved feasibility will help realize a secure and viable transit option for Afghanistan.
Shipment of wheat is a landmark moment. It will pave the way for operationalisation of the Chabahar port as an alternate, reliable and robust connectivity for Afghanistan —EAM
http://mea.gov.in/press-releases.htm?dtl/29062/Flag_off_of_the_first_consignment_to_Afghanistan_through_Chabahar_port
Terminals upgradation by 2018----------------------------------------------------------
⚡ In a 10 year deal India will operate 2 terminals and pay rental -- must generate enough traffic to make them viable.
➥ India plans to make Chabahar it's conduit for NSTC
➥ India will shortly consign 100,000 tonnes of wheat through Chabahar port
⚡ Under MOU, India must improve 2 port terminals and should start operations within 18mo of contract signing.
➥ Ratification of TTC Agreement completed
➥ India has stepped up work on terminals eg:
1. Chabahar port development corporation set up
2. $150 M Exim loan granted for equipment, etc
3. Tenders issued for Rs 380cr out of Rs 600cr
4. Civil construction has started
5. Equipment (eg crane) purchase started
Economic corridor for Afghanistan-------------------------------------------------------
⚡ Partner countries have signed "Trilateral Agreement" for using Chabahar-Zahedan-Zaranj as a corridor
⚡ India will invest $500M in Transport and Transit Corridor (218km road from Iran to Afghanistan to connect to India-built Delaram-Zaranj road in Afghanistan).
⚡ India's IRCON will build Chabahar-Zahedan Rail (500km, $1.6B)
↓
South Korea willing to finance CZ railways---------------------------------------------------------------
"€8-billion finance from South Korea has been offered to Iran for railway projects incl. construction of Chabahar-Zahedan railway."
http://www.tehrantimes.com/news/417408/12b-in-finance-to-be-finalized-for-transport-projects
Concessional loans may be on offer by JICA-----------------------------------------------------------------
"For Chabahar-Zahedan railway project and also for the development of the Makran region, Iran will receive Japan’s $10 billion finances... construction will be done with participation from Indians and possibly Japanese,"— Iranian minister
http://ifpnews.com/exclusive/korea-germany-iran-electric-trains/
REPLY Oct 29, 2017
Rivalry with India will likely spillover to bloody hostility
China and Pakistan are unhappy about India, its presence in the region and competition to their pet projects (China's BRI and Pakistan's CPEC). Indian Asian land-routes are an easy target for sabotage and the said countries have ready-made proxies (like Taliban) to "teach India a lesson and some more". Eastern routes to CAR and Afghanistan are closest to these respective countries and routes outside of Iran (ie. in Afghanistan or CAR) are likely targets.
Iran was mentioned due to its anti-US activities inside Afghanistan. But Iran is a key proponent and can shut off these routes at anytime if it so desires.
I have been warned off about posting an opinion piece from Diplomat. Perhaps I have touched on sensitive matters. So lets summarize:
The article mentions threats to Chabahar corridor from Taliban terrorists in Afghanistan. Chabahar corridor primarily benefits Afghanistan, India and Iran in that order. According to the article support for Taliban terrorists comes from a few nations principally Pakistan, China, Iran and Russia. This sets up my headline mentioning 'bloody hostility'.
Iran is problematic for US and US presence in Afghanistan is no doubt a factor. But Iran is also a gateway to Chabahar corridor— it has an economic stakes in NSTC & Chabahar — and can shut off the overland routes to both. Thus sabotage by it seems unwarranted. Russia has no direct hostility for any land-routes. But China and Pakistan are touting their connectivity projects—are now acting as partners. So implications are obvious. But all this is reflective and derived from the article. The actual security situation has not stopped India and other participating nations from investing into the transit routes.
Another point—spelled out in great detail is the non-viability of NSTC. But comparisons for trade costs to Western Europe will not favour NSTC for obvious reasons (like sea route is cheaper per km traveled), so its a point not worth mentioning.
It went into details on how China trade was very large and India's trade was low thus even shipping to Iran needs a port visit to a neighbouring port. All this misses the benefits of NSTC for the region itself and that it helps to promote trade with Indian Ocean rim countries (including Japan, Australia). India's investment is strategic as these transit routes have long-term benefits for India.
http://thediplomat.com/2017/05/does-indias-chabahar-deal-make-sense/REPLY Aug 14, 2017 - Routes through Myanmar, with more to come
PM Modi's visit to Myanmar in Sept 2017 will seek to expand strategic and economic ties, with India no doubt wanting to do more to help Myanmar.
India ought to be grateful to Myanmar for its cooperation and willingness to provide crucial land and sea links for the NE region. With this NE will get integrated with the fast growing ASEAN economies.
India is building two connectivity infra in Myanmar:
1. Indo-Myanmar-Thai highway
2. Kaladan multi-modal project incl Sittwe Port
Unhappy neighbourhood
====================
Clearly Myanmar is NOT in a happy neighbourhood. It is accosted by China-backed rebels on China side and Rohingya terrorists on the Bangladesh border. It is heading for debt crisis due to failing China-backed infra projects and is under pressure from China to concede strategic ground. Eg
▬ $3.6-B Myitsone dam project was suspended in September 2011.
▬ $7.3-B Kyauk Pyu deep-sea port project is blighted by China upping its demand for controlling interest (from 50% to 70-85%).
REPLY Sep 8, 2017 - Big socio-economic projects lined up for Rakhine, Myanmar
REPLY Sep 18, 2017 - India's South Asian energy security matrix
"Neighbourhood-first policy" is the cornerstone of India's new foreign policy. It is meant to provide security, counter outside influence and support regional economic activity for mutual benefit. One aspect is to create an energy security matrix within South Asia. India's foreign ministry is involved and Japan is helping aggressively with infrastructure projects. It is not a quick or simple matter to conclude energy projects as there are many delays and cancellations along the way. For example SL govt pulled the plug on a coal-fired thermal power plant.
Examples of co-operation:
▬ Cross border electricity trade
▬ Hydrocarbon networks
▬ Supply of gas and petroleum products
▬ Standalone energy projects
Cross border electricity trade--------------------------------------------
Nepal (83GW) and Bhutan (30GW) have huge hydro-electricity potential and HE by its nature is best suited for balancing the grid. Nepal & Bhutan can get best prices by supplying all-India power grid through cross border electricity trade. Reduced power tariffs are on offer as under-utilized power generators and cheap renewable power input the grid in a big way.
The vast East to West power grid by itself can even out peaks and troughs because peaking loads happen at different time zones and so does intermittent renewable power generation from solar and wind. India already has power grid links with Bhutan, Nepal and Bangladesh and plans to develop power transmission links with Myanmar and SL.
http://www.livemint.com/Industry/CipgVG9qbEr46WnWJVKlJM/How-India-is-evolving-its-neighbourhood-energy-security-para.html
Hydrocarbon networks and trade---------------------------------------------------
SAARC energy initiative aims to create sub-regional gas networks and extend them to landlocked regions like Nepal and India's NE. India will build oil pipelines from refineries in India to Nepal. It has started sending oil tanker deliveries to Myanmar and its vast refinery infra is available for other SAARC countries.
Oil and Natural gas pipelines to Nepal & fuel marketing-------------------------------------------------------------------------
India will build petrol and diesel pipelines to Nepal to circumvent disruptions to tanker deliveries. India will also extend natural gas pipeline from a terminus at Gorakhpur (UP) to Nepal. Indian Oil has agreed to supply petrol, diesel, kerosene, jet fuel and cooking gas to Nepal under a 5 year deal.
http://economictimes.indiatimes.com/industry/energy/oil-gas/indian-oil-to-help-build-pipeline-to-supply-fuel-to-nepal-dharmendra-pradhan/articleshow/57857811.cms
LNG terminal & gas pipelines to BD & MMR, HSD pipeline to BD------------------------------------------------------------------------------
India and BD have worked out an efficient transportation mechanism. There is a proposal for a joint LPG terminal in Chittagong (BD) and a 6,900-km gas pipeline to link Chittagong, NE India & Sitwe (MMR). High-speed diesel pipeline is proposed from Siliguri refinery in WB to Parbatipur in northern BD. Interim, BD will be supplied by rail from Assam refinery.
http://economictimes.indiatimes.com/industry/energy/oil-gas/india-plans-high-speed-diesel-pipeline-to-bangladesh/articleshow/58037897.cms
LNG terminal, CGD, exploration & oil storage in SL-----------------------------------------------------------------------------
India will be involved in setting up LNG terminal and city gas distribution in Colombo to supply various power plants and promote the gas economy. Colombo is a major port city comprising 50% of GDP and 25% (or 5m) of SL population. India is proposing joint ventures for exploration in Mannar basin, oil storage in Trincomalee, supply of aviation fuel and marketing of CNG (automobiles), PNG (kitchens) & oil products through retail stores.
http://energy.economictimes.indiatimes.com/news/oil-and-gas/india-to-set-up-lng-terminal-city-gas-network-in-sri-lanka/54720606
Gas from an undersea pipeline?
An international consortium says it can build the Iran-India undersea pipeline in 2 years and return 25% on capital (ie project will cost $4+B and save 25% or $1B pa on imported LNG). It wants a gas sale and purchase agreement with Iran/ India and clearances to lay the pipelines. There are options for taking gas from Qatar via the Oman-India link and for buying gas from Turkmenistan via a swap agreement involving Iran as the other party.
REPLY Sep 18, 2017 - Why develop a sea route from Chennai to Vladivostok?
Shipping route hugs SE Asian and East Asian coasts and connects southern point of India to most significant port in Russia's Far East. It subsumes the India-Japan route; and overlaps with Chinese maritime route to Indian Ocean. Investment on this route by India, Russia and Japan would facilitate trade for all these countries. Most importantly it allows India to invest in Russia's Far East for mutual benefit.
Russia's Far East-------------------------
India has oil investments there. It has abundant natural resources such as land, timber, oil, natural gas and minerals like tin, gold, tungsten, diamonds. Russia has invited Indian companies to set up processing units for agriculture, mining, logging, etc. Its an opportunity that India is taking seriously. For Russia, it reduces Chinese influence in the region and helps stop Chinese infiltration.
REPLY Sep 22, 2017 - High impact Afghanistan projects
India has announced 116 high impact community projects in 31 Afghan provinces. This is in addition to other commitments. For example, its development partnership includes 6 grant aided projects (shatoot dam, drinking water supply, low cost housing, connectivity, national park, manufacturing unit), its governance assistance (institutions building, skill development, education & health) and its strategic engagement includes defense assistance; regional security cooperation incl cross-border terrorism; action against organised crime incl drug trafficking & money laundering; corruption; Chabahar port; and expansion of commercial ties (eg. air corridor, agriculture, space, energy, 5-yr multiple entry business visas).
Africa prefers India's non-interference development model over China
India has speedily completed 20 major projects in Africa. It has since scaled up its presence by agreeing to a new $10-B credit line. It has now shifted to building key infrastructure (like dams, power plants, water supply) as per requirements. AAGC (Indo-Japan initiative) is designed to be collaborative, holistic and in sync with nationally identified needs, ie. it incorporates aspects like rural development, skills development, education & quality of life.
China which started much earlier has received bad press due to their exploitative or imperialist tendencies. For example, credit lines are neither soft (6-8% rates) nor long-term— they are in fact likely to push countries towards a debt trap. Then there is harassment (or undue pressure to change terms or part with national assets), little value addition, migrant workers and focus on China-specific interests like cornering African resources. In a rush to fulfil contracts, Chinese firms have displayed exploitative practices. For example, press has reported shameless exploitation of African workers!!
REPLY Oct 4, 2017
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