South Asia Has a Connectivity Disconnect
Infrastructure projects to enhance integration among states have become another venue for India-Pakistan competition.
The highlights this week: India and Pakistan chart
divergent connectivity paths in South Asia, a
rare terrorist attack strikes Islamabad, and a
$500 million infrastructure grant goes unratified in Nepal.
Connectivity and Competition
Regional connectivity is a long-standing challenge for South Asia: Infrastructure is poor, diplomatic relations are tense, and trade within the region makes up only
5 percent of its total commerce. The World Bank has
characterized South Asia as one of the least integrated regions in the world because of this low level of trade.
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Ironically, current efforts to strengthen connectivity are more likely to drive South Asian states further apart than bring them closer together. New infrastructure plans are playing out in subregions, with India pursuing initiatives to its east and Pakistan eyeing opportunities in Afghanistan and Central Asia. This infrastructure development is becoming the latest battlefield for competition between Islamabad and New Delhi.
On Jan. 15, Pakistan’s energy minister
announced that negotiations are underway with Russia to build a gas pipeline from Kazakhstan to Pakistan. The envisioned new pipeline marks Islamabad’s latest effort to strengthen connectivity with Kabul and Central Asia—but not the rest of South Asia. Last year, Pakistan
concluded a railway development agreement with Afghanistan and Uzbekistan. It also
finalized an arrangement with Afghanistan, Uzbekistan, and the United States to explore connectivity cooperation.
Pakistan’s most established connectivity project is the China-Pakistan Economic Corridor (CPEC), part of Beijing’s Belt and Road Initiative. CPEC lost momentum last year due to security and financing concerns, but it remains a
priority for Islamabad, which hopes to expand CPEC to Kabul. Pakistan is also a part of two older projects hampered by financing obstacles: the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline and the Central Asia-South Asia-1000 project, which intends to bring hydropower from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan.
Pakistan’s geographic focus makes sense for practical and geopolitical reasons. The formal end of the war in Afghanistan lessens security risks for infrastructure development there. The Taliban have previously
endorsed cross-border infrastructure projects, including
TAPI. Pakistan’s
growing relations with Russia will help it navigate Central Asia, where Moscow exerts great influence and Islamabad seeks to outcompete New Delhi. (On Jan. 27, India will
host a summit for Central Asian leaders.)
Meanwhile, India is looking to the other side of South Asia. It has leveraged its membership in the Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation (Bimstec) toward integration. Bimstec includes five South Asian states—but not Pakistan—along with Myanmar and Thailand. Recent Bimstec agreements lay out blueprints for connected electricity grids. India has also approved the use of its grid by other countries, resulting in electricity-sharing deals with
Bangladesh and
Nepal.
India’s eastward push also seems to be strategic. Pakistan doesn’t provide transit trade rights to India, constraining any Indian connectivity plans to the west. With the Taliban in power in Afghanistan, New Delhi has less influence in Kabul. Embracing Bimstec allows India to sideline Pakistan within its own region. Additionally, Bimstec is an attractive commercial partner: Its members
boast a combined GDP of nearly $3 trillion.
Both Pakistan and India’s connectivity plans face challenges. Afghanistan’s war may have ended, but ongoing terrorism risks and an economic crisis pose significant obstacles to infrastructure development. So does political volatility in Central Asia. Financing also remains a concern. Bimstec is
underfunded, and it lacks a free trade agreement. Border disputes are a challenge too. On Jan. 16, Nepal
objected to India building roads on disputed territory.
For South Asian connectivity projects to be truly regional, relations between India and Pakistan must improve—something that is not in the cards anytime soon. For the moment, subregional connectivity may be the best possible outcome, making broader regional integration elusive.
What We’re Following
Violence escalates in Pakistan. The Tehrik-i-Taliban Pakistan (TTP), also known as the Pakistani Taliban,
carried out several attacks on police officers this week—the latest surge of violence from the group in recent months. Increasing attacks in part explain why violence-related casualties in Pakistan increased by 42 percent in 2021, according to a new
report from the Center for Research and Security Studies, a Pakistani think tank.
A deadly
attack on police in Islamabad, Pakistan’s relatively safe capital, earlier this week is particularly significant. Most of the TTP’s recent assaults have taken place near the border with Afghanistan, where the TTP’s leadership is based. The Islamabad attack suggests that the TTP is expanding its geographic reach, as it did between 2007 and 2014, when it was Pakistan’s biggest terrorist threat. One difference is the TTP now appears to be targeting security forces and other state targets, not civilians.
At the same time, this week offered a grim reminder that the TTP isn’t the only terror threat in Pakistan. On Thursday, a separatist group from Balochistan province claimed responsibility for a
blast that ripped through a market in Lahore, Pakistan, killing at least two people and injuring more than two dozen.
India finalizes currency swap with Sri Lanka. On Jan. 13, India’s high commissioner to Sri Lanka
confirmed a $400 million currency swap between the countries to replenish Sri Lanka’s plummeting foreign reserves. Plans for a deal were first
announced last month, when Sri Lanka’s finance minister visited New Delhi. The package is expected to include food, health, and energy assistance for Sri Lanka, currently experiencing one of South Asia’s worst economic crises—in large part due to the pandemic’s impact on its critical tourism industry.
India’s move comes against a backdrop of intensifying competition with China in Sri Lanka. Relations stumbled last year after Colombo, which has received extensive infrastructure investments from Beijing,
axed a New Delhi-backed port investment project. India later capitalized on a
spat between Sri Lanka and China over contaminated fertilizer, sending its own products. High-level economic talks followed, including discussion of the currency swap.
Tellingly, New Delhi confirmed the aid package just days after China’s foreign minister
visited Colombo.
Indian and Pakistani migrant workers killed in drone strike. The three people killed in a drone strike that targeted fuel trucks in Abu Dhabi, United Arab Emirates, on Monday were from South Asia:
two Indians and one Pakistani. According to the
Indian Embassy in the United Arab Emirates, 2 of the 6 people injured were also Indians. The three people who died all worked for the Abu Dhabi National Oil Company.
Many Indians and Pakistanis—from migrant laborers to corporate executives—work in the UAE, a country with warm relations with both New Delhi and Islamabad. They rarely face security threats. Around
1.6 million Pakistanis live in the country, and it is the
top destination abroad for Indian workers, according to their respective governments. Millions more work in the broader Persian Gulf region, making it a top source of remittances for both India and Pakistan.
Stat of the Week
“Sixty percent of American voters, including 47 percent of Democrats and 3 in 4 Republicans, oppose sending financial aid to mitigate Afghanistan’s multiple humanitarian crises because the money could end up with the Taliban.”
—
Finding from a new Morning Consult/POLITICO poll
Under the Radar
The Millennium Challenge Corporation (MCC), a U.S. government agency that provides foreign assistance grants to promote economic growth, is not known for courting controversy. But in Nepal, a proposed
$500 million MCC grant for new road and power projects has been a political hot potato for more than four years.
The grant agreement, originally signed in September 2017, is the
largest foreign grant Kathmandu has ever received. It is envisioned to address glaring needs, but Nepal’s parliament has never ratified it due to resistance from leaders in both the opposition and ruling parties. Critics
worry that Washington’s
characterization of the grant as part of its Indo-Pacific policy means Beijing will perceive it as an anti-China initiative.
Critics also
fear the United States won’t follow Nepal’s laws if disputes emerge from grant activities. When Nepalese Prime Minister Sher Bahadur Deuba took power last year, it seemed like the grant would finally be ratified. Deuba is
seen as less close to Beijing than his predecessor, and he has vowed to ratify the deal. However, in recent weeks, his coalition partners have refused, leaving half a billion dollars in potential infrastructure support untapped.
Regional Voices
A
Daily Mirror editorial warns that politicians in Sri Lanka are trying to divert the public’s attention from economic stress by emphasizing communal threats that don’t exist: “It’s time the government intervenes to clear up the mess created by little-minded people attempting to cover up mismanagement by raising discord among the communities.”
In the
Dhaka Tribune, journalist
Syed Badrul Ahsan argues that Bangladeshi writers of all stripes are poorly marketed overseas. “There is absolutely little way for foreign connoisseurs of culture to know that a tribe of writers ready and willing to offer their works to them reigns in Bangladesh,” he writes.
Pakistani journalist
Zofeen Ebrahim writes in
Dawn that the good health of new mothers is critical to reduce child malnutrition. “If, for the first six months of a child’s life, her/his mother is treated as someone special, there is no reason for the infant to be malnourished,” she writes.
Infrastructure projects to enhance integration among states have become another venue for India-Pakistan competition.
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