Chinese String of Pearl around India

by Maloy Krishna Dhar

(August 24, New Delhi, Sri Lanka Guardian) Every country reserves the right to develop its strategic relations in the neighborhood as well as in geostrategic areas. China is not a South and South Asian power. However, for strategic reasons China has adopted an aggressive policy of establishing itself as stable and trusted friends of countries around India. Initially Pakistan was the fertile ground for China to develop strategic stranglehold around India. Over years China has pumped in pumped in over $ 100 billion in Pakistan. It is involved in mining operations in Balochistan and Punjab, port up gradation at Gwadar, oil and gas exploration, hydro-power projects in Kashmir’s northern areas, telecommunication in FATA region and Punjab. After completion of the Karakoram Road connecting Pakistan and China it is now negotiating expansion of railway connectivity with the Pakistan authorities. Over 15,000 PLA personnel are present in Pakistan on ostensive construction activities. While Pakistan has removed the US trainers, there are reliable reports that the PLA are working as instructors with the SSG and high altitude warfare commandos in the Northern Areas of Pak-occupied Kashmir. Supply of missiles, air crafts, reactors and other sophisticated weaponries are well known facts. Pakistan’s rocket technology has been developed with North Korean and Chinese helps. Certain forward airbases have also been upgraded with Chinese help. China is likely to invest in Iran-Pakistan gas pipe line that will be extended to the Chinese border. In short, China is an all-weather partner of Pakistan.

To elaborate, Pakistan is the main target of geopolitical satellite fabrication by China in India’s neighborhood. Chinese collaboration in completing the Gwadar Port in southern Balochistan is well known. Though completed, the port is sparsely used for commercial purposes as the security situation in Balochistan is fragile. In Balochistan the Chinese are also present in developing the Saindak copper-gold mine. China is not keen on operating in Baloch area as some of their workers were kidnapped by Baloch rebels.

Pakistan has given contract to China to establish mobile phone network in FATA area. Pakistan has proposal to give similar contract to Chinese companies for Waziristan and Northern Areas (POK). Pakistan is wooing China to agree to join the proposed Iran-Pakistan-Xinxiang gas pipeline. Earlier India was supposed to be a partner in the venture. Prohibitive cost and security problems made India to back out from the proposed gas pipeline. China has not yet agreed to the Pakistani proposal.

The Karakoram highway was built by China and Pakistan connecting both the countries. The deployment of Chinese troops in this region even though for the ostensible purposes of infrastructural improvements of the ‘Karakoram Corridor’ heralds a new phase of China flexing its muscles not only against India but more significantly against United States in the wider global context. According to Dr. Subhash Kapila, “Ominously, China’s up gradation of the Karakoram Corridor on Pakistan’s behalf enables China’s strategic outreach to the North Arabian Sea and the Gulf. Building oil and gas pipelines through this Corridor significantly improve China’s military postures in Western Tibet and Xingjian both against India and countering the NATO’s Eastward creep towards China’s peripheries. Notwithstanding that, the Karakoram Corridor initially passes through disputed territory, China has gone ahead with this major project as the major portion traversing Pakistan gives a strategic advantage to China in not only in outflanking US embedment in Afghanistan but also places a strong ‘strategic pressure point’ in China’s hand against the United States when coupled with Chinese naval presence at Gwadar Port in proximity of the Hormuz Straits.”

Recently President Asif Ali Zardari pleaded with China in August 2010 about Chinese help in developing hydro, thermal and solar energy in Pakistan, especially in the Gilgit-Skardu-Baltistan areas. Signing of MOU for construction of dam at Bunji in the Astore district of Northern Area with Pakistani ministry of water & power and China’s Three Gorges Project Corporation has not been taken kindly by India. This is one of the 8 projects that would produce 7000 mw electricity; part of which would be exported to China.

Tensions between India and China stepped up in October 2010 after reports that thousands of Chinese troops were in the Gilgit-Baltistan area of Pakistan-controlled Kashmir near the border with China. The controversy was sparked by an inflammatory article by Selig Harrison in the New York Times on August 26 declaring that Islamabad was “handing over de facto control” of the strategic region to China by allowing the entry of between 7,000 and 11,000 Chinese soldiers. His article was based on “foreign intelligence sources, Pakistani journalists and Pakistani human rights workers”.

Harrison acknowledged that many of the “troops” were involved in construction work on road and rail links between China and Pakistan. He suspected that 22 tunnels could be used by China and Pakistan for storing missiles. Commenting on the land routes from China via Gilgit-Baltistan to Chinese-built ports in southern Pakistan, Harrison declared: “Coupled with its support for the Taliban, Islamabad’s collusion in facilitating Chinese access to the [Persian] Gulf makes clear that Pakistan is not a US ‘ally’.”

While Pakistani Establishment and media denounced Harrison’s comments and claimed that the Chinese troops were present for repair work of the Karakoram highway and China-Pakistan rail link, the Indian reaction was sharp. In response to the New York Times article, Indian Prime Minister Manmohan Singh briefed various Indian newspapers on the dangers of China’s alleged military presence in Gilgit-Baltistan. As reported in the Times of India on September 7, Singh declared: “China would like to have a foothold in South Asia and we have to reflect on this reality.” He went on to warn of a “new assertiveness among the Chinese”. Singh said China could use India’s “soft underbelly” of Kashmir “to keep India in low-level equilibrium”.

On September 13, India’s defense minister A.K. Antony told a military conference that “we cannot afford to drop our guard” in relation to China. “We want to develop friendly relations with China … However; we cannot lose sight of the fact that China has been improving its military and physical infrastructure. In fact, there has been an increasing assertiveness on the part of China,” he said.

A protagonist of “Balawaristan” (independent Northern Area and POK) now in exile, shared with the author that besides working in Bunji dam project Pakistan has invited Chinese experts to teach Pakistanis in river fish cultivation and development of inland fishery industry. Including Karakoram Highway and the railway project there are about 20, 000 Chinese uniformed men in Gilgit-Baltistan area, in addition to huge Pakistani army and Northern Light Infantry and ISI operative presence. Despite inauguration of a facade of self-rule structure combined Chinese and Pakistani presence and planned induction of Sunni Punjabi and tribal Muslims in the area have created conditions of insecurity amongst the “Balawaris.”

Chinese presence in the Northern Area and shifting stand of China on Kashmir has added new breather to the separatists inspired and instigated by Pakistan. China now has sided with Pakistan and accepts Kashmir as a disputed territory and not as an integral part of India. It issues stapled visa to the Kashmiris and even declined to issue visa to a senior army officer because of his alleged posting in Kashmir. China invited Mirwaiz Farooq to China for discussion on the Kashmir issue. Gradually China is trying to emerge as the third party in the Kashmir tangle between India and Pakistan. Why not? Pakistan had transferred a huge part of Indian Kashmir to China back in 1966. Obviously Aksai Chin issue is there. So, how can India exclude China from any future talk?

Militarily India has slowly reacted to Chinese belligerence. It has increased troops, air force and missile capability in Arunachal Pradesh and Assam. New air landing facilities are being developed in Ladakh and border roads from Arunachal to Kashmir are being developed. It is expected that the pace of construction would be hastened up. The question of counter-military response in Kashmir-Ladakh region is being actively considered. Besides India the USA has a big stake in gradual but steady Chinese built up in Pakistan. Even if the USA and the NATO gradually withdraw from Afghanistan in 2014/15 Pakistan is not likely to cut its umbilical connection with Afghan Taliban and al Qaeda. Unless the state of Pakistan is overtaken by internal insurgent forces in the name of Islam the Army, Establishment and the ISI are not likely to abandon their ambidextrous policies and keep vast spaces open in Afghanistan open to be filled up by its friendly forces and the USA to be replaced by China. America would cease to be a regional power in this smoldering Islamist triangle and its strategic presence would be replaced by China. Strategic planners in Pakistan are actively weighing these probabilities. What should the USA and India do in these circumstances?

It is understood that the Indian strategists and military experts have taken into account the security ambiance arising out of Pak-China entente in the region. No doubt clouds the perception of Indian strategists that Sino-Pak liaison is not merely development oriented. It has definite military orientation aimed at the high priority target-India. Pakistan’s India-centric policy craves for upgraded Chinese collaboration, in the background of the facts that USA and other powers are not provide Pakistan with most sophisticated weaponry systems, aircrafts and other sinuses of warfare.

The Indian media occasionally hype the Sino-Pak collaboration without focusing on darker aspects of understanding that in the event of Indo-Pak war China is definitely going to join shoulders and confront India over the unresolved border disputes. Better media coverage and satellite and electronic intelligence gathering are, therefore, of cardinal importance.

India has not been paying adequate attention to increasing Chinese incursions in Nepal, Myanmar and Sri Lanka and strengthening its footholds on Nepal, Bangladesh, Maldives and the Seychelles Islands in the Indian Ocean zone. These aspects require diplomatic, military and strategic study keeping in view India’s long term interest in South and South East Asia and the Indian Ocean zone.

China has made deep inroads in Myammar. A China-South Korea consortium is on the verge of constructing a mega energy deal in Myanmar. The energy mega-deal actually involves several separate projects: offshore gas development, a deep-sea port, gas and oil terminals, roads, and other infrastructure. The pipelines, however, are the vital element. Operated by the state-owned Chinese National Petroleum Corporation (CNPC), in collaboration with the Myanmar Oil and Gas Enterprise (MOGE), the oil pipeline will enable China’s crude shipments from the Middle East to circumvent the vulnerable Strait of Malacca, a narrow shipping chokepoint controlled by the U.S. It will also conveniently avoid the South China Sea, where China and its neighbor Vietnam are feuding over oil-rich territories claimed by both countries. The gas line will likewise follow the same overland route as the oil pipeline, under the control of CNPC and South Korea’s Daweoo International, together with the Gas Authority of India, Korea Gas Corporation and ONGC Videsh (India). All told, more than $10 billion in new oil and gas investments poured into Burma last year alone, according to the country’s official figures.

South Korea is involved in pumping weapons to Myanmar. From 2002-2006, executives from Daewoo International and other companies sold military equipment as well as blueprints for weapons technology to Burma in violation of Korean trade law, which restricts the export of strategic materials to countries deemed a potential obstruction “to world peace and regional security.” In 2004, the law was amended to label Burma a “limited export area.” Senior Daewoo executives and their associates code-named their weapons supply scheme the “Axle Project” because they considered it the key lever to keep the gas wheel turning with Burma’s notorious difficult military leaders, according to prosecutors in the case.

Fourteen Korean executives, including six from Daewoo, were ultimately convicted in trial court, appellate court, and then again at the Supreme Court on charges of conspiracy and failure to obtain government approval for exporting strategic materials. The prosecution argued that the company used various ploys to obscure the initiative: The Burmese Directorate of Defense Industries was code-named the “landlord’s house”; a weapons factory constructed by the group in Burma was the “rice bowl”; and financial exchanges between the parties were conducted through personal bank accounts.

Daewoo’s Executive Director Lee Tae-yong was alleged to have personally overseen the export of 480 different types of military equipment worth hundreds of millions of dollars.

One 55-year old employee of the Korean government-affiliated Agency for Defense Development was charged with stealing more than 850 pages of blueprints for weapons technologies, and providing them for use in Axle. A Daewoo-led secret team also quietly trained Burmese officials in weapons manufacturing in Burma and Korea, court documents show. The ultimate goal of the Axle Project was to help the military junta construct a fully functioning weapons factory in central Burma, according to facts recognized by the trial court. The now complete factory was designed to produce tens of thousands of six different artillery shells annually, including 120mm artillery shells and 105mm howitzer high-explosive shells. “The 120mm mortar is the standard heavy mortar shell that the Burma army has used for years in attacking the resistance and villagers,” wrote David Eubank, director of the Free Burma Rangers in an email to CorpWatch. Eubank is a former U.S. Army Ranger and Special Forces officer. “The 105 is also used against some ethnic groups,” Eubank added.

According to Inhong Kim, a member of the Korea University international human rights clinic, sentences for the 14 executives varied from suspended jail time to fines. Daewoo’s Executive Director Lee Tae-yong was fined just $54,550. In an email response to CorpWatch dated June 28, Daewoo noted that “only certain individual employees of the Company were sentenced to punishment…for violation of Korea laws” and that “the violation of the individuals was irrelevant to the Company.”

China, building on its warm relations with Myanmar, has become the Southwest Asia country’s largest foreign investor, a report said Monday. The Myanmar-language Weekly Eleven says that China poured more than $3 billion into Myanmar from November last year through January this year. The increased investment has brought China’s cumulative investment in Myanmar since 1988 to $9.6 billion, as compared to Thailand’s $9.56 billion, the Weekly Eleven said. The news report, citing an unnamed official from the Union of Myanmar Chamber of Commerce and Industry, said China’s major new investments were in hydropower, natural gas and infrastructure projects to lay a solid foundation for an economic take-off in one of the least developed ASEAN countries. There have been no major new Western investments in recent years in Myanmar because of tough economic sanctions imposed by the United States, reports said.

On May 1st 2007, exactly a year before the cyclone Nargis first struck, the Myanmar’s Ministry of Electric Power and China Power Investment Cooperation (CPI) held an inaugural ceremony for the construction of a dam: according to the project a 152-meter dam generating 3.600 MW, most of which intended for China thus bringing in annual earnings of about 500 million dollars. This was just one of a series of dams projected by the junta with the aim of producing hydroelectric energy to sell at a low cost to neighboring countries. More specifically, the sum total of seven dams was planned along the Irrawaddy and all of them Chinese. The ever increasing demand for electric power in the cities of eastern China drives the Red Dragon Country to adopt a policy of “transmission of power from West to East” and in this sense investments in the hydroelectric sector in Burma represents one aspect of the close economic and political collaboration between the two nations.

It’s interesting to point out that, even with the other dams, the energy produced is in any case reserved for exportation or the military and just a minimal part for the local population, who are quite happily left in the dark when the need arises.

21st May of the same year, many residents of the area concerned about the consequences of the construction of the dam (which by the way is 100km from the Sagaing fault, a high seismic risk area) sent protest letters directly to general Than Shwe asking to stop the project. Of course they never received any answer.

Just a few months later, in October, a few activists revealed that tens of thousands of people were being threatened with eviction. In fact, in a detailed report of Kachin Development Networking Group (KDNG) we read that at least 47 villages have been eliminated, that the dam has also had a heavy impact on the environment, on communications, on transportation and on means of subsistence, and furthermore, that there has been an increase in abuse, violations of human rights, rape and sexual violence committed by the military. And that’s not all: the activists anticipated that even the population downstream, the over 3 million inhabitants of the delta area, would have had huge problems and that the area would no longer be “Burma’s rice bowl”.

It is practically the same scenario which we were faced with after the Nargis swept through and which seemed only to have accidentally opened and smoothed out the way for the government’s profit-making projects. A great opportunity to once more avoid being answerable to the defenseless people, to get rid of the survivors and with them their protests which are, as always, indigestible to the Generals. What’s the big deal if there are less farmers and fishermen to exploit, there’s all that environmental butchery to feed from and fatten the junta, of course, always with support coming from China.

China announced on May 28, plans to build a railway line between Chinese city of Ruili and Myanmar”s port city Kyaukphyu, not far from Kolkata, while Yangon secured a USD 763 million line of credit from Beijing to deepen economic cooperation between the two close allies. China Railway announced that it signed an agreement with Myanmar to jointly build the 810-km long rail line from Ruili in southwestern Yunnan Province to Kyaukphyu via Muse. The agreements was signed during the landmark three-day visit of Myanmar President Thein Sein that ended today during which Yangon secured a USD 763 million line of credit from the China Development Bank. Under the MOU to connect China with Myanmar”s Kyaukphyu port, China Railway Group Limited (China Railway) would be in charge of building the rail line. China Railway said the project, expected to be completed within three years, would help deepen China-Myanmar economic ties and boost the economic growth of Myanmar. Kyaukpyu, according to previous reports, was envisaged as terminus for Middle East and African tankers supplying oil to China from where it was expected to be transported by pipelines. The bilateral agreement for a USD 763 million line of credit was signed along with raft of financial pacts last night after talks between Chinese President Hu Jintao and his counterpart from Myanmar.

China involved in mining copper, iron and other minerals in Myanmar. The Myanmar Taguang Taung Nickel Ore Project Mining System, with joint investment from China Nonferrous Group and Taiyuan Iron and Steel (Group) Co. Ltd. (TISCO), has been put into operation, authorities said Friday. The project’s smelting system will be put into operation within the year, said Yang Haigui, secretary of the Communist Party Committee of TISCO. The project is the biggest cooperative mining project between China and Myanmar and is expected to provide 85,000 tonnes of high grade ferro-nickel annually upon completion. Located on the bank of the Fenhe River in Taiyuan, a city in north China’s Shanxi Province, TISCO is the world’s largest stainless steel enterprise with an annual output of 10 million tons of steel. The company’s products include stainless steel, cold rolled silicon steel and high strength and toughness steel.

It is also reported that China proposes to build a deep water port in southern Myanmar at Hianggyi Island, at the mouth of the Bassein River delta, on the understanding that it could be used by the Chinese Navy. Although it is believed, that when finally completed, the Hianggyi base will be too small to host Chinese surface warships of the size required for effective operations in the Indian Ocean.12 However, China will still be able to berth smaller vessels, which could help monitor Indian naval activity in the area. China is also believed to be modernizing the existing naval facilities in Myanmar’s ports of Akyab and Mergui. India remains wary of all these developments.

Indian sources report that China is building a signal intelligence station on Great Cocos Islands which could help China monitor Indian naval communications at sea, as well as observe and track Indian missile bases in the Indian state of Orissa. The Great Cocos islands are only at a distance of some 30 nautical miles from the Indian Andaman chain of islands and, therefore, the reports of establishment of such facilities are of particular concern to India.

It is also reported that in the renewed hostility between the Junta in Myanmar and Shan and Kachin rebels the Chinese are providing arms and other assistance to the military regime.

On the other hand Thailand is engaged in constructing a deep sea port in Myanmar. When complete, the Dawei port in southwestern Burma will be able to take ships of 300,000 tones, says Sing Tangcharoenchaichana, president of the industrial council of the Thai central region. Road connectivity to the port will be provided to China border and to Vietnam. This port is supposed to cut the cost of carrying oil and other merchandise to the South China Seas and the Gulf of Thailand through the Straits of Malacca.

India, for whatever reason, mostly because of foreign policy inertia and lack of forward vision has pushed Myanmar to the orbit of China. It is no Indian concern if Myanmar is ruled by military junta or democratic government. India blindly toed the American line and ignored forward policy in Myanmar. India’s proposal to open up the Mizoram to Sitwe port in Mynamar is still languishing in political and bureaucratic wrangle. In case the Sitwe gateway is opened India can stop depending on Bangladesh for its exports imports to the Northeast states.

China has also made deep inroads in Sri Lanka. The Chinese Government endeavors to develop its friendship and cooperation with Sri Lanka on the basis of the Five Principles of Peaceful Co-Existence. Chinese enterprises are contracted to build the Hambantota port.

The foundation for the construction of a modern port with Chinese assistance at Hambantota in southern Sri Lanka was formally laid in October, 2007. The construction actually started in January, 2008.

It is a 15-year project to be completed in stages. The entire project is estimated to cost US $ one billion. The present Chinese commitment is for the construction of the first stage only, which is estimated to cost US $ 360 million. China has agreed to give 85 per cent of this amount at concessional interest. The balance is being contributed by the Government of Sri Lanka.

The first stage of the 15-year (2008-2023) project is expected to be completed by the end of 2010. This stage envisages the construction of a 1000-metre jetty, which will enable the harbor to function as an industrial port for the import and export of industrial chemicals, fuel and heavy machinery. By 2023, Hambantota is projected to have a liquefied natural gas refinery, aviation fuel storage facilities, three separate docks giving the port a transshipment capacity and dry docks for ship repair and construction. The project also envisages that when completed the port will serve as a base for bunkering and refueling.

The draught (depth) of the new harbour will be 16 metres against 15 metres in Colombo. A 230 metre passage-entrance channel will be created at the breakwater which is 988 metres long on the west end and 311 metres long on the east end.

The Government hopes that as a refueling location Hambantota will have many advantages over the Colombo port or ports in South India. The construction has been undertaken by a consortium of Chinese companies headed by the China Harbour Engineering Company and the Sino Hydro Corporation.

The project doesn’t have a separate consultant. The Sri Lanka Port Authority (SLPA) is functioning as the client-cum-consultant while the China Harbour Engineering Co Ltd is the contractor. In September, 2008, there were 328 Sri Lankans and 235 Chinese working at the site-engineers, administrative personnel and others. The present number is not known.

The first stage due to be ready by end 2010 will allow three ships to berth. The final stage, for which there is no offer of funding yet from China, is planned to accommodate more than 30 ships, which is the present capacity at Colombo.

Reliable reports say that while the Sri Lankan authorities want Hambantota to emerge as a modern port with better facilities and efficiency than any of the ports in South India, they do not want the present importance of the Colombo port to be reduced. Colombo presently has the reputation of being the most modern and most efficient port in South Asia. They want this reputation to be maintained. There is no proposal at present to set up container yards and cater to container ships at Hambantota.

The present Chinese interest is in the use of the docking and refueling facilities that would come up in Hambantota for their commercial and naval ships. There is no proposal at present for a Chinese naval base at Hambantota.

Chinese port operator China Merchants Holdings (International) is negotiating with the Sri Lankan authorities a contract for the construction of a new container terminal at Colombo. The company has bid for the contract jointly with a Sri Lankan company Aitken Spence.

On November 27, 2009, Rajapaksa inaugurated the construction of Sri Lanka’s second international airport at Maththala in Hambantota. The new airport will be constructed on a plot of 2,000 hectares in Hambantota district at a cost of US$ 190 million. The Government of the People’s Republic of China will provide financial assistance for the project with a soft loan through its Ex-Im Bank.. According to the Ports and Aviation Ministry, the construction of the airport will be completed in two phases. All basic facilities including runways, taxiways and parking facilities will be completed in the first phase to be completed by 2011. All other airport and aviation related facilities will be completed in the second phase. These include servicing and repairing centre for aircraft, hotels, pilot training centre, maintenance hub, private jet parking, and technical training centers. The Government hopes to commission the airport by the end of 2011 and land the first flight by December 2011.

Other Chinese activities in Lanka include: the construction of the Colombo–Katunayake Expressway.( US $ 248 million), improvement of the railways—US $ 100 million to be given by China’s Ex-Im Bank. Agreement signed on March 10, 2010. Norochcholai Coal Power Plant (US$855 million), a flood protection system for Colombo suburbs of Kotte, Dehiwela-Mount Lavinia, Maharagama, Kesbewa and Moratuwa. (US $ 59 million) To be given by China Construction Bank, National Theatre of Performing Arts in Colombo (US $ 21 million). Sri Lanka’s investment promotion agency, the Board of Investment, announced in July, 2009, it has signed a deal with China’s Huichen Investment to manage a special economic zone dedicated to Chinese investors. Huichen will invest US $28 million in the zone in Mirigama, north of Colombo, to improve infrastructure in the first phase over three years. The company, a conglomerate that specializes in infrastructure development and does coal and iron ore mining, will also market the zone and attract Chinese investors.

More than 50 per cent of the funding received by Sri Lanka from abroad for construction and development projects since Rajapaksa came to power came from China.

Since 2007, Sri Lanka has been trying to launch a communication satellite. China has agreed to provide financial and technical assistance, “Executive Director of the Institute of Policy Studies, Dr. Saman Kelegama was quoted as saying in November 2009. In May 2009, Priyantha Kariyapperuma, Director-General of the Telecommunications Regulatory Commission, had said that the Government had begun work on a space programme hoping to launch two communication satellites. “The University of Surrey specializes in satellite technology having created about 35 satellites. They have made a presentation to President Mahindra Rajapakse and have entered into an agreement to transfer technology and knowledge to our universities, “he told the Island Financial Review. Kariyapperuma said a consortium of vice chancellors from universities with engineering faculties had been formed for this purpose. He said the Government planned to launch two communication satellites—a lower earth orbit satellite used mainly for images and a geo stationary communication satellite. The two satellites will be used not only for communication purposes but also for disaster management, agriculture planning, irrigation planning, town/urban planning and coastal conservation. He said the low earth orbiting satellite could be financed with domestic funds particularly from the Telecommunication Development Fund. The private sector would also be called to contribute to the development of the two satellites.

Burgeoning Chinese presence in Nepal is marked by construction of a road linking China and Nepal and project to connect Nepal with the main rail routes of China. China has committed $3 billion aid to Nepal for joint venture development of Lumbini on Indian border, the birth place of Lord Buddha. This will be place of global tourist attraction. India failed to link up development of Nalanda and Saranath with Lumbini. If India had undertaken that project with Japanese, Korean, Taiwan and Thai assistance Lumbini would have not been grabbed by China. It is a clear failure of Indian diplomacy.

Global collaboration of Chinese companies are involved in internal road construction and the two governments are negotiating on the aspects of Construction of several hydro electric projects on rivers flowing from Nepal to India. This may pose serious problems for India. Defying limitations of Indo-Nepal agreement Nepal received several consignments of weapons systems from China. With the rise of Maoists parties in Nepal India is likely to face increasing hostile attitude from sections of Nepalese leaders.

China has already started investing in the tourism industry of the Maldives and Maldivian students are encouraged tom study in Chinese universities. India’s relationship with Male is warm. But Delhi requires paying better attention to Maldives. Similarly, India should overcome the impasse caused by its Tamil sensitivities. The Indian Tamils should also understand that sympathy with a Diaspora cannot be poised against the country’s international relations. The war against the LTTE was fully exploited by Pakistan and China. That passivism phase should be discarded by India. It should encourage Sri Lankan students to study in India on scholarship, allow liberal export from Colombo and get involved in Lanka’s quest for development. In international cooperation money spent is money earned.

It is time to wake up and extend hands of cooperation towards Myanmar, Lanka, Nepal and other ASEAN countries. India needs reorientation of its foreign policy and expansion of its sphere of influence in the region.