The Tribune – China has chance to explain Ladakh incursion: Ex-envoy Nalin Surie

K V Prasad, Tribune News Service

New Delhi, May 18. Suggesting that the recent Ladakh incursion by China has cast a “dark shadow” over its relations with India, a former envoy has said the Beijing leadership after having resolved the issue in a mature manner will have the opportunity to tell New Delhi the reason behind the move.

As new Chinese Premier Li Keqiang arrives here tomorrow on his first overseas visit to any country after assuming office, former Indian Ambassdor to China Nalin Surie feels Premier Li and his team have an opportunity to explain why the incident occurred. “It is an advantage for Premier Li and his team to explain why it happened while India can understand the aspirations of the new Chinese leadership,” Surie said in an interaction here today.

A spokesperson for the Chinese Foreign Office had recently told Indian mediapesons that the Ladakh incursion was an “isolated incident”, which Surie felt was not an adequate explanation.

Surie, who succeeded current National Security Adviser Shiv Shankar Menon as Indian Ambassador to China, said the new Chinese leadership had been groomed for the task and was well aware of the aspirations of the country and the world.

Referring to the recent statement by Li during an interaction with an Indian youth delegation that it was time to look ahead, Surie said while it was good to think of the future, this constant testing by Beijing in the form of Ladakh incursion sets back the trust that should be built in the relationship between the two most populous neighbours in Asia.

Surie, who retired last year after serving as the Indian High Commissioner in the United Kingdom, felt while there were no differences between the Chinese leadership in government and military, whoever ordered the Chinese platoon to move into the Ladakh region made an “error of judgement”.

Citing his lecture at a conference on Sino-Indian relations at Thrissur, Kerala, earlier this year, Suire said both India and China were too big and growing in power to be contained and even when India was less powerful, both countries were not susceptible to containment.

The relationship between the two countries would in the foreseeable future continue to be a mix of competition and cooperation, he said, adding that the key resentment in Beijing was that while its rise was seen as being threatening, India’s rise wasn’t.

It is an advantage for Premier Li and his team to explain why it happened while India can understand the aspirations of the new Chinese leadership.
—Nalin Surie, former Indian envoy

http://www.tribuneindia.com/2013/20130519/main2.htm

BBC News – India and China ‘pull back troops’ in disputed border area

Monday, 6 May 2013. India and China have pulled back troops from disputed territory near the two countries’ de facto border in the Himalayas, Indian media reports say.

Soldiers were said to have set up camps facing each other on the ill-defined frontier in Ladakh region last month.

The two sides held a series of talks to resolve the row and the troops were withdrawn on Sunday, the reports added.

The two countries dispute several Himalayan border areas and fought a brief war in 1962.

Tensions flare up from time to time. They have held numerous rounds of border talks, but all have been unsuccessful so far.

Reports in the Indian media quoting official sources said that Indian and Chinese commanders ended a near three-week long stand-off on the border after four rounds of talks, ordering troops to remove camps 300 metres apart on Sunday evening.

There has been no official confirmation of the development from either side yet.

Indian officials had accused Chinese troops of straying 10 km (six miles) into Indian territory on 15 April and putting up tents in the Depsang valley in Ladakh, in eastern Kashmir. China had denied reports of an incursion.

Sunday’s reported pull-out comes days ahead of Indian Foreign Minister Salman Khurshid’s visit to China, ahead of a scheduled visit by Chinese Premier Li Keqiang to India.

Mr Khurshid is visiting China on 9 May, ahead of Mr Li’s visit on 20 May for his first overseas trip.

http://www.bbc.co.uk/news/world-asia-india-22423999

The Asian Age – Rajnath demands Khurshid’s visit to China be cancelled

New Delhi, 28 April 2013. BJP president Rajnath Singh today demanded cancellation of external affairs minister Salman Khurshid’s May 9 visit to China till it withdraws its Army personnel from Depsang Valley in Ladakh where they intruded a fortnight back.

“Despite all this, our foreign minister is going to China on a visit. I am sorry but I would humbly request the Prime Minister to stop the foreign minister. Till the time China leaves Ladakh and goes back, there should not be any visit to Beijing,” Singh said addressing the Matri Shree awards function here.

He also demanded that the area should be handed over to the Army instead of ITBP, which is currently posted there. “The area where China has infiltrated was under the Army till 2010. The government pulled out the Army from there and handed it over to ITBP, which fall under the home ministry.

“I request that without any delay, the area under ITBP be handed back to the Army because no other force can work there. It is a very sensitive matter and our country is facing grave danger from outside,” Singh said.

The government so far has decided to go ahead with Khurshid’s visit notwithstanding the Chinese intrusion. Khurshid’s trip comes ahead of the visit by newly elected Chinese premier Li Keqiang to India later next month. A lot of significance is being attached to Li’s visit, his first abroad after becoming Prime Minister last month.

The BJP chief said the way China was surrounding India from all corners was “not a recent thing” and that he had attracted the government’s attention to this five years ago.

“I was the first politician to raise the issue of China building a dam on Brahmaputra five-six years ago and trying to divert its water. I raised this issue in Parliament. The Prime Minister said it is a serious matter and I would speak to you personally. I suggested composition of a joint committee to probe the matter but it wasn’t done,” Singh rued.

On the attack on Indian prisoner Sarabjit Singh in a Lahore jail, the BJP chief said had India been strong in protesting against earlier similar incidents in Pakistan, no one could have dared to attack him. (PTI)

http://www.asianage.com/india/rajnath-demands-khurshid-s-visit-china-be-cancelled-337

Dawn – Manmohan Singh says Pakistan not doing enough against terrorists

From our correspondent

New Delhi, 7 March 2013. Prime Minister Manmohan Singh said on Wednesday that India was continuing to talk to Pakistan to normalise ties, but the latter was faltering on its part of the bargain with regard to terrorism.

Addressing the Lok Sabha where he berated the Bharatiya Janata Party for using foul language against him and his party, Dr Singh drew a rosy picture of his domestic and foreign policy measures.

“Our dialogue with Pakistan continues in order to normalise our relations: promote bilateral cooperation and people-to-people contacts; and resolve outstanding issues,” Dr Singh said towards the end of his speech before winning a key vote on government’s policies. He described the recent flare-up on the Line of Control as a negative influence on the dialogue process.

“Progress has been possible in some areas like trade and people-to-people contacts. But incidents such as the barbaric manner in which two Indian soldiers were killed on the Line of Control in January vitiate the atmosphere and cast a shadow on the bilateral dialogue process.

“Further, we are yet to see tangible progress in dismantling the terrorism infrastructure in Pakistan and in bringing to justice the perpetrators of the Mumbai terror attack of November 2008. Normal, good-neighbourly relations between India and Pakistan — free from the threat of violence, and enhanced bilateral economic cooperation — would be in our mutual interest. We also expect Pakistan to take steps to create a conducive environment to take the process of normalisation forward,” Dr Singh said.

India has an abiding interest in a stable, strong, united, democratic and prosperous Afghanistan, which is no longer a safe haven for terrorism.

“As Afghanistan undergoes political, economic and security transitions in 2014 and beyond, we will continue to help build Afghan capabilities to evolve peacefully and fight terrorism and extremism,” the prime minister said.

The Indian government is under pressure from its Tamil deputies to support a US-led resolution against Sri Lanka’s human rights record against Jaffna Tamils. The prime minister hedged his bets on how India would vote.

“As regards the issue of a draft resolution expected to be tabled by the United States at the forthcoming session of the UN Human Rights Council in Geneva, our decision will depend on the substance of the final text tabled in the council. We will, however, be guided by our consistent position that we support proposals that seek to advance the achievement of a future for the Tamil community in Sri Lanka that is marked by equality, dignity, justice and self respect.”

Responding to concerns raised by the deputies on the alleged threat India faces from China, Dr Singh played down the issue.

“In my view, there is enough space in the world today for both countries to achieve their developmental aspirations.

While we do have differences over the border issue, since 1988 we have evolved mechanisms to address the issue and to maintain peace and tranquillity on the border.”

http://dawn.com/2013/03/07/singh-says-pakistan-not-doing-enough-against-terrorists/

The Tribune – Menon in Beijing; Army chief reviews border security

Kolkata, December 2. On a day when National Security Adviser Shivshankar Menon arrived in Beijing for carrying forward the border talks, Army Chief Generak Bikram Singh reviewed the operational preparedness of troops along the China border in the NorthEast.

“Eastern Army Commander Lt General Dalbir Singh Suhag briefed the Army Chief on the operational preparedness and the security scenario in the eastern region,” a defence spokesperson said. The Eastern Command is in-charge of securing the region east of Kolkata up to Arunachal covering boundary with China.

India is upgrading its defence preparedness along the eastern boundary by raising more troops, new formations and deploying more lethal assets such as the BrahMos supersonic cruise missile.

This was General Singh’s maiden visit to the Fort William-based Command headquarter since taking over as Army Chief on May 31, this year.

The visit follows his earlier visits to the three Corps headquarters under Eastern Command based at Sukna, Dimapur and Tezpur in recent months.

“It is virtually a homecoming,” said General Singh on arrival. Having commanded the Eastern Command for over two years, this is one formation that is very close to my heart,” he said.

As a mark of respect to former Prime Minister I K Gujral, who passed away on Friday, several planned social events were cancelled during the visit, the spokesperson said.

The Army Chief, who has so far addressed nearly 16,000 officers during his official visits to various formations and units across the country, including via video conferencing, addressed over 250 officers posted in and around Kolkata.

Sharing his vision to enhance operational effectiveness of the Army, he dwelt on some of the thrust areas that include effective fulfilment of the constitutional obligations and assigned roles, including force modernisation as per stipulated time lines.

General Singh also stressed on effective human resource management to ensure highest standards of motivation and morale.

“In my reckoning, unless these people are happy, the Army cannot be strong and happy. We cannot afford to ignore our ex-servicemen and ‘veer naris’ (war widows)” he said, while delving on various measures initiated for their welfare.

Menon in Beijing for talks

Beijing: In the first high-level Sino-India contact since the once-in-a-decade leadership change in the ruling CPC, National Security Advisor Shivshankar Menon arrived here on Sunday for wide-ranging talks on bilateral ties, including the vexed border issue.

During his three-days stay here, Menon would be meeting some of the new leaders elected during last month’s Congress of the ruling Communist Party of China (CPC) to succeed the outgoing administration headed by President Hu Jintao.

There is no official announcement here about Menon’s schedule.

Besides holding talks with his counterpart and China’s top diplomat Dai Bingguo, who too would retire in March next year, Menon is expected to call on Vice Premier Li Keqiang, the number two leader in the seven-member new Standing Committee of the party headed by General Secretary Xi Jinping, according to official sources.

Li is tipped to succeed Premier Wen Jiabao when he steps down in March after which a new administration headed by Xi, who would replace President Hu Jintao, would take over power formally.

The two officials designated as Special Representatives for the talks to resolve the border issue would review the progress achieved during the last 15 rounds of parleys and exchange views on a wide spectrum of bilateral relations, according to officials.

http://www.tribuneindia.com/2012/20121203/main4.htm

The Hindu – Kalam: like China, India too going nuclear way

Beijing to push forward plans after undertaking extensive safety review

Ananth Krishnan

Beijing, 3 November 2012.

Just as China has moved towards ending its ban on new nuclear projects after the Fukushima disaster by giving the go-ahead for constructing power plants, the former President, A.P.J. Abdul Kalam, said in Beijing on Friday that India “had also come to the conclusion” that nuclear power would have to play a key role in achieving energy independence.

While Japan and some countries in the West, such as Germany, have moved away from nuclear energy in the wake of Fukushima, the Chinese government on October 25 signalled its intent to push forward its ambitious plans for the nuclear sector, albeit at a slower pace, after undertaking an extensive safety review.

Asked about China’s plans to go forward with nuclear energy, Dr. Kalam, who is in Beijing to attend a conference, told The Hindu in an interview that India was also of a similar view. “India has also come to the conclusion,” he said. “We have got to generate 20,000 MW by 2020, so definitely India is going ahead. There is no doubt about it.”

‘We have to shape ideas’

“Of course in a democratic nation,” he said, “some views will come out.. [But] we have to shape ideas.”

China, which is operating 16 nuclear power reactors and has 26 more under construction, on October 25 approved a Nuclear Power Safety Plan from 2011-2020, after a longer than expected safety review was initiated in March.

A Cabinet meeting decided China “will return to normal nuclear power construction by maintaining a rational construction pace,” indicating it would slow down its expansion plans.

The government said it would not construct any nuclear projects in inland areas — some of the 26 projects already approved are in the interior — and would only build plants in coastal areas.

To address safety fears, the government said it would also spend 80 billion yuan (Rs. 68,800 crore) by 2015 to upgrade security standards and phase out older reactors.

Dr. Kalam said the experiences of other countries — whether the bullishness in China or the wariness in Japan and Europe — did not ultimately matter as far as India was concerned.

“We have to think about what is right for India,” he said, “and India should go for energy independence.”

Offer to teach

Dr. Kalam was welcomed warmly on his first visit to Beijing, where he addressed a conference on Friday.

Peking University’s Council Chairman Zhu Shanlu, who met with the former president, extended an invitation to Dr. Kalam to deliver annual lectures at the university and conduct research here.

“They said you must teach here, and can come here and do research,” he said. “I love to teach youth wherever they are, I teach in the U.S., I teach in India. It is a unique place because this is the place where we have to build bridges.”

Scientists at the China Academy of Space Technology told Dr. Kalam they wanted to work with India and the Indian Space Research Organisation (ISRO) on their space missions and set up a formal initiative.

Dr. Kalam on Friday suggested setting up a World Knowledge Platform for Global Action that would invest $4 billion to bring together universities, governments and entrepreneurs to take forward joint initiatives on sustainable development, energy independence and the environment.

“The youth and the intellectuals and the academy here, and even in the political field, can see there is a necessity to work together [with India],” he said, suggesting India could leverage China’s core competencies in manufacturing while India could offer its know-how in IT and the services.

“We [India and China] had a bad experience historically, the question is what do we do now,” he said. “If you look at Europe, they fought for 100 years and one day they all joined together. We have to make up our mind. Defence is of course very important for every country,” he added, “but we are talking about 37 per cent of the world’s population, and that is a great opportunity.”

http://www.thehindu.com/news/international/kalam-like-china-india-too-going-nuclear-way/article4059277.ece

The Tribune – US to seek firm commitment from India on Afghanistan; Defence Secretary for increased Indian engagement in trouble-torn country

Ajay Banerjee, Tribune News Service

New Delhi, June 5. Visiting US Defence Secretary Leon Panetta is expected to ask India to increase its engagement in Afghanistan to bring about peace there, especially after 2014 when the international forces start to withdraw from the country.

In the past one week, the US has indicated it will have an ‘enduring presence’ in the country after 2014. However, it has not spelt out the force levels or other details. Over the next 24 hours, Washington is expected to extend a hand to New Delhi, seeking a firm commitment on Afghanistan.

For India, it will be a tough call to take. New Delhi has no intention of putting its troops on the ground in Afghanistan but is comfortable in its existing role of training the Afghan National Army as also the police forces besides leading infrastructure development for which $ 2 billion has been pledged.

Panetta arrived here this afternoon and called on Prime Minister Manmohan Singh in the evening at his residence. The Indian officials termed his visit as a “courtesy call”. He will meet Defence Minister AK Antony tomorrow for 45 minutes, which is the ‘business part’ of his visit. “Ongoing defence cooperation and regional security situation will figure prominently during discussions,” the Indian Defence Ministry said tonight.

One of the long-term thinking of the US is to ask Pakistan and India to “harmonize their approaches” towards Afghanistan even as it fears that India-Pak istan rivalry could trigger a race to influence Afghanistan post-2014. In October, India and Afghanistan signed a wide-ranging agreement to deepen ties. The agreement included training to Afghan security forces by the Indian Army, which angered Pakistan.

Panetta, a former Director of the Central Investigative Agency (CIA), has arrived in India just a week ahead of the India-US strategic dialogue, which will be held in Washington on June 13. Importantly for India, he has come at a time when the United States has announced a major policy shift and has swung eastwards which is being seen as a “China centric policy”.

Much to the chagrin of China, the US has announced the shifting of its naval assets to strengthen the Pacific Area Command (PACOM). Under the United States’ scheme of things, Pacific Area Command jurisdiction includes countries like India. The new plan will include stationing of 60 per cent of the United States’ Naval fleet under Pacific Area Command by 2020. So far the assets have been divided 50:50 between Pacific Area Command and the Central Command. The United States terms this as a ‘re-balancing’act.

Some six sea-borne aircraft carriers, a majority of cruisers, destroyers, littoral combat ships and submarines will be stationed under Pacific Area Command. China does not have single aircraft carrier but has nuclear submarines.

Beijing has termed the United States decision to shift the bulk of its naval fleet to the Pacific by 2020 as “untimely”.

The United States is also keen to get a bigger slice of India’s defence acquisitions, and is negotiating to sell it about two dozen Apache attack helicopters along with other weapons.

Visit ahead of strategic dialogue

Leon Panetta has arrived in India a week ahead of the India-US strategic dialogue, which will be held in Washington on June 13. He has come at a time when the US has announced a major policy shift which is being seen as a “China centric policy”.

http://www.tribuneindia.com/2012/20120606/main1.htm

The Tribune – Manmohan meets President Thein Sein; Trade to double with Myanmar, Delhi ropes in private sector

By Raj Chengappa in Nay Pyi Taw, Myanmar

For long, the major grouse of Myanmar’s ruling junta was that while India stood tall in talk, it was small on delivery of its promises. In diplomatic circles, India was often referred to with the derisive acronym NATO – No Action Talk Only.

On Monday, the second day of his historic visit to Myanmar, the first by an Indian Prime Minister in a quarter of a century, Manmohan Singh was determined to shake the image of India being a sleeping elephant. As he sat down for a summit meeting with President Thein Sein in the sprawling 100-room Presidential Palace, the two sides signed an exhaustive list of deliverables that spanned trade and investment, connectivity, development and security.

That list included a decision to double bilateral trade that currently totals $ 1.3 billion by 2015 or in the next three years.

India made a major effort to involve its private sector to give “greater depth and spread,” as External Affairs Minister S M Krishna put it, to trade and investment tie-ups between the two countries.

That saw a 25-member delegation of business honchos descend on the capital to have a meeting with President Thein Sein and his key cabinet ministers. With Myanmar sitting on huge oil and gas reserves, many Indian companies have shown interest in investing in available blocks for exploration. At the bilateral meeting, a production sharing contract was signed between the Myanmar government and Jubilant Energy, a privately owned Indian oil exploration company, for an onshore block.

The bilateral meeting went far beyond the scheduled time, with Manmohan Singh reiterating “India’s readiness to extend all necessary assistance in accelerating the country’s democratic transition. ”Though the longyi-clad Thein Sein understands and speaks English, he chose to communicate through Burmese, the official language, so that his entire cabinet which was present could understand the dialogue. Given that the Myanmar President operates through a collective leadership dominated by retired and current military top brass, Thein Sein was also ensuring that China-backers in his cabinet were on board.

Both India and Myanmar are acutely conscious of China’s overarching influence in the region and are keen to diminish it by strengthening ties with each other for differing reasons. While Myanmar needs India to increase its bargaining power with China and lessen its dependence to it, India is keen to strengthen ties with Myanmar because in many ways it sees the country as the gateway to its ‘Look East’ ambition of a significant engagement with the Association of South East Asian Nations (ASEAN).

Even then India would be hard put to match China’s investments which pumped in $ 4 billion last November for a single power project. Summing up the outcome of the bilateral visit, Foreign Secretary Ranjan Mathai told The Tribune, “We didn’t go for a big-bang approach, but took a whole series of small but significant steps to ensure that our relationship with Myanmar had substance and left them with no doubt that we regarded them as a key neighbour.”

Among the other decisions taken by the two leaders was to significantly enhance connectivity between the two countries to promote both trade and tourism. They decided to speed up the trilateral connectivity with Thailand by putting on fast-track the construction of the highway linking Moreh in Manipur with Mae Sot in Thailand via Myanmar.

To ensure that there would be seamless trilateral connectivity by 2016, Manmohan Singh announced that India would repair and upgrade 71 bridges on the Tamu-Kalewa friendship road apart from upgrading the Kalewa-Yargi road segment. On its part, Myanmar would upgrade the Yargyi-Monywa stretch to Thailand. The two leaders also agreed to launch a trans-border bus service from Imphal in India to Mandalay, Myanmar’s business hub.

As significant was the signing of a new Air Service Agreement between the two countries that provides for expansion of air connectivity to cover more carriers, flights and destinations. The agreement provides for what is known as “5th freedom rights” that enables Indian carriers to combine their flights to Myanmar with other destinations in South East Asia and elsewhere – a rare concession. Currently there are no direct flights between India and Myanmar and the new agreement is to give incentives to airliners both public and private to correct the situation.

Even though there is a gauge difference between tracks used by Indian and Myanmar Railways, the two sides decided to set up a Joint Working Group on Cooperation in the Railway Sector to look at sorting such issues out and also the feasibility of movement of freight from India to the South East Asian Region from its North East borders.

Meanwhile, during the bilateral meeting, the progress of the Kaladan Multi-modal Transit Transport Project was also reviewed. Conceived by India, the Kaladan project set up in 2010 at cost of $ 500 million, is aimed at providing an alternate cargo route to India’s landlocked North-Eastern states via Myanmar. India is funding and constructing a deep-water port at the mouth of the Kaladan River in Sittwe in Southern Myanmar apart from upgrading highways in Myanmar to develop transport infrastructure between the border areas of the two countries.

With India and Myanmar sharing a 1,600 km border such cooperation has become critical. A Memorandum of Understanding (MOU) provides for the setting up a Border Haat on a pilot basis at Pangsau Pass, Arunachal Pradesh. Many such Boarder Haats are being proposed primarily to enhance trade between the border states of the two countries. An MOU was also signed on India-Myanmar Border Area Development to look at infrastructure development and micro-economic projects including upgradation of roads and construction of schools, health centres and bridges.

With trouble in the border states being a sour point between the two countries – India had always objected to Myanmar’s tacit support to North Eastern rebel groups in the past – the visit saw a renewed effort to ensure that they worked in coordination to thwart militant groups especially Naga rebels. Myanmar too is concerned with militancy by its ethnic minorities that live in areas bordering India.

The joint statement after the bilateral meeting stated that both Manmohan Singh and Thein Sein, “reaffirmed their shared commitment to fight the scourge of terrorism and insurgent activity in all its forms and manifestations.” That included committing that the territories of either country would not be allowed to be used for “activities inimical to the other including for training, sanctuary and other operations by terrorists and insurgent organisations and their operatives.”

http://www.tribuneindia.com/2012/20120529/main1.htm

The Tribune – China violated LAC 505 times since Jan 2010; Triggered by differing perceptions of disputed line

Ajay Banerjee, Tribune News Service

New Delhi, May 16. Differing perceptions of the disputed Line of Actual Control (LAC) between India and China has led to a whopping 505 transgressions by Chinese soldiers since January 2010.

Explaining ‘transgressions’, officials said India and China do not agree on the LAC, hence soldiers on either side patrol up to the point they perceive as the LAC. Soldiers on both sides show a banner asking the other party to withdraw when the LAC is crossed. Despite the underlying tension, the process of withdrawing by both sides keeps a lid on the situation along the tense frontier between the two edgy neighbours.

Today, the matter of transgressions was raised in the Rajya Sabha and the Minister of State for Home Affairs Mullappally Ramachandran said, “There have been 228 reported cases of transgression in 2010, 213 in 2011 and 64 till April this year. It was clarified, “There has been no intrusion along the India-China border. However, there are cases of transgression (by People’s Liberation Army, PLA) due to different perception of the LAC.” The word ‘intrusion’ is the official nomenclature to indicate a breach of the sanctity of the border and is different from transgression on LAC, that too on sections which are disputed.

The LAC is 4,057-km-long and traverses areas of Himalayan states, principally in Eastern Ladakh (J&K), parts of Uttarakhand, Sikkim and Arunachal Pradesh. Historically, there has never been a demarcated boundary. These are strategically vital portions which are contiguous with Tibet.

New Delhi takes up specific incidents of transgression with the Chinese side through established mechanisms such as hotlines, flag meetings, border personnel meetings and normal diplomatic channels.

The 15th round of Sino-Indian Special Representatives (SR)-level talks was held in New Delhi in January last. Sources said the two sides are at an advanced stage of taking a decision on a joint civil-military mechanism to maintain peace along the LAC.

Despite the transgressions, peace is maintained along the LAC following an agreement thrashed out in April 2005. India and China have worked out what is called a ‘banner drill’, which helps keep tension under check.

Whenever either side perceives that a transgression has been made across the LAC, soldiers show a 10-feet-wide banner with a slogan painted across to each other. The banner primarily cites the 2005 agreement and says there is a need to back off from the present positions of patrolling.

http://www.tribuneindia.com/2012/20120517/main6.htm

BBC News – Asia’s rapid growth fuelling inequality, the ADB warns

Wednesday 11 April 2012. Asia’s rapid economic growth may undermine stability because the gap between the rich and poor is widening, the Asia Development Bank has warned.

Releasing its annual report, the bank said a key inequality measure increased to an average reading of 38 in Asia.

And while that is less than the average found in Latin America and Africa, Asia’s figure is climbing as it declines in the other regions.

China, India and Indonesia have seen significant growth in inequality.

Not just bread

Speaking to the BBC, the Asia Development Bank’s (ADB) chief economist Changyong Rhee explained that Asia may be seeing a long-term shift in the way the gap between rich and poor has been managed.

During the 1960s and 1970s, Asia was better at ensuring that growth did not marginalise large chunks of the region’s population and was actually reducing the gap between the rich and the poor.

However, over the past decade the sudden explosion of growth and rapid enrichment of many people has seen the rich-poor divide grow. The ADB estimates that currently in most Asian countries the wealthiest 5% of the population now account for 20% of total expenditure.

At the same time, for hundreds of millions of people access to education, healthcare and housing has become more difficult and expensive.

The ADB’s Mr Rhee said policy makers would have to become more responsive to the growing divide, not least because people are now more aware of being left behind.

“With technology and communications, people can see how others are living all over the world, and their desire to live more equally is increasing,” he explained.

“People are asking for more. Not only are they asking for bread, but they are asking for a more even distribution of bread.”

Vicious circle

The ADB uses the Gini coefficient to quantify the inequality gap, and says that the higher the figure, the bigger the problem.

Food market in Manila where prices have been rising Asia is seeing the emergence of a stronger consumer class with greater aspirations

In its report, the ADB said that the Gini coefficient in China had increased to 43 in 2010, from 32 in the early 1990s. For India, the figure rose to 37 from 33 during the same period. In Indonesia it jumped to 39 from 29.

“Inequality leads to a vicious circle, with unequal opportunities creating income disparities, that in turn lead to dramatic differences in future opportunities for families,” said Mr Rhee.

Social tensions such as these can undermine governments and lead to populist politics, Mr Rhee said.

They can also see a split in national development between urban and rural areas, increasing internal instability and tensions.

Poverty shift?

However, it is not all bad news. Economic growth in developing Asia is still expected to keep growing steadily, coming in at 6.9% in 2012 and 7.3% in 2013. Inflationary pressures, one of the biggest headaches over the past 12 months, are seen moderating.

The ABD also found that the number of people living below the poverty line of $1.25 (£0.80) a day fell by 430 million between 2005 and 2010.

Going forward, the key will be ensuring the region’s economic expansion is more evenly distributed, the ADB said.

“Another 240 million people could have been lifted out of poverty over the past 20 years if inequality had remained stable instead of increasing, as it has since the 1990s,” Mr Rhee added.

http://www.bbc.co.uk/news/business-17673445