Tuesday, June 23, 2015

AIIB: The need for thought to replace hasty resolve

 By Tarun Nair*

The Asian Infrastructure Investment Bank (AIIB) has been in the news off late, mostly for the right reasons. Heralded as the answer to the World Bank’s deficiencies which include its exclusive representation of European interests, it is touted to be a mechanism which will singularly fulfil Asia’s development needs through timely funding. Considering that a recent report pegs Asia’s infrastructural development to require around 8 trillion dollars’ worth of investment, the AIIB may indeed occupy a place of great importance, with its 100 billion dollar capital allocation. (china.org.cn) However, though the initiative must be welcomed, no extreme positions can be taken as of now, for it has certain aspects which must be carefully evaluated first. Until the shares, voting and veto rights are announced, it is early to comment on the role played by the organisation. Other concerns abound about whether the bank will be dominated by Chinese interests as an arm of their foreign policy, its possible interference with schemes put forward by the Asian Development Bank (ADB) and whether it is a ploy to counter American financial power and supplement China’s rise amongst others. More importantly issues like the credit worthiness, environmental impact and projects to be implemented lie unresolved.
On this note, the haste displayed by nations to join as founding members may be questioned. Without considering any of the aspects mentioned, 57 nations including all the BRIC’s nations, 14 of the G20 nations (EU giants like Germany) and others from Africa and Latin America have pledged their support. The strength of this new multilateral initiative can be seen in the fact that 16 of the world’s largest economies are on board. (Tiezzi)  Notable sceptics include the United States and Japan who are looking in from the outside as of now. The implications of this can be demarcated into strategic underpinnings, financial benefits and inherent problems

Talking Strategy

While the AIIB was intended to be an organisation devoid of politics and unnecessary power plays, the politics seem to have begun before the start of the organisation itself. This can be seen in the rejection of Taiwan, with the nation making a last ditch bid for founding member status. The bid was refused on the grounds that their status as a sovereign named Taiwan was unacceptable to China, who considers Taiwan as its territory. To add insult to injury, China mentioned that future bids under the name Chinese Taipei would be welcomed. (BBC)
The issue here, a questionable precedent in itself, is that China’s foreign policy, an issue limited to the domestic realm, has already begun to influence the workings of a multilateral initiative. Taiwan though being diplomatically isolationist due their status, has a flourishing economy and fulfils other membership criteria like an economy open to scrutiny, something which fellow reject North Korea does not. At the same time membership was promptly assigned to Iran, a nation which has long been in the international gaze for its covert military nuclear program. The inclusion of Germany also raises questions owing to the strategic sum of the move. The move could possibly reflect the beginning of a closer relationship, which also includes a trade off-Chinese backing for Germany’s permanent membership in the Security Council in return for help against Taiwan. UK’s membership has certain strategic undertones as well. Considering that they always wanted Chinese multilateral involvement, the British involvement may be their way of influencing policy from the inside and keeping a check on China. AIIB can be used by China in the future to use investment and their large role at the bank, to strong-arm dependent nations for strategic benefits. Though China has declined their veto right in order to woo European nations, this does not in any way ensure against their misuse of the mechanism. The collective paranoia off being left out of ‘the next big thing’ has caused nations to commit without foresight and has inevitably created a bigger strategic dilemma.
Additionally the inception of the AIIB takes away the problem of multiple avenues requiring funds. With AIIB investments funding strategic projects like ports in Sri Lanka, the Kra canal in Thailand and the developments in the Spratleys, a majority of their own funds can be solely concentrated towards domestic projects like the socialist countryside program. (Chengfang Liu) How to understand and negotiate these concerns should be a bigger question before joining for nations.


The primary concern is that China is using the AIIB to counter their economic slowdown and problems like rising labour prices. This suspicion cannot be entirely discredited since with an expected share of 30%, China may offset their slowing manufacturing growth with AIIB funded investments in the next 10 years. It is even more important since they have committed to projects like the ‘One Belt, One Road’ initiative and will need money to fund highway projects etc. This forms a part of the bigger concern here, which is that majority stake holders China and India will appropriate the maximum funding for their own projects, decreasing incentives for lower Asian stakeholders and making it a bank by China, for China and of China. While China is already benefitting from low cost loans from the ADB, it will now have the additional funding as well as geopolitical influence, afforded to it through the initiative.
The second problem is that as of now, there is no mechanism in place to counter countries engaging in currency manipulation for competitive advantages, something China has been known to dabble in. There has been no commitment from the bank’s side regarding environmental stability in the face of infrastructural developments, a factor which is regarded as the fundamental pillar of multilateral finance bodies like the ADB. Talking about the ADB, there are unlimited opportunities for growth and inter organisation cooperation. But more than this, there is a risk that the AIIB may overlap with schemes being floated by the ADB which are already in existence. More so the relevance of the ADB stands to be eroded with promises of a bigger loan portfolio and by extension higher annual lending going by current capital estimates. (Reisen) In the long run this Sino centric economic system may indeed entrench itself the same way Western powers did so with the Bretton Woods institutions. Thus America does have reason to worry.
There is also the underlying problem of good project selections and evaluations towards this goal. With the politics involved, strategic or beneficial infrastructural projects may take a back seat in favour of projects with lesser feasibility and reduced scope in several nations. For right tenders to be passed, independent directors with considerable expertise are required, which is factor the founders don’t seem to have commented on. Also, AIIB has the aim of being a lean organisation bereft of bureaucratic issues, but with 57 members can it afford to do so? Proportional representation would require 10-15 vice presidents thus putting it right back in the red tapism it wished to avoid.

What lies ahead?

For nations like India, the benefits provided by the formation of AIIB are immense. Keeping in mind that the World Bank has refused to allocate loans for energy purposes citing environmental concerns, the AIIB may be the solution for the medium term purchase of coal, thus propelling manufacturing as envisaged by the Modi government as well. However a great degree of caution is to be exercised. With challenges like the lack of a firm commitment on the institution’s integrity lying in wait, it is imperative that nations including India do not get carried away by the promise of infrastructural expansion propelled by ease of procuring finances for the same. In the coming times it will also be interesting to see China’s reactions to the flux of political and economic pressures, brought about by the diversified membership in what was initially proposed as an ‘Asian’ bank.


BBC. “Taiwan rejected from China-led Asia bank 'due to name'.” 13th April 2015. bbc.com. 28th May 2015. <http://www.bbc.com/news/world-asia-32285583>.
Chengfang Liu, Linxiu Zhang, Renfu Luo, Scott Rozelle and Linxiu Zhan. “Infrastructure Investment in Rural China: Is Quality Being Compromised during Quantity Expansion?” The China Journal (2009): 105-129.
china.org.cn. “China-proposed AIIB is a gift to world.” 19th May 2015. china.org.cn. 28th May 2015. <http://www.china.org.cn/business/2015-03/19/content_35103443.htm>.
Reisen, Helmut. “How the New AIIB Dwarfs the Asian Development Bank.” 8th April 2015. theglobalist.com. 28th May 2015. <http://www.theglobalist.com/aiib-to-dwarf-adb-loan-portfolio/>.
Tiezzi, Shannon. “China’s AIIB: The Final Tally.” 17th April 2015. thediplomat.com. 28th May 2015. <http://thediplomat.com/2015/04/chinas-aiib-the-final-tally/>.

*Tarun Nair is Research Intern at CPPR and a student of International Relations at FLAMES, Pune

The Authors views are personal and does not in anyway represent the views of Centre for Public Policy Research.

Monday, June 15, 2015

Road Safety in India- Still in Coma

 By Pallavi Rachel George*

“It’s Road Safety, Not Rocket Science” is the road safety program of the city of Philadelphia. The program provides extremely catchy phrases like “objects in the mirror appear only when looked at- its road safety not rocket science”, telling its citizens to be smart on the roads. The initiative has received a lot of attention. The reason why I began the article with this example is to quickly make the reader wonder about any such programs in their locality. If you were able to come up with one, kudos. If however, like the majority of the people, you weren’t able to find one, then we need to do some thinking.

Every year, approximately 1.3 million people die as the result of road traffic collisions — more than 3,500 deaths per day. According to the World Health Organisation (WHO), road traffic accidents kill more people around the world than malaria, and are the leading cause of death for young people aged five to 29 – especially in developing countries.Recognizing the gravity of the road safety crisis, the United Nations General Assembly proclaimed in 2010 a Decade of Action for Road Safety 2011–2020.

When it comes to the policy provisions for averting road accidents, India does not have much to its name. The Motor Vehicles Act, 1988, that has been governing our roads is too ineffective a tool to curb road accidents. The call for an amendment had been voiced first 15 years back, and it is yet to see the light of day. The Road Transport and Safety Bill 2014, which received wide public support after the demise of Union Minister Shri Gopinath Munde in June last year, now faces the threat of being reduced to just another draft, to be shelved, only to gather dust. The government has missed three self-imposed deadlines, and the bill itself has been severely diluted. Transport Minister Nitin Gadkari himself has said that corruption and vested interests have been stalling the bill. Even a strike was called by the transport sector against the “stringent” rules in the new bill. The Government of India recently released guidelines to protect good Samaritans who come forward to help road accidents victims. Fifty percent of road crash victims die of treatable injuries in the country, and this is a welcome step to reduce that number. The one hour after a road accident is known as the Golden Hour. The kind of aid the victim receives in this one hour is crucial in saving her life. However, by-standers most often hesitate to help the victim fearing police scrutiny and the hassle they might have to face in the hospital. The guidelines that have been issued ensures that the Samaritan is free of any accountability and sanctions disciplinary action against a doctor who does not provide care during an emergency. However, the difficulty lies in implementation. The public has to be convinced of the provisions of the guidelines, while the government needs to ensure they are duly followed.

Coming to the state level, there are councils and authorities that are responsible for road safety, such as the Kerala Road Safety Authority(KRSA).  The Kerala Road Safety Authority Act, 2007, provides for a fund, comprising of taxes and grants, to be used specifically for road safety related programmes. Based on an RTI filed, the KRSA is yet to utilize Rs 52 crore of the fund earmarked for it from 2010 onwards. The act also states that the authority has the right to order removal of anything (tree, hoarding and other obstructions) that poses a threat. Failure to comply with their orders can even lead to imprisonment. 

It is one thing to have the legislation in place. But it is a totally different ball game to actually execute the provisions. Reducing road accidents is a two way process. From the side of the government, infrastructure needs to be in place, regularly maintained and modified according to the demands of the location. For example, in Kerala, although we have a well-connected road network, the climate continues to be a hindrance. Potholes and overflowing sewers are part and parcel of the monsoon season.  The streets are extremely narrow and difficult to navigate. Moreover, pedestrian pathways are close to being non-existent. In Delhi, on the other hand, the primary problem is the sheer volume of traffic on the roads. Hence, the most fundamental issue that needs to be addressed is infrastructure. The authorities also need to ensure that the laws are adequately followed. Increasing penalties for offences can have two effects: it can be deterrence for the public, as the stakes are now higher. However, it can also be a way to breed corruption. A fine of, say Rs. 2000, does not yield to much if the offender can simply bribe the traffic police officer for Rs. 1000. Hence, a high penalty must be rolled out with higher accountability and transparency.

The second approach to road safety is from the public. This involves a conscious effort to realize that, while on the road, we are not only responsible for ourselves, but also for those around us. Basic road safety rules must be ingrained in us, so much that it is almost reflexive. We need to move beyond the good old “ look both sides before you cross” slogan that we teach children. Driving classes can even be introduced in schools. Driving is a skill and hence can be taught, just like any sport. The school curriculum can include road safety as well. The media is the best way to reach the youth, and this can be exploited fully with relatable posters, advertisements and many other means.

According to WHO, without action, road traffic crashes are predicted to result in the deaths of around 1.9 million people annually by 2020. This number can only be reduced if each stakeholder takes the onus to act responsibly. I end where I began the article- It’s road safety. Not rocket science.

The Guardian. http://www.theguardian.com/global-development/poverty-matters/2011/may/11/most-dangerous-roads

Express News Service. 18th May 2015. http://www.newindianexpress.com/cities/thiruvananthapuram/Road-Safety-Authority-Yet-to-Utilise-Rs-52-Crore/2015/05/18/article2819785.ece

WHO media centre. Road traffic injuries http://www.who.int/mediacentre/factsheets/fs358/en/

 * The Author is Research intern at CPPR and a student of Economics at St Stephens, Delhi

The views of the Author are persona and do not anyway represent that of CPPR

Tuesday, June 02, 2015

Do we need UN anymore?

By Tarun Nair*

A terrible death seems to have befallen the United Nations in recent times, an entity which was born out of the horrors of the great wars and was instituted as a collective to serve mankind in the times to come. Today, it is an endeavour devoid of the very direction and purpose it was endowed with at its inception, failing time and again to grasp the demands of contemporary realities. The foremost platform of incisive international action has turned into a farce of sorts, a tool in the hands of prominent powers, myopic as they are in the confines of their own interests. So do we need UN anymore?

One cannot discount the fact that the organisation has certain glaring loopholes in its existing structure which prevent for its optimum functioning. The debate regarding reforms and more importantly, what kind of reforms are needed, has been going on for several decades now, with extreme positions being taken up on the spectrum of consensus. The process of reforms however, is problematic in itself considering the sheer enormity of power being wielded by member nations.

To pay or not to pay

Addressing the conundrum of reform in the funding structure first, the issue of accountability is of paramount importance. Since several decades the UN has been operating on a shaky financial foundation, with the sword of insolvency resting upon its committees’ heads, preventing the performance of essential functions. The UN is funded through assessed and voluntary contributions by its member states. Assessed contributions refers to the dues accrued by nation states as agreed through consensus, by the General Assembly in a fiscal period. The rationale behind this estimation lies in an approximation of funding needed for organisational activities under the regular budget (to be delineated from the peacekeeping budget which follows the same method). A nation state pays depending on its ability to do so as derived from its Gross National Product, with percentages going from 0.01% to 25%. (Schaefer) Allegations from various quarters abound regarding misspending of these funds, internal misappropriation including kickbacks etc. Even though reports are issued, they are usually unnecessarily elaborate and lack clarity on actual spending. Cases like the Oil for Food scam are still fresh in public memory, and don’t do well to reassure nations when they pledge taxpayer’s earnings to functions of the UN.

 Another problem is that money contributed sometimes goes against a nations approach to a situation or nation, with regard to foreign policy. Taking the case of the United States, several factions within the nation have pressurised the government to demand extensive audit reports from the UN, in addition to existing accountability related documentation. This has been done in response to public claims that taxpayer’s money has strengthened the World Intellectual and Property Organisation (WIPO) and its coffers in ensuring the transfer of dual use technology to Iran and North Korea, both of which have been sanctioned regarding technology transfer, under US domestic law as well as internationally. (Newman)Even the sanctity of the Office for Oversight (the secretariats internal audit instrument) has been tarnished, as the body has been embroiled in a web of allegations regarding financial wrongdoings and subsequent coercion by ‘higher’ authorities to hide the same. In the case of voluntary contributions, the existing layer of transparency too is pulled away, leading to an environment which can be termed at best, as ideally conducive to financial misappropriation. The UN’s recent foray into engagements with business leaders and corporations has unwittingly provided a gateway for motivation based pecuniary transactions, which further erodes the credibility afforded by its neutral status.

Security Council: A case of flawed composition and representation or something more?

The Security Council is arguably the foremost committee within the UN when addressing crisis management and important security issues. This is bolstered by the powers invested in it, making its resolutions binding upon those required, ensuring complete compliance other than in cases where nations turn rogue and disregard the rules imposed. Even in such cases, the powers bestowed upon the council through chapters VI and VII of the charter ensure that stringent countermeasures can be enacted with a great degree of immediacy. However it is perhaps the most prominent body to be at the receiving end of scathing criticism, considering the stark polarity in its composition and the ambiguities in its mandate. Debate regarding the first aspect of criticism is singularly centred on the veto power. The veto was instituted with the founding of the council, considering that the major powers of the time wished to project a unanimity in their decisions, apart from the fact that they wished to safeguard their status and legacy, as in the case of Great Britain (later UK) for generations to come. However several points are important in this context. Firstly, the changing geopolitical realities have left certain nations with the ‘mantle of leadership’ as opposed to others who have been relegated to the side lines. The unchanging structure of the veto powers while being undemocratic does not reflect this new reality. Secondly, an instrument like veto is counterproductive when it impedes decision making and promotes indolence.

History stands testament to this fact, as is seen in the lack of intervention in situations demanding mediation. A prominent example of the same would be when the UN was left helpless as Israel unleashed their war machine on the citizens of the Gaza strip in 2008 as part of operation cast lead. When resolutions were brought about to curb Israel’s defiance in the face of international pressure, close allies America were quick to shoot it down. (Chossudovsky) Within the general ambit of this discussion, it is also relevant to discuss the Responsibility to Protect, a norm introduced by a Canadian policy organisation which is fast becoming a de facto basis for intervention. While proponents of the principle believe that the veto goes against R2P’s basic ideals, the norm has been misused within the overarching authority of the Security Council to justify invasions against nations, often trespassing their territorial sovereignty as in the case of Libya in 2011. (Adams)Therefore it is unclear as to when and how R2P can be invoked, along with a chapter VII resolution. This lack of mandate is seen even in the case of laws of engagement involving peacekeeping forces. The disastrous episode in Rwanda saw confused Belgian peacekeepers lay down their arms in front of the local militia only to be massacred in cold blood. (Ponthus) Interestingly, the international community could not come to a consensus regarding intervention in Rwanda, and therefore turned a rather convenient blind eye towards one of the largest genocides ever witnessed.

If the Security Council is to succeed as an organisation, it will have to do better to define and enforce a mandate regarding intervention, peacekeeping and use of veto in crisis situations. Proponents of a democratised UNSC have suggested doing away with the veto altogether instead of complicating the decision making process by offering more permanent seats, but the recondite article 108 is an obstruction to such endeavours. The article in lay terms suggest that a veto power may veto a resolution to get rid of the veto itself, a clever self-preserving peace of legalese which acts as a shield for wanton self-interest, which is unfortunately propagated using the security council as a shield. (Charter Of The United Nations)

Peacekeeping Blues: A need for permanency

The precarious funding of the UN peacekeeping office has led to calls for ensuring its permanency instead of its impermanent mandate. It has occurred in the past that during a crisis situation, the expedited nature of the issue has stymied planners who in the absence of concrete long term plans have instituted a response mission but have been unable to provide the peacekeepers food for more than 10 days at a stretch. Often there is no time for members of different army elements to combine and train resulting in a confusion on ground. This was most recently seen in the 1993 American mission to capture and extract Somali warlord Mohammed Farrah Aidid. Had the Malaysian and Pakistani elements on ground as part of the UN mission there trained together, one may imagine that many American lives would have been saved when the operation fell to pieces and the UN intervened. (Clarke and Herbst) Therefore the Security Council should work proactively towards a standing UN force, simply because the vagaries of 21st century warfare demand timely and organised intervention, especially in the case of civil conflicts, which erupt across the globe at various moments in time.

It is imperative for the problems of today to be combatted by a UN of today, instead of being confronted by a beleaguered organisation with lack of clarity on role, purpose or methodology. While arguments continue about whether the UN should play a greater role in world affairs or expand its humanitarian efforts, one cannot mince words regarding the changes needed or their urgency. Engagements in today’s world are not bound by the conventional boundaries of the nation state. Today transnational actors are playing an increasingly important role in dictating the flow of global currents. In such a scenario it is crucial that the UN awakens and rethinks the impact it wishes to have, as a collective action body, on this world.

Works Cited

Adams, Simon. "Libya and the Responsibility to Protect: Results and Prospect." 28th March 2014. Global Policy Journal. 25th May 2015. <http://www.globalpolicyjournal.com/blog/28/03/2014/libya-and-responsibility-protect-results-and-prospects>.
"Charter Of The United Nations." n.d. un.org. 25th May 2015. <http://www.un.org/en/documents/charter/chapter18.shtml>.
Chossudovsky, Michel. "The Invasion of Gaza: “Operation Cast Lead”, Part of a Broader Israeli Military-Intelligence Agenda." 4th January 2009. Global Research. 25th May 2015. <http://www.globalresearch.ca/the-invasion-of-gaza-operation-cast-lead-part-of-a-broader-israeli-military-intelligence-agenda/11606>.
Clarke, Walter and Jeffrey Herbst. "Somalia and the future of humanitarian intervention." Foreign Affairs (1996): 70-85.
Newman, Alex. 23rd July 2012. The New American. 25th May 2015. <http://www.thenewamerican.com/usnews/foreign-policy/item/12178-lawmakers-blast-un-for-handing-us-technology-to-north-korea-iran>.
Ponthus, Julien. "Rwandan convicted of killing Belgian peacekeepers." 4th Jul 2007. reuters.com. 25th May 2015. <http://www.reuters.com/article/2007/07/04/us-rwanda-genocide-belgium-idUSL0469900520070704>.
Schaefer, Brett D. "United Nations: Urgent Problems That Need Congressional Action." n.d. The Heritage Foundation. 25th May 2015. <http://www.heritage.org/research/lecture/2011/02/united-nations-urgent-problems-that-need-congressional-action>.

* Tarun Nair is Research Intern at CPPR and a student of International Relations at FLAMES, Pune

The Authors views are personal and does not in anyway represent the views of Centre for Public Policy Research.