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India’s neighbours drifting towards China: Has PM Modi’s “Neighbourhood First” policy failed?

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Syed Ahmed Uzair

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India’s neighbours drifting towards China: Has PM Modi’s “Neighbourhood First” policy failed?

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Global Views 360

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October 16, 2020

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Prime Minister Narendra Modi in a 2014 SAARC Meeting

Prime Minister Narendra Modi in a 2014 SAARC Meeting | Source: Wikimedia

Back in 2014, when BJP came to power in India under the leadership of Narendra Modi, he invited the heads of government from Nepal, Bangladesh, Pakistan, Afghanistan, the Maldives, Bhutan, and Sri Lanka to his swearing-in ceremony at the Rashtrapati Bhavan.­ The move set the tone nicely for Modi’s “Neighbourhood First” foreign policy and was hailed by experts and critics alike as a positive step towards bolstering regional connectivity and improving cross border relations. Cut to 2020, and the ongoing China-India conflict has exposed plenty of problems for New Delhi regarding its relations with its neighbouring countries, particularly, Pakistan, Bangladesh, Sri Lanka, and Nepal.

In recent days China has increased its investments in Asia and beyond even as India and the West have watched from close quarters. Most of the investments have revolved around Chinese President Xi Jinping’s Belt and Road (BRI) Initiative , which aims to create a Sino-centric global trading network and sphere of influence. The BRI initiative is a matter of concern particularly for India because of the China-Pakistan Economic Corridor (CPEC) that is perhaps the most important project under the BRI initiative.

India has, traditionally, played a dominant role in economic and political matters concerning most of its smaller neighbours. However, with the BRI initiative, China gradually built up its political ties with countries such as Nepal, Sri Lanka, and Pakistan, while India’s relations with these countries have become less cordial in recent years. Nepal, Sri Lanka, and Bangladesh, who were once considered allies to India appear to have tilted in favour of China.

The changing nature of India’s and China's relation with India’s neighbouring countries was evident in the silence of these countries when there was a serious flare-up on the India-China border. It is important to note that every South-Asian nation except Bhutan has signed on to China’s BRI. Bhutan is still following India’s lead in not joining BRI due to its own border dispute with China, for which India’s support is essential.

Nepalese Prime Minister KP Oli with PM Modi | Source: Wikimedia

Nepalese PM KP Oli had called Indian PM Narendra Modi, on 15th August, India’s seventy-third Independence anniversary. A statement by India’s Ministry of External Affairs stated, “‘The leaders expressed mutual solidarity in the context of the efforts being made to minimise the impact of the Covid-19 pandemic in both countries.” However, in June 2020, the Nepalese Armed Police Force fired upon a group of Indian citizens at the India-Nepal border, killing one person and injuring two others. A third Indian who had been detained was released later. The move came in the aftermath of the Nepalese Parliament declaring the Indian territories of Limpiyadhura, Lipulekh and Kalapani as a part of Nepal.

Historically, India and Bangladesh have maintained close ties with each other. Modi’s rise to power in 2014 had no effect as Bangladesh’s PM Sheikh Hasina continued to maintain relations with India. In June 2015, when Modi visited Bangladesh 22 bilateral agreements were signed, including the resolution to a border issue that had existed since 1947 through a successful land boundary agreement (LBA). India also pledged $5 billion worth of investments in Bangladesh. When Sheikh Hasina visited New Delhi in April 2017, a civil nuclear tripartite pact was signed between India, Russia, and Bangladesh. Under the pact India will play an important role in establishing a nuclear power plant in Bangladesh. Even as late as March 2019, Narendra Modi had launched four projects in Bangladesh.

PM Modi, during a meeting with Bangladeshi PM Sheikh Hasina donates the steering wheel of INS Vikrant (R11) to the Bangladesh War Museum | Source: Wikimedia

However, India’s relationship with Bangladesh turned sour post August 2019, when the BJP government implemented the NRC in Assam, a north-eastern Indian state. The process of NRC was meant to identify illegal immigrants from Bangladesh. The 1.9 million people left out in the Assam NRC were a cause of concern for Bangladesh owing to the fear of a sudden influx of people forced out of the Indian state. Bangladesh thus turned to China under its “look East” policy in a bid to reduce its dependence on India. China replaced India to become the top trade partner of Bangladesh in 2015 and has provided assistance to Bangladesh through the BRI via 27 agreements signed on Xi Jinping’s visit to the nation in 2016.

“China is behaving how emerging superpowers generally tend to behave—they try to flex muscles and project power—all of which China is trying to do at the moment," says Happymon Jacob, associate professor of disarmament studies at Jawaharlal Nehru University (JNU). “When that happens, states around that emerging power will either stand up against it (like India) or jump on the bandwagon (like other smaller south Asian countries)."

While China continues to make rapid strides, India is left to wonder as to how to deal with this apparent crisis surrounding its neighbouring countries. Modi’s neighbourhood first policy has certainly failed to deliver the promises it made and relations with most neighbouring countries have worsened over the past six years. New Delhi has missed out on several economic gains that would have strengthened ties with neighbouring countries and thereby would have helped to counter the growing Chinese influence in the region. It remains to be seen as to how India decides to get over this tricky situation and improves its ties with its neighbouring countries.

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February 4, 2021 4:48 PM

Kenyans turning to mobile loans in times of COVID-19

The economic impact of COVID-19 is felt on the personal finance of people across the world who are looking for ways to tide over the situation. In Kenya, people are lapping the short-term credit in the form of digital loans by mobile money operators. The number of people taking digital loans has doubled during the COVId-19 induced lockdown period.

Boston Consulting Group's Consumer Sentiments Survey conducted in April and May 2020 reported that "In May, 29 percent responded that they had taken out a short-term loan, compared to 16 percent in April. Mobile money operators were the most common sources of this credit”

Kenya is a pioneer in using mobile money transfer services as the key tool for providing financial inclusion to its citizens. A simple money transfer service, M-PESA launched in 2007 has transformed the financial service industry in Kenya. Today mobile money operators are providing multiple services like digital loans, marketplace for small businesses and farmers.

Digital loans are easy to process and disbursed but there are concerns of shaming the defaulters and compromising the data security of clients. The Digital Lenders Association of Kenya (DLAK) which is a body representing the digital lenders of Kenya has distanced from two of their members, Okash and Opesa over unethical practices. These mobile apps have shared the details of defaulting customers with the moneylenders and asking them to recover the money.

DLAK also stated that Opesa and Okash are known for attacking a client's data privacy which is against the Kenyan data protection laws and has additionally spoiled the reputation of digital leaders in Kenya.

In April 2020, Central Bank of Kenya barred unregulated digital mobile lenders from forwarding the names of loan defaulters to credit reference bureaus. A huge number of Kenyans have been recorded on Credit Reference Bureaus by digital money lenders for loans as little as $5.

Central Bank of Kenya governor Patrick Njoroge told during a press conference in May 2020 that the central bank in consultation with the mobile money operators and digital lenders is presently working to develop a model where the borrowers are protected from mistreatment of online moneylenders.

The borrowers are looking up to the regulatory authorities and the industry bodies to come up with a mechanism which will protect their interest in times of such a health and economic emergency.

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