Masood Azhar proving to be Albatross around China’s neck

China is finding itself increasingly isolated after its blind support to Pakistan by repeatedly thwarting the United Nations efforts to declare Jaish-e-Mohammad chief Masood Azhar as a global terrorist. The United States’ decision to discuss the issue of Azhar in the open UN General Assembly has put China in a very embarrassing situation. Frustrated by China’s intransigence not to lift the technical hold on the UN listing of Azhar as a global terrorist, the three key members of the P-5 Club in the UNSC have sought explanation from Beijing. There is no doubt that major countries have been exasperated with China for torpedoing the repeated efforts of the United Nations to ban Azhar.

Pix courtesy: the print.in

Rankled by the US decision to take the issue directly to the UN Security Council, China seems to be running out of its options. Sensing that it can no longer protect Jaish chief, China made its all-weather ally Pakistan to bail it out with a statement which exposes the nexus between the two countries. Last week, Pakistan suggested that China could withdraw its technical hold on Azhar if India agreed to military de-escalation along the border and resumed the stalled bilateral talks. It is clearly indicative of the realization on the part of both China and Pakistan that the issue could not be procrastinated further. China has reportedly been rebuked by the US after it made the issue of Indo-Pak military de-escalation and resumption of talks as pre-condition for lifting the technical hold on Azhar, thus allowing later to be listed as a global terrorist.

With the US refusing to play ball with China in linking the two issues and major members of the UN Security Council hardening their position on Azhar, time is running out for Beijing. China is now working to wriggle itself out of the situation and this week’s statement by its foreign office says it all. China’s foreign ministry spokesperson Geng Shuang said in a regular media briefing: “After the application for designation of Azhar was proposed (in the 1267 Sanctions Committee), China is in close communication and coordination with various parties and made positive progress. The US knows that very well.”

“We hope various parties will meet each other half way and continue to properly solve this issue under the 1267 Committee framework. Last Friday, UN Security Council members exchanged views on the US-proposed draft resolution. The majority believes that efforts should be made to solve the issue under the 1267 Committee framework,” the spokesperson added.

The statement is not only significant but self-explanatory as China seems to be feeling the heat. It is matter of time before China falls in line and throws its weight behind the world in declaring Azhar a global terrorist. But it would make every effort to prolong the issue knowing well that India’s ruling party could use it as a major victory ahead of the national elections. Not mentioning US by name, the foreign ministry spokesman went on to add: “We believe under the current circumstances, forcing a draft resolution at the Security Council is not a constructive move and sets a bad example… It is also not conducive for peace and stability in South Asia. China is opposed to this.”

When asked specifically whether the US move to take Azhar’s listing directly to the UN Security Council could benefit the ruling BJP in general election, Geng said: “It is setting a bad example that will only complicate the matter … The general election is the domestic affair of India. We do not comment on that.”

There are three important elements to the statement. One, China has made its displeasure known at US attempts to corner it by referring the issue to the wider Security Council. Once the issue is deliberated in the Security Council, China will find itself isolated in the important forum as all the 15 countries (10 non-permanent members and five members) excluding Beijing are in favour of Azhar being declared a global terrorist in the aftermath of Pulwama attack when a JeM operative rammed an explosive-ridden vehicle into a convoy of CRPF killing at least 40 personnel in February. China is aware of its imminent defeat in the Security Council.

This is the fourth time that China has blocked a combined bid by the United States, France and the United Kingdom to declare Azhar a global terrorist by putting the proposal on a “technical hold” before eventually terminating it on the grounds that “there is no consensus” in the 1267 Committee of the UN Security Council.  How can there be a consensus if one country (read China) continues with its unprincipled stand on Azhar? In 2017 also, it was the odd nation out in the 15-member Security Council when the P3 nations – the US, UK and France – sought to place Azhar on the 1267 sanctions list that would have entailed his travel ban and freezing of assets. While the proposal had approval of all the other 14 members of the Security Council, it was China which censored it. Needless to say, China is misusing its veto power.

Second important point which exposes China’s double standards in the war against terrorism is how can listing Azhar as a global terrorist is not conducive for peace and stability in South Asia. One fails to understand the weird explanation offered by China. China’s opposition to proscribing Azhar is baffling given that Jaish-e-Mohammad has already been blacklisted by the 15-nation Security Council of which China is one of the five permanent members. The Jaish was blacklisted by the UN Security Council in 2001, a year after its formation, following a deadly attack on Indian parliament in December 2001, which had brought India and Pakistan on the verge of a fourth war. Strangely, China considers JeM an outlawed organization, but not its leader? 

What is China’s compulsion in protecting Azhar, who is, no doubt, a prized asset for Pakistan? Well, if the United Nations declares Azhar a global terrorist, then Pakistan will be compelled to arrest him and seize his assets.  And this is something the Imran Khan government can’t afford to do fearing violence by an army of militants prepared by Azhar. Most importantly, he enjoys the support of the Pakistani army. Does Imran Khan, who himself has been propped up by the army, have the guts to go after Azhar?

Thirdly and lastly, China does not want to give an issue on a platter to Prime Minister Narendra Modi when India is in midst of campaigning to elect its new parliament two months from now. The designation of Masood as a global terrorist and his subsequent arrest will no doubt be a big boost for Modi’s attempts in returning to power.  Therefore, China will keep on prolonging the issue as much as it can, but ultimately, it will be forced to fall in line. Any further attempts by China to stall the move will be seen as its weakening resolve to fight the global war against terrorism. It now needs to take a stand on which side of terror it stands. The world is watching it closely.

DEMONETISATION IS A FLOP SHOW

The verdict is out. In the next three months, the government’s Great Demonetisation Drive completes two years. And the country’s top bank has made a startling fact that almost all (99.3%) of the 15.4 trillion rupees high currency notes sucked out of circulation have been returned. The Reserve Bank of India report is a damning censure of the ill-conceived government move, which was touted as the panacea for all the ills, affecting the economy as well as the country’s internal security.

The RBI disclosure punctures the government’s several claims. During the abrupt November 8, 2016 address to the nation, Prime Minister Narendra Modi had compared demonetization to a “mahayagna”, saying it would purify the country from corruption, black money, fake notes and terrorism. 

 The government made people to believe that with one stroke the corruption will be wiped out from the country. Has it? With almost all of the so-called Black Money back in the system, the claim flies in the face of the government. Last year, the Transparency International report dubbed India as the most corrupt Asian country. With a bribery rate of 69 per cent, India led the dubious list leaving behind even Pakistan.

The government invalidated 500 and 1000 rupee notes on the surmise that the large denomination currency notes were being used to stockpile black money and evade tax. If one buys the government theory, then it defies all logic when it introduced even a bigger currency note of Rs 2,000. Which is the larger denomination currency – a 1,000 rupee currency note or a 2,000 rupee currency note? Won’t it be easier to stash black money in the form of 2,000 rupee notes than the 1,000 rupee notes? 

Therefore, the government’s reasoning was far from the truth. One can draw only two plausible conclusions behind this exercise. Either the government was ill-advised or it was a deliberate attempt to convert the alleged black money into white.

Did the new colourful but highly deceptive (some even compared the new currency notes with ‘churan wali pudiya notes) currency notes make any dent on the fake currency notes as was claimed then? The fake new currency notes continue to be printed across the border and smuggled into India as several government agencies have seized them from time to time. With regard to terrorism, the less said the better. The terrorism related incidents have only spiked in Kashmir since then.

The RBI disclosure is also a big setback as the government had sniffed windfall gains expecting that between 2 to 3 lakh crore rupees would never return to the banking system. To the contrary, the so-called black money, on which the government had planned surgical strike, became legit. This raises a serious question on the intent of the government. With so much hidden money back into the system, the banks will now be bound to pay interest on the money parked with them. In effect, the cash lying idle at people’s homes has also started earning interest.

In a nutshell, the move to demonetize higher currency notes does not seem to have the desired results as the government had tom-tommed. The country is still struggling to come out of the shock which has caused more pain than gain.

DEMONETISATION SINKS INDIAN ECONOMY, FOR NOW

Well, the numbers tell the story. The government data has demonized the demonetization, which was touted as the panacea for all the ills, affecting the economy as was the country’s internal security. The country’s economic growth slipped to a three-year low in the last quarter. The 5.7 per cent Gross Domestic Product (GDP) growth in the last quarter (April-June), the slowest since the January-March quarter 2014, is a matter of serious concern.  What is most shocking is that the economy grew at a healthy 7 per cent in the fiscal third quarter last year despite Prime Minister Narendra Modi’s out-of-the-blue decree to withdraw high denomination bank notes.

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The Central Statistics Office (CSO) figures came as a double whammy for the government as a day earlier the Reserve Bank of India said in its annual report that all but one per cent of the estimated 15.4 trillion rupees of demonetized bank notes had returned to the banking system. This was a big setback as the government had sniffed windfall gains expecting that between 2 to 3 lakh crore rupees would never return to the banking system. To the contrary, the so-called black money, on which the government had planned surgical strike, became legit. This raises a serious question on the intent of the government.

Why I say so? The government invalidated 500 and 1000 rupee notes on the surmise that the large denomination currency notes were being used to stockpile black money and evade tax. If one buys the government theory, then it defies all logic when it introduced even a bigger currency note of Rs 2,000. Which is the larger denomination currency – a 1,000 rupee currency note or a 2,000 rupee currency note? Won’t it be easier to stash black money in the form of 2,000 rupee notes than the 1,000 rupee notes? Therefore, the government’s reasoning is far from the truth. This is no way one can stop generating black money. One can draw only two plausible conclusions behind this exercise. Either the government was ill-advised or it was a deliberate attempt to convert the alleged black money into white.

The jury is still out whether the economy has bottomed out. No one knows for sure where the economy will gather steam from here onwards. For, the first quarter of the current fiscal presents dismal picture. The private consumption has seen a dip of 0.6 percent at 6.7 per cent. The continuing woes of cash crunch and massive job loss are seen as main villains behind the falling consumption. Almost all sectors, with the exception of services, have shown deceleration.  The agriculture sector, which was showing signs of revival in the last quarter of 2016-17 with 5.2 per cent growth, slumped to 2.3 per cent. So is the industry sector which registered a decline of 1.5 per cent in the same period.  Sentiment remains depressed in mining, manufacturing and construction sectors even nine months after Mr. Modi declared the high currency value notes as illegal accounting for 86 per cent of the currency in circulation. The manufacturing sector took the maximum hit which slowed to 1.2 percent in the June quarter from a 10.7 percent growth last year. The only silver lining is Services which registered a growth of 1.5 per cent compared to the last quarter of 2016-17.

It now becomes clear that demonetization is proving to be “monumental mismanagement” as the former Prime Minister and eminent economist Dr Manmohan Singh had predicted during his speech in parliament. He had termed the move “organized loot and legalized plunder” drawing sharp opposition from the treasury benches. One hopes his warning that "For those saying this is good in the long run, it reminds me of John Keynes' words, 'In the long run we are all dead” does not turn out to be true.

With economy in complete mess, let’s now focus on other key areas which Prime Minister Modi cited during his famous November 8 address to the nation. While comparing demonetization to a “mahayagna”, Mr. Modi said it would purify the country from corruption, black money, fake notes and terrorism.  The latest Transparency International report released on September 1 has dubbed India as the most corrupt Asian country. With a bribery rate of 69 per cent, India leads the dubious list. In fact, our neighbor Pakistan fares better than us. As far as black money is concerned, how much of it is left in the hands of individuals, the RBI report has wisened us. The fake new currency notes continue to be printed across the border and smuggled into India as several government agencies have seized them from time to time. With regard to terrorism, the less said the better. The terrorism related incidents have only spiked in Kashmir since then. In fact, the new 2,000 currency notes were recovered from one of the slain militants in Kashmir within a week of their introduction.

In a nutshell, the move to demonetize higher currency notes does not seem to have the desired results as the government had tom-tommed. The country is still struggling to come out of the shock which has caused more pain than gain.