ROUND THE WORLD

New Delhi, 27 August 2007

Japanese PM Visit To India

EXPECTATIONS & UNCERTAINTIES REMAIN

By Dr. H.S.Prabhakar

School of International Studies, JNU

The just concluded Japanese Prime Minister Shinzo Abe's visit to India was a part of a three-nation tour (Indonesia and Malaysia besides India) during the Japanese summer vacation. In India, he visited New Delhi and Kolkata between 21and 23 August.

Certain visible features of the visit are: The Japanese Prime Minister Abe had meetings with the President of India Pratibha Patil, the Prime Minister Manmohan Singh, the Foreign Minister Pranab Mukherjee, and the Leader of Opposition in the Lok Sabha Advani, besides addressing the MPs in Parliament’s Central Hall. The Japanese delegation consisted of about 200-strong business representatives, including top CEOs of internationally known Japanese companies.

Asserted the Japanese Prime Minister, “it is in Japan's national interest to further strengthen relations with India”. It is expected that in the next ten years the India-Japan ties might overtake Japan's relations with the US and China. Hence, Japan is striving to build up India's potential as a strategic partner to help balance China's clout in the region.

Both countries decided on a road map to implement a strategic relationship. This would entail political and diplomatic coordination on bilateral, regional and global issues and a stronger defense and technological cooperation.

Additionally, a few important agreements where signed in the economic sphere relating to currency swap as also in the environment, energy and cultural areas. Including, MOUs between a few Japanese universities and some Indian universities, research institutes, IITs and IIM (Calcutta) and the India Institute of Foreign Trade.

The Japanese Prime Minister’s address to MPs, titled, 'Confluence of the Seas' contained references to the emergence of an alliance between the U.S., Japan, Australia and India. Though explicitly not mentioned, yet it appeared abundantly clear that such an alliance was to contain China's rising economic, political and military clout. He also suggested that Japan and India cooperate in national security through the protection of sea lanes.

India sought Japan's support for its civilian nuclear accord with the US. Importantly, Abe’s reaction was guarded. He stated that he “would carefully consider the impact the agreement will have on the nuclear non-proliferation regime”. Abe's response is being seen by the Japanese media as inscrutable, against the backdrop that this is politically and socially a very sensitive issue in Japan.

Already, the Opposition Leader of the Democratic Party of Japan (DPJ) which enjoys a majority in the Upper House has reacted sharply. He stated that in the event his Party comes to power, it would reconsider Japan's relations with the U.S. and India, if Japan supports India's requests in the Nuclear Suppliers Group. Hence, there was no clear commitment from Japan on India's nuclear deal.

As it stands, Abe is facing a politically uncertain situation at home, specially in the Upper House of Parliament where the Opposition is in majority and transacting business is difficult. Not only that. Just as in the case of India, a general election is rumored in the next six to eight months in Japan.

Moreover, the Japanese ruling Liberal Democratic Party (LDP) panel in a recent report has criticized Abe for his questionable handling of problems that had caused the LDP's crushing defeat in the Upper House.

Questioning the Japanese Prime Minister’s pet slogans like "Towards a Beautiful Nation" and "Departure from the Postwar Regime", the report listed out the problems Abe failed to deal with: the pension record keeping debacle, scandals relating to political funds and gaffes involving cabinet ministers.     

That apart, Japan has a 'positive attitude' on supporting India's infrastructure development. The Indian Commerce Minister Kamal Nath and Japanese business leaders expressed hope to take the bilateral trade value to $ 20 billion by 2012 from the current level of $ 8 billion.

India has successfully convinced Japan of the need, importance and benefits of the Delhi-Mumbai Industrial Corridor (DMIC), a $ 90 billion project to develop the 1483 km highway that winds through six States including  industrial zones, sector-specific investment regions, a 4000 MW power plant, ports and many airports.

India has requested Japan to provide half the estimated cost, $ 10 billion over the next five years. This sum comprises of FDI from Japanese companies, Government loans and Japanese depository receipts that would be floated by Indian listed companies. The Japanese readiness to help India with all possible assistance is to be seen against the backdrop of increased Japanese confidence in India’s economic stability and growth prospects of a “new industrial revolution.”

The DMIC project would help further India's goal of boosting manufacturing and exports. Japan is building a platform wherein India can become the gateway of exports to the UK, Middle East and Africa. The first phase of the project is to be completed by 2012 and the remaining by 2016.

Nevertheless, skeptics wonder if the DMIC would really be completed as it involved acquisition of land which might prove difficult due to the farmers resistance to the Special Economic Zones (SEZs). Thus, the completion of the DMIC corridor project potentially remains a challenge for India in attracting huge Japanese FDI and technology herein after.

The flow of Japanese FDI, technology and SMEs into India is certain to generate enormous employment opportunities. Japan is the fifth largest investor in India with its FDI totaling $ 2.2 billion between August 1991 to March 2007. Japan is behind Mauritius, the US, UK and the Netherlands.

Abe also sought India’s assistance in dealing with the issue of global warming. Recall, since May last, the Japanese Prime Minister has been campaigning for his 'Cool Earth 50' plan to deal with global warming. The major objective of the plan is to cut green house gas emission by 2050 to half the present level.

As transforming economies, both India and China are today big consumers of energy sources and thus emitters. Hence New Delhi's cooperation is essential if the 'Cool Earth 50' plan is to succeed.

Recognizing the importance of the post-Kyoto Protocol efforts to reduce CO2 and other GHG emissions, the Indian Prime Minister Manmohan Singh said, “social and economic growth in reducing poverty were equally important to India as environmental issues.”

Towards that end, both countries released a joint statement on cooperation in environmental protection and energy security. In the statement, India insisted on the word 'scientific consensus' in the Japanese Prime Minister’s initiatives to halve carbon dioxide and other GHG emissions by 2050.

Notwithstanding the above mentioned doubts, India enjoys a strategic partnership with Japan. The new catch word “strategic partnership” has made all-round relationship with India possible.  

Importantly, India is the only country with which Japan has instituted the PM level annual summit since December 2006 to be held in each other's capital. This naturally boosts confidence between India and Japan at every level. ---- INFA

(Copyright India News and Feature Alliance)