Thursday, Oct 02, 2014

Arrested development

Written by Pranab Dhal Samanta | Posted: January 25, 2014 12:10 am | Updated: January 25, 2014 9:21 am

IJMA Japanese prime minister taking the salute at an Indian military parade for the first time is a picture that will send out many messages, one that, in some ways, will reflect Japan’s changing strategic outlook. This is further underscored in the context of the complications in Japan-China relations, Beijing’s aggressive streak and the consequent necessity for China’s neighbours (like India and Japan) to forge deeper strategic bonds.

Yet, beneath all this symbolism and strategic congruence is the cold truth — one that exposes the failure to exploit the moment. This is not about assistance to build metro rail networks or industrial and rail corridors or even bullet trains in future. India and Japan crossed those mental milestones long ago — without doubt, Japan is among India’s most reliable development partners. And there is physical evidence to back that up.

The question is about the missing strategic link, about the inability to successfully replicate cooperation in spheres such as high technology, civil nuclear energy, defence and the like — areas that show trust in practice. It’s against this test that all the goodwill and obvious congruence of interests fail to measure up.

Take the example of the India-Japan rare earths agreement, which was firmed up in 2012. At the time, there was panic in Japan after China, producer of 90 per cent of the world’s rare earths, decided to cut down exports and banned supply to Japan. In urgent need of fresh sources of supply, Tokyo turned to New Delhi. It was agreed that India would supply over 4,000 tonnes of rare earths per year to Japan. A joint venture was also part of the plan for long-term cooperation.

But both sides were unable to settle on a price in the commercial negotiations. As months passed, international prices fell, and so Japan revised its offer downwards. The department of atomic energy here ran into problems with its financial advisors, who feared that agreeing to a lower price may attract adverse attention from the Comptroller and Auditor General of India. As is the mood these days, the establishment developed cold feet and this important agreement, which would have opened a new chapter in the strategic partnership, fell by the wayside. In the meantime, enterprising Japanese engineers have developed a motor without using rare earths. Japan has also secured supplies from other countries. Clearly, the moment has passed, even though the idea is still on the table.

It’s always important to remember that Japan is undergoing a transition in its strategic thinking and approach. The bonds of trust and reliability built during these stages often last long and go far — like India’s relationship with the erstwhile USSR, now Russia. So, when Japan decided to offer India the US2i amphibious aircraft, it was not a simple decision but a big leap in the mind. A joint working group was set up but, again, there is no notable progress in sight. The message to Japanese officials is that the continued…

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