With neighbours like these

India’s stakes in the stability and security of Nepal are huge. Preventing state failure and the emergence of an extremist government in Kathmandu have become India’s national security objectives. They have shaped India’s response to the rise of the Maoists over the last few years and the more recent coup by King Gyanendra.

Similarly the turmoil in Bangladesh — marked by the bitter and bloody rivalry between the government and the opposition — is bound to intensify. Dhaka’s inability to provide security to its leaders in political opposition and its blind eye to the rise of extremist forces in the country presage an extended period of domestic instability in Bangladesh. The Khalida Zia government has blamed the opposition Awami League for creating conditions inimical to holding the SAARC summit and lobbying India to avoid attending it.

As the crises in Nepal and Bangladesh deepen, one thing is clear. The recent brief period of relative political quiescence in South Asia has come to an end. The prospect of one or two failed states on India’s doorstep is real. Whether New Delhi wants it or not, India is being irrevocably sucked into the internal politics of Nepal and Bangladesh.

Political classes among Indian neighbours will at once seek and resent India’s intervention in their internal affairs. They want to leverage India’s weight in the region to settle scores with domestic adversaries.

India needs to enter this phase of South Asian turbulence with eyes wide openand a full awareness of the potential dangers that could arise from its interventions aimed at shaping the political evolution of its neighbours. Interventions are never easy and even in the best of circumstances will invite charges of hegemonism. Bitter arguments about India’s role in the region will begin to cast a shadow over the fledgling process of expanding regional cooperation.

As India considers a variety of options in managing the emerging crises in the region, New Delhi will have to give up the traditional notion that it can handle them unilaterally. The idea of the Subcontinent as an exclusive sphere of influence has been an enduring one in Indian strategic thought. India’s suspicion of the great powers and outsiders in the past naturally led to a policy aimed at minimising their influence. This is increasingly unsustainable amidst the globalisation of South Asian security.

To some extent, India has already adapted its policy towards the neighbourhood. In the Sri Lankan crisis at the turn of the decade, India allowed, after considerable initial reluctance, Norway to mediate between Colombo and the Tamil Tigers. It has allowed Japan to take the lead in the international development assistance to Sri Lanka as part of the peace process. After the tsunami, India agreed to let American troops conduct relief operations in Sri Lanka.

In the last few years, India had also developed a regional security dialogue with the US. This has helped generate greater understanding of Delhi’s security concerns in Washington and the prospects for harmonising Indian and American interests in South Asia.

As the situation in Nepal started degenerating in recent years, there has been close consultation and coordination between the Indian, US and British missions in Kathmandu. A few weeks ago, in a simultaneous move New Delhi, Washington and London cautioned Gyanendra against his plans to grab all power. And since the coup there has been a coordinated response from the three capitals.

Despite these adjustments there is strong resistance in Delhi against thinking about South Asian security in multilateral terms. Acting in concert with others does not take away India’s primacy in the Subcontinent. In fact, such an approach will reduce the risks inherent in Indian interventions and make its regional policy less costly and controversial.

India needs to consider expanding its regional security dialogue to cover other major powers like the European Union, Japan and China. As a neighbour of the region and the second largest economy in the world, China’s presence south of Himalayas is bound to grow. Instead of trying to keep China out of the Subcontinent, it makes sense for New Delhi to test Chinese intentions by engaging them in a substantive dialogue on regional security.

While India-led multilateralism is the future of South Asian security, unilateralism remains a potent instrument of India’s regional economic policy. Functionalists will shed few tears at the failure of SAARC to hold even regular summits. SAARC has shown no real life when it comes to regional economic integration. Even when impressive agreements like the South Asian Free Trade Agreement were signed at Islamabad last year a lot of difficult issues like rules of origin and dispute settlement were left unresolved.

Given its economic size and the fact that only India shares borders with all South Asian countries, New Delhi can easily bind the region together through forward-looking regional economic policies. Instead of waiting for SAARC to become effective, India must open its market to the neighbours, promote trans-regional transportation and energy corridors, facilitate Indian investment in the neighbourhood and reduce trade surpluses with the neighbours. And India’s economic initiatives must be de-linked from its other political differences with the neighbours.

If India does not act wisely and decisively at this moment, the turbulence in South Asia will pull India down as well. The two principles that must guide India’s new approach to the troubled neighbourhood must be security multilateralism and economic unilateralism.