KARZAI WANTS TRANSFER, NOT DEMOLITION, OF NATO BASES
President Hamid Karzai and Afghan lawyers have called on NATO to cease demolition of western military bases, citing that the facilities can be converted to suit civilian purposes—such as schools, clinics and offices. This comes as NATO starts to identify and dismantle bases that the 200,000 member Afghan army lacks the logistical capability to inherit. While NATO has proposed the consolidation and downsizing of some facilities, both sides remain at odds. According to the Washington Post, officials in Kabul said that they have been shut out of the process and are dismayed by the demolition of some of the country’s most modern, best-fortified buildings. NATO officials, however, say that Afghans have been given the opportunity to claim the facilities, but often do not act in time. (Washington Post, July 24 2012)
CHINA REJECTS INDIAN PROPOSAL TO REOPEN TIBETAN CONSULATE
Beijing has rejected New Delhi’s proposal to reopen a consulate in Lhasa, the administrative capital of the Tibet Autonomous Region. Instead, China proposed Chengdu, the capital if Sichuan province, as an alternative location. But India will not settle for anything less, and was unsurprised by China’s other offers. China has been wary of opening any more diplomatic missions in Tibet following recent self-immolations by Tibetans (44 in total) in support of their right to self-determination; protests China believes were provoked by the Dalai Lama. India’s request came in response to a Chinese proposal to open a consulate in Chennai. (Hindustan Times, August 6 2012)
INDIA RECONSIDERS VIETNAMESE OFFER TO EXPLORE OIL IN SOUTH CHINA SEA
Indian oil and gas company ONGC is taking a second look at its decision to vacate an oil block off Vietnam’s coast. In May, the Indian company pulled out of block 128, citing logistical constraints of anchoring a rig on the hard seabed. However, outside observers suspected the decision was not based on economic and technical considerations, but rather China’s vocal opposition to Indian activity in waters claimed by China may have played a larger role. IN the months since the announcement, Vietnam’s parliament has urged ONGC to reconsider its withdrawal, offering the company a new contract. Recent reports indicate ONGC will accept that offer, ensuring India remains a party to the intensifying disputes in the South China Sea. (NY Daily News, August 3 2012)
TRADE WOES STRAIN SINO-INDIAN RELATIONSHIP
A growing trade deficit with China is grabbing the attention of policymakers in India, as the county’s total current account deficit reaches an all-time high. In addition to the depreciation of the rupee, India’s trade deficit with China rose 42 percent in the last fiscal year and was the largest contributor to the nation’s overall gap between imports and exports. New Delhi has become irritated that trade talks with China, which were initiated in 2010, have not produced the expected benefits. This has resulted in enormous pressure for the country to attract foreign capital, which is why India is urging China to ease restrictions on Indian imports, particularly in India’s strength areas, like pharmaceuticals and software. Yet Indian exports in the drug and fine chemical areas actually dropped 12 percent in the last five years, even as sales to the U.S. doubled.
Meanwhile, Indian markets are flooded with sophisticated Chinese goods that yield higher profit margins. (The Wall Street Journal, August 3 2012)