South Asia Strategy Monitor No. 3

Related Categories: Arms Control and Proliferation; Democracy and Governance; Economic Sanctions; Human Rights and Humanitarian Issues; International Economics and Trade; Public Diplomacy and Information Operations; Border Security; Afghanistan; China; India; Pakistan; Russia

Welcome to the third issue of the South Asia Strategy Monitor. The SASM is designed to track political and strategic developments in South Asia. You will continue to receive the next issue of the South Asia Strategy Monitor via this list. Should you wish to subscribe to the SASM directly, please click here, and it will email us your request.

SINO-PAKISTANI TIES WARM FURTHER
In a recent two-day visit to Beijing, Pakistani Prime Minister Shehbaz Sharif met with both China's President, Xi Jinping, and its Prime Minister, Li Keqiang, to discuss the future of Sino-Pakistani relations. Given Pakistan's recent floods and high bilateral debt (currently estimated at some $27 billion), the meeting was an important one for the Pakistani premier. And, by all indications, it was a resounding diplomatic success. Not only did Chinese officials signal their support for Pakistan's efforts to restructure its debt, Sharif also walked away with a stronger commitment to the "All-Weather Strategic Cooperation Partnership" between the two countries, greater momentum for the formation of China Pakistan Economic Corridor (CPEC), including a new $9.85 billion high speed railway through Pakistan, and an additional $68 million in flood relief assistance. The warming Sino-Pakistani ties, and the construction of the CPEC, has put some Asian nations on edge - in particular India, because the path of the CPEC cuts through Pakistan-Occupied Kashmir, and may end up extending to Afghanistan. (Press Trust of India, November 2, 2022; Bloomberg, November 2, 2022)

ISLAMABAD, BACK IN THE FATF'S GOOD GRACES
Back in 2018, Pakistan was put on the international "grey list" of the Financial Action Task Force (FATF), which subjected the nation to increased surveillance for terrorism financing. Last month, after an on-site visit to verify its progress in monitoring terrorism funding, Pakistan was removed from the list in what amounts to a big step for the country's international reputation and standing. Thanks to the stamp of approval, Pakistan is likely to see a boost in foreign direct investment and trade - something that the South Asian nation, now facing rising inflation, deep debt, and the repercussions of widespread flooding, greatly needs. (Nikkei, October 22, 2022)

MYANMAR'S MILITARY... AND THE NETWORK THAT SUSTAINS IT
In February 2021, Myanmar's government was overthrown in a violent coup that installed a military junta in its position. The period since has seen a discernable deterioration of human rights in the country, as well as the rise of armed rebel groups there, while the heavy-handed response of Myanmar's military has exacerbated the situation. Late last month, for example, Myanmar's ruling junta conducted airstrikes that killed 80 people and injured dozens more in a attempt to stamp out resistance to its rule. The offensive received widespread condemnation from foreign countries, as well as from the United Nations, for its disregard for international humanitarian law.

The Myanmar government's aggression isn't self-contained, however. It is being funded by an extensive covert fuel supply chain that has helped sustain its military machine, a recent investigation by Amnesty International has found. Energy firms, shipping agents and truck distributors have all been tied to the current war effort - potentially making them complicit in the junta's war crimes. In response, Amnesty International has called on "states and companies to suspend the supply of aviation fuel to Myanmar." (CNN, October 24, 2022; UPI, November 3, 2022)

A HELPING HAND FOR THE TALIBAN
Ever since returning to power in Afghanistan following the abrupt U.S. withdrawal of troops in August of 2021, the Taliban has been something of an international pariah, with few diplomatic engagements and little contact with the outside world. But now, the radical Islamist group is receiving much needed political and economic assistance - from another rogue. Last month, Russia's government signed a draft deal with the Taliban to supply petrol, diesel, gas and wheat to Afghanistan at discounted prices. The agreement represents a win for the Taliban, which has few trading partners and is presiding over a deepening domestic humanitarian crisis. However, it is also a reflection of Russia's increasingly dire plight. With the Kremlin's Ukraine war garnering near-universal condemnation, Russia's government is now being forced to make trade deals with other marginal actors. And while no country has yet formally recognized the Taliban, the Russian trade deal marks the first major agreement of its kind made with the new Taliban government in Kabul. (Voice of America, November 14, 2022; WION, November 15, 2022)

THE TROUBLED AFGHANISTAN-PAKISTAN BORDER
Since the Taliban returned to power last year in Afghanistan, the country's crumbling economy has ramped up Kabul's dependence on neighboring Pakistan for bilateral trade and revenue. But all is not well between the two South Asian neighbors. Clashes between the border troops of the two countries have steadily increased, and on November 13th, just weeks after the reopening of the Chaman terminal in Baluchistan, a Taliban security officer opened fire on Pakistani security forces along the border crossing, killing one member of the paramilitary Frontier Corps and injuring two others.

The skirmish threatens to upend the already-tenuous economic ties between the two countries. Already, Pakistani authorities have barred all movement across this main southern trading terminal, and Islamabad has stated that it will not reopen the southwestern border until the Taliban hands over the suspected killer. The suspension of trade has left many trucks carrying goods stranded on either side, causing a delay in the supply of goods to the people of Pakistan and Afghanistan, both of whom are locked in humanitarian crisis. (BBC, November 4, 2022)