Fortnightly Review & Analysis - Neighbourhood Studies (Vol 2 Issue VIII)

(Pakistan, Afghanistan, Nepal, Bhutan, Bangladesh, Sri Lanka & Maldives)

April 16 – 30, 2017

Pakistan

SC Orders Inquiry against PM, Family in Panama Papers Scandal

Prime Minister Nawaz Sharif's troubles mounted after the Supreme Court of Pakistan ordered a court monitored investigation into the assets of the PMs family that were revealed by the Panama Papers leaks. The five member bench passed a 3-2 split verdict in the case on April 20. Two of the judges had ruled that the PM was disqualified on grounds that he was neither truthful nor honest (Sadiq and Ameen) as he did not disclose the source of funds or answer the queries put to him by the court. The majority judgment avoided guillotining the PM but ordered an inquiry into the source of funds used to purchase properties in London. What is more worrying for the PM is the fact that even the majority judges passed fairly scathing comments in their ruling against the claims made by the PM and his family members. The inquiry will be conducted by six officials belonging to four civilian institutions - National Accountability Bureau, Federal Investigation Agency, Security and Exchange Commission of Pakistan, State Bank of Pakistan - and two representatives of the army's intelligence agencies - one from ISI and the other from Military Intelligence.

The inclusion of the army in the inquiry has raised a lot of eyebrows inside Pakistan and is seen as the judiciary's attempt to ensure integrity of investigation. But many analysts feel that since the inquiry was going to be monitored by the Supreme Court, including the military officials wasn't required, even less so given that the intelligence agencies aren't investigators and have little or no expertise in investigating financial scams. While the Supreme Court has given a 60 day time limit for completing the inquiry, the question many people are asking is how the investigation team can get to the bottom of a case which the Pakistan People’s Party (PPP) government wasn't able to crack in the three years from 1993-96 and Gen Pervez Musharraf was able to in nine years that he was ruling Pakistan. The one possibility which is being speculated is that Nawaz Sharif and his family be asked to prove their innocence through documentary evidence. The other big question is what happens after the inquiry is completed. Will the case then be decided by the Supreme Court or will it be sent for trial to an accountability court. If it the former then it could be curtains for Nawaz Sharif but if it is the latter then this case will drag on for many years.

Politically, the Panama Papers has damaged Nawaz Sharif Nawaz Sharif given his political rivals a handle against him. But whether they will be able to capitalise on this opportunity is another matter. Imran Khan has meanwhile gone on the offensive and s demanding Nawaz Sharif's resignation. He has also hurled an accusation that the Sharifs' were ready to pay him Rs. 10 billion to not pursue the case. The Sharif's have challenged this accusation, which on the face of it doesn't make any sense considering that Imran Khan himself says that he got to know about this alleged offer just about ten days before the judgment of the Supreme Court was given. By that time it was pretty much decided what the judgment would be and Imran Khan not pursuing the case was a non-issue.

Military Reads Riot Act to Civilian Government in ‘Dawnleaks’ Case

The civilian government was rudely shown its subordinate position in the pecking order after the Inter-services Public Relations (ISPR) chief publicly, through a tweet, 'rejected' the notification issued by the government to implement the recommendations of the inquiry commission that probed the ‘Dawnleaks’ case. Apparently, the government had thought that sacrificing, Tariq Fatemi, Special Assistant to the Prime Minister on Foreign Affairs, and Rao Tehseen, Principal Information Officer, would placate the army and the matter of Dawnleaks would be settled. The government had already made the sacrifice of information minister, Parvaiz Rashid, earlier. The charge against Rashid was that he failed to stop the publication of the report. But in reality he was seen as unacceptable by the army ever since he made a remark that the government would be guided by a logical argument (daleel) i.e. media and not by a slingshot (gulail) i.e. military, in the context of the shooting of journalist Hamid Mir. He had been an eyesore since then and the Dawnleaks presented an opportunity to see his back. Tariq Fatemi is blamed for leaking the story to Dawn, something he has strongly denied. He too has been unacceptable to the military because he is a strong believer in civilian supremacy and was loath to first briefing the military before he briefed the civilian leadership. Rao Tehseen is seen as collateral damage.

The ISPR tweet exposed the civil-military divide and has put the government in an extremely embarrassing position. But given that Nawaz Sharif is already got his back to the wall in the Panama papers case, it is unlikely that he can do anything much to take on the army and assert his de jure position as the chief executive of the country. He therefore faces a Hobson's choice: if he defies the army, or sacks some senior officer for defiance of the civilian government, he would be tempting fate and worse; if he doesn't do anything and caves in, as it seems likely, he will be seen as a virtual non entity, both domestically as well as diplomatically. In other words, he will not be seen as a credible interlocutor who can deliver on anything he says or commits.

Afghanistan

Massacre in Mazar-e-Sharif Military Camp

A few days after the US dropped the ‘Mother of All Bombs’ on an Daesh base which was followed by the visit of US National Security Advisor Lt Gen HR McMaster, and just a few days before the Taliban announced their spring offensive named after Mullah Mansour, the slain successor of Mullah Omar, a ten member terrorist squad of the Taliban stormed a military camp in Mazar-e-Sharif and killed nearly 200 soldiers (some accounts put the casualty figure at 300). This has been one of the biggest setbacks to the Afghan government and in the aftermath of this tragedy the army chief and the defence minister were forced to tender their resignation. It is believed that Taliban had managed to infiltrate the army base weeks before the attack. The assault itself was launched by terrorists who were wearing Afghan army uniforms, something that added to the confusion when counter action was being taken to neutralise the terrorists because it was difficult to tell friend from foe.

The Mazar-e- Sharif attack is the second devastating attack by the Taliban in the last few weeks, the first one being the attack on the military hospital in Kabul. The modus operandi in both attacks was similar - the Taliban had infiltrated both installations weeks before the actual attack, and they impersonated doctors in the Kabul hospital and soldiers in the army camp to cause maximum damage and sow great confusion. The attack has had a demoralising effect on the Afghan state and has enhanced the already high state of uncertainty in the country. But there was also good news that counter balanced the negative impact of these attacks. For one, the McMaster visit seems to have conveyed a message that not only are the Americans not going to abandon Afghanistan but also that they are likely to ratchet up pressure on Pakistan to end the safe havens in side that country and cooperate meaningfully with the US efforts to stabilise Afghanistan. Secondly, the return of the former warlord Gulbadin Hekmatyar is also expected to have a salutary impact on the security situation. Hekmatyar has made very encouraging noises on his return to Afghanistan and the deal with him is being seen as a possible template that can be adopted to rope in reconcilable elements among the Taliban.

Nepal

Nepal President Visits India

Nepalese President Smt. Bidya Devi Bhandari paid a 5-day State visit to India (April 17-21). She was accompanied by a 33-member delegation which included the Foreign Minister Prakash Sharan Mahat, Peace and Reconstruction, Minister Smt. Sita Devi Yadav, five women parliamentarian representing various political parties and two former Members of Parliament. The visiting leader met President Pranab Mukherjee, while Vice President Ansari, Prime Minister Modi, Home Minister Rajnath Singh and the Minister for External Affairs Sushma Swaraj paid courtesy call Mrs. Bhandari. Though no agreements or MOU’s were on the agenda, discussion took place on implementation of the ongoing projects, trade, connectivity and other developmental projects. Cross border rail links also featured during in the discussion. Nepal and India underscored the importance of integrated check-posts, cross border oil pipe lines and issue of old Indian currency notes post demonetization. The leaders discussed infrastructure development post-earthquake and need of further such bi-lateral cooperation in case of eventuality. The Nepalese Foreign Minister acknowledged India’s high priority towards positive bi-lateral ties with Nepal. Sh. Rajnath Singh also focused on the bi-lateral corporation including in the area of security and India’s support in Nepal’s progress and prosperity. President Bhandari urged Indian entrepreneurs and investors to invest in Nepal as the country possesses an amicable business environment. The Nepalese President said that development is not possible through the effort of a single country alone as it requires collective efforts from the neighbouring nations as well.

Political Slugfest in Nepal Continues

Five major political parties while supporting the local body’s elections on May 14, respective leaders also discussed on how to bring the agitating (United Democratic Madhesi Front) UDMF on board the local level elections and on the future possibilities of holding the elections in two phases. A meeting was called by Prime Minister Dahal, which was attended by Nepali Congress President Sher Bahadur Deuba, Communist Party of Nepal - Unified Marxist–Leninist (CPN)-UML) Vice Chairman Bamdev Gautam, Rastrya Prajantra Party (RPP) leader Deepak Bohara and Madhesi People’s Right Forum (Democratic) Chairman Bijay Gachhedar. Post meeting the leaders were of the opinion that elections could be conducted in two phases only if the agitating UDMF assures their participation in the polls. The leaders mutually agreed to continue discussions with the UDMF to create an environment congenial for Madhesi participation. Prime Minister Dahal asked the UDMF to accept the constitution Amendment bill and participate in the May 14 elections. The Madhesi parties reportedly struck a deal with the government to take part in the election only after the revised constitutional amendment bill was passed in Parliament thorough a fast-track process.

Following cabinet endorsement of the agreement the Madhesi parties called off their stir. Rashtriya Janta Party leader, Rajendra Mahato informed that the government has admitted that the circular sent to 11 districts in Terai seeking suggestion on increasing the number of local bodies has been withdrawn. The government now has promised to abide by the negotiations with the agitating parties with regards to an increase of number of seats in the local bodies after holding prior discussions. The government has already initiated the dialogue with the opposition CPN-UML and the leaders of the Madhes-based parties. Federal Affairs Minister Kamal Thapa assured UML leaders that local units will only be added once all parties reach a consensus. PM Dahal has agreed to annul the notice sent to 11 districts – 8 in province 2 and 3 in province 5. Dahal has also called for an all-party meeting to discuss the issues of local units and simultaneously to fast-track endorsement of the Constitution Amendment Bill.

Meanwhile Deputy Prime Minister and RPP chairman Kamal Thapa warned of boycotting the local level election if the Election Commission does not pay heed to the party’s demand on its charter. The party wants the Election Commission to rethink its decision on deleting issues of Hindu state and Monarchy from the party statue. Thapa has also warned of quitting the government and the House if the decision was not reversed. It may be recalled that last month the Commission had suo moto decided to delete from the party’s statute the portions relating to establishment of Hindu state and restoration of monarchy, on the ground that these were in conflict with constitutional provisions on republican order and secularism.

Deputy PM Mahara to Represent Nepal in One Belt One Road Meeting

Nepal has confirmed its participation in One Belt One Road (OBOR) international conference in Beijing on May 14, 2017. Deputy Prime Minister and the Finance Minister Krishna Bahadur Mahara will lead the delegation that will include two other ministers and senior government officials. It may be recalled that Prime Minister Dahal during his recent visit to China had assured Nepal’s participation in this Chinese endeavour. 28 heads of state and over 150 nations have confirmed their participation in the event.

Bhutan

Bhutan Backs Out of Bhutan, Bangladesh, India, Nepal (BBIN) Motor Vehicle Agreement (MVA)

Bhutan has for the time being decided not to ratify the South Asian sub-regional connectivity of BBIN’s Motor Vehicle Pact. The Tshering Tobgay led government, which is scheduled for polls next year, is not willing to take any risks far as the BBIN project is concerned. The opposition parties have cited issues relating to an increase in traffic, pollution and the eventual loss of jobs if vehicles from other countries were allowed to ply freely in Bhutan. The Bhutanese Prime Minister has suggested that the other members may go ahead with the project and Bhutan may perhaps join in at a later stage. It may be recalled that the proposed connectivity project started off in early 2015 and the proposed MVA was signed on June 15, 2015 in Thimpu. While India, Bangladesh and Nepal have ratified the agreement, Bhutan’s statement says that their government “is in a process of completing its internal procedures for ratification to address the concerns raised by domestic stake holders”. It further says that “to facilitate early implementation of BBIN MVA, Bhutan government” has decided to give its consent for entry into force of the agreement among the three members state (Bangladesh, India and Nepal) without any obligation to Bhutan. The agreement will enter into force for Bhutan after its ratification process is completed. Bhutanese Prime Minister said that the environment is not in harmony with the concerned MVA. Had the MVA been ratified, it would have allowed the cross border movement of passengers, personnel and cargo vehicles on authorised routes within the sub - region.

Bangladesh

Prime Minister Sheikh Hasina Visits Bhutan

Bangladesh PM Sheikh Hasina visited Bhutan (April 18-20, 2017). During the visit the two countries signed six Memoranda of Understanding including two agreements. The two countries reaffirmed to further consolidate bilateral ties and work bi-laterally and regionally to boost cooperation in the areas of power, water resources, regional connectivity, greater peace, prosperity and development in the region and beyond. Sheikh Hasina and Dshao Tshering Tobgay emphasized on the advantages of sub-regional cooperation in the areas of power, water resources and connectivity for mutual benefits. The newly signed MoU will give Bhutan alternative sea routes through the ports in Chittagong and Mongla. The agreement for avoidance of Double Taxation and Prevention of Fiscal Evasion will clarify the taxing right of both countries on form of income flows arising from cross-border business activities. Similarly the island water route stretching from Indian territory through the Brahmaputra till Mongla and Chittagong will now be accessible to Bhutan.

Meanwhile Bangladesh and Bhutan welcomed the proposed Tri-lateral memorandum of understanding between Bangladesh, Bhutan and India for cooperation in the field of Hydro-electric Power on the principles of agreed regional framework. The said MoU will be signed at an occasion when leaders of all three countries would meet next. Bhutan thanked Bangladesh for taking a number of measures including opening of Land Customs stations and resolving duty exemption on several goods. Bhutan also praised Bangladesh’s advancement in ICT sector and reiterated its interest to establish a third gateway for internal connectively from Bangladesh.

In trade, Bhutan has exempted 90 products from Bangladesh and the latter has exempted import duty on 18 products from Bhutan. Bangladesh is the only country with which Bhutan has a trade surplus. The two countries have agreed to explore ways to increase in imports so as to ensure that there is no substantial trade difference between the two countries.

Bhutan and Bangladesh have reflected their common aspiration for peace, collective prosperity and development of the South Asian Region.

Four Militants Killed in a Terror Den

In a twelve hour raid on a terror den in Chapainawabgani, four militants blew themselves up. Among the dead was Rafiqul Islam alias Abu, a “Neo” Jamaat ul-Mujahideen Bangladesh (JMB) suspect. According to the investigators, Abu was an operative of the mainstream JMB. He later jointed the “Neo JMB” with the task of providing shelter to members of the outfit. The other three are suspected to be his accomplices. Prior to this operation, the Counter Terrorism and Transnational Crime (CTTC) unit of Dhaka Metropolitan Police on April 21, busted a terrorist den in Jhenidah where it recovered a large cache of explosive and bomb-making material. With the death of four suspected militants and other operations on five “Neo JMB” hideout in Chittagong, Sylhet and Moulvi Bazar, approximately 17 criminals have been liquidated.

David Cameron Visits Bangladesh

Delivering the key-note address at the “Global challenges in 2017” event in Dhaka, former British Prime Minister David Cameron underscored the need to maintain high quality democracy, fight extremism and tackle corruption. Cameron termed Bangladesh as a shining example of progress in the world. He lauded the counties growth rate of over 6.5% in the last few years and progress achieved in the others areas. Referring to the phenomenon of Islamic militancy, Cameron referred to it as a “clash within a religion” and “not a clash between civilizations”.

Sri Lanka

‘Working’ Visit of Prime Minister of Sri Lanka to India

Sri Lankan Prime Minister Ranil Wickremesinghe was on working visit in New Delhi from April 25-29, 2017 during which he held discussion on a range of bilateral issues and matters of mutual interest with his Indian counterpart, PM Narendra Modi.

A Memorandum of Understanding for ‘Cooperation in Economic Projects’, which outlines the agenda for bilateral economic cooperation in the foreseeable future was signed between the two countries. Both sides expressed the hope for early conclusion of the ongoing negotiations on the Economic and Technology Cooperation Agreement. Other notable issues that were discussed includes Sri Lanka co-sponsored resolution on "Promoting Reconciliation, Accountability and Human Rights in Sri Lanka” at the United Nations Human Rights Council (UNHRC) last month and fishermen’s issue. The Indian side informed the Sri Lankan side of the measures taken by India to encourage the Indian fishermen concerned for adopting deep sea fishing. Commerce Ministry officials continued their three-day talks on the ETCA with Sri Lanka, which still faces opposition from many quarters of Lankan society.

This visit was expected to confirm a number of agreements to be announced during Prime Minister Narendra Modi’s visit to Sri Lanka from May 12 to 14, 2017. Earlier, the External Affairs Ministry officials said they hoped to see the agreement on the Trincomalee oil storage, which was first negotiated in 2003, and the development of infrastructure — highways, power plants, a refinery and a Special Economic Zone (SEZ) — around the key port town of Trincomalee to be wrapped up during Mr. Wickremesinghe’s visit. In a last-minute hitch on April 23, oil union workers in Colombo went on strike against the planned MoU with India for 84 tanks in the Trincomalee upper oil tank farm, of which Sri Lanka is keen to retain at least 10 for use by the Ceylon Petroleum Corporation. After day-long talks with Sri Lanka’s Petroleum Minister, and an intervention by PM Wickremesinghe, the unions called off the strike, claiming assurance that their concerns over leasing the tanks to India, will be taken into consideration before any announcement was made. Backing their protest were members of the Joint Opposition and the leftist JVP, who said the deal would give India control over energy resources in the island nation.

However, according to media reports, President Sirisena has clarified that no agreements were likely to be signed during PM Modi’s upcoming visit which was only to take part in the United Nations Vesak Day celebrations and will not involve in any other official functions.

Fiscal Policy Reforms Improve Sri Lanka's Economic Outlook - World Bank

The World Bank report released on 16 April says that despite formidable challenges, Sri Lanka's macroeconomic performance remained broadly satisfactory in 2016, thanks to key policy measures taken during the year. The Lankan economy is projected to grow by 4.7 percent in 2017 and marginally exceed 5.0 percent growth in the medium term, driven by private consumption and investment. The report "South Asia Economic Focus, Spring 2017: Globalization Backlash" which explores the economic growth in South Asia, points to the recent policy measures supporting fiscal consolidation and monetary tightening contributed to an improved outlook, against the backdrop of the International Monetary Fund (IMF) program.

Despite the downward pressure from low international commodity prices, Sri Lanka's inflation rate is expected to increase in 2017 due to the impact of past currency depreciation and the rise in the VAT rate. The external sector is poised to benefit from the reinstatement of GSP+ preferential access to European Union and rapidly growing tourism, although the drought could adversely impact exports and increase petroleum imports. External buffers are projected to improve, with emphasis placed on purchasing foreign exchange, maintaining a more market-determined exchange rate, using monetary policy and the sale of selected government assets. The fiscal deficit is projected to fall to 5.0 percent of GDP for 2017 due to the implementation of revenue measures.

However, given the significantly large external obligations falling due, especially starting in 2019, potential actions include buying back and re-issuing longer-dated bonds. Key risks include a growth slowdown, which would lead to fast rising public debt; and delays in key reforms in a challenging political environment. However, the direct impact of a slowdown in China and the Brexit would be limited although global policy uncertainty could weigh on the external sector performance while continued economic woes in the Middle East and the EU could adversely affect exports and remittances, according to the World Bank.

EU Parliamentary Group Tables Resolution against Granting GSP+ to Sri Lanka:

An European Parliamentary group has tabled a resolution in the European Parliament against granting the Generalized System of Preferences plus (GSP+) tariff concession to Sri Lanka saying that Sri Lanka's government's reform efforts are not adequate to grant the tariff concession. The group, Confederal Group of the European United Left/Nordic Green Left (GUE/NGL) of 52 Members of European Parliament (MEPs) in their submission says that the government's reform efforts, including those that directly relate to the GSP+ criteria, have not yet delivered in their purpose to comply with the international conventions. In the motion for resolution submitted, the GUE/NGL urges the European Parliament to forward the resolution to the European Commission and to notify it that the delegated regulation to grant the GSP+ to Sri Lanka cannot enter into force.

It is noteworthy that the European Commission has examined Sri Lanka's request for GSP+ treatment and established that Sri Lanka meets the eligibility criteria for the trade concession. Regarding the final decision to grant GSP+ preferences to Sri Lanka, the Commission will keep under review the status of ratification of the relevant conventions and their effective implementation by Sri Lanka, as well as its cooperation with the relevant monitoring bodies. The reason why this preference is important for Sri Lanka is it would make Sri Lankan exports to the 28-member European Union (EU) cheaper which in turn would contribute to its export growth vital to boost external reserves. Hence this move has direct implications for stability of Lankan economy.

The EU parliamentary group in their motion citing the recent UN Human Rights Council Report says while the government of Sri Lanka has taken some positive steps towards improving human rights the measures taken by Sri Lanka since October 2015 have been "inadequate to ensure real progress", and the fulfilment of commitments has been "worryingly slow". It says the process of repealing and replacing the Prevention of Terrorism Act (PTA) has not yet been accomplished and the Sri Lankan government is suspected of not adequately tackling the culture of impunity by rewarding military officials accused of human rights violations with government positions. The Motion states that the existing breaches of Human Rights in Sri Lanka raise concerns about the appropriateness of granting GSP+ status while there is inadequate real progress according to international bodies. Apart from this, two of the MEPs of the group earlier last month visited Sri Lanka as part of a fact finding mission to evaluate the country's respect for labor rights prior to the European Union's decision on granting Sri Lanka preferential trade access. They demanded Sri Lanka to adhere to core conventions of the International Labor Organization and deliver on its promise of guaranteeing employee rights if the country looks to regain its preferential trade.

Many analyst point out that a good number of important countries in the EU has substantial number of Sri Lankan Tamil diaspora which has played a key role in shaping the ongoing resistance to grant GSP+ status to Sri Lanka. Thus the human rights violation and labour laws are nothing but a pretext to push their attempt to isolate Sri Lanka on international stage.

Maldives

Young Blogger Stabbed to Death

Social media activist and blogger, Yameen Rasheed, 29, was stabbed to death on April 23 in Male’ City. Yameen hails from Chanbeyleege in Feydhoo, Addu City. He was taken to the Indira Gandhi Memorial Hospital where he breathed his last while receiving treatment for his injuries. It is very pertinent to note that Yameen was a close friend of journalist Ahmed Rilwan, who went missing more than two years ago. Over four years ago, in October 2012, Maldivians were similarly shocked by the brutal murder of a prominent reformist religious scholar and Member of Parliament, Afrasheem Ali. Both Rasheed and Ali died after multiple stabbings in the Maldives' capital, Male.

The United Nations has called for the investigation in Yameen’s murder case to be up to the international standards. The High Commissioner of Human Rights, Zeid Ra'ad Al Hussein condemned his stabbing saying that “killing comes in the context of what appears to be an upsurge in arrests and prosecutions of the political opposition.” Yameen’s parents have requested the police and President Abdulla Yameen Abdul Gayoom to allow experienced, international investigators to join the investigated to ensure a trusted outcome of the investigation.

Yameen, had in a March 21 post on Twitter talked about death threats which he had received in September 2014. Fellow Maldivian blogger Muju Naeem, who also writes about religious extremism and secularism, said to have been friends with Yameen for seven years. They started activism together with a couple of other youths. Muju has revealed that Yameen had been receiving death threats for a while, which he lodged to police last year, as well as January and February of this year and kept a public record of the abusive messages on his blog.