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19 July 2013, Gateway House

India-Bhutan: Winning friendship

The opposition People’s Democratic Party in Bhutan won the National Assembly elections held on July 13 taking another large step towards democracy. However, India became the unwitting subject of campaign discourse after the government abruptly halted fuel subsidies to the country

Director, Gateway House

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Bhutan, famous for propagating the concept of Gross National Happiness instead of the commonly-used Gross National Product, took another major step towards democratization by successfully concluding its second election to the National Assembly on 13 July.

This guided-from-the-top process brought in the opposition People’s Democratic Party, led by Sangay Ngedup, to a 32 out of 47 seat victory over the ruling Bhutan Peace and Prosperity Party led by outgoing Prime Minister Jigmi Thinley in an election deemed free and fair, even by the losers. Considering that a majority of voters in 2008 had opposed the end of absolute monarchy, the Bhutanese public seems to have taken to democracy with a vengeance the second time around. Incumbency proved to be an insuperable burden. The two big issues in the election campaign were corruption and a shortage of the Indian Rupee allegedly caused by budgetary overruns. However, the abrupt termination of fuel (cooking gas and kerosene) subsidies annually worth approximately Rs. 200 crores by India on 30 June, shifted the focus of the campaign discourse to India.

The sudden intimation from Indian Oil Corporation to the government of Bhutan set off speculation about the significance of the timing. The consensus among commentators in India and Bhutan was that the government of India was signalling displeasure at the high-level exchanges with China, specifically the June 2012 meeting with the former Prime Minister Wen Jiabao on the sidelines of the Climate summit at Rio de Janeiro, Brazil.

Although the government of Bhutan had sought to downplay the importance of the meeting, the Chinese Foreign Ministry website quoted both  Prime Ministers as wanting to “forge formal diplomatic ties” with each other and “to settle border issues” in a cooperative manner.

Both by treaty and informal understanding, Bhutan, which used to be “guided” by India, is now expected to “consult” with India on its international relations and initiatives.

Both issues, the establishment of new embassies in Thimpu and the settlement of the still undemarcated Bhutan-China border are extremely sensitive for India, and with good reasons. Tiny Bhutan, with a population of just under 750,000, is the traditional buffer between India and Tibet (now China). This is especially so because of the extraordinarily strategic location of the tri-junction point, the Chumbi valley, which juts into India’s heart like the proverbial “dagger.”

Any territorial concessions by Bhutan could make the narrow 22-kilometre Chicken’s Neck, which connects Assam to India’s northeastern states, permanently vulnerable. This was the apprehension during the 1962 war with China. It may have been an element in the incorporation of Sikkim as a state into the Indian Union in 1975 because it was the third side of that open triangle.

Coming back to the present election in Bhutan, the Indian government lost the public relations contest even among Indians. It put forth a lame technical argument that the termination of the fuel subsidy was not an attempt to influence the outcome of the elections, but a coincidence that the 10 Plan ended on 30 June and that discussions on budgetary and plan support for the 11thPlan were to be held with the new government.

Prime Minister Manmohan Singh’s congratulatory message emphasised that India-Bhutan relations “have been carefully nurtured over decades,” that India extends “steadfast and unflinching” support to Bhutan’s democratisation and its socio economic progress, and concluded with the intent to “prepare for discussions on our plan assistance to Bhutan.”

In other words, the government of India is maintaining that it does not play favourites. But it is difficult to ignore the parallels in relations with India’s other neighbour, Nepal, which also lies sandwiched between India and China. In 1988, contrary to the spirit of the 1950 Treaty of peace and friendship with India, the Royal Nepal Government purchased sophisticated weapon systems from China. The relationship deteriorated so much that India sought to recombine the two separate trade and transit treaties with Nepal. As a consequence, transit rights would have become contingent and eventually the 37 trading and transit points were reduced to just two, causing a near-blockade situation with severe shortages and price rises of fuel and even food in Nepal.

It took more than two years and a political evolution towards democracy in Nepal to break the stalemate with both sides undertaking to fully respect each other’s security concerns and to have consultations on defence-related measures in 1990.

Despite having discovered the limitations of Chinese support, Nepal, floundering in its political chaos, has repeatedly breached these understandings, to the point of treating China as its preferred partner.

In the end, everything on India’s northern border involves China. This used to revolve solely around the Dalai Lama but now has many more strategic objectives. These include Tibet itself along with its mineral wealth, sparsely populated, but richly endowed Islamic Xinjiang, a link to the minerals of Afghanistan and access to the warm waters of the Arabian Sea through Pakistan and overland to Central Asian oil and gas, besides markets in each country.

So while we may be occasionally irked by the government of Bhutan, we must act generously, always recalling Bhutan’s consistent and uniquely positive attitude towards us. We have to also get used to the expanded economic and political weight of China in our neighbourhood and indeed within India itself.

Rather than signals of petulance, getting our own economy growing rapidly again with its positive fallout for our neighbours will be the best way to keep and strengthen friendship with them.

Ambassador Neelam Deo is Director of Gateway House: Indian Council on Global Relations and former Ambassador to Denmark and former Joint Secretary for Myanmar, Sri Lanka, Maldives and Bangladesh.

This article was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

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