Select Committee on Foreign Affairs Minutes of Evidence


Examination of Witnesses (Questions 200 - 216)

WEDNESDAY 31 JANUARY 2007

MR MICHAEL GRIFFIN, DR MATTHEW NELSON AND DR GARETH PRICE

  Q200  Chairman: I would like to move on to Sri Lanka, where the situation seems to be deteriorating all the time. Clearly there are quite a few people living in this country who are of Sri Lankan origin; over the years, many of them have come here as refugees. Is there a role that the UK Government can play in helping to resolve that conflict?

  Gareth Price: The short answer is that the situation is very much like Kashmir. The UK could be asked to play particular roles, such as in policing—Northern Ireland issues potentially have relevance to Sri Lanka.

  The main issue that will determine what happens in Sri Lanka is the political will on both sides for a peaceful settlement, which at the moment does not seem to be there. The Norwegians are the main mediators, or interlocutors—whichever—in the process. I do not know what the term would be, but clearly they are in league with India, or acting with India's behind-the-scenes backing. However, if the two sides in Sri Lanka are not particularly interested in sitting down round a table and discussing matters, then certainly with the current situation it is very hard to see what anyone can do.

  Q201  Chairman: There is the list of terrorist organisations, which includes the Liberation Tigers of Tamil Eelam, which is also now on the EU list, I understand. Is its inclusion a factor in blocking any role that we might have? On the other hand, Paul Murphy, the former Northern Ireland Secretary, recently went to Sri Lanka to try to inject some ideas based on what had happened in Northern Ireland, and to ask whether those ideas might be helpful to the process in Sri Lanka.

  Gareth Price: It is an issue that is debated. On the one side, people say that we should not proscribe organisations, as it stops channels of communication, and so forth. To be honest, I think that most of these things can be got around. If people want to talk to the LTTE, it is do-able, despite the fact that it is proscribed. Proscribing the LTTE makes it harder for its members to travel. There was a report that the wife of Anton Balasingham, formerly the LTTE's chief negotiator based in London and who died a short while ago, would replace him as its main mediator; I think that she is Australian. I do not know; it is one of those things—six of one and half a dozen of another. It depends on how you want to look at it. Negotiation can take place whether organisations are proscribed or not, but it certainly makes negotiation harder. Does it make the Tamil Tigers feel that they are more oppressed, or that their backs are to the wall? Possibly.

  Q202  Chairman: There are also allegations that the Sri Lankan armed forces have been using ex-Tamil Tigers who broke away to abduct children and train them as guerrillas against the Tamil Tigers. Can you enlighten us on that?

  Gareth Price: I only know of the Human Rights Watch report that the Karuna faction had split from the LTTE. There are lots of allegations that that faction is being supported by the Sri Lankan Government. The Human Rights Watch report said that the Karuna faction is now recruiting children in Government-controlled areas, with Government complicity.

  On a wider point, the issue of child recruitment in Sri Lanka has been a major one. I think that it was one of the reasons that led the EU to proscribe the LTTE.

  Q203  Chairman: Is there any prospect that, although there is the history of the assassination of an Indian Prime Minister by the Tamil Tigers, India might want to try to facilitate a peaceful agreement in Sri Lanka, given India's Tamil population in the south and its historic and geographic links with Sri Lanka?

  Gareth Price: India would certainly like peace in Sri Lanka—that is undoubted. Its own experience of direct involvement, with its peacekeeping mission in 1989, was unsuccessful, or not as successful as it could have been, so that has left a bad taste within India. For the moment, India is happy to let Norway lead, which again is quite unusual in terms of India's attitude towards outside involvement in south Asia. However, India has discussions with Norway on where things are going, which at the moment is obviously not very far. I think that Velupillai Prabhakaran faces a death sentence in India—

  Q204  Chairman: Because of the assassination of Rajiv Gandhi?

  Gareth Price: Indeed. He either has a death sentence or a very long jail sentence outstanding, so that is an issue. People claim that it is more of an issue with Congress being in power, given that Rajiv Gandhi was Sonia Gandhi's husband.

  My opinion is that the links between Tamils in southern India and Tamils in Sri Lanka is a justification for not getting involved rather than something real. There are a couple of Tamil parties that make speeches about the LTTE, or Tamils in general, but they are not particularly mainstream. As in Bangladesh, refugees are a big issue. They had almost all made it back from India and now they are starting to come over from Sri Lanka again because of the trouble.

  Q205  Mr Purchase: I have a tangential question about Sri Lanka. A number of Members of Parliament have in their constituencies Sri Lankans who are here temporarily as refugees and asylum seekers. Do you see any prospect of people going back to Sri Lanka from Britain in the immediate future? Is the situation such that you think that lives would be endangered?

  Gareth Price: At the moment, I think so, whether the trajectory of the conflict stays at this level—people are stopping just short of saying that it is a civil war—or escalates. The level of violence seems to suit both sides. They do not want it to increase, but peace is not on the table at the moment. While the current situation continues, refugees will leave Sri Lanka rather than go back. It is very hard to see how that situation will change if it suits both sides.

  Q206  Mr Purchase: I think that we are still deporting, are we not?

  Chairman: No, the Government have stopped the removals.

  Q207  Mr Purchase: Your opinion is that it would be a little dangerous at present?

  Gareth Price: Yes. From the past few months, the escalation in violence seems likely to worsen.

  Chairman: Yes, the Government stopped the removal programme a few months ago for precisely that reason.

  Q208  Sir John Stanley: At long last, the civil war in Nepal seems to be coming to a halt. The Maoists have agreed with the other democratic political parties a basis on which they can enter the Nepalese Parliament. It seems likely that there will be elections to the constituent assembly—I hope that they are to a good standard—perhaps as early as June this year. As for the repercussions in India if the peace process in Nepal is not derailed and we emerge on the far side of that terrible civil war with a proper, peaceful, multi-party democracy, do you think that that will choke off the Naxalite movement in India? Or do you think that that movement has energy, dynamism, militancy and terrorism of its own and will continue unchanged?

  Gareth Price: Where to start? It was thought that there were connections between Naxalites in India and Maoists in Nepal. The rhetoric from the Maoists was at first very anti-Indian. They are still talking about renegotiating some of the treaties and so on. In practice, however, people recognise that when they come to power in Nepal, they have to live with India. India is the country that Nepal trades with and it is where its economic opportunities will come from through hydroelectricity and such like. The big unknown about Nepal is the extent to which the Maoists will temper their aims once they are in power. Maoist economic policy includes not allowing Nepalese to work overseas, which seems completely unfeasible given that Nepal is very dependent on remittances from Nepalese working abroad, mainly in India but also in the Gulf. We do not yet know, but the assumption is that as they come into power, they will temper their policies. With regard to the Naxalites, the Maoists have already said that they will not give any support, and certainly not any military support, to Naxalites working in India, but they might give some kind of moral support for the cause.

  That leads on to whether something can be done in Nepal to resolve the core grievances that led to the Maoist uprising—things such as unfair land ownership and so forth. Land redistribution was talked about, but there is not that much land to redistribute. The whole thing needs to be thought through a lot. What does land redistribution mean, if you have a few goats grazing on a mountain? There is a long way to go in this thinking. But if something comes from that, does that then present some kind of model for India? India's case is that as India is a functioning democracy, Naxalites in India are a different kettle of fish from Maoists in Nepal. But some ideas that come from Nepal could be used in some format in some of the more backward districts in India where the Naxalites are most active to try to drain the swamp, or whatever the phraseology should be.

  Q209  Mr Horam: There are at least two proposals for pipelines to India, one from Iran through Pakistan to India and the other from Tajikistan through Afghanistan to India. Obviously, India is very energy deficient. Are these pipe dreams—sorry about the pun—or are they serious proposals that might go ahead? It is not exactly like Russia and Germany having an agreement to put a pipeline through the Baltic sea, which is already being built. There are serious political problems associated with these proposals. Do you think they will come to fruition?

  Matthew Nelson: Not any time soon, for a couple of different reasons. The pipeline from Iran to India would pass through Pakistan and particularly through Baluchistan, where there is a great deal of ongoing unrest right now, and the pipeline is not likely to emerge any time soon for that reason. There is also further concern that such a pipeline involving a relationship between India and Iran would complicate India's changing and improving relationship with the US. There is the possibility that the United States and Iran and their own ongoing tussle, will be used, or at least considered, within India as a factor in their own improving relations with Iran. Whether that could cause India itself to slow down the process, even apart from Pakistan and concerns about Baluchistan, is an interesting question. For both reasons, I do not see that pipeline happening quickly.

  Q210  Mr Horam: It is the same with the one from Tajikistan, which is even more remote, is it not?

  Matthew Nelson: There is a different set of factors. In the case of Tajikistan and Afghanistan, the relationship with the Government of Afghanistan will very much relate to the US involvement in that Government. Perhaps a relationship between India, Afghanistan and the US with such an arrangement could be much better, but this is pure speculation on my part.

  Q211  Mr Horam: How is India going to make up its energy deficiency? Renewables? More coal?

  Gareth Price: Yes, India could do with more energy now, but the key issue about all these things is that India plots what it needs if it is going to sustain 7%. growth. It is more an issue in 10 years' time, and even more an issue in 20 years' time, by which point one can well see the other pipeline that is talked about being planned from Myanmar through Bangladesh. If peace broke out in Nepal and it was running smoothly, there would be another focus on hydroelectricity, which is incredibly successful in Bhutan as a source of power for that part of India. Nuclear is another option, and that would come on-stream in five or 10 years' time. I think that although the time frames are so long because there is long-term planning in India, it has not become the main priority. People talk about it and know that it is there as an issue, but given the current choice, Iran has issues with the United States. Whether those can be got around, perhaps by the confidence-building measures of pipelines running through Pakistan into India, and whether that can be sorted out, could be seen as outweighing any of the negative impacts. If India and Pakistan can manage to agree on a pipeline, the benefits of that might outweigh the issue of US concerns about Iran. The Iran-Pakistan-India gas pipeline was first talked about in, I think, 1994 or 1995, and it is now 2007. Yes, lots of studies have happened.

  Q212  Mr Horam: A lot of political decisions will have to be made. One point that was made to us very strongly in India was that, in a way, the present prosperity and growth were acting as a deterrent to these political decisions. People were saying, "Well, it's not too bad. Let's put things off a bit. We can afford to put things off." However, that is precisely what they cannot afford to do, if they are going to sustain this in 10 years' time.

  Gareth Price: This is why it has moved up the agenda in India, but India's economic growth has been predicated on high-value service sectors, such as IT and pharmaceuticals. There is now a recognition within India that they need to create more jobs, and that needs a manufacturing sector. A manufacturing sector needs more power, so the issue is going up the table. At the same time, things are happening—for example, the huge Reliance refinery that was recently built is the largest in the world. One of the big issues within India is that it does not enjoy being reliant on world pricing. So if the price of oil goes up, India's current account looks bad. With these longer-term accounts, as with Qatar and other places, for longer-term supply of natural gas—this is the whole point about the Iran pipeline, or hydroelectricity, for that matter—you do the initial investment, but then you know what the price is, and you are not going to be subject to sudden current account problems.

  Chairman: We turn now to the issue of water.

  Q213  Mr Moss: India, as we all know, has huge water needs related to its large population and its historic dependence on agriculture in the economy, and now, as we have just been discussing, the rapid increase in its economic activity. India has water disputes with three of its neighbours—Pakistan, Bangladesh and Nepal. What do you see as the main areas for concern in that respect, and how important do you think water sharing will be to the future of this region?

  Gareth Price: I think that water disputes are potentially a major problem. The Indus water treaty is the most successful treaty between India and Pakistan—I think that it was signed in 1960 or 1962. Until last year, they never used international arbitration, so the treaty lasted through various wars that took place during that time. If the right agreements can be sorted out, that is potentially a confidence-building measure, whether it is with Pakistan, Bangladesh or Nepal.

   The problem is that water-sharing really is a zero-sum game—water tables are shrinking and populations are growing. It is a major issue of concern, and is going to continue to be an issue of concern, and not just between India and Pakistan or India and Bangladesh. There are also water disputes within Pakistan about the dam that they are talking about building between the North West Frontier province, Punjab and Sindh province. Sindh thinks that it will get less water, and Punjab wants to stand because it thinks that it will get more water, and the North West Frontier province does not want it because the reservoir is going to flood a large area of it. Even within Pakistan, and within India, you have the Cauvery river dispute between Karnataka and Tamil Nadu. So it is going to be at a range of different levels. Recently a storage reservoir was opened up for Delhi in Uttar Pradesh, and that led to a dispute between Delhi and Uttar Pradesh about who should get that water. If some good model on water sharing could be put together, it would be very beneficial, but as it is, it is going to be a major source of contention for the region.

  Q214  Chairman: Thank you. We come to the final question, you will be pleased to hear. The South Asian Association for Regional Co-operation has recently expanded and some people see it as a model, which would move from an economic free-trade model to a kind of political, co-operative model. How important is SAARC for the countries of the region? Is it very important for the smaller countries and not at all important for India, or is it the other way round?

  Gareth Price: The big problem with SAARC is that the political disputes between India and Pakistan get in the way of substantial progress. SAARC has introduced a free trade area recently, but it is only for India and Pakistan, which have not agreed to it, and the smaller countries do not have to do anything until, I think, 2011.

  More important than SAARC, at the moment anyway, are the bilateral agreements between different countries, particularly between India and Sri Lanka. There is now talk of a free trade area or bilateral trade agreement between India and Bangladesh. Essentially, while the relationship between India and Pakistan remains poor, although improving, SAARC is not going to go anywhere fast. I think that is why India is focusing on bilateral agreements, not just within the region but also with other countries, such as Thailand and Singapore.

  Q215  Mr Purchase: Are any of the national economies strong enough to withstand a greater degree of free trade than is presently operated? Do they not all need some protection, from each other and certainly from the rest of the world?

  Gareth Price: That is not quite how it looks. India's tariffs are still among the highest in the world, but they have come down dramatically. The big issue throughout south Asia is not protection but tax. Income tax collection in Pakistan, India and Bangladesh is incredibly low. You end up with a very small industrial sector, which is the main source of tax, plus taxes on trade. If you suddenly say, "Let's have complete free trade and not collect any money", then suddenly India's 9%. deficit turns into a 14%. deficit. There is the same issue in Pakistan. Yes, there is a protectionist issue, but never forget that the Governments are relying on this money and need to widen their tax bases.

  Q216  Mr Purchase: It sounds like they need to make them more effective in terms of collecting what is due. Is it possible to widen the tax base in India with so many people in India without incomes worth talking about? Should not the rich people pay more tax?

  Gareth Price: I think that in India 30 million or 40 million people pay income tax out of 1.2 billion. In Pakistan it is something like 1.3 million—they tried to raise it to 2 million and gave up. The number of people who pay income tax is very small. Obviously, that is largely because people are poor. They are trying to introduce value added taxes in South Asia, but, off the top of my head, taxes on trade make up about half the taxes.

  The big thing that is not taxed throughout south Asia is agriculture, so 60 to 70%. of the population depend on agriculture and are not paying any tax. A few plantations in India pay tax—if you are defined as a plantation, you pay tax—but 60%. of the population are out of the tax net by definition, at least in Bangladesh, India and Pakistan. Sri Lanka is a bit different.

  Chairman: That raise issues that we do not have time to get into now, but are certainly food for thought. May I thank you all for coming today, Dr Price, Dr Nelson and Mr Griffin? I think we have found this a very useful session, which has given us a number of areas to think about. It also gives us public evidence on many of the things that we have picked up on our visits, which we did not actually have public evidence on. It is always helpful when people tell us in public what we have been told by others in private. That helps us in writing our report. I thank you all very much and conclude the session.





 
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