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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