Tiny Bhutan, which has earned the epithet of being the “happiest place on earth” as per the new concept of Gross National Happiness (GNH), finds itself in a very unhappy situation today. For the past month and a half, Bhutan has been at the centre of a conflict between its two giant neighbours, China and India, that could put it at the crossroads in economic and political terms.
The two Asian powers are fighting over a tiny patch of land called Doklam located in the tri-junction of Bhutan, China, and India. Doklam’s importance is in its strategic location. The Doklam plateau is within striking distance of the Siliguri Corridor which is a tiny “chicken neck” of a link between mainland India and its North East states like Assam.
But Bhutan’s silence on the India-China dispute is intriguing, as the Sino-Indian military confrontation in Doklam is taking place on land claimed by Bhutan and China. Officially, India isn’t party to the dispute, and yet it’s there, ostensibly because of the 2007 Indo-Bhutanese treaty which enjoins close cooperation to protect each other’s national interest.
"It has also come to light that Bhutan was unaware that the Indian military was crossing the border into Bhutan on June 18, he said. Clearly, Bhutan had been kept in the dark"
According to several commentators, Bhutan’s silence may be a muted expression of the issues it faces vis-à-vis India. Bhutan has already been moving away from India steadily though subtly.
According to former Indian diplomat M.K.Bhadrakumar, Bhutan’s one and only statement on Doklam, dated June 29, didn’t say anything to the effect that Thimpu had sought Indian help to tackle Chinese intransigence in Doklam, or that it consulted the Indian government. It has also come to light that Bhutan was unaware that the Indian military was crossing the border into Bhutan on June 18, he said. Clearly, Bhutan had been kept in the dark, Bhandrakumar says.
It’s probable that there is disquiet in Thimphu about this, as past incidents show. Anticipating objections and trouble from India, Bhutan had had 24 rounds of border talks with China behind India’s back. In these talks, Bhutan had routinely given in to China’s demands without getting the concurrence of India, thus violating the 2007 Indo-Bhutanese accord in spirit.
Indian Premier Narendra Modi (right) holds a bilateral meeting with Bhutanese Premier Tshering Tobjay ahead of the BRICS -Bimstec Outreach Summit.
But Bhutan’s silence on the India-China dispute is intriguing
India was aware that China had offered Bhutan a “package deal”
The Siliguri corridor is the only link mainland India has with some of its North-Eastern states
India’s strategic interest
It was the fear that Bhutan might acquiesce to China’s bid to take over Doklam which made India bypass it to militarily thwart China’s road building effort in Doklam. India was aware that China had offered Bhutan a “package deal” to settle the entire border issue, under which, China would give up a number of claims in other places if Bhutan would drop its claim to Doklam.
If Bhutan had acquiesced on Doklam too, India’s security would have been in jeopardy, given the fact that China’s sitting on the Doklam plateau, at the tri-junction of India, China and Bhutan, would have seriously threatened the Siliguri corridor in India. Known as the chicken neck, the Siliguri corridor is the only link mainland India has with its North-Eastern states of Assam, Tripura, Nagaland, Meghalaya, Manipur, Mizoram and Arunachal Pradesh, which apart from being insurgency affected, share borders with either China, Myanmar or Bangladesh.
Controversial economic involvement
Even before the standoff over Doklam began on June 16, Bhutan had been looking for friendly relations with China despite getting loads of aid from India.
According to Indian official figures, Bhutan had received US$ 5.8 billion from India between 2000-2001 and 2016-2017, to be the top most recipient of Indian aid in South Asia. 84% of Bhutan’s exports go to India, and India accounts for 64% of its imports. Hydro power generated by Indian companies accounts for 40% of Bhutan’s GDP and is also the main item of export to India.
But the heavy economic dependence on India in trade and investment has led to apprehensions in Bhutan and some real problems too. In 2009, India said it would help step up power generation to 10,000 MW by 2020, and purchase all the surplus power. However, Shripad Dharmadhikary of the Manthan Adhyayan Kendra quotes the New Delhi-based Vasudha Foundation to say that the commissioning of new projects was delayed while costs went up.
"Even before the standoff over Doklam began on June 16, Bhutan had been looking for friendly relations with China despite getting loads of aid from India"
The cost of the 1,200 MW Punatsangchhu-I had gone up from US$ 510 million to US$ 1.46 billion. In the case of the 1,020 MW Punatsangchhu –II project, it went up to US$ 1.1 billion from US$ 570 million. And in the case of the 720 MW Mangdechhu, the cost went up to US$D 675 million from US$ 435 million.
India was to finance the entire project with a 60% grant component and 40% loan component. But this was reversed, due to “financial difficulties”. The loan component now comprises 60 to 70%. Interest rates have also gone up. The net profit per unit of electricity sold to India has fallen sharply since 2007, the Vasudha Foundation report said.
Hydropower has contributed to a steep rise in Bhutan’s debts, and the report notes that Bhutan is “among 14 other countries that are fast heading towards a debt crisis.” At the same time hydropower projects are causing massive environmental damage and jobless growth, the study pointed out.
Conflict on international front
According to P. Stobdan, Bhutan didn’t follow India’s stance on the status of landlocked nations at the UN; signed the Nuclear Non-Proliferation Treaty in 1985; and supported Pakistan’s Nuclear Free Zone South Asia proposal. It is yet to accede to the Bangladesh, Bhutan, India and Nepal Motor Vehicle Agreement (BBIN) for the regulation of passenger, personal and cargo vehicular traffic signed under SAARC in June 2015. Bhutan’s first democratically elected government led by Prime Minister Jigme Thinley, increased diplomatic ties from 25 nations in 2011 to 53 in 2013.
It’s now close to establishing diplomatic ties with China as China wants to discuss the border and other issues directly with it. Commenting on this, diplomat Stobdan wrote: “India looked for an opportunity to punish Thinley. In the days leading up to the Bhutanese General Election in July 2013, New Delhi, in an unambiguous signal, abruptly cut subsidies on gas and kerosene sales (among other tough measures) to Bhutan. Some critics inferred the move was simply meant to rock the election campaign. Others saw a clear message from New Delhi to the Bhutanese – be prepared to face sanctions if Thinley is voted back to power.” There was scathing criticism in Bhutan of India’s meddling in the elections. The Bhuatanese also nurse a fear that India might absorb Bhutan as it absorbed Sikkim in 1975.
Fear of china
However, the Bhutanese are apprehensive about China too. They fear that China may grab Bhutan, the way it grabbed Tibet in the 1950s and drove out its temporal and spiritual ruler, the Dalai Lama. The Bhutanese know that China under President Xi Jinping may press its claims by brazen aggression as evident in its actions in the South China Sea. The world’s happiest place is now well and truly in the Sino-Indian cleft stick.
(P.K.Balachandran is a Colombo-based journalist reporting on South Asia)