Another quad rises
Welcome to South Asia Brief.
The highlights this week: A new Quad gets its groove on, Sri Lanka’s political uncertainty continues, and the IMF and Pakistan near a deal.
The New I2U2 Quad Has Legs
The leaders of a new quadrilateral forum comprising India, Israel, the United Arab Emirates, and the United States met (virtually) for the first time on Thursday.
The grouping, officially called I2U2, first convened last October with a virtual meeting of foreign ministers. After some uncertainty, this new Quad appears to be gaining momentum. It’s not about to eclipse the Indo-Pacific Quad (India, Japan, the United States, and Australia) in significance, but it has the potential to be more than just another group capitalizing on the “minilateralism” trend in international relations.
I2U2’s emergence can be attributed to rapidly growing cooperation among its member countries, with a boost from the 2020 Abraham Accords that produced normalization agreements between Israel and several Arab neighbors, including the UAE.
Washington has strong motivations for advancing I2U2: expanding the geographic scope of its top relationships, restoring partnerships and alliances that suffered during the Donald Trump presidency, and reframing relations with the Middle East in an era when it seeks a smaller footprint there.
New Delhi has compelling reasons to back it, too: playing a greater global role without compromising its strategic autonomy, expanding cooperation with Washington beyond Asia, and deepening ties in a Middle East region it views as strategically significant because of its energy and economic interests and a large diaspora presence.
In October, I wrote in South Asia Brief that I2U2 will face three tests: strategy, sustainability, and substance. Today, there are encouraging signs on all three fronts.
I2U2 lacks a unifying, galvanizing cause. By contrast, the Indo-Pacific Quad is fueled by a common desire to counter Beijing. This is a long-shot objective for I2U2, given China’s strengthening commercial cooperation with both Israel and the UAE.
The Iran factor is intriguing, however. It’s a bitter rival of Israel and the United States. Abu Dhabi and New Delhi want to find ways to engage with Tehran, but territorial disputes and reduced energy ties—not to mention their growing relationship with Iran’s rival Saudi Arabia—may limit engagement prospects. U.S. President Joe Biden’s visit to Riyadh on Friday, along with new sanctions on Iran, underscore growing U.S. tensions with Tehran and provide Washington with added incentive to push for positioning I2U2 as an entity that counters Iran’s influence.
Meanwhile, there are indications that I2U2 is focused on ensuring continuity. That all four leaders met for the first time is the biggest sign yet of a sustained commitment. Additionally, when India’s External Affairs Ministry formally announced on Monday Prime Minister Narendra Modi’s participation in Thursday’s summit, it revealed that the four countries have “Sherpa-level interactions regularly to discuss the possible areas of cooperation.” This means personal envoys to each country’s leader are carrying on conversations about future collaborations.
There are also signs that I2U2 is homing in on meaningful projects. An Indian government statement indicated that the group will encourage joint investments in six “mutually identified” nonsecurity areas: energy, food security, health, space, transportation, and water.
Food security has grown in importance since Russia’s invasion of Ukraine, which resulted in rising global food costs. The three group members other than the United States have taken subdued positions on the Russian invasion. But by identifying food security as a top summit priority, I2U2 has signaled a wish to tackle the war’s deleterious global consequences.
On Thursday, the group announced two initial joint projects—the development and financing of a series of food parks and a renewable energy project, both in India.
Like the Indo-Pacific Quad, I2U2 is leveraging the warm relations enjoyed by its members and its public messaging to emphasize cooperation in nonsecurity spaces, while staying quiet on more sensitive issues related to security or grand strategy goals.
It has less strategic clarity, not to mention a much thinner track record, than the Indo-Pacific Quad. But it can still make its mark if it maintains a sustained and substantive focus on its six areas of shared interest and on pursuing its publicly stated goals of strengthening infrastructure, climate change mitigation, public health, and technological development—major needs in the four member countries and beyond.
Sri Lanka in turmoil. It’s been a tumultuous few days in Sri Lanka. Last weekend, thousands of protesters, enraged by the government’s inability to ease acute economic stress, stormed the presidential palace. Sri Lankan President Gotabaya Rajapaksa, who had refused to step down even though protesters had demanded his ouster for months, pledged to resign. But instead of resigning, he fled to Maldives on a military jet on Wednesday and appointed Prime Minister Ranil Wickremesinghe as acting president.
On Thursday, he flew on to Singapore, though the government there said it had permitted him to arrive on a “private visit,” and that he had not requested asylum. Singapore may not be his final destination; among other factors, the country has a large population of Tamils, and Rajapaksa has been accused of being complicit in the killing of “tens of thousands” of Tamils in Sri Lanka during the country’s civil war. Singaporean authorities may worry his presence could trigger unrest.
Reporters in Sri Lanka said Rajapaksa “emailed his resignation” on Thursday, though the government has not made a formal announcement. On Thursday evening local time, the office of Sri Lanka’s parliamentary speaker issued a statement indicating that a letter of resignation had been received from Gotabaya via the Sri Lankan High Commission in Singapore.
Sri Lanka’s constitution stipulates that if a president resigns, the prime minister temporarily becomes president until Parliament appoints a lawmaker to serve out the remainder of the president’s term, which in Rajapaksa’s case ends in 2024.
The lack of clarity about Sri Lanka’s immediate political future complicates its economic crisis. The country desperately needs a new loan from the International Monetary Fund, but the IMF is unlikely to agree to provide one until a new government is in place.
If and when Sri Lanka gets an IMF deal, it will likely require fresh austerity measures that the public is unlikely to react well to, especially if the government is not perceived as credible. This suggests Sri Lanka could remain politically tense until its next elections, which the new government will be under pressure to hold early.
Pakistan nears IMF deal. If it weren’t for Sri Lanka and Afghanistan, Pakistan would be suffering South Asia’s worst economic crisis. Heavily indebted and grappling with rapidly dwindling foreign reserves, it faces similar problems to Sri Lanka, though not as acute. This week brought good news: Islamabad has reached an agreement with the IMF for a new funding package. It will become final pending approval from the fund’s Executive Board.
The announcement wasn’t unexpected. Though Pakistan’s new government, which took office in April, has struggled to develop an economic recovery plan, in recent weeks it has taken the steps the IMF would want prior to reaching a deal: It released an austerity budget and raised electricity tariffs and gas prices.
While fresh infusions of IMF funds would mark a major step forward in Pakistan’s economic recovery, it won’t help the political cause of a beleaguered government facing relentless pressure—in the form of large anti-government rallies—from the opposition. The general population, already hammered by high prices, won’t be pleased about having to bear the brunt of additional austerity spending necessitated by the IMF deal.
Abe’s deep legacy in India. The late former Japanese Prime Minister Shinzo Abe is being fondly remembered in India. While India and Japan have long enjoyed cordial ties, in great part because of their shared rivalry with China, Abe is credited with ushering in a new and deeper phase in bilateral relations.
In 2007, he delivered a speech in India’s parliament that spoke of shared cultural and historical ties and called on the two to promote stability and security across the Indian and Pacific Oceans. In his speech, he laid out a vision for an “open and transparent” region—principles that would later be embraced within the Indo-Pacific Quad.
Abe also had a warm personal relationship with Modi. The Indian premier was one of the first world leaders to react publicly to Abe’s death. He published a blog post—titled “My Friend, Abe San”—about his friendship with Abe and declared a day of mourning. The two shared some ideological similarities, including nationalistic positions that called for their nations to play a greater role on the global stage.
Under the Radar
Earlier this month, the Taliban announced they were raising coal prices from $90 to $200 per ton. It revealed this move soon after Pakistani Prime Minister Shehbaz Sharif said Pakistan would import coal from Afghanistan using local currency, in order to conserve foreign reserves. Coal in South Africa, a top Pakistani supplier, has risen in price in recent weeks, so Islamabad likely thought it could get a better deal from Afghanistan.
The Taliban raised prices on their coal exports to bring a boost to an economy on the verge of collapse. The economy has been in deep crisis since the Taliban takeover last year, which prompted the flow of international financial assistance—on which Afghanistan is heavily dependent—to ground to a halt.
But there may be an ulterior political motive as well. The Taliban have struggled to gain legitimacy at home amid their unsuccessful efforts to ease the general public’s economic stress. One tactic they have tried to use to gain more domestic support is to take a hard line on Pakistan—a country that provided sanctuary and other support to the Taliban when the group was waging its insurgency.
Many Afghans resent the Taliban for siding with Pakistan. Consequently, ever since the end of the war, the Taliban have sought to demonstrate their independence from their former ally by sparring with Pakistani soldiers trying to fence the Afghanistan-Pakistan border. Burdening energy-insecure Pakistan with higher coal prices may be another way of tightening the screws on Islamabad to curry more favor from the Afghan public.
An editorial in the Daily Mirror, weighing in on Sri Lanka’s political upheaval, celebrates the strength of people power: “Non-violent people’s power … when mobilized for legitimate reasons is way more powerful than those in power, who attempt to clothe themselves in flimsy garments of imagined invincibility.”
Scholar Badrul Imam argues in the Daily Star that Bangladesh’s current gas shortages aren’t tied to the Ukraine crisis—they’re a consequence of not enough exploration activities. “The current gas crisis … was not inevitable, but is the result of not doing enough to find and lift the gas from below the ground.”
Natural resource analyst Madhukar Upadhya warns in the Kathmandu Post that Nepal faces an impending food crisis due to the government’s poor food security policies and failure to acknowledge the threat of climate change: “The imminent food crisis is only a single instance of how climate change will affect everyone. We’re on the precipice of catastrophe becoming the norm.”