Srinivas Mazumdaru

South Asia’s Difficult Relationship With the British Monarchy

In spite of their difficult colonial past, India and Pakistan had a cordial relationship with Queen Elizabeth II.

Elizabeth II was crowned queen of the United Kingdom in 1952, just five years after India and Pakistan gained independence from British colonial rule. The memories of British rule, which was marked by the subjugation of the people of then-undivided India, were fresh in public memory at the time.

Just 25 years old when she became queen, Elizabeth, however, is largely admired and respected by people in the former British colonies.

People in India and Pakistan – as well as in other South Asian countries, such as Bangladesh, Nepal and Bhutan – received the news of the queen’s death with a great deal of sadness. Thousands of South Asians posted condolences on social media.

“The role of Queen Elizabeth II between 1952 and 1956 was passive and uneventful. She deliberately kept herself away from interfering in Pakistan’s internal matters,” Mazhar Abbas, a historian at Government College University Faisalabad, told DW.

“She engaged with India and Pakistan through the Commonwealth platform,” he added.

Elizabeth also remained neutral in conflicts between India and Pakistan.

Also Read: As India Mourns Queen Elizabeth II’s Death, Many Question Government Decision

“In fact, Indian politicians appreciated her stabilising role in British politics” after she took over as head of state of the United Kingdom, according to Indian historian Rakesh Batabyal.

“While history has documented the servitude during the colonial era, our relationship with the British monarchy has remained cordial after gaining independence. The queen visited Pakistan many times and maintained good relations with our leaders,” Shazia Marri, Pakistan’s poverty alleviation minister, told DW.

Asif Nazrul, a professor at Dhaka University in Bangladesh, expressed similar sentiments. “ln spite of the colonial legacy, many people in Bangladesh are sad. We can’t live in the past forever. Queen Elizabeth’s calm, soothing and accommodating image eventually prevailed in the last few decades,” he said, adding that the world has lost an “icon of history.”

Subhash Talekar, president of the Mumbai Dabbawala Association, a food delivery service, said he was saddened by the queen’s death.

“We have a great association with the British royal family. Ever since Prince Charles [now King Charles III] visited Mumbai in 2004, the connection has grown,” Talekar told DW. “The royal family invited two of our colleagues to the wedding ceremony of Charles and Camilla Parker in 2005. The invitation from the queen had a personal touch, which reflected her human side,” Talekar said.

But not everyone is ready to gloss over Britain’s colonial rule. Some have even criticised Elizabeth’s “noninterference” approach, for instance, during the first four years of Elizabeth’s rule when she was also the “Queen of Pakistan.” The monarchy was abolished on March 23, 1956, when Pakistan became a republic within the Commonwealth with a president as its own head of state.

“She never used the Commonwealth platform to resolve the Kashmir dispute between India and Pakistan,” said Abbas, the Pakistani historian.

“She could have played a role in strengthening parliamentary democracy in Pakistan. For instance, she could have interfered in 1953, when Ghulam Muhammad, the then governor-general of Pakistan, dismissed the then prime minister, Khawaja Nazimuddin. The deposed PM made a futile attempt to request the queen to reverse Muhammad’s decision,” he added.

But Nonica Datta, a historian at the Jawaharlal Nehru University in Delhi, told DW that Elizabeth had inherited “an enduring and complex legacy of the British empire.”

“She represents the end of the British Empire and the transition of former colonies into independent states. Rarely do we find such a historical figure who embodied the spirit of colonial and imperial past laced with the post-World War II democratic values of the new world order,” Datta said.

Also Read: Queen Elizabeth, First British Monarch to Accede to Throne After India’s Independence, Visited Country Three Times

Vijayasai Reddy, an Indian lawmaker, tweeted that Queen Elizabeth II “may not have apologised for India’s brutal colonisation… but her leadership qualities and morality impacted UK politics.”

Shahidul K.K. Shuvra, a Bangladeshi journalist, told DW he was befuddled as to why people on the Indian subcontinent are so anguished by Elizabeth’s demise.

“South Asians are always more interested in the queen and the royal family rather than how Britain exploited them for 200 years,” he said. “The precious Koh-i-Noor [one of the largest cut diamonds in the world] on her crown was taken away from India,” he added.

Saimum Parvez, a political analyst in Dhaka, also played down the significance of the queen’s death for the people in South Asia.

“The death of the queen does not have any impact on our lives, neither socially nor politically. The Bangladesh government has announced a three-day national mourning, which was expected, but is totally unnecessary,” he said.

“Yes, we don’t want to live in the colonial past,” he added, “but we should not also completely forget what we went through under this monarchy.”

Indian writer Rana Safvi, however, said condoling the death of Queen Elizabeth II was not synonymous with condoning or forgetting colonialism. “We, in India, are still suffering because of the colonial policies,” Safvi said. “We don’t have to endorse the monarchy.”

This article was first published on DW.

How US Sanctions Are Crippling Iran’s Economy

The US moves have hit the Iranian economy hard. While the oil-rich nation’s crude exports have been down, inflation and unemployment have spiralled.

US President Donald Trump has slapped fresh sanctions on Iran as part of his “maximum pressure” campaign against the Middle Eastern nation. Trump’s executive order on Monday targeted none other than Iran’s supreme leader, Ayatollah Ali Khamenei, and his associates with financial sanctions.

US Treasury Secretary Steven Mnuchin said Trump’s order will lock up billions of additional dollars in Iranian assets.

Tehran and Washington are currently locked in a bitter standoff, and escalating tensions have fueled fears of an unintended slide toward a military confrontation between the two sides, particularly after Iran shot down a US spy drone over the Persian Gulf last week.

The US has also beefed up its military presence in the region and blacklisted Iran’s Revolutionary Guards as a “foreign terrorist organisation.” In response, Iran declared the US a “state sponsor of terrorism” and American forces in the Middle East and beyond as “terrorist groups.”

Last year, Trump unilaterally pulled the US out of the landmark nuclear deal that Iran and six world powers struck in 2015. He has since reimposed wide-ranging sanctions, aimed at putting an end to Iran’s oil exports, crippling its main source of foreign exchange and forcing Tehran to abandon its nuclear ambitions.

How have US sanctions hit Iran?

The US moves have hit the Iranian economy hard. While the oil-rich nation’s crude exports have been down, inflation and unemployment have spiralled.

Iran, which sits on the world’s fourth-largest oil reserves and second-biggest gas reserves, shipped over 2.5 million barrels per day of crude in April 2018, the month before Trump withdrew the US from the nuclear deal. That figure was down to about 400,000-500,000 barrels per day in May, reported Reuters news agency, citing industry sources.

The lifting of international sanctions in 2016 spurred rapid growth in Iran, with the country’s economy expanding by more than 12% in 2016. But the reimposition of sanctions last year dealt a massive blow. The Iranian economy, the second-largest in the region behind Saudi Arabia’s, shrunk by 3.9% last year, estimated the International Monetary Fund (IMF).

In 2019, IMF forecasts say, Iran’s economy will shrink by a massive 6%.

Also read: The US Must Not Be Allowed to Strong-Arm India-Iran Ties

Frustration over the sanctions is running high among Iranians, who have seen the value of Iran’s currency rial plummet by about 60% over the past year. Inflation is up 37% and the cost of food and medicine has soared 40% to 60%, according to EU figures.

“In the last weeks and months, the prices of daily products have increased dramatically for every Iranian,” Michael Tockuss, managing director of the German-Iranian Chamber of Commerce, told DW. “The sanctions are not specific anymore; they’re not directed against special companies or against the rulers of the country. Instead, they hit average Iranians all over the country.”

Many foreign companies, including carmakers like Daimler and Peugeot and oil group Total, have wound up their operations in Iran in recent months. This has driven up the jobless rate in the country, with overall unemployment currently hovering around 12%.

Iran’s young people are bearing the brunt of unemployment even more. The youth unemployment rate is closer to 30% in a country where 60% of the 80 million people are under 30.

A parliamentary report last September warned that rising unemployment could threaten the country’s stability. The report also said if Iran’s economic growth remained below 5% in the coming years, unemployment could hit 26%.

Iranian President Hassan Rouhani says his country is facing “economic war.” But Washington stresses that economic pressures on Tehran are directed at the government, not at the Iranian people.

In May, Iran said it would begin backing away from the nuclear accord’s terms, setting a July 7 deadline for the deal’s remaining signatories – the UK, France, Germany, Russia and China to negotiate new terms or it would resume enriching uranium closer to weapons-grade levels.

Observers say should Iran follow through on enriching uranium beyond the permitted levels, the nuclear deal could collapse entirely. In that case, UN sanctions would also be reimposed, a move that could devastate the already crisis-hit economy

Can Europe help?

Following Trump’s withdrawal from the nuclear deal, Germany, France and the UK set up a special payment channel called INSTEX to circumvent US sanctions and continue trade with Iran. The European move came despite the Trump administration warning against initiatives to sidestep sanctions on Iran.

The mechanism was set up in January, but it has so far failed to deliver. While the payment channel would theoretically shield European companies from US sanctions-related penalties, many businesses have been reluctant to trade with Iran due to concerns they could find themselves on the wrong side of US law and risk losing access to the American market.

The failure has caused disappointment in Iran. Iran’s supreme leader, Ayatollah Ali Khamenei, even dismissed INSTEX as a “bitter joke.”

“Practically, at the moment, this system plays no role,” said Tockuss.

Holly Dagres, nonresident fellow at the Washington-based Atlantic Council, told DW in May that the EU’s options were limited when it came to preserving the nuclear deal and trading with Iran.

“The reality is that Europe is limited in terms of telling its companies to go and do business in Iran. There is this greater fear that they will be sanctioned,” said Dagres.

This article was originally published on Deutsche Welle.

Can India Become the Next China for Carmakers?

By 2020, India is projected to surpass Japan and become the world’s third-largest car market, behind China and the US.

China has been the world’s largest car market for the past decade. In 2017, sales there reached over 28 million, according to car news provider yiche.com. But last year, vehicle sales dropped 5.8% to some 22.4 million, according to the China Passenger Car Association, recording their first annual decline in nearly 20 years.

Sales have continued to tumble this year, dropping a steeper 15.8% from a year earlier to 2.37 million units in January, said the Association of Automobile Manufacturers (CAAM).

A slowing economy, weak consumer confidence and mounting trade tensions have hurt demand, with Chinese shoppers ending up buying fewer cars. Analysts also point to the government’s crackdown on peer-to-peer lending for the drop in automotive sales.

This type of debt financing accounts for a significant proportion of new-vehicles sales, and Beijing’s efforts to rein in risky lending after a rapid rise in debt levels mean there has been a sharp cutback in the availability of such credit.

Another reason behind the slump is the “impact of front-loading of demand when purchase tax was cut from October 2015 through the end of 2017,” said Janet Lewis, head of Asian auto research at Macquarie Group.

With slowing demand in the world’s top auto market, carmakers seem to be facing a bumpy road ahead. Given its size and clout, when the Chinese market sneezes, the entire global auto industry now catches a cold.

Most important market

In recent years, a number of auto MNCs – from German giant Volkswagen (VW) to US firm General Motors (GM) – have come to rely on China’s gigantic market to boost their global sales. VW, for instance, sells around 40% of its cars to customers in China, and the Asian country is the biggest market for GM.

Despite the sharp drop in demand, some automakers seem to be faring much better than others. There are also some regional disparities, with demand falling in smaller cities while holding up in coastal areas.

“The biggest slowdown has been among first-time buyers, while replacement demand has held up better,” Lewis said, adding that this in turn favors German (Volkswagen, Mercedes-Benz, BMW) and Japanese (especially Toyota/Lexus, Honda and Nissan) brands, which are preferred by second-time buyers. “That is why these brands have continued to post growth even as the overall market has declined,” the expert pointed out.

Also read: China Is Taking Over India’s Tech Space. Should We Worry?

But those foreign car makers with a weak brand value have ceded market share to much stronger domestic brands in China. The weak market in China has left automakers with few places to go for sales growth, particularly at a time when the industry is facing a potentially disruptive decade.

A plethora of new technologies – from electric vehicles to autonomous mobility – are reshaping how people use and drive vehicles. Traditional automakers are increasingly facing competition from tech giants that are entering the sector.

Huge potential

Some hope India, with its giant market and rapid economic growth, will be able to step in and offer respite to global automakers. The Indian auto market is one of the fastest growing in the world. According to Society of Indian Automobile Manufacturers, the country’s total sales volume, including both passenger and commercial vehicles, hit a record high of 4.01 million units in 2017-18, an increase of almost 10%.

By 2020, the country is projected to surpass Japan and become the world’s third-largest car market, behind China and the US. Many view India as the auto market offering the best growth potential over the next decade.

With a per capita income of around $2,100, India currently has just over 50 motor vehicles per 1,000 people, while a much richer China – whose per capita income amounts to about $7,500 – has more than 200 motor vehicles per 1,000 inhabitants. Experts say the low penetration in India means the market offers enormous growth potential.

Observers say macroeconomic and demographic trends, like rapid urbanization, rising incomes and increased participation of women and youth in the labor force, will boost demand for mobility and drive growth in the auto market.

Massive shifts

Despite its potential, automotive analyst Lewis said, the Indian market’s base is much smaller than in China, and motorcycles are likely to continue to dominate personal transportation in the country.

“I don’t think you can look at India and say it offers respite to global automakers, even assuming it grows 10% per year,” said Lewis.

She explained that over 50% of auto sales in India are from Maruti Suzuki and Suzuki recently pulled out of China. “Number 2 is Hyundai but it has suffered from a lack of capacity in India, so growth has been slow. It is more likely to look to North America to offset the weakness it has seen in China.

“Other international automakers in India have no more than 5% market share. They are playing the long game, but the relative size to China and their relative position means one can’t offset the other,” the expert said.

Furthermore, India’s automotive landscape is not immune to the massive shifts reshaping the auto industry globally, changing car ownership and usage patterns. The emergence of new app-based cab services and ride-pooling options, including Uber and Ola, as well as growing coverage of public transportation in cities are affecting urban Indians’ desire to buy cars. Added to these are problems like traffic congestion, pollution concerns and long commutes, among other factors.

In India’s big cities, where the cost of using an app-based cab is lower than driving a personal car, observers say many price-sensitive Indians might choose to forego car ownership, denting the sales prospects of automakers.

This article was originally published on Deutsche Welle.