India & Japan

Business as usual

Print edition : October 03, 2014

Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe at the Toji Temple in Kyoto, western Japan, on August 31. Photo: AP

A bullet train crosses the Fuji Gawa river in Fuji City, Japan. Japan and India are doing feasibility studies for a bullet train between Mumbai and Ahmedabad. Photo: Tomohiro Ohsumi/Bloomberg

Modi with Chinese President Xi Jinping at the 6th BRICS summit in Fortaleza in Brazil. For India, China is a much larger trading partner than Japan and is of greater geopolitical importance. Photo: PTI

Narendra Modi’s visit to Japan, far from inaugurating a new era, stayed very much in the well-established framework, building on projects and policies in the pipeline and focussing on business.

PRIME MINISTER Narendra Modi’s recent five-day visit to Japan was heralded as path-breaking, signalling the beginning of a really close relationship between India and Japan that would redraw the power configuration of Asia. The visit was seen to mark the beginning, as one hopeful commentator remarked, of an Asia that was not China-centred. The coverage has been effusive. The images evoked an air of bonhomie and warmth: Modi hugging his twitter friend Shinzo Abe, the Prime Minister of Japan; discoursing with Buddhist priests; playing the flute and drums. But far from inaugurating a new era, the visit marked a step forward, building on projects and policies in the pipeline and, aside from some remarks about aggressive neighbours, focussed on business.

The visit led to an agreement to work on a number of initiatives: economic, defence and cultural. The major focus was on infrastructural projects. Japan pledged $500 million towards a public-private infrastructure financing project to India Infrastructure Finance Company Limited (IIFCL). Japan also agreed to double its current investment to $35 billion over the next five years. The infrastructural development will start with building smart cities in six States along the Delhi Mumbai Industrial Corridor. This is not really new as it has been on the cards. If it is implemented, there are huge opportunities for both Indian and Japanese businesses.

A memorandum of understanding was signed between the Ministry of New and Renewable Energy and the Japan Bank of Industrial Cooperation (JBIC). But there was no deal on cooperation to develop civil nuclear energy; rather, the two countries agreed to develop clean coal-fired power plants.

Given the problems of global warming, nuclear energy offers the prospect of clean energy, a choice that the Abe government has not rejected despite the massive contamination caused by the Fukushima disaster. The Japanese government’s reluctance to agree on the export of civil nuclear technology to India goes against the grain of the Abe government’s policy of restarting nuclear plants despite widespread public opposition.

India could have taken this as an opportunity to work out an agreement to explore cooperation in green technologies. Abe, while addressing the New York Stock Exchange on September 25, 2013, spoke about increasing the capacity of “floating” offshore wind power from the 2-megawatt class that exists in the world today to a 7-MW class, which would result in a massive increase in power generation. These giant turbines, off the coast of Fukushima, unaffected by the roll of the waves, he said, would generate clean power. India could benefit from these and other technologies.

Bullet trains

An agreement was reached by which Japan, as part of the infrastructural development plan, would provide technical, financial and operational support to build a Shinkansen (literally new trunk lines) or a bullet train system for India, starting with a line connecting Ahmedabad and Mumbai for which joint feasibility studies are being conducted. This, however, is a comedown from what was discussed in 2006 when Prime Minister Manmohan Singh visited Tokyo. Then Japan had assured India that it would cooperate in providing a high-speed train link between New Delhi and Mumbai.

While infrastructural development and connectivity is important and high-speed train services are necessary, it is highly debatable whether the Japanese Shinkansen system is a solution or is even workable at this stage. The Shinkansen has become the marker of development. China has introduced it and so, as we turn our cities into Shanghai, must we.

The Japanese have operated the Shinkansen system since 1964 without an accident and to date the whole system has not been exported. Its benefits to Japan have not always been good, with over-concentration of populations in Tokyo and western Japan, the relative neglect of rural areas, and other problems that the country has been trying to address for decades. Exports are relatively recent. Taiwan has purchased some trains, and China purchased bullet trains in 2004 but later went on to make copies that have the same exterior. The Chinese track record does not compare well with Japan’s. In 2011, barely three years into operation, China had an accident, which was blamed on manufacturing defects and lack of training.

The Shinkansen system requires expertise at various levels both to produce and operate sophisticated technologies and, even more importantly, well-trained manpower, which India lacks. The Indian railway system has many shortcomings and needs to be improved, but it provides cheap transport to many. The cheapest Shinkansen ticket for a 1,300-kilometre, nearly five-hour trip between Beijing and Shanghai in the fastest train, is over Rs.5,000, twice that for a first class ticket. A flight takes two hours and costs around Rs.7,000. In Japan, if a Shinkansen journey is over four hours, people prefer to take a plane. As in Europe, where equally fast trains have been introduced, budget travellers take planes and the rich can take the superfast trains as they are convenient and fast though expensive. These high-speed trains have their drawbacks: noise pollution, the need for dedicated corridors, high costs and the gradual phasing out of cheaper trains. The heavy costs incurred in building such a system to gain half an hour are hard to justify when improving air travel would seem to provide a cheaper and faster way to travel.

Pact on defence

The second major area where agreements have been reached is defence. A Joint Working Group will coordinate the development of the US-2 amphibian aircraft and explore other areas for cooperation in the Indian aircraft industry. Japan, it is hoped, will transfer aircraft technology to India. This again is a project that was in the pipeline. ShinMaywa Industries, which manufactures these planes, has been in talks with the Indian government.

Japan has begun to break the long-established taboo against exporting defence-related equipment. As part of the Abe government’s strategy to allow Japan to act as a “normal” country, that is, enter into alliances, send troops abroad, etc., the government has been trying to increase defence exports. Defence equipment produced in Japan has very high per unit cost because it only supplies its own limited needs. Defence export has become a new area for a struggling economy and an important arrow in Abe’s quiver of economic policies.

Japan’s entry as an exporter of weapons has benefits for the Japanese economy, but these exports to India and other countries in the region are based on the idea that China is a growing military threat and can only be countered by strengthening defence. This creates the climate for an arms race in the region. Modi himself had not too long ago proclaimed that India should not depend on the import of weapons for security, that it should become self-reliant. In fact, he even said that India should export defence equipment to smaller countries.

Smart cities

Smart city was another keyword in the agreements. Smart cities promise the use of technology to provide a more rational, efficient and environment-friendly way to manage large urban conglomerations. But as critics have begun to note, the way these ideas are transforming cities is much the way car travel did in an earlier time. The urban landscape was transformed by the construction of highways and roads. Equally, though not so obviously, technology will have a strong impact that needs to be publicly debated. Increasingly, private companies build and operate the public services. The huge amount of data that are gathered can be used to reduce energy consumption or track crime, but it can also be used for unregulated surveillance. For instance, sensors can gather data about how you travel through automated licence recognition.

Urban designers have warned that the smart city model fits well with authoritarian ideas. The problems faced in our cities, of poverty, social inequality, inadequate public educational facilities and environmental pollution, cannot be solved from a single command centre but need the active engagement of the citizenry. The really smart way to build a smart city would be with more citizen engagement, for at the end of the day cities are for those who live in them. The South Korean city of Songdo shows the promise and problems of a smart city. Songdo, built outside Seoul, has smart sensors that can control temperature, manage traffic flow and regulate energy. Household waste flows through pipes directly from homes to waste treatment plants, so there is no visible disposal, and 40 per cent of the area is reserved for parks. But, strangely, it has not attracted the foreign corporates, despite tax concessions and subsidies, that it was hoped would come.

India has also agreed to the export of rare earths, which Japan has imported from China, a country that has some 85 per cent of the world’s rare earths. But in 2010, China restricted exports. The extraction of rare earths is done using chemicals that seriously damage the area and harm the people, and in China, because of lax environmental regulations, this has adversely affected the health of people and the environment. The United States and Australia are developing more environment-friendly mining techniques, and substitutes are being developed. It remains to be seen how the mining of rare earths will be regulated in India. But given the prevailing view that environmental restrictions hinder economic growth, it does not look hopeful.

The bonhomie was kept in check with one eye on China. Modi and Abe recognise the “special strategic and global partnership” that the two countries have but could only agree to consider upgrading the level of their foreign and defence talks and regularise joint exercises between the Indian Navy and the Japan Maritime Self Defence Force. Both India and Japan have their border disputes with China and are wary of its developing power and its increasing assertion of its position. However, Abe has been more aggressive in his opposition and has not been able to meet Chinese leaders since December 2012. Modi, on the other hand, has met with President Xi Jinping on the sidelines of the BRICS (Brazil, Russia, India, China and South Africa) summit in July and Xi is going to be the first major leader to visit India since Modi became Prime Minister, when he visits later this month. So, there is speculation that India did not upgrade the talks, keeping Chinese sensibilities in mind. China is a much larger trading partner than Japan—four times larger—and is of greater geopolitical importance. Modi perhaps sees that he cannot let the India-Japan relationship be embroiled in the China-India relationship.

The India-Japan relationship has a long history, and since the mid-1980s it has been growing slowly but steadily. Even though Modi’s trip was projected as if there was a momentous change in the relationship, the fact is that it has stayed very much in the well-established framework. How the visit of the Chinese President works out will clarify the direction Modi’s foreign policy will take.

Brij Tankha retired as Professor of Modern Japanese History, University of Delhi.

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