The diplomatic tug of war between India and China over the $60 million loan from the Asian Development Bank, or ADB, for Arunachal Pradesh has entered a new arena: Japan.
Both India and China are trying to win over Asia’s largest economy, one of the largest donors to the Manila-based multilateral lending institution.
China does not want ADB to provide money for Arunachal, parts of which it claims as its territory. According to top sources in the United Progressive Alliance government at the Centre, Chinese authorities are seeking Japan’s help to prevent ADB from issuing “public notification” of its approval of the loan for Arunachal Pradesh.
Recently, ADB overruled China’s objection and approved a $60 million loan for a watershed development project in Arunachal. It is a part of its $2.9 billion India development plan for three years to 2012.
Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee and Foreign Secretary Shivshankar Menon are the key players formulating the diplomatic response to China. On Wednesday night, Menon, currently in Rome along with the Prime Minister for the G8 summit, had a chat with Mukherjee in Delhi to discuss the situation. Japan Prime Minister Taro Aso was also in Rome. According to sources, India has already placed its case before the Aso administration.
If the Chinese authorities succeed in their efforts, it will be a diplomatic embarrassment for India and jeopardise the future of the Arunachal project.
China was initially successful when it forced the postponement of an ADB Board meeting to decide on the plan. After China raised objections, ADB asked India to resolve the matter “bilaterally”. New Delhi reacted sharply and said that it would scrap the entire plan but not remove Arunachal from the project.
Last month the ADB Board overlooked its objections and approved the $2.9 billion plan for India. “The Asian Development Bank, regardless of the major concerns of China, approved the India Country Partnership strategy, which involves the territorial dispute between China and India,” Chinese foreign ministry spokesman Qin Gang had said after the board meeting.
China also said that the Manila-based bank should not interfere in the “political issues of its members”.
Giving the current status of the Arunachal project in Parliament today, Foreign Minister SM Krishna said: “China did not endorse the Country Partnership Strategy (CPS) 2009-12 for India at the Board of ADB on the ground that the proposed India CPS involved technical assistance funding for the Flood and River Erosion Management Project in Arunachal Pradesh, which China claims is its territory.”
India had told ADB and all member countries including the US, Japan, Australia, Canada, Indonesia, Korea, Malaysia, the Philippines, Germany and Italy that the CPS was not a political document and it did not make any judgement as to the legal or other status of any territory.
Under CPS, ADB assists member countries through technical assistance grants and projects loans.
“China's objection on political grounds is a clear violation of ADB's charter, which prohibits the bank from evaluating any proposal on grounds other than economic,” the minister said. “India's CPS was discussed in the meeting of the Board of Executive Directors of the ADB on June 15 and all member countries except China supported the document.
Krishna said New Delhi had told the ADB member nations, including China, that Arunachal Pradesh was “an integral part of India and its status is not negotiable”.
