India-Pakistan Sparring Opens Door for China in South Asia – Businessweek

For a senior Afghan diplomat sitting in India’s capital, it’s easy to explain how a region with a quarter of the world’s people can account for only five percent of global trade.

Narendra Modi and Xi Jinping

“India and Pakistan need to overcome their problems,” M. Ashraf Haidari, deputy chief of mission at Afghanistan’s embassy in New Delhi, said in an interview ahead of this week’s meeting of the South Asian Association for Regional Cooperation, or SAARC. “Summits happen, leaders come, there’s all this consensus and declarations announced. But unfortunately it doesn’t happen in reality.”

As leaders of eight SAARC countries meet in Nepal this week for the first time since 2011, Indian Prime Minister Narendra Modi has more reasons than ever to turn the bloc into a regional force to counter China’s growing influence in South Asia. Doing so will require him to overcome differences with Pakistani leader Nawaz Sharif.

So far, things aren’t looking good. Modi’s government scrapped talks with Pakistan in August, which was followed by the worst border fighting between the countries in a decade. At the same time, China has promised SAARC nations part of a $40 billion Silk Road fund to finance infrastructure investments.

“SAARC won’t be able to counter China’s influence,” said Nishan de Mel, executive director and head of research at Colombo-based Verite Research Pvt., a policy research group. “China tends to have an approach that isn’t too demanding and isn’t politically difficult for the partner country and where the partner country will tend to see benefits quite quickly. India’s approach tends to be more hard-nosed.”

via India-Pakistan Sparring Opens Door for China in South Asia – Businessweek.

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