#229 Credibility or Credulity?
Spotlight on India-Canada tensions, and a Framework to Understand Opportunity Cost Neglect.
India Policy Watch: Trudeau, Is It True Though?
Insights on issues relevant to India
— RSJ
Sorry about that headline. Bad punning is a bad habit. Cannot help it.
On Monday this week, Justin Trudeau told the House of Commons of Canada that his government was looking at “credible allegations potentially linking agents of the Indian government” to the murder of Hardeep Singh Nijjar, a Canadian Sikh leader wanted in India for multiple crimes against the state.
“Any involvement of a foreign government in the killing of a Canadian citizen on Canadian soil is an unacceptable violation of our sovereignty,” he said. “Canada is a rule-of-law country, the protection of our citizens and defence of our sovereignty are fundamental.
Our top priorities have therefore been one, that our law enforcement and security agencies ensure the continued safety of all Canadians. And two, that all steps be taken to hold perpetrators of this murder to account.”
Coming a few days after a rather frosty visit by Trudeau to New Delhi for the G20 summit, where India largely ignored him, this marked an unprecedented ratcheting of tension between two countries who have had an uneasy relationship for more than four decades now. Soon, the Canadian government expelled an Indian diplomat, and New Delhi expelled a Canadian diplomat in a tit-for-tat response. India also suspended visa services to Canadians, citing security concerns of its staff at the consulates. Later in the week, Trudeau escalated things further. First, by claiming that Canada had shared the “credible allegations” with India many weeks ago. He also maintained this was a point he brought up in his bilateral talk with PM Modi. That apart, the discussions on an FTA between India and Canada have been put on hold. It is safe to say India-Canada relations will take years to recover from this.
Canada has gone on a diplomatic offensive by speaking to its allies, especially the “five eyes” partners with whom they share signal intelligence regularly, and having their foreign ministries make statements about the issue. It is likely that Trudeau had made the statement in the Parliament after having briefed his allies in advance. The U.S. secretary of state, Antony Blinken, called on India to cooperate with Canada on the issue in a tone that suggested it was far from dismissive on this matter. As the Guardian reports:
“We want to see accountability. And it’s important that the investigation run its course and lead to that result,” Blinken said in New York on Friday, where he was taking part in the UN general assembly. “We would hope that our Indian friends would cooperate with that investigation as well.”
Blinken, without commenting directly on the substance of the allegations, said the US took “very, very seriously” incidents of “transnational repression”.
Similar statements have been issued by Australian and U.K. foreign ministries, too. This isn’t the news cycle India and PM Modi were hoping for after successfully chairing the G20 summit as hosts last week. The importance of India as a strategic counter to China in the Indo-Pacific has grown as the relationship between the West and China has turned sour. India is in a ‘sweet spot’ both as an investment opportunity for global investors and for its large and growing market, which, despite recent protectionist moves, continues to be open. The Canadian government has maintained so far that they have “credible allegations”, which is a step removed from “evidence”. If its investigations do turn up “evidence", it will be a setback for India, that’s positioning itself as the mother of democracy, of rule of law and a vishwaguru on all things. Of course, India can and will deny any such accusations, but it will dent its image, and it is yet to reach a level of strategic importance where it can brazen its way out without consequences. But that’s for another day if and when Canada does come up with credible evidence.
To an ordinary observer in India today, this overseas revival of the khalistan movement for a separate homeland for Sikhs is quite perplexing. Largely because there’s hardly any support for it in Punjab, the state that’s home to most Sikhs in India. Khalistan has been absent from political discourse in India for over a couple of decades now. The only reference to it was when the government itself bizarrely blamed khalistani elements for fomenting farmers’ protests against the farm reforms bill a couple of years ago. The usual ingredients that make for a credible secessionist movement are missing here. There are free and fair elections in Punjab; the Sikhs have political freedom and enjoy their rights as much as any other Indian, and they have more than their fair share of representation in power. There are no restrictions on their movement within or outside of India. Sikhs aren’t queuing up outside of foreign embassies seeking political asylum because of persecution in India. They do queue up to emigrate to Canada, but those are for economic reasons alone. The diaspora has no restriction on visiting Punjab, and it remits a significant amount of capital back to their families in Punjab quite easily. Punjab has been an underperformer on the economic front in the past decade, and it does have a rampant drug abuse problem among its youth, but these aren’t sponsored acts against it by the Indian state. There’s nothing today that suggests Sikhs in Punjab have deep grievances about being discriminated against by the Indian state any more than any other province. Of course, Punjab has a history of a violent and long secessionist movement that crippled it in the 80s, and that was put down ruthlessly by the Indian state. But what led to that, in terms of political self-goals, propping up of pseudo-religious leaders for political gains and an active Pakistan that was more in control of itself are all things of the past today. India’s political leadership can be tremendously shortsighted on these issues, as we can see today in Manipur. However, in Punjab, there’s no groundswell of any kind at this moment that is in sync with the images of Sikhs holding pro-Khalistan posters in Toronto.
So, what explains the apparent ferment of the khalistan movement in Canada? One, Canada does take its image of being a liberal, multicultural society quite seriously. So, there’s not just freedom but also active political encouragement for all kinds of lost and bizarre causes to pursue their interests. Two, there’s a legacy of those who emigrated to Canada in the 80s at the peak of militancy. Like most immigrants, they are stuck in the time warp of when they left India and their worldview is still shaped by it. Many of them have made it good in Canada and carry tremendous political heft today. It is clear they still harbour strong anti-India sentiments because of what happened in the 80s, and they are willing to wallow in the occasional Khalistan nostalgia. This is always a fertile ground for someone to exploit, and Hardeep Singh Nijjar was one among the few who took advantage of this. Lastly, at about 3 per cent of its population and growing, Sikhs represent a solid electoral bloc, and it is clear Canadian politicians, especially the ruling Liberal party, are happy pandering to the vocal fringe elements who claim to represent the community. The one good thing that might come out of this diplomatic kerfuffle is for some reasonable voices in Canadian media to ask why have they let their soil be used by immigrants carrying out their domestic agenda long after they have left their homes. It isn’t as if these immigrants are living in refugee camps and will leave Canada and go back to live in their independent homelands if that scenario unfolds in future. Far from it. The Sikhs, especially, are well assimilated into Canadian society and continue to bring in more of their family and friends from Punjab. So, someone needs to ask who these elements are agitating for? Their Sikh brethren in Punjab aren’t up in arms against the state. As a matter of fact, they are busy watching Gadar 2 and cricket at Mohali. So they cannot be demanding Khalistan for them. This, them are merely rank opportunists running a racket of raising funds on emotional grounds from the diaspora and getting tacit support from political forces who mine these sentiments for their own gains.
But the blinding stupidity of Canada to be used by these forces should not preclude them from protesting an alleged murder of their citizen on their soil. They do have a case for that. The question is why did PM Trudeau raise this now when he only had what he termed “credible allegations”. Wouldn’t it have been more persuasive if the investigating agencies had credible evidence that they submitted to the court? That would have made his case stronger. There can only be two explanations for the timing. One, he was convinced after his New Delhi trip, where he claims he told the Indian government of his concern, that the Indian government would not bother with whatever evidence he brought up on this issue. The only way to force its hand would be to make it known to the world. That he chose the floor of the parliament is quite telling in this regard. Or, two, he was so miffed with his treatment during the G20 meeting that he decided to throw caution to the winds and put India on the backfoot with whatever limited data he had on this issue. India would like to believe it is the latter.
So, what happens from here on? In the short term, this diplomatic standoff is useful for both the PMs on their domestic political fronts. PM Trudeau has in the past shown he could stand up to China, and now he has further opportunity to be seen as someone who doesn’t get bullied. For PM Modi, the idea of a strong, muscular India that responds in kind is exactly what his support base needs to reinforce their faith in him. The WhatsApp groups are filled with messages that echo the “ghus ke maara” (translation: beat them in their own den) sentiment that was rife when India did those surgical strikes against Pakistan back in 2019. So, from a political perspective, it might be good for them both in the short run. What’s definitely been set back for years, and maybe decades, are the shared economic interests: the investment in India by Canadian pension funds and business houses, the bilateral trade and the huge movement of people from India to Canada for work or for studies. This will take time to get back to normalcy.
What remains open is how one of the parties will brazen it out if the evidence regarding the involvement or the lack of it shows up. For India, if things go wrong on this, it will also mean a quick end to the wolf warrior diplomacy kind of path it was starting to go down. The way I see it, the data is stacked against India. It will require tremendous diplomatic skill combined with India’s newfound assertiveness to navigate this. Bluster and triumphalism of being the new Israel or being as strong as Russia to snook the West might work for the masses at home. But in the real world, credibility and conduct matter as much or even more. That’s what India will have to navigate in the coming months.
Addendum
— Pranay Kotasthane
As of this writing, I do not think that this kerfuffle will have any significant impact on India’s important geopolitical or economic relationships with the West.
At the outset, the role of “credible evidence” is overrated. Regardless of the quality of evidence (or the truth, for that matter), countries are likely to work under the assumption that India was involved in one way or another. Countries will demand “accountability” publicly but will use this incident to extract better concessions during negotiations with their Indian counterparts behind closed doors. Nothing that India’s diplomats cannot manage.
Some writers have expressed fear that credible evidence against India will make it appear not very different from Russia and China in the eyes of the Western elite. I think this is an exaggeration. The news that nation-states conduct covert operations against each other isn’t news to any political establishment. Moreover, there are crucial qualitative differences between this case and past acts of overseas “repression” by Russia, Saudi Arabia, and China. The governments of these countries targeted dissidents based in other countries. In this case, the target was a terrorist involved explicitly in activities against the Indian State. Whether India was involved or not is beside the point; most countries in the West are unlikely to see actions against a terrorist in the same light as those of Russia, China, and Saudi Arabia.
The other apprehension is that this incident will strengthen anti-India coalitions in the West, underscoring the limits of cooperating with India. This might well be the case. However, countering China’s aggression will remain the primary preoccupation of the governments of these countries, for which India’s role will remain crucial. Regardless of the evidence that Canada supposedly has, this fundamental logic of strategy doesn’t change. Interests far outweigh values in times of geopolitical stress.
Geopolitical relationships apart, India has two other specific areas to worry about.
The first issue is the domestic political and economic situation in Punjab. While khalistan has little resonance within Indian borders, this incident is sure to increase mobilisation for this cause outside India.
And that will have an impact back home as well. Past work on radicalisation by political scientist Alexander Lee shows that “the politically involved are likely to be relatively wealthy and well educated because they have access to political information and can afford to devote time and energy to political involvement.”
Worsening future economic opportunities in Punjab, combined with a past of rapid wealth generation and reasonable education levels, portend a high risk for political mobilisation and radicalisation.
Despite a change in governments over the last decade, the dominant political narrative in Punjab is still of despair. There are hardly any narratives of hope, and that should worry everyone. Beyond business-as-usual politicking, parties need to form a fresh consensus on rescuing Punjab’s economy, for it can cause political disturbances to spill over to other states.
The second issue that needs attention is diaspora politics. As India becomes a bigger global power, its main export will continue to be people. And where there are people, there is politics. We can expect intra-India tensions to play out on the global stage in different countries. Eventually, countries might prefer to moderate the flow of Indian immigrants.
The takeaways from this episode aren’t quite obvious.
A Framework a Week: Conceptualising Opportunity Cost Neglect
Tools for thinking public policy
— Pranay Kotasthane
In edition #62, we linked out to an interesting paper titled Opportunity Cost Neglect in Public Policy. Through experiments, authors Emil Persson and Gustav Tinghög find:
“.. a strong evidence of opportunity cost neglect in public policy, where participants who acted in the role of policymakers were between six and ten percentage points less likely to invest in a public health program when reminded about opportunity costs (money could fund other health programs)… The implications of opportunity cost neglect for public policy are substantial, including misallocation of public resources and an artificially high demand for public spending.”
Here’s an All Things Policy episode discussing this result in detail.
Turns out, there’s a much better way to conceptualise why welfare programmes are prone to opportunity cost neglect. Thanks to the latest episode of The Seen and the Unseen podcast, I revisited this framework from Milton and Rose Friedman’s classic, Free to Choose.
As the chart illustrates, how we spend money depends on the source and recipient of the money. We economise when we pay, and we try to extract maximum value when the money is spent on us. Welfare spending by governments operates in the lower half of the chart. We either seek higher subsidies for ourselves from taxpayer money (lower-left quadrant), or we seek higher subsidies for someone else at the taxpayer’s expense (lower-right quadrant).
Civil servants demanding higher pensions is an example of the first kind of opportunity cost neglect, while elites cheering higher spending for mid-day meals in government schools is an example of the second kind.
This helpful framework should probably be the first lesson in any public finance course.
HomeWork
Reading and listening recommendations on public policy matters
[Article] Nitin Pai writes about the change India needs in its diaspora engagement.
[Blog] Amit Varma’s take on ‘Friedman’s Law of Spending’.
[Podcast] We have a Puliyabaazi on the India/Middle-east/Europe Economic Corridor.
[Post] Check our take on the worrying fiscal situation of Punjab.
Saying that Punjabis themselves have no demands for Khalistan does not square with the 26th Jan incident of a Khalistan flag being raised at the Red fort during the farmer's protests. It seems like at least some Khakistanis were embedded in that protest and the government foolishly capitulated against them.
I was waiting for this. The best commentary on the recent India-Canada tensions I have seen till now. Thanks Pranay and RSJ.