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India-China face-off worsens over ADB loan for Arunachal, Bank doesn't help

India-China face-off worsens over ADB loan for Arunachal, Bank doesn't help

Author: Pranab Dhal Samanta
Publication: The Indian Express
Date: May 15, 2009
URL: http://www.indianexpress.com/news/indiachina-faceoff-worsens-over-adb-loan-f/459910/

Introduction: India objects after ADB says sort out Arunachal issue with China

India and China are headed for a major confrontation in the Asian Development Bank with Beijing digging its heels in and not giving its consent to the $2.9-billion India development plan unless the mention of Arunachal Pradesh is removed from the document.

A sum of $60 million is marked for a watershed development project, including flood management, for Arunachal Pradesh.

China considers the state "disputed territory" and wants it to be removed from the document.

The Bank has asked India to resolve the matter bilaterally provoking a strong reaction from New Delhi. While a board meeting has been scheduled for June 2, India has let it be known that it would rather withdraw the entire plan than remove Arunachal Pradesh for the sake of financial approval.

In March, as first reported by The Indian Express, China successfully obtained a postponement of a decision on the plan at the ADB Board meeting but India had hoped that the ADB would resolve the matter in due course. However, New Delhi was taken by surprise when the ADB wrote to the government recently that it should use bilateral channels to find a way out.

It's learnt that India has asked the ADB not to indulge China on bilateral issues. In the run-up to the June 2 meeting, India will look to lobby hard with other board members to ensure that the Chinese objection is overruled. If the conflict isn't resolved, official sources said, the government may look for alternative funding.

Part of the problem emerges from the fact that ADB does not have a policy for projects in disputed areas. Being the largest donor after US and Japan to the Bank, China is clearly using its clout. India, which is only next to China, will have to lean on the US and Japan along with South Korea to get its way.

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