The Return of Dubai’s Runaway Princess Courtesy New Delhi

India is looking to gain more influence in the global arena, and is willing to take bolder steps to do so. It is willing to invest in infrastructure even if it means taking on some risks, as long as it is in line with its national interests. This shows a shift in India’s diplomatic approach, from a more passive and submissive role to a more aggressive stance

By Alam Srinivas
  • Like China, a host of Middle East nations, and South Africa, the Modi-Jaishankar team refused to cow down to the demands of the West
  • Recently, Adani Ports sold its Myanmar port for $30 million and incurred a loss of $120 million, as it had spent $150 million on it
  • Gatik Ship Management, an Indian company with an address in Mumbai emerged as one of the largest shippers of Russian crude
  • Security experts contend that India’s interest in Myanmar port was to curb the sea-based smuggling linked to terror groups

FOR more than half her life, Princess Sheikha Latifa bint Mohammed Al Maktoum, who was 32 years old in 2018, planned to become a global fugitive, escape from Dubai, and seek asylum in the US. This was despite the pro-feminist image her father, Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of United Arab Emirates (UAE) and the controlling force in Dubai, enjoyed. In the US and Europe, the Sheikh was known as the poster boy of Islam, Dubai’s modernised-westernised ruler, who believed in women’s emancipation, and who had vowed to “remove all the (conservative, traditional, social, and religious) hurdles that women face” in the Muslim nations.

The sad truth was that at home, Latifa, the younger daughter-Princess, felt that she was in jail (an “open air prison”), lived in a palace where disobedience by women was “brutally punished”, and whose elder sister, another Princess, had been under strict and severe house arrest for years. According to a recent article in The New Yorker, “In her teens, Latifa had been ferociously beaten for defying her father. As an adult, she was forbidden to leave Dubai, and kept under the constant surveillance of the guards.” She had to escape, or her life would turn out to be the same as, or worse than, her elder sister.

FAILED ATTEMPT TO ESCAPE FOR LIFE

In February 2018, according to The New Yorker, Latifa met her-in-escape, Tina Jauhiainen, a Finnish martial arts instructor, at a local cafe. From Tina’s apartment, the duo picked up scuba suits, satellite communicators, and boat parts. They had envisaged a long, convoluted journey. They hoped to drive across the UAE border to Oman with Latifa hidden in the spare-tire compartment in the trunk of a car, use an underwater scooter and scuba rebreathers to reach a dinghy, which would take them to a US-flagged yacht, Nostromo, which was parked 16 miles off the Oman coast. The yacht was purchased by Herve Jaubert, a French-American marine engineer and possibly an agent for the French secret service, via money delivered by Tina.

Human rights activists alleged that Adani was caught in the diplomatic crosshair because the Myanmar regime was being investigated by the International Criminal Court and International Court of Justice for “crimes against humanity, war crimes, and even in the case of crimes against the Rohingya genocide”

The plan, Latifa and Tina would sail to either India or Sri Lanka, and the Princess would use a fake passport to fly to the US. Life was good and bad at sea. The boat was “filthy” and “supplies were riddled with cockroaches”, said Tina’s. They were on a ration of beans, porridge, and boiled potatoes. Yet they were thrilled. Freedom beckoned them. Latifa posted a message on Instagram, “I have escaped the UAE after being trapped for 18 years.” (In a later interview with The New Yorker, Jaubert insisted that the “boat was ‘immaculate’, and that cockroaches are an inevitable part of seafaring.”)

But things took a nasty turn. It seemed worse than being in Dubai. First, the yacht captain warned that they were running out of fuel, even as the boat was merely 30 miles from the Indian coast. Jaubert told a friend that the tank would be empty in a couple of days. Latifa and Tina also learnt that another accomplice, Christian Elombo, a Frenchman, who had met them on the Oman coast to load them on the dinghy, was arrested by the Omani Police minutes after he reached his car at the beach. It was a possibility that the Dubai Sheikh, Latifa’s father, knew about the intricacies of the escape route.
Unknown to Latifa’s, her communication from the boat, especially to human rights activists, was intercepted and, “at the UAE’s request Interpol had issued Red Notices for her accomplices, accusing them of kidnapping her.” Armed with the legal notices, and after the UAE located the yacht off the Goa coast, Father Sheikh Mohammed placed a crucial call. According to The New Yorker, he spoke to the Indian Prime Minister Narendra Modi, and struck a diplomatic deal. The Sheikh “agreed to extradite a Dubai-based arms dealer in exchange for his daughter’s capture.” New Delhi agreed, as the deal was a bilateral coup, which was legally backed by Interpol notices.

“The Indian government deployed boats, helicopters, and a team of armed commandos to storm Nostromo and carry Latifa away,” wrote The New Yorker. The article added, “After disappearing overboard on Nostromo, she had been dragged onto an Indian naval boat, then aboard a helicopter and onto a private jet.” After being tranquilised thrice, Latifa found herself in a UAE desert prison, in a cell with blacked-out windows. After news of her capture became public, and Tina gave an interview to BBC, she was transferred to a villa. Despite rulings by the London High Court that the Sheikh was in the wrong, diplomacy and public relations won the day.

Latifa’s escape, capture, and turmoil was soon forgotten. The US inched closer to UAE, global organisations stated that Latifa was safe and comfortable. India’s role received scant attention, apart from the coverage in The New Yorker and a few media publications. To Indians, the incident proved that New Delhi was willing to play an aggressive, partly illegal, role on the global arena. It was willing to flex its muscles to gain bilateral and multilateral benefits and advantages. Modi’s diplomacy was a mix of aggression and cooperation. The decibel levels of India’s Foreign Minister, Subrahmanyam Jaishankar, would not be subdued as before, but echo across the world.

PUTIN’S SLIMY, SLIPPERY AND SLICK STRATEGY

This belligerent and antagonistic attitude, blended with peaceful overtures, was evident in how India dealt with the Russia-Ukraine war. Like China, a host of Middle East nations, and South Africa, the Modi-Jaishankar team refused to cow down to the demands of the West, especially the US and NATO nations. They took the neutral stance, and continued with their defence-business relationship with Vladimir Putin, Russia’s new Czar. In fact, New Delhi enhanced and concretized the business deals, and imported huge quantities of crude oil from Moscow, despite the global West-dictated economic sanctions.

According to Reuters reports, Russia emerged as India’s largest crude oil supplier, and accounted for nearly 40% of total imports. As India skirted the western sanctions to buy Russian crude, its state-owned Indian Oil Corporation hiked the ongoing deal to buy oil from Russia’s state-owned Rosneft. Along with imports from Azerbaijan and Kazakhstan, India purchased more from this region compared to the Middle East, which was the major supplier. Compared to 2022-23, the share of Russian oil has shot up this year. For instance, in April 2023, it comprised 1.9 million bpd out of total imports of 4.81 million bpd.

Media reports indicated that Gatik Ship Management, an Indian company with an address in Mumbai, and partially owned by Indians through links and connections in Dubai, Iberia, and Monaco, emerged as one of the largest shippers of Russian crude. Newspaper articles claimed that Gatik “owned just two chemical tankers in 2021”, but had now acquired “a fleet of 58 vessels with an estimated value of $1.6 billion.” According to global experts, the shipper’s largest client is Russia’s Rosneft. A report in Financial Times said that Gatik had shipped 83 million tons of Russian crude and oil products, a quantity that was enough to meet the UK’s demand for two months.

Joseph Borrell, European Union’s (EU’s) policy chief, alleged that India has imported crude from Russia, and Indian private and state-owned refiners converted it into petroleum products like diesel and gasoline, which were sold to the West. He charged that this was “circumvention of sanctions”, and EU’s member countries “have to take measures” against these Indian exports. India purchased Russian crude at prices that were above the sanction-stated ones. In addition, New Delhi refused to back UN resolutions that seek to condemn Moscow’s bellicose and violent behaviour against Ukraine.

In response, Jaishankar thundered that the EU’s policy chief “should take a look at the regulations that have been passed by his own organisation.” The Indian Foreign Minister took a hardline stance and forcibly added, “I really don’t see the basis… because my understanding of the (European) Council’s regulations is that if Russian crude is substantially transformed in a third country, then it’s not treated as Russian anymore.” He pointed at Council’s Regulation 833/2014 to further his case. As Indian refiners converted the crude into petroleum products, the western sanctions did not apply.

Even as New Delhi took on the West vis-à-vis Russia, it did not fail to cosy up to the US, and European nations. Modi scheduled a visit to America, and invited foreign leaders to India. Thus, India conveyed that its diplomatic strategy, whether active or passive, or aggressive or subdued, was aimed to sync with its national interests. If India felt it benefited more from kidnapping a Dubai Princess off the coast of Goa, or surreptitiously, if not illegally, importing oil from Russia, and re-export oil products to the West, so be it. There was nothing to be ashamed of such moves, even if they had to be completely or partially hidden.

DIPLOMATIC DESIRES VIA PRIVATE PROFITS

As we saw above, the public and private sector align their business goals with those of the Indian government. Thus, the trio act in consonance with a win-win scenario to achieve foreign affairs-related objectives. However, in some cases, the private players act independently, or with covert and overt support of the policy makers. The latter is true of China, mostly in the case of international energy and infrastructure projects. India too has adopted the same approach, and broadened it to allow the private sector to do the same. Take the case of Adani Group’s two foreign ports in Israel and Myanmar.

After being tranquilised thrice, Latifa,the younger daughter-Princess, found herself in a UAE desert prison, in a cell with blacked-out windows. After news of her capture became public, and Tina gave an interview to BBC, she was transferred to a villa. Despite rulings by the London High Court that the Sheikh was in the wrong, diplomacy and public relations won the day

Gautam Adani, the controversial patriarch of the Adani Group, who is in the eye of a stock market storm, met Israel’s Prime Minister Benjamin Netanyahu in February this year for a formal takeover of the Haifa port. Adani, and an Israeli firm, paid $1.18 billion to buy the port, which is billed as the gateway for maritime trade between Asia and Europe, via the Middle East. Adani Ports claimed that the acquisition would “expand its footprint into the European port sector, which includes the lucrative Mediterranean region.” What is true for the business group is also a fact for the Indian economy.

Post the event, Adani tweeted that the port had “immense strategic and historical significance for both (the) nations.” This was reflected partly by the fact that the deal was signed in 2022, “around the same time when the leaders of I2U2, comprising India, Israel, the US, and UAE were holding a virtual conference”. In this new Quad, the US did not want China to grab the port, and UAE, one of the original bidders, withdrew at the last minute. One of the reasons behind the emerging Quartet is to stem the growing global influence of China. And there is no doubt that India and UAE are closer than ever before.
One gets a whiff that Adani realised how important it was for India to get hold of Haifa. Reports indicate that the group paid much more than what was offered by the others. The Israeli media clearly stated that this was a “strategic purchase” where “price was less important” than other factors. A report explained that with an estimated price-earning ratio of 18, the message given by Adani was clear – “Step aside, this is a strategic purchase,” and we are not worried about the valuation. It added, “With such a gap (between the various bids), you understand that this is a completely different ball game.”

TERRORISM, COUPS & SMUGGLING ROUTES

However, investing in global infrastructure is neither a win-win or zero-sum game. It can be a loss-making one too, when the main economic rationale is to help the country. This is true of Adani’s port venture in Myanmar. Recently, the group sold it for $30 million, and incurred a loss of $120 million, as it had spent $150 million on it. The reasons were due to global pressure, US sanctions, and displeasure of human rights entities. The root of the problem was the human rights violations by a military regime in Myanmar, which came to power via a coup that displaced a popularly-elected government.

When Adani signed the deal, there were reports that the group would spend $290 million to manage the port that was controlled by the armed forces. In March 2021, the US imposed targeted financial sanctions against the two of the military’s conglomerates, which included Myanmar Economic Corporation (MEC) that is funded by the military junta and owns the port. Documents revealed that Adani would pay $52 million to MEC, even as it agreed to bring in $141 million capital-in-cash and $148 million capital-in-kind. There were fears that the $52 million could be used to conduct international crimes.

Russia emerged as India’s largest crude oil supplier, and accounted for nearly 40% of total imports. Compared to 2022-23, the share of Russian oil has shot up this year. For instance, in April 2023, it comprised 1.9 million bpd out of total imports of 4.81 million bpd

Human rights activists alleged that Adani was caught in the diplomatic crosshair because the Myanmar regime was being investigated by the International Criminal Court and International Court of Justice for “crimes against humanity, war crimes, and even in the case of crimes against the Rohingya genocide.” They put the Indian group on “notice” several times, but Adani refused to “disengage” from the MEC deal. This was a problem as a UN fact-finding mission concluded that the military-controlled entities like MEC “provide essential financial streams directly to the Myanmar military.”

To top it up, there were past videos and images that showed a meeting between Karan Adani, CEO, Adani Ports, Myanmar’s top general, Min Aung Hlaing. In July 2019, the two exchanged gifts during the latter’s visit to Adani’s Mundra port in Gujarat. Hlaing is accused of several crimes. The Indian group denied that it had engaged or had links with the Myanmar military, either before or after the port deal. It clarified that it was a purely business deal, minus any security or diplomatic ramifications. For example, American investments in China or Russia cannot be deemed to be those with autocratic regimes.

An Adani spokesperson said that General Hlaing’s visit to Mundra was not organised by the group, but hosted by India. Government officials accompanied the general, and this was “only one location out of multiple sites on this visit.” The general went to other places, and interacted with other business groups. Adani had neither any role to play in, nor did it have the capacity to prevent, the uploading of the alleged videos by the Myanmar military on YouTube, as well as references in the Myanmar media. However, the pressure mounted; Adani had no option but to extricate himself from the deal.

Security experts contend that India’s interest in Myanmar port was to curb the sea-based smuggling linked to terror groups, which are active in the North East and have bases in Bangladesh and Myanmar. A hold over a regional-global port could impede the smugglers’ activities. This was also the reason why India decided to re-route coal from the eastern belt to the northern states, via sea-land routes, which were longer than the direct railway links. An executive order stated that the eastern coal would go via sea to the western coast, and be transported over land to the northern states like Punjab.

Obviously, states like Punjab opposed the move, as the order would exponentially increase the transportation costs and, hence, the power tariffs. This would adversely impact the states’ subsidy budgets, as many gave free power to farmers and poor sections. Several chief ministers alleged that the only motive behind the re-routing of coal was to benefit the Adani Group, whose ports lay along the sea route. Even the official order conceded that costs would indeed shoot up, but still stated that this was the best option possible. The central regime did not yield an inch, and refused to budge on this count.
In off-the-record talks, intelligence officials revealed that the coal re-routing had nothing to do with either politics (BJP versus non-BJP states) or economics (power pricing). It was dictated by security reasons: to curb smuggling that aided terrorists. The railway route allowed illegal diversion of coal, thefts, and use of railway wagons to smuggle goods, including arms. Government officials were in cahoots with the terrorist-smugglers. If the coal could go via routes where either the Center, or its loyalists in the private sector, had more control and held the keys, it was easier to restrict the illegal trade.

“We feel that the Center can better manage security and terror issues, compared to the states, where the ruling parties have different ideologies and agendas. Similarly, the longer route in this case implied higher costs, and lower profits, for the smugglers. This itself would make the contraband trade less lucrative. If the terrorists tried to seek alternative and newer routes, they would need fresh linkages, which would be easier to observe and control. Although it was a setback to the expenditure budgets of the state governments, the move was in national interest,” explains a retired intelligence official.

Newspaper articles claimed that Gatik “owned just two chemical tankers in 2021”, but had now acquired “a fleet of 58 vessels with an estimated value of $1.6 billion

Adani, therefore, was an integral and important chess piece in this game. The Center wished to change the rules of play in a bid to restrict the movements of the smugglers who aided the terrorists. Thus, like in the cases of Latifa, the Dubai Princess, Russian crude oil and Gatik, or buying ports in the neighbourhood and far away, strategic interests overpower possible diplomatic and business reverses. If a nation is lucky, it can be a win-win, as it may be with Haifa port. But many times, the Center, as well as a nation cannot hold. Things can slip away. Diplomacy is a constant cat-and-mouse game, and today’s tom cat can easily turn into a scurrying mouse tomorrow.

Alam Srinivas

Alam Srinivas is a business journalist with almost four decades of experience and has written for the Times of India, bbc.com, India Today, Outlook, and San Jose Mercury News. He is working on a new book on the benefits and pitfalls of the Indian Bankruptcy Code.

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