Modi’s Kashmir Surprise Puts Region on Edge

(Bloomberg) --

Prime Minister Narendra Modi’s penchant for surprise decisions has shocked Indians before. But nothing prepared the nation for his move to abolish Kashmir’s seven-decade-long autonomy — sneaked in among routine parliamentary discussions.

Still, there were warning signs.

India’s only Muslim-majority state had been tense for more than a week. As many as 10,000 extra troops were deployed to the already heavily militarized region, and tourists and pilgrims visiting the famous cave temple of the Hindu God Shiva were abruptly asked to leave. Two former chief ministers were placed under house arrest hours before the announcement.

Long an aim of Modi’s ruling Hindu nationalist party, analysts say U.S. President Donald Trump’s recent offer to mediate in the India-Pakistan dispute — rebuffed by India — may have pushed the premier to rush his Kashmir decision.

The move has enhanced Modi’s strongman image and redefined the boundaries of Indian democracy. It also lays the ground for deepening conflict with Pakistan — the nuclear-armed neighbors have fought two wars over Kashmir and both claim the region — and may intensify religious divides in the rest of India where violence against minorities is rising. Pakistan has launched a diplomatic offensive against India’s move, calling on global powers to sanction New Delhi.

No one knows what Kashmiris think of the change. That will only emerge after restrictions on communication and movement in the restive state are lifted.

Global Headlines

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• Democratic presidential hopeful Cory Booker will speak on gun violence and white nationalism at a Charleston church where a white extremist killed nine black congregants in 2015.
• The U.S. Supreme Court is weighing whether to go forward with a Second Amendment showdown for the first time in a decade.

Currency clash | China moved to limit weakness in the yuan, providing some stability to markets, after the Trump administration formally labeled it a currency manipulator, escalating its trade war with Beijing. While the potential penalties are less punitive than the steps Trump has already taken, the move underscores how rapidly relations between the world’s two largest economies are deteriorating. China denied it’s a currency manipulator, saying markets determined the yuan’s recent slide.

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Mexico confusion | Eight months into his six-year term, Mexican President Andres Manuel Lopez Obrador has left business leaders in a state of investment paralysis. Executives interviewed on a recent trip to the capital described a struggle to navigate the leftist leader’s policies and abrupt pronouncements, often calling decision-making process “erratic.”

What to Watch

• Nigeria’s government must decide whether to comply with a high court ruling to release ailing Shiite leader Ibrahim el-Zakzaky, whose arrest four years ago sparked protests in which dozens of people have died.
• North Korea’s foreign ministry renewed its threat to take a “new road” in negotiations with the U.S., a sign that talks may be back on the edge of collapse six weeks after Trump’s historic meeting with Kim Jong Un at the DMZ.
• Puerto Rico’s roiling political crisis has entered a new phase, with the U.S. territory’s top court agreeing to consider whether freshly sworn-in Governor Pedro Pierluisi assumed the office legally.

And finally … A decades-old dream of building the world’s biggest hydroelectric project to power energy-hungry African nations may be inching closer to reality, thanks to the involvement of consortia from China and Spain. But there’s a catch — it’s in the Democratic Republic of Congo, a country two-thirds the size of Western Europe that’s one of the most difficult places on Earth to get anything done. Pauline Bax and William Clowes explain.

--With assistance from Alessandro Speciale, Kathleen Hunter, Alan Crawford and Karl Maier.

To contact the editor responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Anthony Halpin

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