Commentary from the South Asia Center on the most relevant news from the region, and suggested “must-read” analyses from the week.

The dispute over Afghanistan’s presidential elections reached new heights this week, as candidate Dr. Abdullah Abdullah rejected the preliminary results that placed Ashraf Ghani Ahmedzai in the lead by 12 percentage points and threatened to form a parallel government. The crisis threatens to reignite ethnic tensions at the most delicate phase of Afghanistan’s transition to self-governance. A key point of contention is the dramatic increase of voter turnout during the second round in southern and eastern Afghanistan’s predominantly Pashtun provinces, where support for Ghani is strongest. The fact that 7,000 disputed polling stations were included in the preliminary results further dented Abdullah’s confidence in an electoral process that was already tainted by charges of collusion between the Ghani camp, the Karzai administration, and the Independent Electoral Commission (IEC). Secretary of State John Kerry is visiting Kabul and playing a mediation role between the two candidates. The Obama administration’s threat to terminate US aid to Afghanistan if extra-constitutional steps are pursued by either party demonstrates that Mr. Kerry will have significant leverage in pushing both sides towards a mutually accepted outcome. A resolution would entail an extensive audit of disputed ballots by the United Nations, a condition that both parties have agreed to, according to a senior US official.

Relevant News Stories
US Ambassador Meets with Candidates Ahead of Kerry (Tolo News)
How to Avert Afghanistan’s Implosion (Wall Street Journal)
Kerry pushes for solution in Afghan election dispute (Washington Post)

Representatives of Iran and the P5+1 are continuing to negotiate in Vienna to reach an agreement over Tehran’s nuclear program. According to the Iranian foreign ministry’s spokeswoman, the most controversial issues of the program are being discussed in the current phase; namely, Iran’s ability to enrich uranium in centrifuges. There continues to be a significant gap between the quantity of operating centrifuges that the P5+1 would find acceptable and the number that Iran aspires to build in the coming years. A final deal remains elusive, with both negotiating teams facing internal pressure not to compromise any further. While Congress has threatened not to lift sanctions in the event of an unsatisfactory agreement, Ayatollah Khamenei and the Iranian Revolutionary Guard Corps have reiterated a “right” to enrich uranium at levels that still gives them “break-out capability,” or the ability to produce weapons grade material in a few weeks. Given that a resolution to the dispute is unlikely before the June 20 deadline, it is possible that John Kerry’s visit to Vienna will result in an extension of the negotiating process. The standoff over the nuclear program seems not to have affected Iran’s perspective of cooperation with the US against the ISIS insurgency in Iraq, with the chairman of Iran’s Expediency Council Ayatollah Rafsanjani stating: “Iran and the United States have common interests in Iraq. And there is no obstacle to cooperation. If the two countries deem it necessary that there is a need for cooperation, they may make planning in this regard.”

Relevant News Stories
Kerry to Join Talks on Iran as Deadline Draws Near (New York Times)
Iran, G5+1 Continue Hectic Diplomacy for Final Deal (Fars News Agency)
Iran may cooperate with U.S. on Iraq: Rafsanjani (Tehran Times)

The new Indian government headed by Prime Minister Narendra Modi unveiled its first budget on Thursday. The budget includes efforts to attract more foreign direct investment (FDI), higher spending on infrastructure, an increased goods and services tax (GST), and plans to decrease subsidies on food and fuel. India’s growth has slowed down in recent years with a mere growth of 4.7% in 2013-14 (compared to 10.1% in 2007). The government of India is faced with a daunting task – it must create more jobs for the one million people entering the country’s work force every month. A government survey published on Wednesday forecasts GDP growth of 5.4% to 5.9%. The government pledged to revive the economy with Finance Minister Arun Jaitley promising a growth rate of 7% to 8% within the next three to four years. Mr. Jaitley warned that this transition will probably have short-term shocks and could be painful. He stressed on fiscal prudence and maintained, “we cannot spend beyond our means.” The current lack of details on the specificities of the budget make it “challenging to assess the credit impact,” according to Moody’s. Initial reactions to the budget claim that it is “not a radical Modi budget” and that the government might have played safe in retaining some figures from the interim budget such as the fiscal deficit and revenue growth target figures – a move which is surprisingly uncharacteristic of BJP. The full text of the Finance Minister’s budgetary speech can be found here

Relevant News Stories
India budget: Arun Jaitley unveils reform plans (BBC News)  
Will Jaitley’s first budget bring ‘achche din’ for you? (Hindustan Times)
Why Arun Jaitley has chosen to play safe with Budget 2014 (First Post)

Pakistani terror group, Tehreek-e-Khilafat, announced its allegiance to the Islamic State (formerly the Islamic State of Iraq and al-Sham) becoming the first group outside the Middle East to partner with Abu Bakr al-Baghdadi. Tehreek-e-Khilafat had previously claimed responsibility for multiple attacks in Karachi. In a separate development, Pakistani president Mamnoon Hussain signed into law a new anti-terror bill, the Protection of Pakistan Bill 2014, applicable for the next two years. Under this law, the maximum sentence for terror offences is doubled to 20 years and the security forces are allowed to hold suspects for up to 60 days without issuing allegations against them or disclosing their whereabouts. The Human Rights Watch (HRW) claims that this new law is tough on terror but violates Pakistan’s international legal obligations. Members of the Human Rights Commission of Pakistan (HRCP) expressed concern about the unconstitutional abuse of human rights by the authorities. 

Relevant News Stories
Pakistani terror group swears allegiance to Islamic State (The Telegraph)
President Mamnoon signs Protection of Pakistan Bill into law (Express Tribune)
Protection of Pakistan Bill 2014 approved (Dawn)

A UN tribunal awarded Bangladesh with an area of about four-fifths of total 25,000 sq km disputed area in the Bay of Bengal. The Permanent Court of Arbitration at Hague in Netherlands issued the verdict on Tuesday, ending the thirty-year long dispute over a sea border between Bangladesh and India. The verdict allows Bangladesh to explore important energy reserves of oil and gas in the Bay of Bengal, which will help the country meet its rising energy shortage. Bangladeshi Foreign Minister Abul Hassan Mahmood Ali said at a news conference on Tuesday, “It is a victory of friendship and a win-win situation for the peoples of Bangladesh and India.” The verdict is binding on both countries and successfully concludes the arbitration process that was initiated by Bangladesh in 2009 under the UN Convention on the Law of the Sea.

Relevant News Stories
U.N. tribunal rules for Bangladesh in sea border dispute with India (Reuters)
Bangladesh wins another legal battle in the Bay (Dhaka Tribune)