Highlights of Indian Ocean Conference 2016

The India Foundation in association with S Rajaratnam School of International Studies, Singapore; Bangladesh Institute of International and Strategic Studies (BIISS), Dhaka and Institute of Policy Studies (IPS), Colombo hosted a two day “Indian Ocean Conference 2016” from 1-2 September 2016 at Singapore.

Highlights of Counterterrorism Conference 2016

India Foundation, in collaboration with the Government of Rajasthan organized the Counterterrorism Conference 2016 (CTC 2016) at Hotel Crowne Plaza, Jaipur, Rajasthan on 2-3 February 2016. The theme for this year’s conference was Tackling Global Terror Outfits. Over 250 eminent intellectuals, academics and scholars from India and all over the world attended the conference which was addressed by over 35 speakers. This conference brought together field operatives, senior officials from security agencies, policy makers, scholars and government leaders involved in counterterrorism operations, planning and sensitization.

The CTC 2016 emphasized on understanding the phenomenon of the mushrooming terror outfits in the Middle East and its neighbourhood, their methodology, motivation and resources. The first session explored the liaison between technology, terror and terror financing at length. The discussions also covered how the operation of these forces in tandem gives birth to the idea of “global terrorism” that transcends national borders and serves the limited interests of the terrorists.

India Ideas Conclave 2015 – A Short Film

The Rig Veda says, “Ā no bhadrāḥkratavoyantuviśvataḥ” (Let good thoughts come from everywhere, from all the world. It was in this spirit, that India Foundation organised the 2nd India Ideas Conclave in Goa on the theme of Learnings from Civilisations. The 3-day event saw participation from more than 350 eminent intellectuals, academics and scholars. More than 65 speakers from around the world addressed the gathering on socio-economic, cultural and political themes that dominate the public discourse in India today. This was the second edition of the conclave and built upon the ideas deliberated in the first edition which was on the theme of integral human development.

India Ideas Conclave 2014 – Highlights

The first India Ideas Conclave was held at Goa from December 19-21, 2014 in collaboration with the state government, was the first step towards creating the intellectual infrastructure for thinkers to engage on important public policy issues and create space for an alternative narrative of the India story.

Glimpses of Counter Terrorism Conference 2015

The Centre for Strategy and Security, India Foundation in collaboration with Sardar Patel University of Police, Security and Criminal Justice, Jodhpur organized the first Counter Terrorism Conference 2015 at Jaipur, which was a monumental event in the field of strategy and counter terrorism. It was the first time that a conference on such a subject was ever organized at this magnanimous scale. The participants and speakers included the galaxy of scholars and area practitioners of counter-terrorism from around the world for the 3-day Conference. The event was envisioned as a historical milestone in the future of research and action in the field of Security, Strategy and Counter-Terrorism. The representatives of research organizations, think tanks and arms of government dealing with the subject gathered under one roof for setting the global security discourse.

 

Global Power Transition and the Indian Ocean

Over the past 500 years, the Indian Ocean region lost control of its geo-political and geo-economic relevance. First the entire region was subjugated to colonial dictates, and then in the post-colonial era, to cold war concerns and global power plays. You will agree with me that currently the global political and economic balance of power is undergoing tectonic shifts and major re-adjustments are in the offing. Single power and duopoly appear to be a thing of the past, and for the first time in five centuries economic power in the world is moving again towards Asia.

Aside from which the global financial system is moving away from a single currency (the dollar) dominated international system towards a multi-currency international system. New sources of investment capital are reducing western dominance. New consumer markets and the expansion of the Asian middle class are changing the traditional focus of markets.

Several megatrends are also poised to enhance on this shift.

First, it is expected that the individual will be empowered due to reduction in poverty, the rise of the middle classes, the ICT revolution and widespread use of communication technology, the social media and better health care.

Second, there will be a diffusion of power with the uni-polar world – giving way to a multi-polar one – based on networks, coalitions and alliances.

Third, demographic changes, aging populations will impact on economic growth of certain countries.

Fourth, the demand for food, water and energy resources will increase substantially with the growth of the global population.

And fifth, climate change and shifts in the environment will impact on economies across regions. This re-adjustment is increasingly evident in the economic forecast for the next few decades.

We can all tangibly feel how Asia is growing at a tremendous pace.

The wealth and technology gap between the West and the East has narrowed significantly by the sheer weight of numbers in Asia. By the year 2030, it is estimated that Asia will surpass North America and Europe combined, in terms of global power based on GDP, population size, military spending and technological investment. Of the four largest economies of the world – China, US, India and Japan, three are located in Asia.

This global power transition to Asia creates both opportunities and challenges for Asia as whole and the Indian Ocean in particular. This Conference, therefore, is timely and significant.

This transition in global power can be traced to the economic awakening of East Asia, driven by the growth of China and the complementary growth of ASEAN countries – particularly Indonesia and Vietnam. Yet, parallel to that, the US had built close economic alliances and military arrangements with Asia-Pacific countries.

Of course by 2008 there were setbacks suffered by the Western economies. This then challenged the western dominance of the global order and has led to an emerging multi-polar global order.

Now, the US is proposing the furtherance of a single combined security strategy for the two Asian oceans – the Indian and the Pacific.

Will this create a super region with Maritime Asia at its centre? Obviously this will have new implications for Asian security.

This is highlighted by the emergence of such concepts as the Indo-Pacific and more recently the Indo-Asia-Pacific.

The question that remains is – whether such a region – on the scale of the Indo-Pacific or the Indo-Asia-Pacific is viable?

The leading American political scientist and political economist, Francis Fukuyama in a recent interview remarked and I quote:

“Asia is polycentric, multipolar, and constantly evolving. There is no uniformity in Asia in terms of geopolitics and culture and each of those countries is a separate world to itself, even as it overlaps in trade and commerce with its neighbors and with the United States. It is a challenge for Americans to keep up with that region.”

The disparate nature of Asia not only in terms of size, resources, diversity and interests of both regional and extra regional states, but also growing militarisation, historical disputes and strategic mistrust, pose serious challenges to the emergence of a viable and sustainable strategic security order.

There will be resistance to any single country attempting to unilaterally shape the strategic order of the region. Yet building political will and strategic trust and the institution of institutional structures are all prerequisites for such an inclusive multilateral strategic security order that can respond in case of any emergency.

But in reality, these two oceans of Asia also make for two distinct spheres of influence within the Asian continent, each maintaining separate sophisticated trading and political systems while interacting with each other.

The Indian Ocean still has a heavy British influence- the Pacific has taken to American practices. We play cricket, they play baseball, the rest play football.

For instance, unlike the Indian Ocean, the Pacific Region has been intrinsic to US security. For this reason US Administrations from Presidents Franklin D Roosevelt to George W Bush have treated these two areas separately.

On the other hand – the countries in the Indian Ocean Region have historically been reluctant to join power blocs. Despite superior economic and military might, even during colonial times it was difficult to dictate the future of the Indian Ocean Region. The countries of the region have historically played a significant role in global trade and commerce, given rise to some of the great civilizations and religions of the world, and are home to unique and diverse cultures and histories. Whilst partnership and collaborative relationships were built with countries and civilizations outside the region, the region maintained its multi-polar characteristic.

To my mind, the notion of Indo-Pacific or the Indo Asia-Pacific appears destined to remain a more conceptual rather than a realistic premise. The collapse of the Trans Pacific Partnership has further weakened the arguments for it.

In contrast, the Indian Ocean has emerged as one of the world’s busiest and most critical trade corridors, rapidly surpassing the Pacific and Atlantic Oceans. Covering a vast global expanse – extending to East Africa in the West, Australia in the East, South Africa in the South, the Indian Ocean is well poised to regain its influence in world politics and the global economy.

The Indian Ocean Region has always been a significant playing field for big powers. Historically it has also been a bridge between the East and West.

Today the region is acquiring an intrinsic significance of its own. The Atlantic basin is declining. Central Asia and Africa have yet to evolve into mature political economies. The Middle East is in turmoil and Latin America is also undergoing a somewhat troubled growth. The Pacific basin – particularly the Eastern Pacific is very dynamic but it has its own latent instabilities such as the South China Sea and East China Sea disputes, developments in North Korea, increasing militarisation of disputes and the absence as yet of regional institutions to bring coherence to the political economy of the area. So it is possible to argue that the Indian Ocean Region has an extraordinary opportunity to create something new in the global context and something historically uniquely beneficial to its people.

Already, the ASEAN nations are on the ascent in the eastern side of the Indian Ocean. Three ASEAN members control the sea-lanes linking the Indian Ocean to the Pacific.

Moreover, South Asia is also kindling underpinned by the growth of India, making it one of the fastest growing regions of the world. Since South Asia dominates the Indian Ocean and therefore this power transition in the Indian Ocean will be heavily influenced by South Asian developments.

Consequently, I see the South Asia and ASEAN countries presenting an emerging opportunity that can bring with it benefits similar to those that came in the past to the Atlantic and Pacific basins.

That is the challenge of the next decade or two.

Our responses will shape our destiny in the 21st Century. The cooperation and coordination between ASEAN and SAARC including the Ramayana Connection have given us strong cultural affinities. We have similar Governmental institutions and commercial practices. The English language is a link language. We have a huge cohort of youth more regionally conscious than their parents. We also have a lot of work to do in bringing these two groups together. More frank in-depth discussions; On-going dialogue at the highest levels. We must not allow the internal disputes and differences of these multilateral organisations to impede the collective relationships between the two groups. It also challenges SAARC to reach a higher level of cooperation than what we have been able achieve so far.     The opportunities are there – waiting to be exploited – and with ingenuity we should be able to forge ahead.

The multi-polar world we live in will be dominated by the competition among the five or six major global powers during the next two decades. It may well be a protracted undetermined contest. The Indian Ocean will be a major theatre of competition. But the multiplicity of contestants gives us – in the region – a margin of flexibility, which we must utilise to determine the regional order.

We must commit ourselves to an order based on the rights of all States to the freedom of navigation – the unimpeded lawful maritime commerce and over-flight. Our own futures and the futures of our extra-regional partners are therefore heavily invested in how strategic security is managed in the region. Many countries remain dependent on energy supplies and traded goods that are carried across the region.

Those who are geographically located in the region have a primary interest in the security of the Ocean, which is more often than not linked to their economies and the livelihoods of their people.

Managing competition and strengthening cooperation would be essential given both these economic and strategic security factors, which have a direct impact on the future of this region. This is something we cannot do alone.

There are major power interests at play particularly those of China and Japan. Middle power interest such as those of the Republic of Korea (ROK) and Australia. Nor have the US and the European entity relinquished their interest in the region.

As Fukuyama states, the West led by US will continue to project a tremendous amount of soft power globally due to strong institutions, continued stability and prosperity, high per capita GDP, dominance of the English language, technological lead, democratic traditions and culture.

It is time for Indian Ocean countries especially Asian nations to take the lead in determining their own future. It is our belief that an Indian Ocean Order needs to be crafted with accepted rules and agreements that would guide interactions between states.

This Order needs to be built on a consensual agreement and no singular State should dominate the system. The Indian Ocean Order would have the primary responsibility of upholding the freedom of navigation in the Indian Ocean, ensuring that shipping and air routes to East Asia and beyond are kept open, building closer economic cooperation amongst countries in the region, incorporating an Indian Ocean Development Fund for development of the region, and in particular, establishing a strong Humanitarian Assistance and Disaster Management mechanism to deal with natural and manmade disasters.

Today, IORA (the Indian Ocean Rim Association) the regional organization is not an effective force and has fallen short of expected levels of delivery with regard to regional cooperation. It is dormant when the strategic concepts concerning the Indian Ocean are being discussed.

What is required as a start is a dialogue between SAARC and ASEAN leaders. Indonesia, an ASEAN member also the current Chair of the IORA, can initiate this dialogue – spanning the IORA and all the interested major and middle powers.

The final objective will be the agreement on an Indian Ocean Order. A settled arrangement guiding the interaction between states to ensure the safety and security of the Indian Ocean and its lanes of communications. An Order established by consensual agreement for a peaceful maritime security space and the strengthening of Maritime Security cooperation for mutual benefit.

Such an Indian Ocean Order can only be consolidated by strong and meaningful regional cooperation. IORA’s present scope of meeting at official and ministerial level is insufficient for this purpose. This is where organizations such as the India Foundation have a role to play; To present proposals for closer cooperation.

Two of the areas requiring your efforts will be – firstly the establishment of an Indian Ocean Assembly. An Assembly which brings together inter alia Heads of State and Governments, leaders of political parties, officials, academics, intellectuals, non-governmental sectors, cultural and commercial leaders, media representatives, youth groups in order to recommend measures for consideration by the Indian Ocean region.

Secondly a programme for cooperation in Education and Human Capital Development. This single measure will make a significant contribution to the rapid development of the region.

Our task, then, is to begin building a political eco-system that is both prescriptive and preventive; prescriptive in that it creates a structure out of the natural affinities of geography, culture and resources that already exist; preventive in that it contains the inevitable local disputes and prevents them from disrupting or spilling over on to a common Indian Ocean agenda.

(The article is the gist of inaugural address by Shri Ranil Wickremesinghe, Hon’ble Prime Minister of Sri Lanka at the Indian Ocean Conference at Singapore on 1st September 2016.)

The Rise of the Indian Ocean Region – India’s Challenges and Responsibilities

In his eminently readable account of the history of the Indian Ocean and its invaders, Richard Hall begins by declaring that “Now the monsoons of history are blowing afresh, as the balance of world power swings back to the East.  The start of the twenty first century is seen as ushering in a new ‘Age of Asia’, in which the natural unity of the Indian Ocean can once more assert itself.” Reflecting on this observation may well a good way of beginning the Indian Ocean conference.

Hall’s remarks raise a number of questions.  Is the Indian Ocean more than geography?  Was it really so before and can it be so again? Should it be so and in whose interest?  What does it take to create a stronger Indian Ocean identity?  How do we address the challenges of connectivity, economy, security, politics, culture and identity – all of which are critical elements to its possible re-emergence?   And of course, what are India’s views, interests and capabilities in this process?  These are some of the issues that I will address in my remarks.

There is considerable historical evidence to suggest that the Indian Ocean ‘world’ did have an essential unity that was based on maritime trade rhythms. We also know that it was indeed a self- sustaining world, albeit with natural and flexible boundaries, that set it apart from other proximate worlds. The association of maritime trade with cultural influence was both graphic and pervasive across the ocean. As a result, traditions, practices, faiths and commerce created a virtual connectivity that overcame distance.  Yet, it must be admitted that the romance of history gave way to the realities of international relations.  The arrival of the Europeans fragmented the ocean and its littoral. The post-colonial world also created new national, and thereafter, regional identities that put the ocean in the shade.  Moreover, economic activity and cultural habits specific to the coast in the Indian Ocean did not always extend very far inland. This lack of depth perhaps also contributed to the reduction of an entire eco-system into a water space.

Before addressing the challenges of reviving the Indian Ocean as a geo-political concept, let us examine the arguments in its favour.   It is not coincidental that Hall was connecting the unity of the Indian Ocean to the age of Asia, or indeed to the balance of world power.  If we all accept, as I assume we do, that there is a global rebalancing underway driven by Asia’s revival, then we must definitely examine the contribution that Indian Ocean can make to this process.  Is the Asia we promote merely a littoral one or should its progress and prosperity extend into the seas that are part of it?  Is our continent better served by a fuller identity or a narrower one?  If both the world and Asia are heading in the direction of greater multi-polarity and multilateralism, is a broader spectrum not in our collective interest?  And looking beyond, surely a more integrated view of the Indian Ocean also brings the proximate continents of Australia and Africa at its two ends much closer. Let me also make a security argument:  are we not safer if Asia’s sense of itself extends seamlessly to the waterways so essential to our commerce? Or for that matter, are narrow nationalism and sharp regionalism not better harmonised in a pan-oceanic framework?  There is even an economic argument today to look at the Indian Ocean in a more composite way.  The blue economy is an important ‘over the horizon’ opportunity that is waiting to be tapped.  In essence, the case for approaching the Indian Ocean in a less disaggregated manner is strong.  The challenge is to translate these arguments into a regional order.

A key step in that direction is to create the connectivity that promotes a sharper Indian Ocean personality to emerge.  It is obviously unrealistic to just fall back on the past monsoon-driven one, though we should not underestimate the attractions of soft connectivity. The problem is that littoral nations, in the last five decades, have each joined a regional grouping, some of them more than one.  Encouraging them to work towards a composite Indian Ocean one is, therefore, not easy.  None probably would be opposed but few actually have the necessary enthusiasm or appetite.  At a diplomatic level, promoting greater interaction among these groupings would itself make an important contribution to the Indian Ocean. But more important, it is necessary to bridge physically the boundaries between them.  A good example is the India-Myanmar border where the SAARC meets ASEAN.  While land connectivity is obviously critical, we must also recognise that the under-development of maritime infrastructure is itself largely responsible for the profile of the Indian Ocean.

No less significant is hinterland development.  Part of the Indian Ocean’s limitation was the narrowness of its coastal culture.  As unified national societies emerged in Asia, the psychological distance from the ocean has also narrowed.  Hinterland economies have increasingly become linked to maritime trade. It is apparent today that the development of their infrastructure that can be a game changer in elevating the importance of the Indian Ocean.  Let me offer examples from India itself in support of this line of thinking.  We are working on ambitious plans for port and port-led development that would make our 7500 km coastline more relevant to the future of the Indian Ocean and India.  We are similarly looking at more aggressively developing some of our 1200 islands.  Road and rail development projects are improving internal logistical efficiency.  Of particular significance is the steady unfolding of the Delhi-Mumbai Industrial Corridor.  We expect this to be followed by an eastern corridor and a southern one covering Bengaluru to Chennai.  If you juxtapose these infrastructure initiatives with the ‘Make in India’ programme, the implications for the Indian Ocean are quite evident.

We know that historically, the Indian Ocean was a ‘highway’ linking great multitudes across vast geographies.  As our connectivity vision and capabilities expand, this critical role can actually be played once again. For the Indian Ocean to attain its true potential, it is imperative that India, which is its centre of gravity, should be a facilitator rather than an obstruction.  That requires a smoother movement of goods and people within India but also to its immediate neighbourhood.  And beyond. Not coincidentally, stronger connectivity is at the heart of the ‘Neighbourhood First’ policy of the Modi Government.  Whether it is the Kaladan transport project leading to Sittwe port in Myanmar; or the Trilateral Highway to Thailand;  railway modernisation, inland waterways, coastal shipping, or port development in Bangladesh, or in Sri Lanka;  today, better logistics is the dominant theme of India’s neighbourhood outreach.

Our experience towards our west is less positive for reasons you all appreciate.  Nevertheless, the understanding on the Chahbahar port project with Iran and the sea access it can provide for Afghanistan represent important openings.  We appreciate Iran’s considerable potential as a transit corridor even to Eurasia and Europe.  Among the projects we are working on with them is the International North-South Transport Corridor for which a test run was just done in transporting goods all the way to St. Petersburg.  India is also desirous of joining the Ashgabat Agreement that connects the Indian Ocean to Central Asia.

It would, therefore, come as no surprise to all of you that we see the re-energising of SAARC as one of our key foreign policy priorities.  India is very conscious that South Asia is among the least integrated regions of the world. This not only damages the growth prospects of SAARC members but is also a drag on the larger rise of Asia and the Indian Ocean that I have spoken about.  Consequently, we are pressing now to broaden cooperation among SAARC members, including through new initiatives in fields like weather forecasting, disaster management or satellite capabilities.  As I underlined, we also are working towards greater connectivity and promote expanding people-to-people contacts.  Admittedly, there are challenges as not all SAARC members are on the same ambitious page.  To overcome that, we have also conceptualised groupings like BBIN that plurilateraly take forward sectors like motor transport and railways. BIMSTEC is another relevant grouping with reference to the Bay of Bengal. We look forward to its developing a more robust agenda.

Our interest is not limited to the immediate region. We positively evaluate the prospects of working with Japan on the Mekong-Dawei initiative that could further connect to southern India.  Studies are already underway on the Bangladesh-China-India-Myanmar BCIM corridor.  And in the ocean itself, our interest in enhancing maritime logistics in Sri Lanka, Maldives, Mauritius and Seychelles remain strong and will extend further in due course.

The overall contribution that connectivity can make to economic growth and development is hard to overstate.  The examples I have cited in my own country and beyond make a powerful case for an open mind in this regard.  Yet, we cannot ignore the fact that precisely because improved connectivity opens up so many new possibilities, it can also have strategic connotations. Consequently, it is vital that trans-national initiatives should be the outcome of broad-based consultative processes.  It is also very important that the yardstick to judge their viability should essentially be a commercial one.  At the end of the day, connectivity should contribute to the cooperative spirit of this region.

A resurgence of the Indian Ocean must necessarily be predicated on its economic revival.  Only then would any expectation of coherence and cooperation in the Indian Ocean become realistic. There is a strong case for greater intra-ocean trade and investment and indeed, some progress to report in that regard. If India’s economic growth in the last two decades has been catalysed by its ‘Look East’ policy, it can be taken to new levels by a ‘Think West’ one that leverages the huge energy assets in the Gulf region.   In recent months, the two fronts are competing vigorously for attention.  Taken together, they help politically shrink the distances that were elongated by the past fragmentation of the ocean.

For a community sense in the Indian Ocean to grow, more effective intra-regional cooperation is as important as the inter-regional one. This realisation is increasingly sharply felt in Indian policy and we are among the most prominent development assistance partners of our immediate neighbours.  To illustrate, grants and loans extended to Bangladesh are estimated at over USD 3 billion, to Sri Lanka at USD 2.7 billion, to Myanmar at USD 1.75 billion, to Mauritius at USD 960 million, to Maldives at USD 128 million, to Seychelles at USD 60 million.  In addition, we have a USD 10 billion line of credit to Africa offered last year that follows upon an earlier one of USD 5 billion.   People-to-people exchanges accompanying the development assistance is equally strong. It is reflected in training and professional exchanges, as well as in medical treatment.  Programmes offered formally by the Indian Government cover thousands and are further supplemented by market-based efforts.  We believe that these efforts respond to local conditions and requirements of our partners, thereby strengthening a sense of solidarity and goodwill.

Growing awareness of the ocean’s economic potential when combined with sustainability and localisation concerns has given rise to blue economy initiatives.  India is already engaging many of our neighbours in that regard, underlining our commitment to SDG 14.  The OECD report ‘Ocean Economy by 2030’ brings out its tremendous economic and employment potential.  We consequently seek to work more closely with others on marine bio-technology, exploitation of ocean minerals and harnessing ocean energy.

The centrality of the Indian Ocean to global trade and development is not a new development.  After all, it covers one-fifth of the world’s total ocean area and encapsulates coastlines of almost 70,000 kms.  But more than the expanse, it is about location.  With Asia’s economic revival, whether we see the region as markets or production centres, transportation of goods has only acquired greater salience.  The flow of natural resources is correspondingly growing with this ocean now accounting for two-thirds of the world’s maritime oil trade. We are also all aware that more than two-fifths of the world’s population lives around the ocean.

Ensuring the smooth and uninterrupted flow of one-third of the world’s bulk cargo and half its container traffic is not a small responsibility.  With the passage of time, it must also become an increasingly collective one. India takes this challenge seriously and is prepared to shoulder its responsibilities fully.  We have started to conclude white shipping agreements and cooperate on coastal and EEZ surveillance with some of our immediate neighbours.   India participates in arrangements like the ReCAAP and the SOMS mechanism for maritime safety.  We have also taken an active role in fighting piracy, both to our west and east. Since 2008, we have continued to conduct anti-piracy patrols in Gulf of Aden and other maritime routes in the region.  The Indian Navy has undertaken about 50 anti-piracy escort missions.  It has contributed overall to greater maritime safety in the region and enabled the reduction of the High Risk Area in December 2015, thereby reducing shipping insurance costs.

Not all threats are traditional and in recent times, the importance of HADR operations in the Indian Ocean has been increasingly appreciated.  Building on its 2004 tsunami relief experience, India today has undertaken a wide range of HADR operations, from major evacuation efforts in Yemen to bringing drinking water to the Maldives and providing relief supplies by air to Fiji and Sri Lanka.

Security challenges in the Indian Ocean are addressed by different countries in different ways.  In India’s case, they are essentially an outcome of national capabilities, buttressed by participation in relevant regional platforms.  The ASEAN Regional Forum, in particular, is evaluated highly by us as a forum to share perspectives. Closer to home, we are developing trilateral cooperation with Sri Lanka and Maldives. Where naval interests are concerned, the steady growth of the 35-nation Indian Ocean Naval Symposium over the last decade has been a very encouraging development. It has helped to promote a shared understanding of maritime issues, enhance regional maritime security, strengthen capabilities, establish cooperative mechanisms, develop inter-operability and provide speedy HADR responses.

Moving from policy to performance, we also believe that navies working together in pursuit of shared security goals have a stabilising impact. India participates in a number of bilateral exercises with Singapore, Sri Lanka, France and Australia amongst others. In addition, we partner the US and Japan for the Malabar set of exercises.  The Joint Strategic Vision for Asia-Pacific and the Indian Ocean that was agreed to in January 2015 during President Obama’s visit to India is another example of our openness to international cooperation in this sphere.  With some of the Indian Ocean island states, notably Sri Lanka, Maldives, Mauritius and Seychelles, we have supplied naval equipment, provided training and undertaken hydrographic services.  We remain open to working with other partners in this ocean, including in East Africa.

Recognising the growing importance of maritime trade in an increasingly globalised world, India supports freedom of navigation and over flight, and unimpeded commerce, based on the principles of international law, as reflected notably in the UNCLOS. India also believes that States should resolve disputes through peaceful means without threat or use of force and exercise self-restraint in the conduct of activities that could complicate or escalate disputes affecting peace and stability.  Sea lanes of communication are critical for peace, stability, prosperity and development.  As a State Party to the UNCLOS, India urges all parties to show utmost respect for the UNCLOS, which establishes the international legal order of the seas and oceans.  In that connection, the authority of Annex VII Tribunal and its awards is recognised in Part XV of the UNCLOS itself.  India’s own record in this regard is also well known.

If the Indian Ocean is now to occupy a more prominent place in the global political discourse, its best hope is the further development of the Indian Ocean Rim Association (IORA).   Over two decades, it has harmonised multiple diversities to create a common ethos.  With its 21 members, 7 dialogue partners and two observers, IORA is the most obvious platform for trade, socio-economic and cultural cooperation.   It creates common ground for regional economic cooperation and provides opportunities to develop shared interests. It also encourages close interaction of business, academic institutions, scholars and the peoples of the member states.  India is committed to building up IORA in line with its own expanding bilateral ties in the region. We will be supportive in the expansion and further invigoration of its activities, from renewable energy and the blue economy to maritime safety and security, water science and greater institutional and think-tank networking.

Given the history and traditions of the Indian Ocean, it is but appropriate that any serious effort at promoting its coherence would address issues of its unity and identity.  We must take full advantage of the ties of kinship and family that span the Indian Ocean and are an important part of its history.  But more active initiatives are also needed and  I would draw attention to Project Mausam, whose very nomenclature based on the distinctive wind system of the Indian Ocean signifies our interest in the characteristics of the region.  The project promotes archaeological and historical research on cultural, commercial and religious interactions.  It has become a vehicle for knowledge exchanges, networking and publications.  If this is an example of a contemporary initiative to revive the ocean’s identity, let me emphasise that there are many other supporting endeavours that contribute to the same objective.  By raising interest in traditional knowledge and practices such as ayurveda and yoga, by rekindling interest in the journey of faiths like Buddhism or Sufism, or by utilising powerful symbols like Nalanda or Ramayana to promote human exchanges, we are step-by-step adding to the consciousness of an eco-system that was once secure in its vibrancy.

In any defined framework in international relations, those who constitute it generally expect and are expected to shoulder primary responsibility. There is no reason why the Indian Ocean should be any different.  Yet, in this day and age, reality must also take into account expressions of globalisation.  Acceptability is as much a function of following norms and rules as it is in developing an interest.  Why the behaviour of some states is more reassuring than others – a subject that was incidentally commented upon by Lee Kuan Yew – is worth reflecting upon.

In March 2015, Prime Minister Modi, while visiting Mauritius, laid out our vision for the Indian Ocean region. He declared that it was rooted in advancing cooperation and using our capabilities for larger benefit.  This vision had four key elements:

  • To safeguard our mainland and islands, defend our interests, ensure a safe secure and stable Indian Ocean, and make available our capabilities to others.
  • Deepen economic and security cooperation with our maritime neighbours and strengthen their capacities.
  • Envisage collective action and cooperation to advance peace and security and respond to emergencies, and
  • Seek a more integrated and cooperative future for the region that enhances sustainable development.

We stand ready to work with all nations on that basis to create a prosperous, secure and developed Indian Ocean.

(Edited version of keynote address delivered by Dr. S Jaishankar, Foreign Secretary, Ministryof External Affairs, Government of India at Indian Ocean Conference, September 1, 2016, Singapore.)

India as Pivotal Power

It is my privilege to welcome you all at this Conference on the Indian Ocean. Spearheaded by The India Foundation, this effort, in partnership with the Rajaratnam School for International Studies in Singapore (RISS), the Institute of Policy Studies of Sri Lanka (IPS) and the Bangladesh Institute of International and Strategic Studies (BISS), is based on our deeply held conviction that the world is a family. Sensible families sit together to find solutions. Land has boundaries; oceans have none, but that hardly means that they are not the source of disputes. Shared space needs shared intellect for a route map that can ensure equitable prosperity.

India has travelled through the Indian Ocean from a time beyond surviving historical records carrying its literature, learning and trade both to the east and the known west. India has contributed what might be described as a philosophical diaspora in the region, highlighting the advantages of common wisdom, fair trade and syncretic culture. The rest of the world understood the importance of this ocean. Ptolemy’s Geography, written around 150 AD, described the Indian Ocean as “an enormous lake, with southern Africa running right round the bottom half of the map to join an increasingly speculative Asia east of the Malaysian peninsula”. Abbasid Caliph Al Mamun commissioned the first known world map in the first quarter of the 9th century; it showed the Indian Ocean running into the Pacific.

Oceans, the most powerful and creative force and gift of nature, have been a source of prosperity when ruled by the philosophy of cooperation; they have become regions of confrontation, conflict and conquest when misused by nations in search of domination. Domination has disappeared from the agenda of world affairs in an age of equal nations infused by the democratic spirit. History indicates that dynamics of the Indian Ocean can lead in both directions. The sea-lanes of the future must avoid both conflict on the surface and dangerous currents below in order to create new communication lines towards collective prosperity.

The greatest threat to the sea has been from inhabitants of land. The Indian Ocean straddles the vast land mass called Asia [the wife of Prometheus, the god of forethought who gifted fire to man]. Asia is at a unique moment in the evolution of its geopolitics.

Asia has split into two horizons. India sits in the middle.

Look east from India to Japan: there is a diverse range of people, religions, languages, cultures, polities and nations. But there is one powerful factor in common: each nation is rising from problems of the past in the search for economic growth, stability, social order and cohesion. This is the Phoenix Horizon.

Look west from India: from its immediate western neighbour to West Asia and northern Africa. Within the variety of nations and peoples the one focal factor is conflict, with some islands of relative calm struggling to retain their composure in a region pockmarked by war and terrorism. The rise of contemporary terrorism originates with sanctuary provided to the most vicious and barbaric terrorist individuals and organizations by our immediate western neighbour. This is compounded by radicalisation, terrorism, quasi-religious, multi-ethnic and tribal contradictions; while seepage and spread of a radical ideology that distorts Islam has incubated groups like Daesh. This is the Toxic Horizon.

India, geopolitically in the centre, has become the Pivotal Power of Asia. India is the western frontier of peace, and the eastern frontier of war.

The world must recognize India’s critical role in both the quest for prosperity, and the existential struggle to eliminate what Prime Minister Narendra Modi has eloquently described Terrorism as the gravest threat since World War II. India’s dual ability to emancipate the Asian economy in partnership with those who seek a better life; and its determination to confront today’s merchants of death, will determine whether the 21st century belongs to Asia.

India has the strength and conviction to stop the spreading scourge of radicalisation because India also has an ideological answer to this menace, for we offer the template of a democratic polity and modernity to counter regressive jihadism and terrorism.

Prime Minister Modi knows his mind; he recognizes the dimensions of both challenge and opportunity. He is the leader that India needs at this swivel moment in our individual and collective fortunes. He has reached out with his Act East policy; and he has no illusions about the threat from terrorism and its malevolent sponsors, who seem to be unaware that they are committing strategic suicide.

Geography is a constant. But I would also like to suggest that the real dynamism of India as the Pivot Power comes from its contribution towards the demographics of the region; its promise in both productive capacity and as an enormous market. This complements the traditional trade routes, and the rising aspiration of partner nations willing to work in harmony. The Phoenix Horizon is blessed with comity and cross-cultural influences that have grown into identities along the Indian Ocean over centuries. India both complements and protects rising Asia, with its powerful economies like those of Japan and China and, even more so, the growing capacities of the littoral nations across the Indian Ocean, to foster economic growth and stability through mutually beneficial cooperation.

I can say this for my country: only those who do not know India, underestimate India. India will tilt towards its deepest philosophical and historical traditions, towards peace and shared prosperity.

Common sense insists that this search for prosperity must be driven by best practices across the Indian Ocean. India’s policy objectives are transparent: we seek measures that will facilitate the natural flow of peaceful inter-action and consequent growth through cooperation. We do not believe that regional confrontational attitudes are helpful in the ocean, or extended regions like the South China Sea, to give one instance. Law must be respected; after all, law preserves order.

I hope that our discussions will deliberate on both the heritage and the reality of the Indian Ocean as we look to comity, commerce and culture as the core elements that cement and strengthen economic growth, peace and stability in the Indian Ocean region.

(This article is the gist of the welcome address made by Shri M.J. Akbar, Hon’ble Minister of State for External Affairs, Govt. of India at the inaugural session of the Indian Ocean Conference at Singapore on 1st September, 2016)

Indian Ocean: Cultural Capital for a Creative Economy

I was born in the North of Thailand.I was given a name, Vira, borrowed from a Sanskrit word. The word ‘Vira’ , as most of you know, means ‘the brave one’. The use of Indian-style names is indeed an important cultural practice among the Thai people and is one of the many significant Indian cultural contributions that has deeply diffused into Southeast Asia.

Not only  linguistic contributions,  India has also created and passed on their cultural assets  to Southeast Asian people such as philosophy, beliefs and religions especially Buddhism and Hinduism to people of Southeast Asia. These have become the basis of many Southeast Asian cultural expressions both tangible and intangible including Buddhist arts, Ramayana interpretation, cuisine, costumes, commerce as well as state or royal ceremonies. Thailand is a good example as it has embraced and adopted Indian culture over a millennium which can now be seen through many Thai traditions and rituals such as the Royal Ploughing Ceremony, the Royal Barge Procession, Loy Krathong Festival, Visakha Day. Moreover, the Indian civilisation heritage is traceable in Thai historic sites which have also become the world heritage.

Intercultural relations are naturally determined by the geographical location of the region. The location of Southeast Asia and Thailand,situated in between the world’s two great oceans, namely the Indian Ocean and the Pacific, is indeed key to the rich cultural and commercial interchanges since ancient time.  This location is also where the two seasonal monsoon winds known as the “trade winds” meet. The ancient mariners’ knowledge about these trade winds  enabled Southeast Asia to enjoy a very long and rich cultural and commercial relations with the lands across these two oceans and beyond.

In the past, the term “Indianisation” was used with reference to the Southeast Asian states. Evidently, the influence of civilization that spread from India and from the lands beyond India, into this sub-region,dating to the first or second century, left many tangible and durable marks in our sub-region.

The term ” indianisation” was first used by the French archaeologist and Southeast Asian expert, George Coedes, as seen  in his book published in 1944. This term was defined as’the expansion of an organised culture’ that was formed upon Indian conceptions of kingship, Hinduism and Buddhismas well as the Sanskrit language. A number of well-known kingdoms or empires in the early history of Southeast Asia, such as Funan, Chenla, Champa, Khmer, and Srivijava, was therefore called “Indianised Kingdoms” by western historians.

However, over the past decades, the use of this term has been revisited by many scholars. New investigations indicated that the “Indianisation process” in Southeast Asiawas not through force, imposition, or colonisation.  Rather, ‘Indian influences’ offered inspirations to the indigenous people s, and were thus selected and adapted to suit the local contexts of pre-existing and well-developed cultural basesin the sub-region.

Southeast Asian nations are not just the receivers of cultural heritage, but have also exchanged their accumulatively enriched and diverse culture back to the South Asian region. A couple of examples can be seen through the introduction of Lanka Nikaya Buddhism from Sri Lanka in Thailand and, later, the re-introduction of Thailand’s ‘Siam Nikaya order’ of Buddhism in Sri Lanka are the evidence of interchangeable cultural contribution within the region. Also, the Indian Ocean is no stranger to ancient Siamese merchants who exported the Celadon, or Thai porcelains across the ocean to India and as far as to Persia.

Many historic incidents that originated in South Asia have affected the society and culture of Southeast Asia until the present day such as King Ashoka’s Buddhist emissaries who travelled to Suvarnabhumi region during the 3rd century BC. Apart from the historically significant people, ordinary individuals from two sides of the Indian Ocean have continuously connected to one another through maritime trade, cultural and commercial exchange making these people the real contributors to our shared history.

At present, the world has opened the new era of the ‘Asian Century’ whereby Asia, once again, has a crucial role in socio-cultural dialogues. Thailand, as an ASEAN member country, strives to  move forward by engaging in the cooperation with countries and institutions outside the region for regional and global sustainable development. I am delighted that, next year, ASEAN will celebrate the 25th Anniversary of diplomatic relations with India, together with the continuing partnership for development. Also, the Mekong-Ganga cooperation in the cultural framework has flourished since its start in 2000. Added to the sub-regional cooperation, Thailand and India are moving towards the bilateral governmental Programme of Cultural Exchange in the next three years.

Not only preserving the past, Thailand has also moved forward by recapturing the ancient Indian cultural heritage and transforming it into cultural capital for creative economy.From ASEAN cultural exhibitions, ASEAN film festivals and many more,these cultural activities are presentation of ASEAN identities which have been creatively developed from Indian cultural heritage.

On the special occasion of the 70th Anniversary of the establishment of Thailand-India diplomatic relations in 2017, Thailand reaffirms her readiness and willingness to continue to strengthen and further enhance cultural relations with India. As part of the celebration,Thailand,in appreciation of India’s cooperation, is mounting a temporary exhibition of the precious artefacts on loan by India, which would be put on public display.  This exhibition will be an important testimony  to the fruitful cultural cooperation and exchange between our  two nations,  which will also greatly benefit our respective peoples.

Finally,  I would like to take this opportunity to thank the India Foundation and all the agencies involved for organizing this strategically important Conference. I strongly believe that the vision and the geocultural issues and challenges discussed during this Conference will lead to the expected goals of regional sustainable development and peace in the wider Indian Ocean Region in the long run.

(The article is the gist of the keynote address delivered by H.E. Mr.ViraRojpojchanarat, Minister of Culture of Thailand at the plenary Culture Session at Indian Ocean Conference on 2nd September 2016)

We must follow the Path of Cooperation and Collaboration

It is a timely initiative to bring together important states and principal maritime partners of the Indian Ocean Region for consolidating maritime partnership to ensure peace, security and development.

The Oceans and Seas constitute critical ‘global commons’ for our civilization. The Oceans and Seas have been serving as an important component for economic prosperity throughout history. Over the years, increasing dependence on ocean and seas for effective transportation has resulted in greater concern for ensuring the safety and security of the sea lines of communications.

Indian Ocean has remained at the centre of interest to the major players of the world because of its strategic location and natural resources. Indian Ocean Region has also emerged as the most prominent global economic highway. 66% of the world’s oil shipments, 33% of its bulk cargo and 50% of the world’s container traffic pass through its waters. The oil arteries of the world flow through the Indian Ocean.

It is not only trade and economy, competition among some of the major powers in securing visible and credible presence in the Indian Ocean has shaped the dynamics of the Indian Ocean region. We see growing interests among countries in the region to develop new infrastructures in the Indian Ocean. Countries also seek to build, expand and strengthen their naval infrastructures in the Indian Ocean. Efforts are also to be made for further cementing existing alliances and forming new alliances to ensure safety, security and development of the region. Overlapping territorial claims and disputes have added new dimension to this evolving security scenario.

While we recognise the strategic and economic importance of the Indian Ocean, we must not lose sight of the host of challenges it presents. Countries in Asia and the Pacific are four times more likely to be affected by a natural catastrophe than those in Africa, and 25 times more vulnerable than Europe and North America. The climate change impacts and resultant sea level rise have further enhanced the risks and vulnerabilities of the Indian Ocean countries.

We should also recognise a variety of security threats, posing danger to maritime peace and stability. Piracy continues to remain as one of the most worrisome maritime security challenges to date. Maritime terrorism has also surfaced as an omnipresent global and regional threat. Human trafficking and drug smuggling are the twin issues that have lately re-captured global attention.

As I proceed to call upon the Speakers for their deliberations, let me reiterate that maritime peace, security and stability are essential for our development, progress and prosperity. It however requires strong commitment from all the nations of the Indian Ocean region and beyond towards achieving this shared objective.

Let me thanks the Speakers for their very insightful deliberations, presentations and analyses, highlighting potentials, issues and challenges for maritime cooperation in the Indian Ocean region. Let me summarise their views and add my own perspectives to those.

First, the centre of gravity is being shifted to Asia. International relations are, perhaps, in a state of dynamic transition. The geopolitical game in the Asia-Pacific region is taking a new turn. Focus has been shifted from ‘Asia-Pacific’ to ‘Indo-Pacific’. ‘Rebalancing Asia’ or ’Pivot to Asia’ manifests the changing nature of power matrix in the region. Therefore, the role of the Indian Ocean is critically important in this equation.

Second, strategic equations in the Indian Ocean is increasingly becoming complex with major powers competing each other’s for more prominence and visibility. This presents enormous challenges, so are the opportunities. It is, therefore, crucial for us to understand the character, dimension and magnitude of this competition to appropriately choreograph our respective positions vis-à-vis others.

Third, to adequately harness the potentials of oceans and seas, we need to effectively address the maritime boundary related issues. Bangladesh has been able to amicably resolve its maritime disputes with both of its neighbours-India and Myanmar. This has unleashed tremendous possibilities for all of us toexploit the vast resources that we have in our maritime territory including the hydrocarbon reserves.

Four, Maritime security and freedom of navigation are essential as well for enhanced international trade and economic cooperation. The capacity of regional organisations including Indian Ocean Rim Association (IORA) could be further strengthened to manage security related challenges. A collective security architecture based on mutual trust and partnership may be envisioned in this regard.

Five, Many countries of the Indian Ocean region are the worst victims of climate change. It is an imperative for us to coordinate our resources, synergise our strength and share our best practices into minimizing adversities of climate change, with special focus on adaptation measures.

Six, Capacity building of the Indian Ocean countries is a precondition for better utilization of ocean resources. Capacity has to be built across the academia, research institutions, national regulatory bodies and mechanisms. Due priority should be accorded to the transfer of technology and mobilisation of financial resources among and between the Indian Ocean countries. LDCs and Land Locked countries should be given special preference.

Last but not the least, we need to maintain ocean health by striking a balance between conservation, exploitation and utilisation of marine resources. This would eventually contribute towards building an inclusive, equitable and sustainable society, as envisaged in the Sustainable Development Goals (SDGS) adopted in September 2015.

I am convinced that we must follow the path of cooperation and collaboration, not competition and conflict, in tapping the full potentials of the Indian Ocean. Let me conclude quoting the Prime Minister of Bangladesh, “Blue economy concept has ushered in a new horizon for economic development through utilizing the sea and marine resources at national and international level. History of development of many countries tells us that the countries which utilised the sea and its resources became economically more prosperous than others”.

(This article is the gist of remarks made by Mr. Abul Hassan Mahmood Ali, Hon’ble Foreign Minister, Govt. of Bangladesh as the Chair of the ‘Plenary on Comity’ at the Indian Ocean Conference 2016 at Singapore on 2nd September, 2016.)

Indo-Pacific: Rule of Law at Sea – Key to Stability and Growth

This meeting is made possible by the valuable collaboration by the leading think tanks in Asia. This meeting is very timely, for it allows government policy planners engage in a frank exchange of views on how to ensure stability in the Indian Ocean. The Indo-Pacific region is now the growth center of the global economy. Ensuring open and stable sea in the region is vital for the peace and stability of the region and the entire international community.

For Japan, the Indian Ocean was traditionally important as a sea lane for its energy import, for it transported about 90 percent of the crude oil to Japan. However, today, the Indian Ocean is playing a much important role as a sea of trade for everyone. It is supporting all the trade transportation and value-chains among East Asia, Southeast Asia, South Asia, and the Middle East and Africa, where greater economic growth is expected. At the 6th Tokyo International Conference on African Development (TICAD VI), held in Kenya last weekend, Prime Minister Shinzo Abe announced the “Free and Open India and Pacific Strategy” as Japan’s new diplomatic policy.

The key of the stability and prosperity of the international community is the dynamism created by the synergy between the “two continents” ― Asia, which is recording remarkable growth, and Africa, which is full with potentials ― and two free and open seas – the Pacific and the Indian Oceans. By regarding these continents and seas as an integrated region, Japan intends to open up a new frontier of Japanese diplomacy.

The ASEAN countries, including Singapore where we are today, are located where the two Oceans meet. For this reason, It is important for everyone in this region to share the common goal of strengthening maritime security and connectivity.

However, in recent years in the seas of Asia, we have been witnessing scenes of increasing tensions between States. The international community is seriously concerned. Japan would like to emphasize the importance of observing international laws, including UNCLOS, “Constitution of the Oceans,” and of taking concrete actions and engaging in cooperation based on such laws.

Prime Minister Abe proposed the “Three Principles of the Rule of Law at Sea” at the Shangri-La Dialogue in 2014.

1) States should make and clarify their claims based on international law;

2) States should not use force or coercion in trying to drive their claims, and;

3) States should seek to settle disputes by peaceful means.

I believe, now is the time to thoroughly implement these principles.

These principles have received robust support from many states concerned, including those in Asia. Also at the G7 Ise-Shima Summit held in May, the importance of the three principles was reaffirmed. The G7 Foreign Ministers emphasized, in their Declaration on Maritime

Security in April, that coastal states should refrain from any unilateral actions that would cause permanent physical changes to the marine environment in the area pending delimitation, regardless of whether they are for military or civilian purposes.

In particular, the G7 countries shared serious concerns over any unilateral actions that seek to change the status quo. They emphasized the importance of peaceful resolution of maritime disputes, including through arbitration proceedings.

The ruling issued in the arbitration case between the Philippines and China is legally binding for both countries concerned. Japan hopes that compliance by the two countries with this ruling will lead to peaceful resolution of disputes related to the South China Sea.

In addition, Japan is strongly hoping for the full and effective implementation of the Declaration on the Conduct of Parties in the South China Sea (DOC) and the early establishment of a Code of Conduct in the South China Sea (COC). In light of the increasingly severe security environment, Japan will implement various policy measures under the policy of “Proactive Contribution to Peace.”

Piracy is a critical challenge for all countries that enjoy the benefits of maritime trade. Japan is actively involved in dealing with piracy and armed robbery off the coast of Somalia, in the Gulf of Aden and in the Straits of Malacca and Singapore. Japanese Self-Defense Forces has been conducting antipiracy operations without interruption since 2009. This year marks the 10th anniversary of the conclusion of the ReCAAP. Japan will actively support the activities of the Information Sharing Center, for example by sending successive Executive Directors.

Disasters relief is another important issue. In the cases of the disappearance of the Malaysia Airlines and Air Asia aircraft in 2014, Japan immediately dispatched vessels and aircraft of the Self-Defense Forces to conduct search and rescue activities. Based on these experiences, we stress the importance of further strengthening international cooperation in HA/DR activities in Asia. To respond to increasing sea-related challenges, countries need to work together.

Japan will make best use of multilateral and trilateral dialogues, such as Japan-India-US and Japan-Australia-US dialogues, and welcomes US active engagement in this region. Japan also spares no effort to support coastal States in Asia, by providing seamless assistance through a combination of various measures, including ODA, defense equipment cooperation and capacity building assistance. For the economic prosperity of the Indian Ocean, it is critically important to enhance connectivity from East Asia through South Asia to the Middle East and Africa region.

From this viewpoint, Prime Minister Abe announced the “Partnership for Quality Infrastructure” in May 2015 and the “Expanded Partnership for Quality Infrastructure Initiative” in May 2016.

Japan will steadily implement these initiatives in accordance with the G7 Ise-Shima Principles for Promoting Quality Infrastructure Investment, which underline;

1) economic efficiency in view of life-cycle cost;

2) safety and resilience

3) job creation and capacity building;

4) consideration for social and environmental impact, and;

5) alignment with economic and development strategies.

I would like to conclude my remarks by stressing the following:

The key to prosperity of the international community is to unlock the dynamism created by the synergy between “two continents” — Asia and Africa –, and two free and open seas ― the Pacific and the Indian Oceans. To this end, ensuring the maritime security and stability based on the rule of law, as well as further cooperation among us is essential. Japan will make every possible effort and cooperate with all the countries concerned to achieve this common goal of our future.

(This article is the gist of remarks made by Mr. Nobuo Kishi, Hon’ble State Minister for Foreign Affairs, Govt. of Japan at the Indian Ocean Conference 2016 at Singapore on 2nd September, 2016.)

Indo-Pacific Regional Connectivity, Commerce, and Cooperation

Thank you, it’s a pleasure to be here with so many of my distinguished colleagues from around the region. I have to congratulate Ram Madhav and the India Foundation, as well as RSIS and organizing partners from Bangladesh and Sri Lanka, for bringing together such a stellar group of people. In fact, looking through the list of today’s speakers and panelists, it really makes me wonder if there’s anyone left running things back in our capitals.

Today, I’ll talk about why the United States supports greater economic connectivity in the Indian Ocean region, some recent developments, and then some areas for future work.

My country has long recognized the strategic significance of the Indian Ocean. Well over one hundred years ago, Admiral Alfred Mahan – one of the most important American strategists of the nineteenth century – said that the destiny of the world will be decided on the waters of the Indian Ocean.

The question we then face is – How will we write that destiny? Will it be a story of friendly cooperation and mutual benefit, or one of adversarial competition and unnecessary conflict? A story where many millions of people are lifted out of poverty, or one where millions are condemned to suffer the consequences of our inaction? Starkly different outcomes, and we believe that only a strong, transparent, rules-based architecture can bring about the peace and prosperity that all will benefit from.

That means a system where all countries pursue their territorial claims in accordance with international law. It also means a system that engenders greater cooperation on natural disasters, maritime security, and mitigating the effects of climate change. And it means a system that enhances regional economic connectivity across the entire Indian Ocean region, and in particular South Asia, so that goods and services can move at faster speeds, in greater numbers, and at lower costs.

The statistics show just how much needs to be done: South Asia is one of the least economically integrated regions in the world, with less than six percent of its total trade and less than one percent of its investment flows occurring within the region.

Compare that to North America, where over 50 percent of total exports are sold within the region – or Europe, where the same figure has averaged more than 70 percent over the last 20 years – and you can see what is possible. Indeed, one look outside of this building’s windows shows what can be accomplished when a country decides that its future will be built on trade and commerce.

So we know what better economic connectivity can do for the countries of South Asia and the entire Indo-Pacific. And the United States also has a stake in the region’s success – not only because we seek to strengthen our business ties, whether it’s trade in consumer goods, financial services, technology, energy, or education – but also because we know that prosperity is linked to security and stability. This is the basis behind President Obama’s rebalance to Asia and the Joint Strategic Vision that the United States and India put forward last year, showing that our leaders recognize how much more can be accomplished when we work in partnership.

And, as my colleague Rear Admiral Gabrielson rightly pointed out in the last panel, the stability of the Indo-Pacific and the safety of its sea lanes are vital U.S. interests. Twenty five percent of the world’s traded goods and seaborne oil crosses the Strait of Malacca, visible from Singapore’s skyscrapers. That means that one-quarter of the global economy is dependent on the security of a stretch of ocean which, at its narrowest, is only one-and-a-half miles wide.

I think that covers the “why”, but we’re really here to talk about the “how”. Greater connectivity requires infrastructure, and infrastructure requires investment: $2.5 trillion over the next ten years in South Asia alone, according to the World Bank. Roughly speaking, one-third for transport, another third to electricity, and the last third to critical services like water, sanitation, and telecommunications.

It’s a tall order, but with smart investments from the right stakeholders, it can be fulfilled. Asian powers like Japan, India, and China are stepping up, and international financial institutions like the World Bank and the Asian Development Bank have been working on this challenge for decades. Public-private partnerships are also increasingly filling in the gaps.

But greater economic connectivity will take more than just the new hardware of roads, rails, and ports. It will also require better infrastructure “software” – meaning improved regulatory frameworks, more capable institutions, and better-networked businesses and people.

That’s where we think the United States government can add value, and that’s where we’ve focused our efforts. We see ourselves as a convener and a partner. We can help identify projects that have multiplier effects, bring all stakeholders to the table, support and catalyze the early stages of development, and provide the necessary technical support to make sure it gets done right.

Through an initiative we call the Indo-Pacific Economic Corridor, or IPEC, we’re helping create new energy linkages, open up trade and transport corridors, streamline customs procedures and border crossings, and connect entrepreneurs and businesses throughout South Asia and beyond.

On energy alone, there is tremendous potential for expanded trade within South Asia. One example is the 500 megawatt energy link between India and Bangladesh; the U.S. conducted the initial feasibility study that showed the viability of the line, and it’s now being expanded to 1000 megawatts. It’s a true proof-of-concept for what can be accomplished when a multi-stakeholder project is pursued with transparency, quality, and good-faith cooperation.

While relatively modest, IPEC projects like these are emblematic of the vision we are working to build – a vision of a connected Indo-Pacific, of a region that is at the epicenter of global trade and commerce, a region that has lifted hundreds of millions of people out of poverty and drives economic growth in Asia, Africa, and the Americas.

And we see the region embracing this vision.

Through its Act East policy, India is improving relations with its neighbors and overcoming long-standing disagreements.

Bangladesh has been a willing partner, and together with India has peacefully resolved age-old land and maritime border disputes, which will allow for greater investment and the freer, faster, and cheaper movement of goods, services, and people.

Burma’s democratic transition has created new opportunities for investment, and it is working with Bangladesh and India to open up trade corridors into Southeast Asia. Just a week ago, India and Burma signed agreements to complete the Kaladan Multi-Modal Transit Transport project and the trilateral highway to Thailand, which will have a profound impact on the movement of goods and services between South and Southeast Asia.

Sri Lanka has the potential to become a global transit and commercial hub: ninety percent of the oil destined for China and Japan, and seventy percent of all Indian Ocean maritime traffic, pass within 12 miles of Sri Lanka’s southern coastline.

Colombo is already among the top 15 ports in the world for trans-shipment traffic, and top 30 for total container volume. It is now seeking a partner from the Indian subcontinent to finish a mega-terminal that will accommodate the world’s largest container vessels.

And better regional economic connectivity also begets closer cooperation on other cross-cutting issues like maritime security, natural disasters, trafficking and piracy, and environmental protection. These are problems that affect all of our countries, and we can most effectively address them when we recognize our common interests and work together toward common goals.

The United States also believes that harnessing the economic benefits of the ocean – including fisheries, tourism, energy, and transportation –requires responsible investments in sustainability and environmental protection. To put it simply, if we want these resources to last, we have to take care of them. And that requires cooperation, because we all share the same ocean.

In a couple weeks, Secretary Kerry will host the Our Ocean conference in Washington, with a focus on marine protected areas, sustainable fisheries, marine pollution, and climate-related impacts on the ocean. The future of the blue economy depends on how we address these issues together, and inaction is no longer an option. President Obama took the lead last week when he created the world’s largest ecologically protected area in the Northwestern Hawaiian Islands, declaring that “it is in the public interest to preserve the marine environment” – and we know that it is in the global interest too.

We also share an interest in seeing organizations like the Indian Ocean Rim Association strengthened, to help build consensus on pressing regional challenges. IORA presents an opportunity for the Indian Ocean region to craft its own identity – to set its own priorities, build its own connections, set its own peaceful and transparent norms, and strengthen its own common voice – just as other regional organizations have done before.

To conclude, we’ll continue to strengthen and expand our work to promote regional connectivity in the Indo-Pacific, and we believe that it can create fair, broad, and sustainable growth, underpinning the region’s prosperity, security and stability. The United States has an unwavering commitment to this region’s success because, in the words of President Obama, “in an interconnected world, we all rise and fall together.”

(This article is the gist of remarks made by Nisha Desai Biswal, Assistant Secretary, Bureau of South and Central Asian Affairs, USA at the Indian Ocean Conference 2016 at Singapore on 2nd September, 2016.)

Note Ban to Give New Impetus to Indian Economy

Indian Prime Minister Narendra Modi demonetized high value Rs 500 and Rs 1000 notes on November 8, 2016. As an alternative to the demonetized notes, new notes of Rs. 2000 came into circulation from the next day on November 9, 2016. Afterwards, the new note of Rs. 500 was also introduced. The demonetization measure adopted by the government of India with adequate preparation is the boldest step ever taken in economic front in independent India.

Indian people in general have widely supported Prime Minister Modi’s step to demonetize high value notes. They treat this to be a surgical strike on black money, terrorist financing and corruption. They also hope that this would help reduce illicit outflows of money from India, which accounts for over $50 billion a year. As it is well known, India’s black/unaccounted economy exceeds over $1 trillion, which is half of the country’s total GDP.

In the process of implementing demonetization move effectively, the government has made a policy whereby the interests of the honest people have been well considered. It is only the scrupulous elements in the country who have been targeted. As such, a timeframe of December 30, 2016 has been fixed as the last date for depositing Rs. 1000 and Rs. 500 notes in the banks. In special cases, the scrapped notes could still be deposited in the banks under certain provisions of the Reserve Bank of India (RBI) till the end of March 2017.

A person making deposits below the limit of Rs. 250,000 will not have to worry. But those who make deposits worth this amount or over will have to come out with PAN and declare the source of their income. Besides, they would have to pay tax as per the law of the land.

Initially, a provision was made whereby a person could withdraw from the ATM upto Rs. 2000 per week. One was also entitled to withdraw upto Rs. 20,000 from the bank accounts each week and this limit was subsequently increased to Rs. 24,000. Additionally, a person was also allowed to exchange old notes into new ones at the banks up to Rs. 4000 per week. Later on, this limit was increased to Rs. 4500 per week, but again it was reduced to Rs. 2000 to ensure that more of people could get cash.

Most importantly, the government of India later on also allowed the farmers to withdraw up to Rs. 25,000 per week from the banks to ensure that the agricultural activities were not affected. Similarly, the traders were allowed to draw up to Rs. 50,000 per week from their accounts to facilitate their business activities. And, the central government employees were allowed to draw their salary in advance up to Rs. 10,000. Families celebrating weddings were also allowed to draw up to Rs. 2.5 lakh from their bank accounts.

However, it cannot be denied that people of each strata of the society experienced difficulties, though in varied degrees, on account of the cash crunch caused by the demonetization of high valued notes. Production of goods and services has been affected. Because of the disinflationary situation, market transactions have plummeted. Industries are heavily affected.

Many people have been facing acute problem in either drawing even the specified money from the ATMs and their accounts or in making deposits because of the inability of the financial system to entertain such a big mass in the country. Of the total two hundred thousand ATMs in the country, half of them are yet to become operational. Even many of those ATMs which are in operation don’t have enough of cash to meet the requirements of people.

It is not difficult to understand the sufferings caused to the people as Rs. 1000 and Rs. 500 notes that were scrapped accounted for 86.4 per cent of total value of Rs. 16, 415 billion in circulation in the country. Despite the hardships faced by the common mass of the population, support in favour of demonetization drive is gaining ground. People in India seem to have a great trust in Prime Minister Narendra Modi, which is not without reason.

Counterfeit currency, which formed 0.2 per cent in total money in circulation in India is now eliminated. Terrorist financing met a major jolt. As a result, pelting of stones on the security personnel stopped altogether in Kashmir and life has returned to normalcy after four months of political upheaval. Even the educational institutions in the state that were targeted by certain elements have started functioning.

Estimates are that Rs. 3 lakh crore worth of Rs. 1000 and Rs. 500 notes that are black money would be disappeared altogether as that will not come under banking net. This will be profit or windfall gain for the RBI or government. The government has no liability to return this amount. So this gigantic sum of money could be spent for the development of infrastructure facilities, housing, schools and other activities in the country.

Additionally, larger sections of Indian population would come under the tax net. Presently, only 3 per cent Indians pay income tax. With an increase in the number of tax payers, India would have enough of revenue to pay for development activities.

Signs of behavioral change among the people have already become distinct. Many people living mainly in the urban areas have already started making digital transactions to meet their needs of daily expenses to avoid long queues at banks and ATMS. Until recently, only 2.6 crores of India’s 130 crores people used this system. But now people have started making greater use of debit cards, electronic transfers, Paytm card and mobile payment in their transactions. The economy is moving fast towards “less cash,” if not “cash-less” economy.

Because of the digitalization and other efforts made by the government, long queues at the ATMs and the banks have started receding. Each day 12,500 ATMs are rejigged to ensure that they are able to deliver the new notes of Rs. 500 and Rs. 2000. Things will be better once all the 2 lakhs ATMs in the country are made functional in next few days.

Of course, the cash crunch caused by demonetization of high valued notes will still affect the life of the people for some time to come. But what is satisfying is that it has already started paying dividends. Once the gap in the demand for and supply of notes meets equilibrium point, the Indian economy will not only bring billions of dollars worth of unaccounted wealth or black money into mainstream economy, but it will further intensify the process of economic revolution in the country. Net gain from the demonetization will by far negate the loss that is economy is incurring in the short period at the moment.

Dr. Jha is the Executive Director of Centre for Economic and Technical Studies in Nepal. Views expressed by the author are strictly personal.

Commemoration of 1971 India-Pakistan War

India Foundation in partnership with the Indian War Veterans Association, Nehru Memorial Museum and Library & Babu Jagjivan Ram National Foundation is organizing an initiative to commemorate the 1971 India – Pakistan War and the Liberation of Bangladesh on December 15 and 16 in Delhi.

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