Balance-sheet of India-ASEAN Partnership @ 25

On the occasion of 50th anniversary of ASEAN while creating a balance sheet of India-ASEAN partnership we look at the 25 years of missed opportunities for India – from the period 1967- 1992 and thereafter at 25 years of engagement – from 1993-2017, in an attempt to understand India and ASEAN engagement over the years, particularly in the context of the changing geo-politics of the Indo-Pacific region. The Paper begins with a brief snapshot of ASEAN and its partnership with India. In this Golden Jubilee year of the establishment of ASEAN and Silver Jubilee year of its dialogue partnership with India, this Paper endeavours to venture into the multi-dimensional nature of ASEAN and its multi-faceted relationship with India at large.

ASEAN: A Snapshot

Fifty years is usually not a long time in the lifetime of a nation-state. But for ASEAN, a regional conglomeration of ten separate nation-states in Southeast Asia, fifty years has spelled a transformational experience for the region as indeed also the world. Ever since its founding, the regional grouping apart from driving the regional conversations forward around multiple regional and global subjects in a more orderly and well-defined fashion, has injected a sense of predictability and pattern to the way regional multilateralism is conducted in this part of the world. In fact in time, it has evolved as the most institutionalised regional association in Asia. As a collective identity, the ASEAN has not only addressed a welter of issues within the grouping but projected a more potent force for action and bargaining when dealing with players and institutions exogenous to the region. In some ways, it may well be argued that the enduring and lasting success of ASEAN as a regional institution has been the primary reason why other regional entities have not quite proved to be as promising and as fulfilling as the Southeast Asian grouping, notwithstanding the different contexts and purposes for which they were founded in the first place. Perhaps it has something to do with the characteristic resilience of ASEAN as an organisation. When it started out, the Bangkok Declaration of 1967 chiefly had ‘economic, social, cultural, technical, scientific and administrative fields’ in mind apparently even as the underlying motive and the context may have been altogether different. Then the Zone of Peace, Freedom and Neutrality (ZOPFAN) in 1971 had reflected the shifting great power balance in wider Asia. Hallmark of a cautious and thinking institution, it had taken no less than almost a decade for ASEAN to meet at a summit level in 1976 when it accomplished the Declaration of ASEAN Concord and the Treaty of Amity and Cooperation (TAC) with the latter formalising the core principle of non-interference as underpinning the terms of engagement among member states. Buoyed by their individual economic successes in the 1970s and 1980s, the ASEAN 6 had taken their economic agenda to a new level when they decided to establish ASEAN Free Trade Area (AFTA)
in 1992.

As Cold War eventually wound up, the ASEAN’s more formal initiative on regional security fructifying in the ASEAN Regional Forum (ARF) had once more been clearly demonstrative of the organisation’s innate ability to reinvent itself and retain its leadership role as the foremost ideologue of regional multilateralism. When the 1997 Asian financial crisis had scarred virtually all of ASEAN economies, the overtures to the three East Asian nations and shaping up of ASEAN Plus Three (APT) was an exercise emblematic of making virtue out of adversity. From shaping the contours of ASEAN Plus 3 to being at the core of the East Asian Summit, ASEAN has not only retained the reins of regionalism in its own hands, it has expanded its diplomatic weight and footprints from Southeast Asia to the broader East Asia and Asia Pacific. The 2007 Charter besides bestowing on the institution a legal personality, also sets it well on course to truly become an Economic (AEC), Political-Security (APSC) and Socio-cultural (ASCC) community.

Without doubt, ASEAN’s normative benchmarks as constituting renunciation of use of force, non-interference and peaceful settlement of disputes have served the region well for nearly five decades now. Southeast Asia once speculated as the ‘Balkans of the Orient’ has refused to fall apart simply not living up to its borrowed name, and thankfully so – unlike what befell the original Balkans in Europe unfortunately. Boasting of the world’s third largest market on the back of a population of 625 million people and with a combined GDP of US$ 2.6 trillion, ASEAN is already the 7th largest economy in the world projected to be the fourth largest by 2050. No wonder, in a glorious run over fifty years since 1967, the iconic grouping has transformed the region from one of battlefields to marketplaces! As EU increasingly gets weighed down by the post-BREXIT tremors and globalisation pushes back in the reverse, what better time than now to re-examine ASEAN and how it could perhaps carry the flag of regional multilateralism.

Balance-Sheet of
India-ASEAN Partnership

Transformation of India’s foreign policy from the rhetoric of ‘Look East’ to the action oriented ‘Act East’ has reiterated its focus on the extended neighbourhood in the Asia-Pacific. The ‘Act East’ policy was crystallised to underline the importance of East Asian neighbours of India and make them a priority in our foreign policy. It promises to inject new energy into India’s engagement with Asia in the economic, political and security domains. “It has widened the canvass by drawing Australia into India’s Eastern Strategy and the South Pacific back on Delhi’s political radar”1. In this most recent proposition to woo the Southeast Asian neighbours by reviving historical and civilisational ties and engaging in defence and security cooperation, India has raised alarms for the rival powers in the neighbourhood. Given the history of United States realpolitik of shifting alliances, priorities and commitments and its recent rebalancing strategy in the Asia-Pacific and the China’s rising influence in the region, the Southeast Asian countries are welcoming greater Indian involvement in the regional architecture of Asia. In the context of such a geo-strategic mix, they have been following interactions between China and the United States and thereby trying to maximize their strategic independence. In the shifting balance of power in the world politics, India’s Act-East policy emerges as a noteworthy characteristic determining the ‘Great Game’ politics in the Indo-Pacific.

India as a close friend and partner of ASEAN is equally affected by the developments in its extended neighbourhood. Rooted in deeper historical and civilisational ties, augmenting India-ASEAN relations have been the primary focus of our ‘Act East Policy’. In fact, India places ASEAN at the heart of its ‘Act East Policy’ and centre of its dream of an ‘Asian Century’. As ASEAN celebrates fifty years of its existence, India also celebrates 25 years of India-ASEAN Dialogue Partnership. In this relationship, we have graduated from a Dialogue Partner to Summit level interactions and finally to Strategic Partnership in recent times thereby learning lessons of deeper economic integration and comprehensive engagement with Southeast Asian neighbours. Given this background, the next section seeks to make an assessment of the Balance sheet of India-ASEAN partnership by dwelling upon the first 25 years of missed opportunities and the later 25 years of engagement and honeymoon period of India and ASEAN.

25 Years of Missed Opportunities

According to Prime Minister Narendra Modi, “ASEAN began in times of a great global divide, but today as it celebrated its Golden Jubilee, it shone as a beacon of hope; a symbol of peace and prosperity”2. “In 1967, when the whole region was seething with buzz of uncertainties, establishment of ASEAN prevented the ‘Balkanisation of Southeast Asia’, and established the thrust on search for common values, replacing conflict with economic, political, cultural and strategic cooperation”3.

Nevertheless, establishment of ASEAN was viewed with doubts in an ideologically polarised Southeast Asia where “intra-regional ideological polarisation and intervention by the external powers were marked features of geo-political landscape of Southeast Asia”4. This prevented the newly established regional community in Southeast Asia – ASEAN, to embrace India openly in spite of the cultural, religious and cvilisational linkages between the two regions. During the politics of Cold War, India-ASEAN relations were subjected to distrust and doubts about each other’s intentions and ideologies. “The narrative of India-ASEAN relations during the Cold War could be summarized as missed opportunities due to political mistrust, economic uncertainties and occasional military threats”.5

India’s opposition to the United States during its intervention in Vietnam also created suspicion in its expected role in ASEAN6.  During the Cold War politics, India and ASEAN were in ideologically opposed camps. This was seen by India as a means to contain communism, which was on the rise due to the spill over from the Vietnam War. “While South East Asian nations had approached India as early as 1967 to join the ASEAN, India remained lukewarm to their overtures because of overall geopolitical situation in the region and the ongoing Cold War redux in Indo-China at that time”7. India’s support to Vietnam as opposed to the ‘hegemonic’ desires in Indo-China during 1960s resulted in the reciprocal loss of support from the United States. Opportunity cost was in the form of the United States President Johnson postponing the planned visit by Indian Prime Minister Lal Bahadur Shastri to the United States. It further resulted in the cancellation of a planned visit by the United States President Ford to India a decade later, thereby widening the gap between India and ASEAN member countries irrespective of the geographical proximity and historical and cultural ties between the people of the two regions8.

Another case of lost opportunity during the first 25 years of the establishment of ASEAN was visible in the India’s support to the Vietnam’s backed Heng Samarin regime in Cambodia and its strategic ambitions in rest of Indo-China. This further alienated India’s place in the United States policy prescriptions and its approach towards ASEAN member states9. “After the collapse of the Khmer Rouge regime, India recognized the new government and re-opened its Embassy in Phnom Penh in 1981 when much of the world shunned Cambodia”10. This turned out to be a major diplomatic miscalculation. The resultant strategy of Prime Minister Indira Gandhi’s cancellation of the scheduled discussions with ASEAN and internationally embracing the communist regime signified growing bitterness in India’s approach towards existing ASEAN members 11. The stalemate continued until the collapse of Soviet Union, when India became a Sectoral Dialogue with ASEAN in 1992 and established full Dialogue partnership in 1995.

Southeast Asia witnessed a major change in its political atmosphere in the aftermath of the Cold War – especially after the settlement of the Cambodian crisis and change in the ASEAN’s perception towards Vietnam as a potential ally. This contributed in a big way to the emergence of a strong strategic and defence ties between India and ASEAN member countries. This period also saw “the beginning of India’s Look-East Policy which was intended to reach out to the countries of East and Southeast Asia which had been neglected by India in spite of cultural, religious, geographical proximity and historical links”12. With the launching of India’s economic liberalisation programme in 1991, ASEAN came to be identified as being ‘pivotal’ to India’s policy in the Indo-Pacific region.

25 Years of Engagement

Post Cold War era witnessed a significant increase in the engagements between India and ASEAN member countries. They have leveraged from the large potential in synergies between their economies13. “The resolution of the Cambodian conflict brought about a fundamental change in Indo-ASEAN relations”14. There was an expansion in the membership of ASEAN to include all countries which are physically part of Southeast Asian region – irrespective of their ideological orientations and regime types. Furthermore, “the emergence of China as an ‘economic dynamo’ and its increasing trade and commercial interests and cooperation with ASEAN countries has been another motivating factor for India to enhance its own linkages with the ASEAN”15.

India-ASEAN partnership has been a noteworthy feature and provides significant underpinning to the ‘Act East Policy’ today. Though, actually envisaged at “bolstering strategic and economic ties” with Southeast Asian countries, it aims at tapping the region for greater investment and connectivity16. According to Prime Minister Narendra Modi, “our ties with South East Asia are deep rooted. Strengthening relations with ASEAN nations is an important part of our ‘Act East’ policy. It is central to our dream of an Asian century, where India will play a crucial role”. With this background, the following section looks at the political and security engagements; economic cooperation; physical connectivity; people to people relations and development partnership between India and the countries of the Southeast Asian region.

– Political and Security Engagements

The up-gradation of the relationship into a Strategic Partnership in 2012 was a natural progression to the ground covered since India became a Sectoral Partner of the ASEAN in 1992, Dialogue Partner in 1996 and Summit Level Partner in 200217. India is also an active participant in several security based ASEAN forums like the ASEAN Regional Forum (ARF), ASEAN Defence Ministers’ Meeting + (ADMM+) and Expanded ASEAN Maritime Forum (EAMF). India has set up a separate Mission to ASEAN in Jakarta in April 2015 with a dedicated Ambassador to strengthen engagement with ASEAN and ASEAN-centric processes.18 The ASEAN Post Ministerial Conference (PMC) 10+1 Sessions with The Dialogue Partners also provides opportunity for ASEAN and the Dialogue Partners to review their cooperation over the past year and further deepen their cooperation, strengthen their engagement, as well as to ensure the effective implementation of the respective Plans of Action to elevate cooperation in all areas. These meetings also served as avenues for the Ministers to exchange views on regional and international issues of mutual interest and concern, collectively and constructively address global developments and existing, emerging and trans-boundary challenges and strengthen development cooperation with ASEAN19. Measures like the signing of a “Joint Declaration for Cooperation to Combat International Terrorism,” maritime exercises with the navies of ASEAN countries, information-sharing initiatives, and defense agreements with individual ASEAN countries have added a new dimension to ASEAN-India relations.20

Economic Engagements

For enhancing economic ties with ASEAN member countries, India signed a Free Trade Agreement (FTA) in goods in 2009 and an FTA in services and investments in 2014 with ASEAN. The ASEAN-India Free Trade Area has been completed with the entering into force of the ASEAN-India Agreements on Trade in Service and Investments on 1 July 201521. Apart from this, India has a Comprehensive Economic Cooperation Agreement with various countries of the ASEAN region. This has resulted in concessional trade and a rise in investments22.

The ASEAN members and India together consist one of the largest economic regions “with a total population of about 1.8 billion and a combined GDP of $3.8 trillion. ASEAN and India together form an important economic space in the world”23. It is currently India’s fourth largest trading partner, accounting for 10.2 per cent of India’s total trade. India is ASEAN’s seventh largest trading partner. “India’s service-oriented economy perfectly complements the manufacturing-based economies of ASEAN countries. There is, however, considerable scope for further growth”24. As per the Ministry of External Affairs report, “India’s trade with ASEAN has increased to US$ 70 billion in 2016-17 from US$ 65 billion in 2015-16. India’s export to ASEAN has increased to US$ 31.07 billion in 2016-17 from US$ 25 billion in 2015-16. India’s import to ASEAN increased by 1.8% in 2016-17 vis-à-vis 2015-16 and stood at US$ 40.63 billion. Investment flows are also substantial both ways, with ASEAN accounting for approximately 12.5% of investment flows into India since 2000″.25

ASEAN and India have been also working on enhancing private sector engagement. ASEAN India-Business Council (AIBC) was set up in March 2003 in Kuala Lumpur as a forum to bring key private sector players from India and the ASEAN countries on a single platform for business networking and sharing of ideas. AIBC is an organization that builds relationship between India and ASEAN countries to foster stronger ties in trade and economy. It was conceptualized to provide an industry perspective to the broadening and deepening of economic linkages between ASEAN and India26.  The AIBC consists of eminent Leaders of Business in ASEAN Member States and India. They meet on the sidelines of ASEAN-India Economic Ministers’ Meeting27.

People to People Relations

People-to-people exchanges continue to remain an important pillar of India-ASEAN relations today, and “we aim to expand them through various initiatives, such as through the exchange of artists, students, journalists, farmers and parliamentarians, as well as a multiplicity of think-tank initiatives”28. People of the two regions connect not only through political and diplomatic means, but there are historical and civilisational linkages. Ramayana and Mahabharata – two great Indian mythologies find a meeting ground in ASEAN region. Similarly, Buddhism and Bollywood are two great popular cultures capturing the imagination of the people of the region. Besides, a large number of Indian Diaspora in Southeast Asia, provide a fertile ground for linking of people and culture since long.  The cultural and intellectual exchanges between the people of two region has enabled us a better understanding of the relations between India and ASEAN. At the level of the Government, several activities leveraging people-to-people connectivity are held annually to increase interaction between India and ASEAN Community. These include, ASEAN-India Network of Think Tanks, Exchange of Parliamentarians, ASEAN-India Media Exchange Programme, Students Exchange Programme, ASEAN-India Eminent Persons Lecture Series, Special Course for ASEAN Diplomats and their training at the Foreign Service Institute (FSI) in New Delhi29. Recently held India-ASEAN Youth festival in August 2017 is an example of identifying Youth as cultural ambassadors for a deeper understanding of socio-cultural linkages between the two regions.

Physical Connectivity

ASEAN-India connectivity has been a priority for India and central to its ties with ASEAN. In 2013, India became the third dialogue partner of ASEAN to initiate an ASEAN Connectivity Coordinating Committee-India Meeting. While India has made considerable progress in implementing the India-Myanmar-Thailand Trilateral Highway and the Kaladan Multimodal Project, issues related to increasing the maritime and air connectivity between ASEAN and India and transforming the corridors of connectivity into economic corridors are under discussion. A possible extension to India-Myanmar-Thailand Trilateral Highway to Cambodia, Laos and Vietnam is also under consideration. A consensus on finalising the proposed protocol of the India-Myanmar-Thailand Motor Vehicle Agreement has been reached. This agreement will have a critical role in realizing seamless movement of passenger, personal and cargo vehicles along roads linking India, Myanmar and Thailand. PM announced a Line of Credit of US$ 1 billion to promote projects that support physical and digital connectivity between India and ASEAN and a Project Development Fund with a corpus of US $ 50 million to develop manufacturing hubs in CLMV countries at the 13th ASEAN India Summit held in Malaysia in November 201530.  India-ASEAN Connectivity Summit was also organised in December 2017 in New Delhi. According to M. J. Akbar, “While the road component is progressing apace, maritime connectivity – the mainstay of our historical trade relations, requires urgent modernisation in the context of current geopolitical realities”. According to him, “connectivity will address investment opportunities in ASEAN-India Islands Connectivity and discuss the challenges that need to be addressed in order to sustain the progress”31. To add further, the need for not only physical connectivity but digital connectivity has also been emphasised.32

Act East and North-Eastern Region of India

The North-eastern India as a region is landlocked, sharing most of its boundary with neighbouring countries of South and South East Asia. It is supposed to be an essential factor in extending linkages with the Southeast Asian countries and critical for India’s ambitious Act East policy to succeed. Given its strategic location, bordering on Bangladesh, Bhutan, Nepal, Myanmar and China, the region could be developed as a base for India’s growing economic links. “Though considered as the country’s most economically laggard regions, no other region in India can rival it in terms of the availability of natural resources and its potential for international connectivity”33. Over the years, “geo-political distancing of the region from its main port of Kolkata, combined with economic insulation, has weighed down the Northeast’s economy”34. Nevertheless, India has been trying to bridge this isolation through the ‘Act East’ policy by promoting trade and physical connectivity through its north-eastern borders with Southeast Asian region.

Development Partnership with CLMV Countries

Serving as a platform for deepening and strengthening its relationship with ASEAN, the CLMV countries (Cambodia, Lao PDR, Myanmar and Vietnam) have also been a special focus area for India. “At a time when manufacturing facilities are shifting to lower-cost economies, both India and the CLMV countries enjoy an advantage. With ‘Make in India’ emerging as a key campaign for manufacturing, developing new global value chains in partnership with the four least-developed economies of ASEAN would bring benefits to both sides”35. Over the years, special focus has also been on building up of the road, rail and waterways network for developing the infrastructural links between the North-east India and its engagement with the Southeast Asian countries. India has set up a Project Development Fund for CLMV countries and EXIM Bank also provides lines of credit for projects in power, irrigation and railways. Besides, facilities for English language training, entrepreneurship development, and IT skills have also been set-up by India for capacity building in these countries.

Conclusion

India-ASEAN relations are a critical component of India’s overall external engagement with the Indo-Pacific and beyond. A balance-sheet of India-ASEAN relations over the years reveal two and a half decades of missed opportunities resulting from the  ideological misgivings and conflicts in the internal politics of the countries of the region. However, the end of Cold War and collapse of Soviet Union was a critical juncture in the world politics. It brought about a major shift in the balance of power in Southeast Asia also bringing about transformation in the internal political dynamics of the countries of the region. The end of Cold War also marked a turning point in India-ASEAN Relations in the wake of liberalisation and market oriented reforms. In the changing architecture of global politics, India adopted itself to the emerging world order, thereby beginning a new chapter as the ‘Look East Policy’ now being transformed as ‘Act East Policy’ in its foreign policy paradigm. For the last 25 years – driven by geo-strategic and economic realities, India and ASEAN moved on the path of strong political and diplomatic engagements followed by economic and strategic partnership between countries of the region.

Encompassing shared heritage of centuries old civilisational ties – India and ASEAN have provided foundation to the close cultural and historical bonds, upon which lays the edifice of deeper economic and strategic partnership between the countries of the region. To conclude, in the words of Prime Minister Narendra Modi, “for the near future, South and South East Asia will be the growth engine of the world. Hence, building connectivity with ASEAN is a key objective for India”.

References:-

1 Rajamohan (2015), Modi’s World: Expanding India’s Sphere of Influence, Harper Collins.

2 Key Points at Prime Minister’a Address at 12th East Asia Summit in Manila, 14 November 2017.  Online Edition.Accessed on 10 December 2017. URL: https://www.narendramodi.in/key-points-from-prime-minister-s-address-at-the-12th-east-asia-summit-537799

3 Speech of M. J. Akbar at the Regional Conclave on ASEAN@50 and India – ASEAN Relations, 7-8 December 2017, Bengaluru.

4 Acharya, Amitav (2001), Constructing a Security Community in Southeast Asia, Routledge. p. 4

5 The Diplomat (2017), “Revisiting ASEAN-India Relations”. Online Edition.Accessed on 11 December 2017. URL: https://thediplomat.com/2017/11/revisiting-asean-india-relations/

6 Clark, Helen (2016), “Why Vietnam has India in its Side” Lowy Institute.Online Edition.Accessed on 11 December 2017. URL:https://www.lowyinstitute.org/the-interpreter/why-vietnam-has-india-its-sights

7 Anand, Vinod (2017),”India-Vietnam Defense and Security Cooperation”, Vivekanand International Foundation.Online Edition.Accessed on 10 December 2017. URL: http://www.vifindia.org/article/2017/may/12/achievements-india-vietnam-defence-and-security-cooperation

8 Brewster D (2009),The Strategic Relationship between India and Vietnam. Online Edition.Accessed on 12 December 2017. URL:

   https://openresearch-repository.anu.edu.au/bitstream/1885/13058/1/Brewster,%20D.%20India%27s%20S trategic%20Partnership%20with%20Vietnam%202009.pdf

9 Mohammed Ayoob (1990), India and Southeast Asia: Indian Perceptions and Policies, Institute of Southeast Asian Studies. pp 53-72.

10 Ministry of External Affairs (2017), India-Cambodia Relations, Online Edition.Accessed on 15 December 2017. URL: http://www.mea.gov.in/Portal/ForeignRelation/1_Cambodia_November_2017.pdf

11 Brewster D (2009),The Strategic Relationship between India and Vietnam, pp. 8.

12 Ahmad, Asif (2012), India – ASEAN Relations in 21st  Century: Strategic Implications For India – Analysis, Eurasia Review. Online Edition.Accessed on 12 December 2017. URL:

   http://www.eurasiareview.com/09072012-india-asean-relations-in-21st-century-strategic-implications-for-india-analysis/

13 Anand, Mohit (2009), India-ASEAN Relations: Analysing Regional Implications, Institute of Peace and Conflict Sudies Report 72.  Online Edition.Accessed on 12 December 2017. URL:

   http://www.ipcs.org/pdf_file/issue/SR72-Final.pdf

14Ahmad, Asif (2012), India – ASEAN Relations in 21st  Century: Strategic Implications For India – Analysis, Eurasia Review.

15 Hong, Z. (2006), India’s Changing Relations with ASEAN: From China’s Perspective, The Journal of East Asian Affairs, 20(2), pp. 141-170. Online Edition.Accessed on 12 December 2017. URL: https://www.jstor.org/stable/23257942?seq=1#page_scan_tab_contents

16Trivedi Sonu (2014), “Act East Policy vis-a-vis Pivot to Asia”, The Global New Light of Myanmar, November 16.

17 Ministry of External Affairs, India-ASEAN Relations. Online Edition.Accessed on 12 December 2017. URL:

   http://www.mea.gov.in/aseanindia/20-years.htm.

18 Ibid.

19 ASEAN.Online Edition.Accessed on 12 December 2017. URL:

   http://asean.org/chairmans-statement-of-the-asean-post-ministerial-conference-pmc-101-sessions-with-the-dialogue-partners-3/

20 The Diplomat (2017), “Revisiting ASEAN-INDIA Relations”.Online Edition.Accessed on 12 December 2017. URL:  https://thediplomat.com/2017/11/revisiting-asean-india-relations/

21 Indian Mission to ASEAN.Online Edition.Online Edition.Accessed on 15 December. URL: http://www.indmissionasean.com/index.php/asean-india

22 The Diplomat (2017) “Revisiting ASEAN-India Relations”,Online Edition.  Accessed on 15 December. URL: https://thediplomat.com/2017/11/revisiting-asean-india-relations/

23 IDSA (2016), “India ASEAN Approach”.Online Edition.Accessed on 15 December. URL: https://idsa.in/idsanews/india-asean-approach_080416

24Pant, Harsh V, (2017), “The ASEAN Outreach”, The Hindu, November 17.

25 Ministry of External Affairs, India-ASEAN Relations. Online Edition.Accessed on 15 December. URL:  http://www.mea.gov.in/aseanindia/20-years.htm

26ASEAN-India Business Council.Online Edition.Accessed on 15 December. URL:  http://www.asean-india.org/

27Indian Mission to ASEAN.Online Edition.Accessed on 15 December. URL: http://www.indmissionasean.com/index.php/asean-india

28Pioneer (2017), “ASEAN: sharing Values and Common Destiny”, September 6. Online Edition.Accessed on 14 December. URL:

29Indian Mission to ASEAN.Online Edition.Accessed on 15 December. URL:  http://www.indmissionasean.com/index.php/asean-india

30 Ministry of External Affairs, India-ASEAN Relations. Online Edition.Accessed on 13 December. URL:  http://www.mea.gov.in/aseanindia/20-years.htm

31 Assam Tribune (2017), “Connectivity Central to ties with India”. 12 December. Online Edition.Accessed on 15 December. URL: http://www.assamtribune.com/scripts/detailsnew.asp?id=dec1217/at061

32 Speech by Hon Minister for Electronincs & Information and Technology, Ravi Shankar Prasad at Valedictory Session on India-ASEAN Partnership@25, Kalinga International Foundation, 13 December 2017.

33 De, Prabir (2017),”Can Act East Address Northeast India’s Isolation?”.Online Edition.Accessed on 16 December. URL: http://www.eastasiaforum.org/2017/10/27/can-act-east-address-northeast-indias-isolation/

34 Ibid.

35 Banerjee Chandrajeet (2017), “From Look East to Act East”, The Hindu Business Line, February 26.Online Edition.Accessed on 16 December. URL: http://www.thehindubusinessline.com/opinion/developing-new-global-value-chains-in-partnership/article9560295.ece

(Ms. Sonu Trivedi teaches Political Science at Zakir Husain Delhi College, University of Delhi.)

(This article is carried in the print edition of January-February 2018 issue of India Foundation Journal.)

The Upward Trajectory in India-ASEAN Relations

The Association of South East Asian Nations (ASEAN) celebrates 50 years of its existence this year. At the same time, India and ASEAN are commemorating the 25th Anniversary of their Dialogue Relations by organising a wide range of international events – conferences, business conclaves, youth and cultural festivals, such as the India-ASEAN Connectivity Summit, India-ASEAN Youth Summit 2017 held in Bhopal, car rallies, etc. The year 2017 also marks 15 years of summit sevel relation and five years of strategic partnership between India and ASEAN. Since 2002, the India-ASEAN Summit has become an annual affair. In the 13th summit held in Kuala Lumpur on 21 November 2015, the ASEAN leaders acknowledged that India’s “Make in India” and “Act East Policy” initiatives could reinforce ASEAN’s community building efforts. The grouping’s leaders also expect India to work with ASEAN to achieve the goals reflected in the ASEAN 2025: “Forging Ahead Together”. In the Post Ministerial Conference (PMC) Plus One Session with India, held on 5 August 2015 in Kuala Lumpur, the ASEAN and Indian leaders adopted the Plan of Action (POA) to implement the ASEAN-India Partnership for Peace, Progress and Shared Prosperity (2016-2020) comprising three broad areas of cooperation: “political and security cooperation; economic cooperation; and socio-cultural cooperation”.

At a time when global economic growth has been sluggish and there are growing uncertainties due to conflicts in other parts of the world, ASEAN has consolidated itself into a common economic community  and become the most dynamic region in the world. The ASEAN way of decision making by consensus has enhanced its unity as well as centrality in the Asia-Pacific region. India can learn immensely from the ASEAN experience, its economic integration in particular. The Indian Prime Minister has rightly placed South East Asia at the core of India’s Act East Policy – a significant foreign policy initiative to deepen India’s comprehensive engagement and strategic partnership with ASEAN. Both India and ASEAN could enjoy mutual benefits out of such partnerships, and together, they can contribute to regional growth and stability. In the last two years, Indian President, Vice President and Prime Minister had visited nine out of 10 ASEAN countries. The Prime Minister was present at three ASEAN-India and East Asia Summits held in 2014, 2015 and 2016, and he had visited five ASEAN countries, viz., Myanmar, Singapore, Malaysia, Laos and Vietnam, and also 11 East Asia Summit associated countries, including the United States (US), Russia, Australia, China, Japan, Vietnam and Laos. India has set up a mission to ASEAN and the East Asia Summit (EAS) in Jakarta with a dedicated ambassador to ensure a smooth functioning. All this bears testimony to the importance India attaches to its relationship with ASEAN.

India’s endeavour to strengthen its relations with ASEAN comes at this crucial juncture when China becomes more assertive in the region. Beijing’s territorial claims in the oil and gas-rich South-China Sea, which is also a vital international maritime trade route, have caused serious regional security concern. Both India and ASEAN, indeed, keep the China factor in mind and act accordingly in order to sustain a stable balance of power in South East Asia. As natural allies, they participate in the EAS, ASEAN Regional Forum (ARF), ASEAN Defence Ministers Meeting Plus (ADMM+), and the Expanded ASEAN Maritime Forum (EAMF).1 TheADMM +  provides a forum for defence  ministers from the 10 nations of ASEAN plus India, China, Japan, Republic of Korea, Russia, Australia, New Zealand, and the US on a biannual basis. The EAMF creates avenue for diplomacy focussing on maritime issues of common concern.2 The ASEAN is keen to work together with India in securing trade routes and freedom of navigation in international waters and over flights, reducing piracy along the Malacca Straits, addressing traditional and non-traditional security challenges, including ‘de-radicalisation, prevention of violent extremism and cyber crime’. In the new regional security configuration, ASEAN and India also need to focus on the prospects of tackling threats like poverty, transnational health threats, environmental degradation, natural disasters and transnational crimes.3 Most states in the region expect India to be a serious player in the Indo-Pacific. For that, India needs to give the signal that it is committed to a long- term strategic presence in the region.4For both India and ASEAN, connectivity is a matter of strategic priority. At the 13th ASEAN-India Summit held in Malaysia in November 2015, Prime Minister Modi announced a Line of Credit of USD 1 billion for projects that support physical and digital connectivity between India and ASEAN and a Project Development Fund with a corpus of INR 500 crore to develop manufacturing hubs in Cambodia, Laos, Myanmar, Vietnam (CLMV) countries. India supports the Master Plan on ASEAN Plus Connectivity (MPAC) and backs the extension of India-Myanmar-Thailand Trilateral Highway to Laos, Cambodia and Vietnam, and its further linkage with ports in ASEAN countries and integration with Special Economic Zones. Enhanced connectivity to ASEAN region can significantly factor in unlocking the economic energies and enterprise of India’s Northeast, which borders the region. In short, “Connectivity is the reigning mantra as India deepens its diplomatic, economic and cultural ties with its extended neighbourhood”.5

As India and ASEAN share deep economic ties, their trade and investment relations have grown over time. Their annual trade stood at USD 76.63 billion in 2015, although it declined to USD 65.04 billion in 2015-16 due to the slowing down of the global economy. India is ASEAN’s 7th largest trade partner, and ASEAN is India’s 4th largest trading partner which accounts for 10.02 per cent of India’s total trade. Investment flows have also increased. “FDI flows into India from ASEAN between April 2000 to May 2016 was about USD 49.40 billion, while FDI outflows from India to ASEAN countries, from April 2007 to March 2015, as per data maintained by DEA, was about USD 38.672 billion”.6 The ASEAN-India Free Trade Area has been completed with the enforcement of the ASEAN-India Agreements on Trade in Service and Investments on 1st July 2015. The agreement affirms India’s adherence to the vision of having greater economic engagement with ASEAN. India’s service-oriented economy should also complement the manufacturing–based economies of ASEAN. India is also engaged in the Regional Comprehensive Economic Partnership (RCEP) negotiations with ASEAN and its 6 FTA partners. India and ASEAN have also been working on enhancing engagement in private sector, particularly with an objective to bring key private players on a single platform such as ASEAN-India Business Council.

India offers project-based assistance to ASEAN countries from various Funds created under ASEAN Multilateral Division. At the ASEAN-India Summit (2009), India announced USD 50 million contribution to the ASEAN-India Fund for implementation of the ASEAN-India Plan of Action. At the 6th ASEAN-India Summit held in Singapore (2007), India announced the setting up of an ASEAN-India Science & Technology Development Fund (AISTDF) with a contribution of USD 1 million and ASEAN-India Green Fund with a contribution of USD 5 million for collaboration activities relating to environment and climate change. Besides, India has been associating with ASEAN in the implementation of projects in the fields of Agriculture, Science and Technology, Peace, Human Resource Development, Capacity Building, New and Renewable Energy, Tourism, People-to-People contacts, etc.7

Tolerance, pluralism and diversity preserved, maintained and practiced by India and the ASEAN countries can be a unique example for the rest of the world.  These salient characteristic can further strengthen the ties between the two.8 India has accorded priority to promoting its soft power in Southeast Asia “through a vigorous engagement with the diaspora and a strong commitment to build a shared civilisational bonds” – renewing spiritual connectivity with Asia which is as important as physical connectivity.9 Indeed, the large Indian diaspora in the Southeast Asian countries helps strengthen diplomatic, economic and security relations between India and ASEAN. In the presence of such driving forces, it is imperative for both to put in extra efforts to materialise the vision of an ‘Asian century’ that is becoming real with the increasing “shift of economic gravity from the north to the south and the west to the east”.

The Asian dream, therefore, is about surging hopes and aspirations of 1.8 billion people of India and Southeast Asia, who are inching towards carving their place in the changing world. India should seize the moment to chart the course of its strategic partnership with the ASEAN countries and convince them that “India is both a factor for peace and stability in Asia as well as a partner in progress”.10 India and ASEAN stands as natural partners further contributing in the progress of the wider Indo-Pacific region.

 

References:-

1  Pant, Harsh V., Avantika Deb: “India and The ASEAN At 25: Celebrating The Past, Preparing For The Future”, July 04, 2017, ORF Issue Brief. Accessed 20th August, 2017. http://www.orfonline.org/research/india-asean-partnership-at-25/.

2  ASEAN Progress & Prosperity, March 2, 2017: “ASEAN- India Relations”. Accessed 20th August, 2017. http://www.mea.gov.in/aseanindia/20-years.htm.

3  “India ASEAN – A 25 Year long Journey”, February 25, 2017.Accessed 21st August, 2017. http://raja sacademy.com.com/.

4  Roche, Elizabeth. “Why 2017 is a landmark year for India, ASEAN Ties”. Live Mint, February 7, 2017. Accessed August 21, 2017. www.livemint.com/Politics/zahCdddqQwMjQC7X5ykoyO/Why-2017-is-a-landmark-year-for-India-ASEAN-ties.html.

5  Chand, Manish. “India’s Enhanced Look East Policy takes wing”. Ministry of External Affairs, Govt. of India, August 7, 2014. Accessed August 21, 2017.www.mea.gov.in/in-focusarticle.htm?23855/Indias+Enhanced +Look+East+policy+takes+wing.

6  ASEAN Progress & Prosperity, March 2, 2017: “ASEAN- India Relations”. Accessed 20th August, 2017. http://www.mea.gov.in/aseanindia/20-years.htm.

7  Ibid.

8  Saran, Preeti. “India and ASEAN- An Overview”. Speech, New Delhi, February 2, 2017. Nehru Memorial Museum and Library.  www.mea.gov.in/aseanindia/Speeches-Statements.htm?dtl/22615/Keynote+ Address+by+Secretary+East+on+India+and+ASEAN++An+Overview+at+Nehru+Memorial+Museum+ and+Library+New+Delhi+February+2+2017.

9  Raja Mohan, C. “From Looking East to Acting East”. Ministry of External Affairs, Govt. of India, January 29, 2015. Accessed August 22, 2017.

10 Baru, Sanjaya “India and ASEAN: The Emerging Economic Relationship Towards a Bay of Bengal Community.” February, 2001, India Council For Research on International Economic Relations, New Delhi.

(Dr. Shristi Pukhrem is a Senior Research Fellow at India Foundation.)

(This article is carried in the print edition of January-February 2018 issue of India Foundation Journal.)

Look East Policy: A Post-Independence Construct

India-ASEAN relations today are more strategic than economic in character. India  today eyes ASEAN as a major East Asian entity vital to promote Indian geopolitical interests in the region. The twenty-five years of India’s engagement with ASEAN via thirty dialogue mechanisms has undoubtedly strengthened the mutual attachment. The strategic aspect of India’s ASEAN policy became vivid further under the Act East Policy of the Narendra Modi government which intended to accelerate ‘across-the-board engagement between the two growth poles of Asia’.1 Year 2017 marks the 25th anniversary of India-ASEAN Dialogue Partnership which was initiated in 1992 when the decision was taken to set up a Sectoral Dialogue Partnership between ASEAN and India at the 4th ASEAN Summit in Singapore. In his congratulatory message to the ASEAN Chair Rodrigo Duterte, the Philippine President, Prime Minister Narendra Modi termed Act East Policy as the ‘reflection of the importance we attach to our strategic partnership with ASEAN’.2 Responding to Prime Minister Modi’s message President Duterte noted that ASEAN-India relations have contributed to the maintenance of peace, stability and prosperity in the region.3 Tranquil Southeast Asia is beneficial for India whose trade with ASEAN was $71 billion in the 2016-17 financial year, which accounts for 10.85% of India’s global trade.4 Therefore, security of land and sea route is vital for India for which collaboration with the ASEAN countries is necessary. Today, ASEAN is an important strategic ally of India in East Asia where India wants to expand her footprint as was evident from the statement of former Indian Prime Minister Dr. Manmohan Singh: “Our strategic footprint covers the region bounded by Horn of Africa, West Asia, Central Asia, South-East Asia and beyond.”5

In the context of today’s India-ASEAN strategic relations, it will be interesting to introspect whether the strategic aspect of India’s Act East Policy is a later phenomenon or it has its roots in the past. When did independent India look east? How old is India’s strategic considerations vis-à-vis Southeast Asia? In this case it is pertinent to analyse Jawaharlal Nehru’s Southeast Asia policy.

Nehru Looking East

Contrary to the general perception, India looked (and acted) east immediately after independence.  The centrality of India in the Southeast Asian affairs in the eyes of Nehru is best reflected in his speech at the Constituent Assembly on 8th March, 1949 where he said, “If you have to consider any question concerning South-East Asia, you cannot do so without India.”6

The prime concern of Nehru in Southeast Asia was the communist militancy which was the most common problem in all the decolonized states of Asia during that time, including India. The post-war Southeast Asia was experiencing strong anti-imperialist liberation struggle which got intertwined with the communist revolutionary fervor targeting the nationalist factions within the countries. Nehru disapproved this militancy both in India and Southeast Asia saying, “There are communists, who quite apart from their communism, are at present engaged in creating as much trouble as possible not only in India but much more so in Burma, Malaya etc….”7 Not only Nehru, even his deputy and Home Minister Sardar Vallabhbhai Patel expressed concern with the communist extremist militancy in post war Southeast Asia. In his address to the nation on 15th August 1947, Sardar Patel said, “The condition in Malaya, Indo-China and Burma was disappointing…If the undesirable elements in the country were not put down with a firm hand immediately, they were sure to create the same problem as they found existing in some other Asiatic countries.”8

The two prime objectives of India’s Southeast Asia policy post 1947 have been: first, to liquidate colonialism and second, to thwart any major or medium power domination of the region in the name of filling the vacuum which Nehru termed as cloak for imperialism.9 Nehru believed that the continuation of the colonial rule in Southeast Asia would only promote communist rebellion: “If colonialism continues anywhere in South-East Asia, the natural result will be a growth of communism.”10 In an interview with Earnest K. Lindley, when the interviewer asked Nehru whether the communists’ gains in ‘Burma, Malaya and other areas close to India’ would be a concern for Nehru, the Indian Prime Minister answered in affirmative.11 Both Nehru and Patel, during their visits to Southeast Asia, had condemned communists for their ‘extra territorial character’ and confirmed that the victory of communists in Burma and Malaya would be a matter of concern for Indian government. Nehru even deplored the communists for turning Southeast Asia into ‘one of the great danger spots of the world’ and termed their expansionist and interference policy as ‘danger to peace and freedom’.12

Nehru saw instability arising from the communist rebellion in the non-communist Southeast Asian states as a threat, and so was active in thwarting the scenario from worsening further. In a way Nehru saved entire Southeast Asia from turning communist. This was best witnessed in Nehru’s activeness in liberating Indonesia from Dutch rule for which he even convened a conference in New Delhi in 1949 whose resolution was instrumental in the liberation process. Besides, Indonesia was also a major rice supplier to India coping with severe food crisis in the post war years and thus stable non-communist regime in Indonesia was helpful for Nehru’s India. His Malaya policy was apparently contradictory to his anti-imperialist stance since Nehru preferred the British rule there to continue for longer period in order to suppress communist rebellion and help to handle the Indian migrant affairs in Malaya. Besides, he disapproved of the guerrilla tactic of the Malayan communists as ‘terrorist acts’.13

Burma had occupied a very important part of Prime Minister Jawaharlal Nehru’s neighbourhood policy, especially in the context of the Indian migrants there who were soon to become the victims of ultra-nationalist policy of the government there as also because of its strategic importance. He was aware of the importance to have a friendly government in Burma, and thus chose to keep a low profile over the anti-Indian policies of the government there. Although expressing displeasure with the Land Acquisition Act 1948 saying that it hits ‘Indian interests in land hard’14, he opined, “Although the attitude of the Burmese Government has been unyielding thus far, we must recognise that they are facing a most difficult situation in their own country. There is rebellion and disorder and they cannot easily take any step which may weaken their position with the general public.”15 Clearly he was not inclined to put the Burmese government in any difficulty internally. Do we find any similarity between this policy with the ongoing Rohingya crisis vis-à-vis Indian policy towards today’s Myanmar?

Traditional China factor

The Statesman (Kolkata edition) published a report on 14th December 2017 with the headline ‘With China on mind, India woos ASEAN nations’. Referring to an invitation extended to the ten ASEAN leaders as chief guests to the Republic Day parade on 26th January 2018 the report read, “Amid growing challenge from China on regional issues, India is pulling out all the stops to accord an unprecedented welcome to leaders of ten ASEAN nations who will be chief guests at the Republic Day parade on 26th January.”16 There is almost unanimous conclusion among the scholars that China is a major factor in India’s current Southeast Asia policy. Eminent scholar S.D. Muni opined that in many subtle and explicit ways India’s Look East Policy has been driven by China’s rise.17 It is opined that China factor played a role behind the India-Southeast Asia collaboration in the security arena in the post Cold War years.18 But is this China factor a post Cold War phenomenon?

Jawaharlal Nehru said in 1952, “Never forget that the basic challenge in Southeast Asia is between India and China. That challenge runs along the spine of Asia.”19 Michael Brecher wrote about Indian and Chinese role in Southeast Asia, “As the two most populous and potentially most powerful states in Asia, they are inevitable rivals for influence in the vast belt of ‘uncommitted’ countries of South-east Asia.”20 Nehru was aware of the challenge emanating from the newly founded People’s Republic of China (PRC). The new Chinese leadership in Beijing had articulated their intention to promote communist movement in Southeast as well as South Asia. Chinese communist leader Liu Shao Chi identified non-communist countries of South and Southeast Asia, India, Burma, the Philippines and Indonesia as ‘semi-colonies’ which were to be ‘freed from the stranglehold of western imperialism’.21 When asked whether post revolution China would turn eyes to Southeast Asia, Nehru evaded direct answer saying that the Chinese were busy with their own problems now and therefore would not do it but he did refer to long perspective of history saying, “it is difficult to say what might happen in future – what a powerful nation may do to develop expansionist tendencies.” New China was certainly a challenge to India’s, or more precisely, Nehru’s leadership aspiration in Southeast Asia. Nehru considered India as the ‘natural leader of Southeast Asia,’22 and was apprehensive regarding the impact of communist triumph in China. He wrote on 6th December 1948, “The victory and consolidation of Chinese Communists is going to have a far reaching results all over South East Asia and ultimately in the world.”23

Since the foundation of Communist China in 1949, India’s external policy has been China oriented, especially in respect of spread of communism in Southeast Asia.24However, Nehru never wanted any direct confrontation with the giant Asian neighbour until the 1962 tragedy occurred. Nehru’s prime objective in Southeast Asia vis-à-vis China was to minimise the impact of the Asian giant especially in the context of communist influence in the region. Nehru’s strategy in Southeast Asia was to enthrone non-communist regimes wherever feasible like Indonesia, Malaya and Burma. Like today’s India, Nehru’s India was also cautious not to push the then Burma to the lap of China given her strategic location bordering China and hostile East Pakistan (today’s Bangladesh), contiguous to insurgency-hit northeast. Thus Nehru wanted an India-friendly regime in Burma which he found in U Nu. Nehru expressed his suspicion about China to Burmese premier U Nu in the following words, “Obviously we cannot be dead sure what China may do in the future.25

Nehru’s main challenge was in Indochina, the only crisis in Southeast Asia that Jawaharlal Nehru did not see being resolved during his lifetime. The Indochina affair put his policy towards communist growth in Southeast Asia and communist China to a litmus test. With camp politics casting shadow over Indochina, Nehru exercised his Panchsheel policy. Nehru extracted Chinese assurance of peaceful co-existence in the joint communiqué during the visit of Chinese premier Chou En-lai to India in 1954 to be applied in resolution of Indochina conflict. This was to commit China to non-interference in Southeast Asia while China found it helpful firstly to resist American presence in her southern borders while resisting India from joining any future regional defence organization.26This strategy was also to assure kingdoms like Cambodia and Laos planning to opt for either camp amidst Vietnam War. Nehru wanted Indochina to stay away from Cold War politics which might increase American presence activating the Chinese. However, Nehru’s Panchsheel strategy failed eventually while the growing rapport between North Vietnam and China forced India to veer away from neutrality and incline towards pro-US South Vietnam in the International Control Commission founded to resolve the crisis. This was the result of the growing deterioration of the India-China relations since 1959 over border issue. While between 1954 and 1959 India voted for Hanoi in 72 per cent of her decisions, since 1959 India ruled against North Vietnam.27

The war of 1962 had a deep and permanent impact on India’s Southeast Asia policy. Post 1962 Southeast Asia policy under Nehru was overtly anti-China in character with Nehru declaring, “There is no non-alignment vis-à-vis China. There is no Panchsheel vis-à-vis China.”28 India now attempted to dissuade Southeast Asia against China. While visiting Thailand in March 1963, Indian Minister of State for External Affairs, Mrs. Lakshmi Menon, said, “The Chinese problem is a common problem. One day it may be your problem in Southeast Asia…”29This is interesting since prior to the war, India cautiously avoided Thailand (and the Philippines) as pro-US countries of Southeast Asia contradicting Nehru’s non-alignment policy. After the war, Nehru ‘discovered’ Thailand in his fresh Southeast Asia policy. Nehru by then realized the futility of his Panchsheel strategy. Not only this, the war itself was an eye-opener for Nehru to see countries like Thailand and Philippines, along with Malaya, siding with India against Chinese aggression while Burma and Indonesia, the countries he invested the most in, opting for neutral policy.

Conclusion

Southeast Asia has traditionally held strategic importance for India. Commenting on strategic importance of Southeast Asia to India, Major Anthony Strachey of the Indian Army compared the region with Nepal and Tibet in 1947 saying like in case of the Himalayan buffers to India, adverse powers in charge of Burma, French Indochina, Siam or East Indies would be detrimental to India.30 The last world war proved this when Japan marched at the gate of British India in the northeast while it occupied Andaman & Nicobar Islands after seizing Southeast Asia. Today’s India is similarly concerned about the growing might of China whose only maritime link to India is via South China Sea. Tranquil Southeast Asia was always beneficial for India both economically as well as strategically. The rice supply from Burma and Indonesia was a big help to India’s food crisis in the early years of independence. For that, stable and friendly regimes were required there for which Nehru worked hard. This was also needed to handle the Indian migrants there. In a way Nehru was in a nation-building mission in Southeast Asia. And there was a latent desire of Nehru to gain India (or him?) the world-wide prestige as he himself admitted in January 1949 in the context of conference on Indonesian independence, “We had recently the conference on Indonesia which has been a great success and which has enhanced the prestige of India all over the world.”.31 Southeast Asian leaders, fighting against communism, also acknowledged Nehru as their guide as was evident from the visit of Burmese and Indonesian leaders to India. Even the outside world acknowledged Nehru as the ‘influential non-communist voice of Asia’.32 Nehru was the bridge between the contending powers interested in post-war Southeast Asia. He never wanted any single power domination in the region and advocated for its tranquility which he found was threatened by South East Asia Treaty Organisation (SEATO) and Indochina crisis. His strategy in Southeast Asia, was to resist communist victory while engaging China in local affairs. The Bandung Conference of 1955 served the purpose well but initiated the downgrading of Nehru’s influence in Southeast Asia as well.

India had a strategy vis-à-vis Southeast Asia under Prime Minister Nehru which continued even after that. Nehru’s India tried to resist Southeast Asia from pursuing camp politics and follow a non-aligned policy based on Panchsheel strategy which was close to the later ASEAN Treaty of Amity and Cooperation or the Zone of Peace Freedom and Neutrality (ZOPFAN), 1971 which expressed ASEAN’s desire to keep power tussle outside the region. Presumably, Nehru wanted Southeast Asia to balance between contending powers like China and USA. Today, India acknowledges the centrality of ASEAN in the Asia-Pacific security architecture harmonizing ‘larger interests of the world beyond it’, according to Indian minister Gen. VK Singh.33 The omni-enmeshment strategy of the group embracing all the regional and extra-regional powers, including India, within its expanded fold like ASEAN Regional Forum, East Asia Summit and ASEAN Defence Ministers’ Meeting Plus has put it at the centre of the East Asian geopolitics today. During Nehru’s time Southeast Asia was unable to handle its affairs and India under Nehru was in action to set the house in order. Today, when India-ASEAN relations officially turn twenty-five, we see India more as a partner in the ASEAN led missions in East Asia. Besides, Nehru’s Look/Act East strategy was more diplomatic and non-military in character while today India expands her strategic collaboration through joint exercises and port visits. The only consistency in India’s Southeast Asia policy has been the China factor. The China factor remains equally relevant today as it was during Nehru period. India today is partnering with ASEAN to engage China to contain her, as did Nehru. Later ASEAN policy towards China in post-Cold War years reflected this wisdom.

References:

1  Manish Anand, ‘Act East: India’s ASEAN Journey’, Public Diplomacy, Ministry of External Affairs, Government of India, November 10, 2014, http://www.mea.gov.in/in-focus article.htm?24216Act+East+Indias+ ASEAN+Journey (accessed on 12.12.2017)

2  Ministry of External Affairs, Government of India,‘Celebrating 25 Years of ASEAN-India DialoguePartnership’, January 28, 2017, para3,http://mea.gov.in/press releases.htm?dtl/27970Celebrating_25_years_of_ the_ASEANIndia_Dialogue_Partnership (accessed on 12.12.2017)

3  Ibid

4  Ministry of External Affairs, Government of India,‘15th ASEAN-India Summit and 12th East Asia Summit in Manila, the Philippines (November 4, 2017), para6, http://www.mea.gov.in/press-releases.htm?dtl/29102/15th_ASEANIndia_Summit_and_12th_East_Asia_Summit_in_Manila_Philippines_November_14_2017 (accessed on 12.12.2017)

5  Cited in Subhadeep Bhattacharya, Understanding South China Sea Geopolitics, New Delhi, Pentagon Press, 2017, p.214

6  Jawaharlal Nehru, Indian Foreign Policy: Selected Speeches, September 1946-April 1961, New Delhi, The Publication Division, Ministry of Information and Broadcasting, Govt. of India, 1961, p.22

7   Jawaharlal Nehru, Letters to Chief Ministers 1947-64, Vol. 1.(1947-49), New Delhi, Jawaharlal Nehru Memorial Fund,  1985,p.143

8 Cited in Subhadeep Bhattacharya, Looking East Since 1947: India’s Southeast Asia Policy, New Delhi, KW Publishers Pvt. Ltd., 2016, p.7

9 V.P. Dutt, India’s Foreign Policy, New Delhi, Vani Educational Books, 1985, p.254

10Jawaharlal Nehru, Letters to Chief Ministers, 1947-1964, Vol 1, op cit, p.222

11S. Gopal, Selected Works of Jawaharlal Nehru, Second Series, Volume Seven, New Delhi, Jawaharlal Nehru Memorial Fund, 1988, p.616

12 Werner Levi, Free India in Asia, Minneapolis, University of Minnesota Press, 1952,pp.101, 102

13  Nehru’s  cable to V.K. Krishna Menon, July 24, 1948, S. Gopal (ed), Selected Works of Jawaharlal Nehru, Second Series, Volume Seven, New Delhi, Jawaharlal Nehru Memorial Fund, 1988, p.651

14  Jawaharlal Nehru, Letters to Chief Ministers, 1947-1964, Vol 1, op cit, p.235

15 Ibid

16 The Statesman,‘With China on mind, India woos ASEAN nations’, 14.12.2017, p.3

17 S.D. Muni,‘India’s Look East Policy: Strategic Dimension’, ISAS Working Paper, No.121, 1 February, 2011, https://www.files.ethz.ch/isn/126612/ISAS_Working_Paper_121-_Email-_India’s_’look-east’_policy_the_strategic_dimension_01022011145800.pdf  (accessed on 19.08.2017), p.23

18 Balveer Singh, ‘Southeast Asia’s Rising Engagement of India’, Southeast Asia-India Defence Relations in Changing Regional Security Landscape, IDSA, Monograph Series No.4, 2011, p.16

19 Cited in Subhadeep Bhattacharya (2016), op cit, p.6

20 Michael Brecher, Nehru: A Political Biography, New Delhi, Oxford University Press, 2011, p.589

21 D.R. Sardesai,‘India and Southeast Asia’, B.R. Nanda (ed), Indian Foreign Policy: The Nehru Years, Delhi, Vikas Publishing House Pvt Ltd, 1976, p.85

22 Jawaharlal Nehru, Guidelines for the session of the United Nations General Assembly, September 12, 1948, Selected Speeches of Jawaharlal Nehru, Second Series, Volume Seven, 1948,  op cit, p.611

23 Jawaharlal Nehru, Letters to Chief Ministers, Volume 1 (1947-1949), New Delhi, Jawaharlal Nehru Memorial Fund, 1985, p.232

24 D.R. Sardesai, India’s Foreign Policy towards Cambodia, Laos, Cambodia and Vietnam from 1947-1964, Barkley, California University Press, 1968, p.33

25 Sarvepalli Gopal, Jawaharlal Nehru: A Biography, Volume Two-1947-1956, New Delhi, Oxford University Press, p.190

26 Subhadeep Bhattacharya (2016), op cit, p.20

27 Ibid, pp.21, 22

28 Cited in Asis Kumar Majumdar, Southeast Asia in India’s Foreign Policy: Study of India’s Relations with Southeast Asian Countries from 1962-1982, Calcutta, Noya Prokash, 1982, p.70

29 Cited in ibid, p.72

30 Ton That Thien, op cit, p.67

31 Jawaharlal Nehru, Letters to Chief Ministers, 1947-1964, Vol. 1 (1947-1949) op cit,  p.270, emphasis added

32 The New York Times, 29th August 1950, cited in Karunakar Gupta, Indian Foreign Policy : In Defence of National Interest, Calcutta, The World Press Private Ltd., 1956, p.5

33 The Statesman,‘Asean central to region’s security architecture: India’, 07.08.2017, p.1

 

(Subhadeep Bhattacharya is a Researcher at Netaji Institute for Asian Studies (NIAS), Kolkata.)

(This article is carried in the print edition of January-February 2018 issue of India Foundation Journal.)

India in the Regional Comprehensive Economic Partnership (RCEP) – Need for Caution

Introduction

Regional Comprehensive Economic Cooperation Partnership (RCEP) is an initiative of economic cooperation among 10-member ASEAN countries and six Free Trade Agreement (FTA) partners of ASEAN. A broader Asian regional free trade area was contemplated and East Asia Vision Group (EAVG) recommended the establishment of an East Asian Free Trade Area (EAFTA) to the leaders of ASEAN+3 while Japan proposed Comprehensive Economic Partnership for East Asia (CEPEA) based on East Asia Summit framework. In November 2011, ASEAN proposed its own model for an ASEAN centric regional FTA – the RCEP. RECP was conceived as a competitor for TPP agreement. However, TPP agreement faces deadlock and put under backburner and RCEP is receiving more global attention.

The countries participating in the RCEP also signed a number of bilateral FTAs with other member countries. Since there are a number of cross-country FTAs signed between members, the outcome of RECP may not be substantial. But RCEP is expected to improve efficient functioning of the production networks of the region. Also, the coverage of the RCEP should be substantial compared to FTA+1 for sustainable benefit from the agreement.

RCEP negotiations cover trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, e-commerce, and other issues.

RCEP negotiations will follow eight principles: (1) consistency with the WTO; (2) significant improvements over the existing ASEAN+1 FTAs; (3) facilitation of trade and investment; (4) flexibility (e.g., special and differential treatment) to the least developed asean Member States (AMSs); (5) continuation of existing FTAs; (6) open accession clause; (7) technical assistance and capacity building to the developing and least-developed countries; and (8) parallel negotiation. RCEP negotiations were launched in November 2012, and 18 rounds of negotiation have been held, along with six ministerial meetings and three inter-sessional meetings. But there is limited progress as members have disagreements on the tariff reduction on goods, liberalisation of services and investment framework.

Economic and Trade Profile of ASEAN+6 Countries

Table-1 provides the economic and trade profile of ASEAN countries and its six FTA partners. In terms of land area China, Australia and India are the large economies where China, India and Indonesia are the most populous countries in the group. In terms of GDP size, China is by far the largest economy with 11 trillion US $ in 2015 followed by India which is a 2.9 trillion economy. Australia got the highest per capita income followed by New Zealand and Japan. India and China are the fastest growing economies among bigger countries. FDI inflows into China is way high with 133 billion US$ followed by India at 44 billion US$ in 2015. Trade GDP ratio is highest in Singapore as trade is almost three times the GDP of Singapore.

 

 

Table 1 : Economic and Trade Profile of ASEAN+6 Countries, 2016

Indicators Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam Australia China India Japan Korea New Zealand
Land Area(m)km2 5270 176520 1811570 230800 328550 653080 298170 707 510890 310070 7682300 9326410 2973193 364485 96920 264537
Population (million) 0.423 15.578 257.564 6.802 30.331 53.897 100.699 5.604 67.959 93.448 24.309 1382.323 1326.802 126.324 50.504 4.565
GDP Millions Current US$ 12930 18050 861934 12585 296284 62601 292449 292734 395168 193241 1270596 11382057 2274998 4919661 1392963 180583
GDP Per Capita, Current $ 30,553 1159 3346 1850 9768 1161 2904 52239 5815 2068 52268 8234 1715 38945 27581 39556
Real GDP Growth yony % -0.55 7.04 4.79 7.56 4.97 7.29 5.90 2.01 2.83 6.68 2.40 6.70 7.30 1.0 2.70 3.20
Current A/C Balance (%GDP) 13.26 -9.38 ( e ) -2.02 -18.08 7.78 ( e) -7.30 2.82 20.12 8.08 0.47 2.96 (2015) -1.06 (2015) 3.09 (2015) 7.68 (2015) -2.92 (2015)
Exchange Rate ($) 1.375 4067.75 13389.4 8147.91 12.17 ( e) 1162.615 45.503 1.375 34.248 21697.60 1.345 6.644 67.195 108.793 1160.270 1.437
FDI inflows(M$) 173.24 1700.97 15508.16 1219.82 11121.50 2824.0 5234.03 (j) 65262.40 (j) 10844.64 11800.0 48190.25 133700.0 44485 11388.41 10826.60 2291.63
FDI outflows (M$) 507.94 47.46 6249.62 1.13 9899.50 5601.94 (j) 35485.04 (j) 7776.24 1100.0 6011.70 183100.0 5120.27 145242.43 27274.20 -43.86
Personal Remittances (%GDP) 2.20 1.10 0.74 5.11 10.05 1.33 3.10 (2015) 0.09 (2015) 0.48 (2015)
Trade Balance (%GDP) 8.28(e) -7.77 (e ) 0.83 (e ) -5.86 ( e) 7.78 (e ) -2.10 -5.85 27.32 11.38 ( e) 1.59 (e ) -0.75 2.19 -3.49 0.82 7.38 0.55
Trade Balance (% imports) 24.60(e)

 

-10.12 ( e) 4.38 (e ) -17.48 (e ) 12.17 ( e) -9.50 -19.63 17.96 19.50 ( e) 1.82 ( e) -3.73 12.81 -15.57 5.25 20.50 2.09
Trade (% of GDP) 84.90 126.95 37.39   128.08 42.79 64.90 318.42 126.59 176.77 39.95 37.06 39.81 35.59 83.71 55.01

Source: UNCTAD & World Bank

 

Trade by ASEAN+6 Countries       

Singapore is the dominant country in the ASEAN region with regard to international trade. Singapore is having an export of 346 billion US$ and imports worth 296 billion US$ with a trade surplus of 46 billion US$. Thailand, Malaysia, Vietnam and Indonesia are the other important ASEAN countries having larger trade share in the region. With regard to services also Singapore plays a dominant role.

Table 2 :Merchandise trade and services by ASEAN and its FTA Partners, 2015 (Million US $)

  Merchandise Services
Countries Exports Imports Balance Exports Imports Balance
Brunei 6,353 3,229 3,124 577 ( e ) 2,225 ( e ) – 1,648 ( e )
Cambodia 8,542 12,615 -4,073 3,943 ( e) 1,907 ( e) 2.36 ( e)
Indonesia 150,366 142,695 7,672 21,891 ( e ) 30,384 ( e) -8,493 ( e)
Laos 2,769 5,233 -2,464 810  (e) 566 (e ) 244 ( e)
Malaysia 199,158 176,011 23,147 34,844 ( e) 40,044 ( e) -5,200 ( e)
Myanmar 11,429 16,885 -5,456 4,212

(2014)

2,602

(2014)

1,609

(2014)

Philippines 58,827 70,153 -11,326 28,167 23,924 4,244
Singapore 346,638 296,745 49,893 139,611 143,469 -3,858
Thailand 214,352 202,654 11,698 60,543 ( e) 50,779 ( e) 9,864 ( e)
Vietnam 162,107 166,103 -3,996 11,200  (e ) 15,501 (e ) -4,300 ( e)
Australia 190,271 196,150 (e ) -5,879 53941 56532 -2,590
China 2098,161 1587,431 510,730 208,488 453,014 -244,526
India 264,020 359,065 -95,045 161,845 (e ) 133,710 (e ) 28,135 (e )
Japan 644,933 606,927 38,006 173,821 184,710 28,135
Korea 495,426 406,192 89,234 92,828 110,436 -17,608
New Zealand 33,699 36,067 -2,368 14,886 (e ) 11,967 (e ) 2,919 (e )

Source: Extracted from WITS, World Bank

With regard to FTA partners of ASEAN, China enjoys a dominant position with a trade surplus of 510 billion US$. Japan, Korea and India are the other prominent countries with large trade performance. China’s trade performance is very large and other countries shares are much smaller in relative terms.

Top 5 Trade Partners of  India ASEAN+6 Countries

Table 3 gives the top five exports and import partners of ASEAN countries and its six FTA partners. With regard to Brunei, the top export and import partners are primarily from the Asian region with Japan as the major export destination and whereas Malaysia is the largest import partner.  For almost all countries, China is the largest import partner. For Indonesia, Myanmar, Singapore, Australia, Korea and New Zealand, China is the largest export and import partner. The table shows that for most of the ASEAN plus countries a large proportion of trade is happening among themselves.

Table 3 :Top 5 Trade Partners of ASEAN Plus economies for the year 2016.

Brunei (2015)

 

Top 5 Export Partners Japan Rep. of Korea India Thailand Other Asia
Top 5 Import Partners Malaysia Singapore China US Korea
Cambodia Top 5 Export Partners US UK Germany Japan Canada
Top 5 Import Partners China Thailand Vietnam Other Asia Singapore
Indonesia (2016)

 

Top 5 Export Partners China US Japan Singapore India
Top 5 Import Partners China Singapore Japan Thailand US
Laos Top 5 Export Partners Thailand China Vietnam India Japan
Top 5 Import Partners          
Malaysia

 

Top 5 Export Partners Singapore China US Japan Thailand
Top 5 Import Partners China Singapore Japan US Thailand
Myanmar Top 5 Export Partners China Thailand India Singapore Japan
Top 5 Import Partners China Singapore Thailand Japan India
Philippines

 

Top 5 Export Partners Japan US Hong Kong China Singapore
Top 5 Import Partners China Japan US Thailand Korea
Singapore Top 5 Export Partners China Hong Kong Malaysia Indonesia US
Top 5 Import Partners China Malaysia US Other Asia Japan
Thailand (2015) Top 5 Export Partners US China Japan Hong Kong Malaysia
Top 5 Import Partners China Japan US Malaysia UAE
Vietnam (2015) Top 5 Export Partners US China Japan Korea Hong Kong
Top 5 Import Partners China Korea Japan Other Asia Thailand
Australia

 

Top 5 Export Partners China Japan Korea US India
Top 5 Import Partners China US Japan Thailand Germany
China Top 5 Export Partners US Hong Kong Japan Korea Germany
Top 5 Import Partners Korea Japan Other Asia US Unspecified
India

 

Top 5 Export Partners US UAE Hong Kong China UK
Top 5 Import Partners China US UAE Saudi Switzerland
Japan Top 5 Export Partners US China Korea Other Asia Hong Kong
Top 5 Import Partners China US Australia Korea Other Asia
Korea

 

Top 5 Export Partners China US Hong Kong Vietnam Japan
Top 5 Import Partners China Japan US Germany Other Asia
New Zealand Top 5 Export Partners China Australia US Japan Korea
Top 5 Import Partners China Australia US Japan Germany

Source: Extracted from WITS, World Bank

 

ASEAN PLUS Export Share

The table shows the intra-regional export share of ASEAN six countries. China, Japan and Korea are the largest trade partners of Australia. China is having larger export share with Japan. China, Japan, India and Singapore are the important export destinations of Indonesia. India does not enjoy large export share with the ASEAN plus region. For Japan, China if the large export market followed by Korea. More than one-fourth of Korea’s export is going to China only. For Malaysia, China and Singapore are the important trade partners followed by Japan. For New Zealand, Australia and China are important while Singapore is having larger export share with China and Malaysia. China and Japan are the important export destinations for Thailand whereas China, Japan and Korea are important for Vietnam.

Table 4 :Export Share of ASEAN Plus Countries for the year 2015

  Exporting Nations
  AUS BRU CHN INDO IND JPN CAM KOR LAO MYAN MAL NZ SIN THA VIET
AUS 0.00 3.49 1.77 2.46 1.23 2.06 1.03 2.06 0.11 0.05 3.60 15.98 3.32 4.56 1.79
BRN 0.02 0.00 0.06 0.06 0.01 0.02 0.02 0.05 0.00 0.01 0.34 0.01 0.22 0.05 0.02
CHN 32.49 1.52 0.00 10.01 3.62 17.49 4.75 26.03 34.82 39.61 13.02 18.32 13.76 11.05 10.23
IDN 1.99 1.62 1.51 0.00 1.09 1.85 0.17 1.49 0.01 1.24 3.73 1.72 8.18 3.65 1.76
IND 4.23 9.06 2.56 7.80 0.00 1.30 0.12 2.28 1.11 8.31 4.06 1.35 3.06 2.47 1.52
JPN 15.88 36.35 5.97 11.98 1.71 0.00 6.69 4.86 1.66 3.99 9.46 6.29 4.39 9.37 8.70
KHM 0.02 0.00 0.17 0.29 0.05 0.05 0.00 0.12 0.58 0.00 0.12 0.02 0.28 2.31 1.48
KOR 7.08 15.63 4.46 5.10 1.37 7.04 1.61 0.00 0.21 2.40 3.23 3.32 4.18 1.91 5.50
LAO 0.01 0.00 0.05 0.01 0.02 0.02 0.06 0.03 0.00 0.00 0.01 0.00 0.02 1.98 0.32
MMR 0.06 0.00 0.42 0.41 0.33 0.17 0.02 0.13 0.01 0.00 0.39 0.06 0.71 1.95 0.23
MYS 1.82 4.62 1.93 5.07 1.85 1.92 1.57 1.47 0.20 1.52 0.00 1.99 10.89 4.75 2.21
NZL 3.33 5.23 0.22 0.29 0.12 0.34 0.07 0.24 0.02 0.01 0.51 0.00 0.50 0.62 0.20
PHL 0.62 0.39 1.17 2.61 0.49 1.52 0.20 1.58 0.08 0.10 1.69 1.36 1.85 2.80 1.24
SGP 2.71 3.50 2.28 8.40 2.95 3.18 0.69 2.85 0.19 5.50 13.91 1.71 0.00 4.07 2.01
THA 1.73 8.64 1.68 3.66 1.18 4.48 4.05 1.21 33.77 27.54 5.70 1.63 3.97 0.00 1.96
VNM 1.39 0.74 2.90 1.82 2.03 2.01 2.17 5.27 18.02 0.52 2.23 1.10 3.50 4.16 0.00
WLD 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Source: Computed based on data extracted from WITS

ASEAN PLUS IMPORT SHARE

Australia’s imports are coming mainly from China and Japan. Malaysia is the largest import partner of Brunei. China’s largest import partner from the region are Korea and Japan. India imports substantially from China. Indonesia imports large share from China, Singapore, Japan, Korea and Malaysia. One-fourth of the Japanese imports are coming from China. Imports from China are dominant in ASEAN countries and the FTA partners of ASEAN.

Table 5 :Import Share of ASEAN Plus Economies for the year 2015

  Importing Nations
  AUS BRN CHN IDN IND JPN KHM KOR LAO MMR MYS NZL SGP THA VNM
AUS 0.00 1.36 4.79 3.38 2.41 5.56 0.29 3.77 0.37 0.34 2.55 11.91 1.08 2.11 1.22
BRN 0.15 0.00 0.01 0.09 0.16 0.37 0.00 0.22 0.00 0.00 0.08 1.01 0.05 0.36 0.03
CHN 23.22 10.43 0.00 20.63 15.77 25.67 36.95 20.68 18.88 38.05 18.87 19.66 14.20 20.52 29.82
IDN 2.11 2.67 1.29 0.00 3.56 3.16 3.16 2.03 0.23 3.47 4.53 1.75 4.84 3.28 1.65
IND 1.80 1.13 0.87 1.92 0.00 0.78 1.07 0.97 0.38 2.80 2.21 1.15 1.94 1.31 1.60
JPN 7.42 7.41 9.30 9.30 2.47 0.00 3.98 10.51 1.91 9.08 7.82 6.57 6.27 15.61 8.55
KHM 0.06 0.00 0.04 0.01 0.01 0.15 0.00 0.05 0.01 0.00 0.09 0.03 0.05 0.32 0.57
KOR 5.47 9.06 11.36 5.91 3.35 4.29 4.33 0.00 1.28 2.44 4.52 3.70 6.14 3.52 16.64
LAO 0.00 0.00 0.10 0.00 0.04 0.02 0.19 0.01 0.00 0.00 0.00 0.01 0.00 0.73 0.35
MMR 0.02 0.01 0.35 0.11 0.26 0.14 0.03 0.12 0.00 0.00 0.10 0.01 0.04 1.78 0.03
MYS 3.71 21.13 3.47 5.98 2.45 3.44 1.76 1.97 0.32 3.13 0.00 3.35 11.14 5.95 2.52
NZL 2.87 0.15 0.43 0.45 0.14 0.38 0.04 0.28 0.04 0.10 0.44 0.00 0.24 0.30 0.23
PHL 0.28 0.26 1.23 0.48 0.13 1.42 0.09 0.74 0.02 0.12 0.95 0.26 1.53 1.18 0.54
SGP 3.49 14.00 1.80 12.64 1.89 1.26 4.74 1.82 0.21 21.65 11.98 3.47 0.00 3.60 3.64
THA 5.12 3.75 2.42 5.67 1.45 3.27 14.70 1.11 58.82 11.58 6.09 4.16 2.62 0.00 4.99
VNM 1.68 1.18 1.94 2.22 0.69 2.42 8.72 2.25 13.94 1.59 2.75 1.17 1.21 2.02 0.00
WLD 100.00 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Source: Computed based on data extracted from WITS

India’s trade with ASEAN PLUS Countries

India’s exports to ASEAN increased from U.S. $ 10.41 billion in 2005-06 to US$ 25.20 billion in 2015-16 and imports over the same period quadrupled from US$ 10.81 billion in 2005-06 to US$ 39.84 billion. This reflects a compound annual growth rate (CAGR) of about 9.2 percent in exports to the ASEAN region and close to 14 percent per annum growth in imports during 2005-06 to 2015-16. Concomitantly, India’s trade deficit with the ASEAN surged from US$ 0.5 billion in 2005-06 to US$ 14.6 billion. In terms of market share, the share of imports in India’s total imports from ASEAN went up from 7.3 percent in 2005-06 to 10.5 percent in 2015-16, over the same period share of exports to ASEAN in India’s total exports fell from 10.1 percent to 9.6 percent. With regard to India’s trade with individual countries of the region, India runs in to trade deficit with major countries of Southeast Asia. With regard to ASEAN plus countries, India has a trade deficit of 88 billion US$ of which China alone accounts for 52 billion US$. India also has trade deficits with Australia (6.15Bn. US$), Indonesia (11 Bn. US$), Korea (9.48 Bn. US$),Japan (5.10 Bn. US$), Malaysia (4.67 Bn. US$). India got trade surplus with Vietnam (2.68 Bn. US$) and a marginal trade surplus with Cambodia, Philippines and Singapore.

Table 6 : India’s Trade with ASEAN Plus Economies

Partner Name Export Value (Million $) Import Value (Million $) Trade Balance (Millions $)
ASEAN plus FTA partners 47710.76 135805.34 -88,094.58
Australia 3252.81 9411.87 -6,159.05
Brunei 30.39 607.78 -577.39
China 9576.58 61604.43 -52,027.85
Indonesia 2868.88 13902.02 -11,033.14
Japan 4529.72 9635.16 -5,105.44
Cambodia 145.35 42.99 102.36
Korea, Rep. 3609.63 13087.66 -9,478.02
Lao PDR 51.26 142.95 -91.69
Myanmar 859.97 1016.30 -156.33
Malaysia 4892.06 9559.92 -4,667.86
New Zealand 313.90 549.84 -235.94
Philippines 1304.35 518.19 786.16
Singapore 7805.08 7395.99 409.09
Thailand 3113.56 5650.14 -2,536.58
Vietnam 5357.21 2680.09 2,677.12
World 264,381.00 390,744.73 -126,363.73

Source: Data extracted from WITS

Impact of India ASEAN Plus FTA – Smart Simulation Analysis

The economic impact of proposed India-ASEAN plus Free Trade Agreement is analysed using World Integrated Trade Solutions (WITS) tool. WITS is a data extraction and tariff simulation software using databases maintained by UNSD COMTRADE, UNCTAD TRAINS, and WTO IDB/CTS. The SMART simulation model of the WITS allows users to estimate the partial equilibrium impact of tariff reductions for a single market at a time. WITS simulation is largely used to simulate the impact of preferential trade agreements. This simulation involves two aspects. First, a database has to be extracted to conduct simulation exercise. Secondly, simulation parameters are defined to get the impact of a tariff cut arising out of a Free Trade Agreement (FTA).

The simulation exercise for the study used bilateral trade data between India and ASEAN plus countries for the year 2015. India is cutting tariff and the beneficiary Countries are ASEAN and its five FTA partners. Tariff cut is done across the board and all products are affected by that. Since the attempt is to understand the impact of FTA, the new tariff rate is kept at zero percent. There arise five results from the simulation exercise. They are total trade effect, export effect on partners, effect on average duty, welfare effect and tariff revenue effect.

When India initiates100 percent tariff cut against ASEAN plus countries as part of the Free Trade Agreement, they gain access to theIndian market and the exports to India will increase substantially. Table-7 provideschanges in the exports of10-member ASEAN countries and five FTA partners of ASEANdue to 100 percent tariff reduction by India. The biggest trade gains are arising to countries against which the tariff cuts are effected by India. China gains most with an increase of 13.52 billion (22.49 percent), followed by Malaysia, a (4.74 billion $), Korea (3.36 billion $), Thailand (2.19 billion) and Japan (2.18 billion US$). The countries which are losing most from India ASEAN plus FTA is Indonesia (2.77 billion), US (532 million), Germany (523 million), Italy (180 million). Interestingly, Indonesia which is an FTA partner is losing out asubstantial trade to other members of the ASEAN plus group.

Table 7 :Major Gainers from India ASEAN Plus FTA – Smart Simulation

Partner Name Product Code Exports Before in 1000 USD Exports After in 1000 USD Export Change in Revenue in 1000 USD Percentage Change in Exports
China  Total 60,120,801 73,642,347 13,521,546 22.49
Malaysia  Total 9,493,390 14,228,497 4,735,107 49.88
Korea, Rep.  Total 12,878,505 16,233,598 3,355,093 26.05
Thailand  Total 5,417,513 7,608,380 2,190,867 40.44
Japan  Total 9,367,973 11,543,881 2,175,907 23.23
Vietnam  Total 2,536,126 3,882,464 1,346,338 53.09
Singapore  Total 7,380,912 8,577,367 1,196,456 16.21
Australia  Total 9,243,673 10,284,401 1,040,728 11.26
Philippines  Total 505,562.5 620,169.3 114,606.9 22.67
New Zealand  Total 544.125.6 626,297.8 82,172.12 15.10
Brunei  Total 607,783.4 608,538.4 755.072 0.12

Source: Calculated based on WITS SMART simulations

Table 8 :Major Losers from India ASEAN Plus FTA – Smart Simulation

Partner Name Product Code Exports Before in 1000 USD Exports After in 1000 USD Export Change in Revenue in 1000 USD Percentage Change in Exports
Indonesia  Total 13553819 10786291 -2,767,528 -20.42
United States  Total 19628746 19096118 -532,628 -2.71
Germany  Total 11332232 10808555 -523,677 -4.62
Italy  Total 3967955 3787745 -180,210 -4.54
Taiwan, China  Total 3523306 3352020 -171,286 -4.86
Switzerland  Total 21075113 20914464 -160650 -0.76
United Kingdom  Total 5311658 5155350 -156308 -2.94
United Arab Emirates  Total 20265670 20133665 -132005 -0.65
France  Total 3122004 3004414 -117591 -3.77
Saudi Arabia  Total 21348540 21253981 -94559.5 -0.44
Russian Federation  Total 4514333 4425048 -89285 -1.98

Source: Calculated based on WITS SMART simulations

 

The simulations show that India’s imports will increase by 23.58 billion if theFTA is signed with ASEAN plus countries. Because of the elimination of tariffs with ASEAN plus countries, there will be a reduction in customs duty to the tune of 19.3 billion US dollars. Because of the reduction in tariff and the consequent reduction in prices, there will be a consumer surplus to the tune of 1.92 billion US$.

Table 9 :Trade, Revenue and Welfare effect of India-BIMSTEC FTA

Market View of India-ASEAN PLUS FTA
Imports Imports Tariff Tariff Tariff  
Before

($ ‘000)

Change In Revenue ($ ‘000) New Revenue ($ ‘000) Change in Revenue

($ ‘000)

Consumer Surplus

($ ‘000)

377535382

 

23,581,967.25

 

40,965,439.83

 

21,623,485.41

 

-19,341,954.42

 

1,915,040.615

 

Revenue Impact of India-ASEAN PLUS FTA
Revenue Effect ($ ‘000) Trade Total Effect ($ ‘000) Trade Value

($ ‘000)

Old Weighted Rate (%) New Weighted Rate (%)  
-12147512.13

 

23,581,967.25

 

377,535,382

 

10.85

 

5.39

 

 
Welfare Impact from India-ASEAN PLUS FTA
Trade Total Effect ($ ‘000) Welfare ($ ‘000) Old Weighted Rate (%) New Weighted Rate (%)    
23,581,967.25

 

2,224,771.425

 

5.39

 

10.85

 

   
Trade creation from India –ASEAN PLUS FTA
Trade

Total Effect ($ ‘000)

Trade

Diversion Effect ($ ‘000)

Trade Creation

Effect ($ ‘000)

Price

Effect

Old Simple Duty Rate (%) New Simple Duty Rate (%)
23,581,967.25

 

0.097

 

23,581,967.25

 

0

 

10.85

 

5.39

 

Source: Calculated based on WITS SMART simulations

The total trade effect of India ASEAN plus FTA is 23.58 billion US $ of which the trade creation effect is 12.58 billion US$ and the trade diversion effect is only 79 US$the total welfare effect is to the tune of 2.22 billion US$. This showed that the India ASEAN plus is a highly trade creation FTA with no trade diversion and substantial welfare improvement.

 

Conclusion

The simulation exercise showed that India’s import from ASEAN plus countries will substantially increase if the FTA comes into existence. China which enjoys a huge trade surplus with India will further improve its trade performance and increase the trade balance. India’s advantage will be primarily in the services sector and it is better to complete the comprehensive trade agreement which includes trade, services and investment. Also, protection of sensitive product categories with higher Rules of Origin (RoO) support is necessary. India’s experiences with the existing FTAs is not very encouraging. India should ensure its concerns addressed before signing the FTA. Already China is pressurising ASEAN to go ahead with the agreement without India. This kind of Chinese hegemony should be resisted and an institutional framework should be created for the success of RCEP.

References

A Blueprint for Growth ASEAN Economic Community 2015: Progress and Key Achievements http://www.asean.org/storage/images/2015/November/media-summary-ABIS/AEC%202015%20 Progress%20and%20Key%20Achievements_04.11.2015.pdf

ASEAN Integration Report 2015 http://www.asean.org/storage/images/2015/November/media-summary-ABIS/ASEAN%20 Integration%20Report%202015.pdf

ASEAN Community in Figures – Special Edition 2014: A Closer Look at Trade Performance and Dependency, and Investment http://www.asean.org/storage/images/resources/2014/Oct/ACIF%20Special%20Edition%202014_ web.pdf

ASEAN International Merchandise Trade Statistics Yearbook 2014 http://www.asean.org/storage/images/2015/March1/asean_publication/Preview%20IMTS%2012-032015%202.pdf

ASEAN Investment Report 2015 Infrastructure Investment and Connectivityhttp://www.asean.org/storage/images/2015/November/asean-investment-report/ASEAN%20 Investment%20Report%202015.pdf

David Scott, India’s ‘Extended Neighbourhood’ Concept: Power Projection for a Rising Power, India Review 8, No. 2 (2009), accessed June 11, 2017, doi: 10.1080/14736480902901038. 5. For a broad overview of India’s engagement with East and Southeast Asia, see Harsh V Pant, Indian Foreign Policy: An Overview (Manchester: Manchester University Press, 2016), pp. 137-148.

Das, Sanchita Basu The Future of Trade Diplomacy in East Asia, PERSPECTIVE, RESEARCHERS AT ISEAS – YUSOF ISHAK INSTITUTE ANALYSE CURRENT EVENTS, Singapore, 14 February 2017,

Deeparghya Mukherjee, “India-ASEAN economic linkages: Challenges and Way Forward,” Ideas for India, 10 March 2016, accessed June 21, 2017, http://www.ideasforindia.in/article.aspx? article_id=1593.

 

(Dr. B.P. Sarath Chandran is an Associate Professor at
VVM’s Shree Damodar College of Commerce & Economics, Margao, Goa.)

 

(This article is carried in the print edition of January-February 2018 issue of India Foundation Journal.)

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India Ideas Conclave 2017, Goa

Tamil Nadu Young Thinkers Meet 2017

The second edition of the Tamil Nadu Young Thinkers Meet (TNYTM) was organized by Tamil Nadu Young Thinkers Forum (TNYTF) in association with India Foundation and Indic Academy at Puducherry on 7th and 8th October 2017. Over 50 participants from various parts of Tamil Nadu came together for a candid exchange of ideas on a wide spectrum of topics such as the importance of Tamil culture, the need for academic rigour, foreign policy, understanding social exploitation & integration, spirituality and development, the role of media in enabling quality public discourse, and the significance of Jammu and Kashmir to the rest of India.

The speakers included Dr. Kiran Bedi, Lieutenant Governor of Puducherry; Shri Ila Ganesan, Member of Parliament, Rajya Sabha; Prof. Makarand R. Paranjape, Jawaharlal Nehru University; Prof. P. Puneeth, Associate Professor, Jawaharlal Nehru University; Dr. David Frawley, Author and Columnist; Shri Hari Kiran V, Founder, Indic Academy; Shri Abhijeet Iyer Mitra, Senior Research Fellow, Institute of Peace and Conflict Studies; Shri Anand Ranganathan, Consulting Editor and Columnist, News Laundry; Ms. Aarti Tikoo Singh, Senior Assistant Editor, Times of India and Shri Ma Venkatesan, Author and Historian. Rohini Manohar of Chennai Yoga Studio conducted a calming yoga session. As a part of the guest talk series, Prof Madhusudhanan Kalaichelvan, Associate Professor at the Mohammed Sathak AJ Academy of Architecture spoke on the need to enhance public participation to conserve temples. Dr. Rohini Rau spoke on how much India has enabled her to pursue her goals as a doctor cum sailor.

The participants at the Meet were young thinkers between the ages of 25 and 40 years, from varied professional backgrounds such as IT, social studies, law, sports, education, media, cybersecurity, medicine, social entrepreneurship, government etc. There was also representation from socio-spiritual organizations and grass-root leaders from the subaltern communities in Tamil Nadu. It was a gathering of young minds engaging on thought-provoking topics of relevance not just to Tamil Nadu but to the entire nation. The Meet enabled participants to develop a holistic perspective to understand these topics. The group had the opportunity to not only listen to experts and practitioners from the field but also to interact with them via open, healthy and forthright discussions.

(This article is carried in the print edition of November-December 2017 issue of India Foundation Journal.)

UNCLOS: Solutions for Managing the Maritime Global Commons

Maritime issues have emerged as one of the most important security issues in the Indo-Pacific, driving major powers to strategically adjust their policies towards the region. During the past decade, maritime disputes have escalated to the point where the regional order is being affected and the risk of subsequent armed conflict cannot be entirely ruled out.

Considering the strategic significance of Andaman & Nicobar Islands and their proximity to countries of Southeast Asia, India Foundation organised a three-day conference in Port Blair on “UNCLOS: Solutions for Managing the Maritime Global Commons” on 4-6 October, 2017. The Conference highlighted the importance of rule based international order especially in the maritime domain.  The conference witnessed participation from 14 Countries. It was inaugurated by Shri Jagdish Mukhi, Lt Governor, Andaman& Nicobar Islands. Shri M. J. Akbar, Minister of State for External Affairs delivered the Inaugural Address and Vice Admiral Vinay Badhwar, Chief Hydrographer to Government of India delivered the special address in the inaugural session. Ambassadors, diplomats, a former ITLOS judge, experts from academia and Think Tanks attended the conference.

Shri M. J. Akbar highlighted the importance of freedom of navigation in sea and importance of rule based order like UNCLOS in 21st Century. He said that seas must be a shared space for prosperity because conflict for resources will ultimately lead to conflict in the region. This century will be energised by new ideas and new technological innovations. He said that India was going to be a major player regarding technology. He also explained as to why India is also emerging as a naval power. He pointed out that 21st Century was going to be the era of seas, skies & space and not of land. Seas, skies and space have no boundaries. He said that we need to shift our focus from land based approach to sea based strategic thinking because if we see India from land based map then we only look at its size but if we see India from sea then we realize the potential of its outreach with various other continents. India’s outreach through seas to the outer world is significantly different from its territorial size. India’s reach extends from Gulf of Aden in west to Malacca Strait in east and it encompasses far bigger outreach in terms of strategic space.

Shri Jagdish Mukhi, Lt. Governor, Andaman & Nicobar Islands, was the Chief Guest in the inaugural session. He stated that United Nations Convention on the Law of the Sea (UNCLOS) is widely referred to as the ‘Constitution of the Oceans’. It sets out the legal framework within which all activities in the oceans and seas must be carried out, including conservation and sustainable use of the oceans and their resources. He highlighted how UNCLOS also sets forth the legal framework for the sustainable development of the oceans and seas which aims at balancing the rights and obligations of coastal States with those of other States. He also pointed out that abiding all the International laws and decisions of International Tribunals by each country of the world is very essential for global peace. He expressed hope that the maturity exhibited by the littoral states in the Bay of Bengal will also be exhibited by all modern nation states, especially to resolve the outstanding maritime disputes in Indo-Pacific region. He said, “The international community must renew and intensify its efforts to strengthen capacity building with a view to protecting oceans and providing an opportunity for all States to use their resources peacefully, equitably and sustainably for generations to come. To that end, an increased awareness and understanding of the inter-linkages between global legal and policy frameworks and how they can support national and local frameworks, and addressing capacity-needs is also essential. Effective cooperation and coordination, as well as partnerships across all levels and sectors will be critical in that regard. Such cooperation can also be facilitated and stimulated by global-level dialogue and experience-sharing across regions.”

Vice Admiral Vinay Badhwar, Chief Hydro-grapher, Govt. of India, emphasised the relevance of UNCLOS and its continuing vitality in today’s era. He stressed that in today’s time the warfare between traditional States vs States has been intruded by non-State actors which has also threatened the maritime trade and international commerce in the important sea lanes of communications.

Shri Ram Madhav, Director, India Foundation, chaired the session in which keynote address was delivered by Dr. C. Raja Mohan. Shri Madhav said, “All nations must abide by the law of the sea. Just as constitution of land must be understood by citizens in order for it to be better implemented, similarly Law of the Seas must also be understood by people.” He added, “In last few years specially, India has started looking eastwards in its foreign policy approach as is evident in the “Act East” policy. Seaward or ocean-ward thinking in the strategic thought process of Indian minds has started. India as a country has always reiterated its commitment on freedom of navigation and over-flights in the shared space of seas. So in this context UNCLOS becomes very important and thus UNCLOS needs to be strictly adhered by all nations in the region. At a time when global power axis is shifting from Pacific-Atlantic to Indo-Pacific region, the countries in the Indo-Pacific region also need to have a greater say in the evolution and modification of UNCLOS based on present day regional order.”

Dr C Raja Mohan, Director, Carnegie India, in his keynote address spoke of the centrality that the islands of the region will occupy when India realises its maritime destiny. He touched upon the intangibility of the connection between law and power, tensions in the South China Sea, and freedom of navigation. He spoke of the vast expanse that international law has been able to occupy in the last century. He spoke of the enduring tension between law and power, potential pathway to rules based order and concluded by focussing on creating a cooperative framework in the Bay of Bengal.

Dr. Martin Ney, Ambassador of Germany to India, participated in the panel discussion on the ‘Enduring legitimacy of UNCLOS and its Continuing Vitality in 21st Century’, and reiterated that UNCLOS continues to be valid as the all-encompassing reference point concerning any activity in maritime areas, as the single most important source of legitimacy. Ambassador Dr. Ney said, “This concept of UNCLOS being a legal order is still valid today. However, it does need to be upheld and defended. The UN General Assembly Resolution on the Law of the Sea stipulates that: “The convention sets out the legal framework within which all activities in the oceans and seas must be carried out.” Even though we have seen challenges to this notion in recent years, we have to ask: If we were not to accept this convention to be the central framework for all activities, what would be alternatives? I know of none.” Supporting the Tribunal’s award in the South China Sea arbitration, Ambassador Dr. Ney pointed out, “I think that the award of the Tribunal is an excellent example to show the continued legitimacy of UNCLOS and that the Tribunal accomplished a great deal to support its continuing relevance in the 21st century… Any claim saying that mentioned issues concerning the South China Sea only concern adjacent countries and not more distant parties are simply false. Why do they concern all state parties to UNCLOS?  Because what is at stake is also the freedom of the high sea. Trading nations like India and Germany have a huge stake in keeping shipping lines open.”

Mr Ton Sinh Thanh, Ambassador of Vietnam to India, underscored the importance of the South China Sea in terms of its strategic location and natural resources. He noted two types of disputes in the South China Sea at present which are territorial disputes over islands and disputes over maritime boundary, and they are related to each other. He pointed out that The Hague Tribunal’s verdict over the Philippines’ lawsuit against China is a foundation to solve not only issues between the Philippines and China but also disputes between parties with sovereign claims in the South China Sea. Ambassador Thanh said that the South China Sea situation remains complicated and the only solution to this problem is peaceful negotiation in line with international law, especially the UNCLOS. He urged parties with sovereign claims in the South China Sea to avoid complicating the situation by not altering the status quo of this area and respecting the Declaration on the Conduct of Parties in the Sea. Ambassador Thanh also stressed the role of the collective strength of regional nations and powerful countries in the world, including India.

Vice Admiral, Bimal Verma, AVSM, Commander-in-Chief, Andaman & Nicobar Command, Indian Navy, spoke in the valedictory session of the conference. He focussed on the terrorism threats in the maritime domain, ways to promote stability across the Indo-Pacific region, increasing free and fair trade and strengthening energy linkages. He suggested that there is a need to enhance understanding of the crucial maritime issues of freedom of navigation, good order at sea and the legitimate use of the maritime global commons.

Delivering the valedictory address Dr Harsha De Silva articulated the vision of the Sri Lankan government pertaining to the seas and the laws of the sea. He spoke of the opportunities that lie in the ocean for the growth of Sri Lanka and also the region at large. He spoke of the significance of the security of the seas to keep the inter and intra-regional trade going. GDPs of the countries like Bangladesh, Vietnam and Sri Lanka are on an upswing, there is economic transformation in the region along with infra structural development owing to the growing trade in the region. He concluded with an appeal to all the stakeholders of the region to commit themselves to strengthen UNCLOS and work for the development and prosperity of the region.

(This article is carried in the print edition of November-December 2017 issue of India Foundation Journal.)

Centennial Commemoration of the Battle of Haifa

Many battles have been fought but there are some battles that have changed the course of history and human destiny. One such battle was the Battle of Haifa fought on the slopes of the sacred Mount Carmel in present day Israel on 23 September 1918. In the wake of the 100 Years of the Battle of Haifa, the Centennial Commemoration was organised by India Foundation in association with Nehru Memorial Museum and Library (NMML) and Indian War Veterans Association on 20 September 2017 at NMML, New Delhi.

The Battle of Haifa was a great victory for Indian Cavalry (then in British Imperial Service), led by the Indian Officers, who displayed unmatched valour, courage and devotion to duty. The Indian troops faced opposing camps of Ottoman empire in large numbers and the victory of the Indian troops subsequently led to the demise of the mighty Ottoman Empire. It also saved the life of Abdul Baha, the spiritual head of the Baha’is, whose message was that of universal brotherhood and equality.

In the commemoration speakers gave insights of the history of the Battle of Haifa and also shared the information about the officers of the Indian troops who fought the battle. Recently during the visit of Prime Minister Narender Modi to Israel, he paid homage to the Indian heroes of the war.

Shri Ram Madhav, National General Secretary of the BJP and Director, India Foundation, in his inaugural address said, “Battle of Haifa is an epitome of a war to achieve peace and restore the natural stability.” He also remembered the unmatched valour of the Indian officers in the troop who laid down their lives to free Abdul Baha and bring victory to the Bahai Community. He stressed on the peace centric element of the war and said “History should not be about fighting in wars and wining it but it should be more about the peace centric element of the war.” He also reminded that the battle of Haifa is considered to be a landmark battle not only because of its outcome but also because it was the last true cavalry charge in the annals of history as thereafter aircraft, tanks and armoured cars had made their appearance in the battle field, leaving no role for horsed cavalry.

Maj. Chandrakant Singh, VrC, Secretary, Indian War Veterans Association, shared significant facts about the battle. He said, “Before the occurrence of the Battle of Haifa, India already had its footprints in sands of time in the Middle East.” He shared glimpses of temples found in those areas. He recalled the role of Sir Pratap Singh who was a part of the battle of Haifa and how he took the responsibility of funding the war requirements of the Indian troops. An unintended though important consequence of the battle of Haifa was the induction of Indians as officers in the British Indian Army.

Brig M S Jodha, Gp. Cdr, NCC, Tejpur, opined that the outcome of the battle of Haifa laid the foundation for the freedom struggle amongst the Indians against the British. He showcased the aggressiveness and strategy with which the Indian troops fought the battle of Haifa. He said “The Jodhpur and Mysore lancers coordinated in an exemplary manner to attack the position acquired in defence by the Ottoman Empire.” Brig M S Jodha gave a brief account on the state of the battlefield. He said “You had steep tracks, Keshon River which run parallel to Mount Carmel but nothing could stop the Indian troops from sealing the victory.”

Col Bhawani Singh, former Commandant, President’s Body Guard and 61 Cavalry (successor to the Jodhpur Lancers), observed that no more remarkable cavalry action of its scale was fought in the whole course of the campaign. He remarked, “In Palestine, the Jodhpur Lancers demonstrated a regiment being officered entirely by Indians and it was equal to if not better than any other regiment of any army in the world.” He also mentioned the role of different Indian officers in the war and how they administered the troops.

Shri Bhaskar Rao, Addl DG, Karnataka Armed Forces, said “Mysore Lancers were positioned behind the Jodhpur Lancers while the Indian troops were attacking the armoured troops of the Ottoman Empire.” He added, “Mysore raised its own cavalry which was equally strong when compared to the other regiments.”

Shri Wajahat Habibullah, former Chief Information Commissioner and former Chairperson, National Commission for Minorities, said “Huge coordination amongst the troops fighting for the same cause was the major reason behind the victory of the forces in the battle of Haifa.” He also said that it was the Indian Officers that played very significant role giving the command and controlling the major coordination of the troops.

Ms Nazneen Rowhani, President, Bahai Association, in her address narrated who Abdul Baha was and how the Mysore Lancers rescued him. She said, “There was an intelligence report about the threat on the life of Abdul Baha and the Mysore Lancers were given the charge of rescuing Abdul Baha.” She added that Abdul Baha praised the Indian Army and said “For two hundred years seven sovereign powers of the world tried to rescue Palestine from the hands of the Turks but the Indian Cavalry rescued the place so speedily and the quickness exhibited by the Indian Troops was breathtaking.”

Chief Guest of the programme, Shri Gajendra Singh Shekhawat, Union Minister of State for Ministry of Agriculture & Farmers Welfare, in his valedictory address observed that the history of many battles not only the Battle of Haifa remains untouched by the young brigade of our country and that we need to put in more efforts to recognise the history and veterans of the war. He stated “War is not won only because of the weapons and artilleries you have, but instead by bravery and valour.”

(This article is carried in the print edition of November-December 2017 issue of India Foundation Journal.)

Smart Border Management Conference 2017

The 2nd edition of the conference on ‘Smart Border Management’ was organised by India Foundation in partnership with FICCI at the FICCI auditorium on 18-19 September 2017. The conference brought various stakeholders together on a common platform to address the fundamental challenge of border management: How to enhance trans-border movement of peoples, goods and ideas while simultaneously restricting all forms of illegal activities across the borders?

Mr. Kiren Rijiju, Minister of State for Home Affairs, Government of India, in his inaugural address underlined the need for enhanced coordination and collaboration among diverse government agencies and stakeholders besides adoption of technology and change in the mindset for stepping up India’s border management system. With respect to mindsets, the Minister said that other countries encourage civilian settlements in border areas and promote trade and commerce there. These areas are well connected by surface communication means and have all amenities as available in the hinterland. India, on the other hand has isolated its border areas and restricted civilian movement and commerce. He said it was imperative to develop our border areas and promote commercial activity in all such areas.

Mr. Rijiju said that the engagement of multiple agencies in border management was resulting in delay of implementation of policies and adoption of technology. He cited an example where the tedious tender process and other formalities caused unwarranted delay in installing a full body scanner and emphasised the need to address such issues immediately. He said that the government is working towards improving security and infrastructure in border areas and along the coast and that national security cannot be compromised at any cost. Towards this, the government is working towards strengthening marine police to secure India’s long coastal borders. He added that to make India’s border management system robust, secure and well-guarded, it was essential to have seamless coordination between policy makers and defence and security agencies.

Mr. Rijiju informed the audience that for sealing the India-Pakistan border, a smart technology aided fence will be in position by December 2018. He also highlighted the fact that India believes that borders were not for dividing people but for bringing them together and engaging in trade and commercial activities for bringing prosperity.

On the occasion, the Minister released the FICCI-PwC Report ‘Smart Border Management – Indian Coastal & Maritime Security’.

Dr. Subhash Bhamre, Minister of State for Defence, Government of India, said that varying challenges were posed by each border state in India. The major challenges in border security were cross-border terrorism, insurgency, infiltration, narcotics, separatists’ movement and smuggling. There was a need for coordinated and concerted efforts to strengthen policing and guarding of border areas while developing infrastructure. He added that power of technology was needed to be leveraged for effective border management system.

Speaking about Comprehensive Integrated Border Management System (CIBMS), which has been deployed by the Government of India on a pilot basis on select terrains to boost India’s security systems, Mr. K. K. Sharma, Director General, Border Security Force (BSF), said that the main components of the system were virtual fencing, command and control system, response mechanism, power backup, maintenance and training. He added that with the adoption of CIBMS, India was looking at moving towards network-centric surveillance from human-centric to counter the limitations of human resource. He added that adoption of advanced technology and reduced human resource intervention was needed to strengthen India’s defence systems.

Mr.Rajan Luthra, Co-Chair, FICCI Committee on Homeland Security & Head, Special Projects, Chairman’s Office, Reliance Industries Ltd., said that smart borders on one hand should allow seamless movement of authorised people and goods, while on the other, minimise cross border security challenges using innovation and technology enablement. Adoption of advanced technologies for border control and surveillance, and the development of integrated systems for capture and exchange of data will facilitate enhanced effectiveness of the operational agencies with enhanced security. He added that over the long term, smart border management will also have to incorporate systems that digitally monitor patterns of activity through and around
border areas to root out organised crime and anti-national events.

In his theme presentation, Mr.Dhiraj Mathur, Partner & Leader, Aerospace and Defence, PwC India, said that the FICCI-PwC report elucidates the present status of various programmes that have been undertaken by the government, both in the hinterland and in coastal states. It highlights the efforts required for enhancing costal and maritime security with support from industry, especially on the technology, infrastructure and capacity building fronts, and for building an integrated and collaborative coastal and maritime security management framework.

In his special address on ‘Countering Transnational Organised Crime through Effective Border Management,’ Mr. Sergey Kapinos, Representative – The United Nations Office on Drugs and Crime (UNODC) Regional Office for South Asia, said that UNODC is formulating an action plan for 2018 – 21 which will spell out the threat assessment of transnational organised crime in South Asia. The details of the plan will be shared with countries of the region to enable them to take effective and timely measures for putting in place an integrated border management system.

Transnational organised crime manifests in many forms, including trafficking in drugs, firearms and even persons. At the same time, organised crime groups exploit human mobility to smuggle migrants and undermine financial systems through money laundering. The vast sums of money involved can compromise legitimate economies and directly impact public processes by ‘buying’ elections through corruption. It yields high profits for its culprits and results in high risks for individuals who fall victim to it. Every year, countless individuals lose their lives at the hand of criminals involved in organised crime, succumbing to drug-related health problems or injuries inflicted by firearms, or losing their lives as a result of the unscrupulous methods and motives of human traffickers and smugglers of migrants.

Mr.Kapinos said integrated border management needs to be developed as an integral part of the overall national security system in close coordination with neighbouring countries as improving security unilaterally will amount to nothing if not implemented in cooperation with border States. Organised crime has diversified, gone global and reached macro – economic proportions: illicit goods may be sourced from one continent, trafficked across another, and marketed in a third. Transnational organised crime can permeate government agencies and institutions, fuelling corruption, infiltrating business and politics, and hindering economic and social development. And it is undermining governance and democracy by empowering those who operate outside the law.

Mr. Ram Madhav, National General Secretary, Bharatiya Janta Party, while addressing the valedictory session of the conference said that the Government is working towards upgrading the capabilities of security agencies and developing physical infrastructure along with adopting technology for effective management of Indian borders. He said that several border posts of India were still not accessible for maintaining a vigil on the border, but in the next three to four years, the government was committed to connect each border post with a motorable road. Emphasising the importance of having good diplomatic relations with neighbouring countries to combat cross-border terrorism, Mr. Madhav said that recent example was the diffusing of Doklam situation where India was able to secure its interests without resorting to armed conflict. On the Rohingya issue, Mr. Madhav said that India was dealing with the situation from both the security and humanitarian angle.

Mr. Madhav urged FICCI and India Foundation to assist the government in strengthening relations with neighbouring countries by engaging with them on the economic front. He pointed out that it was expected that by 2025, the Indian Ocean Region would emerge as a strong economic power offering immense opportunities to the private sector. However, this would give rise to security concerns. To address such issues, India was upgrading its naval capabilities.

Dr. Sanjaya Baru, Secretary General, FICCI, said that FICCI had been engaging with ASEAN and BIMSTEC and other neighbouring regions of India and would continue to strengthen ties with them. While the government is building and maintaining progressive diplomatic relations, the private sector was doing its bits to assist the government in this regard.

Maj. Gen Dhruv C. Katoch, Director, India Foundation, said that the two day conference had productive deliberations. The actionable points and outcome would be documented and presented to respective ministries and agencies for consideration and implementation.

(This article is carried in the print edition of November-December 2017 issue of India Foundation Journal.)

Indian Ocean Conference 2017

The second Indian Ocean Conference was organised at Colombo on 31st August and 1st September 2017 by India Foundation in association with S. Rajaratnam School of International Studies, Singapore and National Institute of Fundamental Studies, Colombo

31st August 2017

Pre-Conference Symposia on
Peace, Progress and Prosperity

Symposium on Peace

The symposium on peace was chaired by Vice Admiral Shekhar Sinha, Former C-in-C, Western Naval Command. The speakers were: Mr Rahul Roy Chaudhury, Senior Fellow for South Asia, IISS, London, UK; Mr Frederic Grare, Charge de Mission Asia, Ministry Foreign Affairs, France and Mr Phil Midland, Captain, U.S Navy (Retd.), USA.

Setting the tone for the conference, this session covered the various aspects of maintaining peace in the Indian Ocean Region (IOR) and was concluded with a consensus amongst the experts that the need of the hour was for the littoral nations to unite with each other against the external factors to fight the menace of piracy, climate change, and cyber terror for peace, progress and prosperity of the region.

Symposium on Progress

The symposium was chaired by Mr. G Parthasarthy, former Ambassador. The speakers  were Mr. Hardeep Singh Puri, Chairman RIS, India; Dr. Patrick French, Dean of School of Arts and Sciences, Ahmedabad, India; Dr. Wang Pu Qu, Dean, Institute of State Governance Studies, Peking University, China and Dr. Jivanta Schottli, Research Fellow, ISAS, Singapore.

The session focused on the varying degrees of development that could be found in the Indian Ocean countries and how most of them are developing states. Mr. Puri termed democracy, respect for rule of law, and connectivity that respects sentiments of local population as the substantive areas that need attention. Dr. Patrick French began by stating the historical role of the Indian Ocean. He reiterated the importance of the region in global history and spoke at length about the cultural linkages that existed amongst the countries in the region. Dr Jivanta Schottli spoke from a South Asian perspective, and problematised the singular conception of progress and development as enshrined in the western model of liberalism. The last speaker Dr. Wang Pu Qu talked of the vision of China, of its role in the region and conveyed the belief of the Chinese premier, Xi Jingping in working towards peace and development.

Mr. G Parthasarathy summing up the session expressed his faith in the realisation of the dream of having an Indian Ocean Region that is a site for all that the three keywords in the theme of the conference.

Symposium on Prosperity

The symposium was chaired by Mr. Ashok Kantha, Director, Institute of Chinese Studies and the speakers were Mr. Sanjeev Sanyal, Mr. Abdullah Salem Hamad Al Harthi, Mr. Ashish Chauhan and Ms. Mariana Jiang.

Mr. Kantha quoted that 80 percent of trade traffic through the Indian Ocean is destined for other regions and that intra IOR trade is only 20 percent. Quoting the number he raised a question of how a truly multilateral cooperation could be created in the IOR. Mr. Sanjeev Sanyal presented a vivid history of the Indian Ocean while Mr. Abdullah Salem Hamad Al Harthi went on to present the Omani view of the Indian Ocean region by placing the Sultanate of Oman within the strategic geography of the Indian Ocean. Mr. Ashish Chauhan emphasised on the role of technology in the development of the region where as Ms. Mariana Jiang presented her views on how China will interact with the IOR.

Inaugural Session

The inaugural session of the second edition of the Indian Ocean Conference was addressed by H.E Mr Vincent Meriton, Vice President, Seychelles; Mr. Ranil Wickremesinghe, Prime Minister, Sri Lanka; Dr Vivian Balakrishnan, Minister of Foreign Affairs, Singapore and Smt Sushma Swaraj, External Affairs Minister, India.

Extending gratitude towards India and Sri Lanka, Mr. Vincent Meriton emphasised the importance of conferences like the Indian Ocean Conference, as it presents an opportunity to discuss both problems and solutions facing the IOR. He recognised the fact that when it comes to the IOR, the states form a natural region which is not immune to challenges and must therefore, forge efforts to come together for development. Recognising the importance of the theme ‘Peace, Progress and Prosperity’, he reiterated the need for the countries of the region to counter organised crimes like piracy, cross-border terrorism etc. He also appealed to the countries to contain their territorial disputes in order to enhance peaceful coexistence of states in the region and also build an environment of progress and prosperity in terms of economic diversification of resources, sustainable development, investment and industrial growth, food security in the region, etc

Prime Minister of Sri Lanka Mr. Ranil Wickremesinghe thanked the collaborators who made the Indian Ocean Conference 2017 possible. He greeted all on the optimistic note that Indian Ocean is destined to design the future of the world and that Sri Lanka is determined to play a decisive role in the future of this region. He lauded the Indian government for actively working on regional connectivity in the Indian Ocean, which he said, is also vital for Sri Lanka, both politically and economically. The Prime Minister emphasised the need for sustainable use of the resources in Indian Ocean for the development of all. He also reiterated the commitment of Sri Lanka to cooperate and collaborate with all the members in the region for furthering the prosperity and the security of the region.

Dr Vivian Balakrishnan explained the contextual relevance of the budding economy of Singapore by pointing out that it is essential for the development of culture and commerce in the Indian Ocean Region. If one traces the historical trajectories, peace prevailed for most part of the earlier centuries which also exhibit the primordial signs of globalisation in Asia. Raising opposition to immigration, restriction to trade and exchanges, etc. are a consequence of this increased competition. Dr. Balakrishnan thus advocated the need for a diagnosis of these occurrences along with determining solutions to the problems. For instance, skill development among people, utilization of human resources, promotion of the idea of inclusive sustainable growth, etc., can reinstate the level of growth among the states of IOR.

Smt Sushma Swaraj said that the Indian Ocean is one of the busiest and most critical maritime transportation links in the world. Almost a hundred thousand ships a year pass through these waters, carrying about half of the world’s container shipments, one-third of the world’s bulk cargo traffic and two-thirds of the oil shipments. She enunciated Prime Minister’s vision for the IOR and referred to the concept of SAGAR – “Security and Growth for All in the Region”coined by the Prime Minister of India in March 2015. She went on to term it to be a clear, high-level articulation of India’s vision for the Indian Ocean. She talked of the emergence of the ‘Blue Economy’ as a promising new pillar of prosperity in the region, with immense economic and employment potential and spoke of India’s role in it. She concluded her remarks by mentioning some of India’s contributions to disaster relief work. Indian ships were involved in the safe evacuation of over 2,000 Indian expatriates and over 1,300 foreign nationals from Yemen in April 2015. India carried out rescue missions in Libya, Lebanon and Somalia. India has been the “first responder” to calls of assistance.

 

Special Plenary

The Special Plenary session of the Conference was addressed by Mr Tofail Ahmed, Minister for Commerce, Bangladesh; Mr Tilak Marapana, Minister of Foreign Affairs, Sri Lanka; Mr Premdut Koonjoo, Minister of Ocean Economy, Marine Resources, Fishing and Shipping, Mauritius; Mr Iwao Horii, Parliamentary Vice Minister for Foreign Affairs, Japan and Mr To Anh Dzung, Assistant Minister of Foreign Affairs, Vietnam.

Mr. Ahmed highlighted the important link between the collective and the individual. He said, “Collective progress and development depends on individual development and prosperity”.  Instating ideas for achieving international peace, the Sri Lankan Minister of Foreign Affairs Mr Tilak Marapana suggested the need for identifying mutual challenges to development in IOR and responding to it with unity via public-private-partnership. The minister from Mauritius spoke about the threats facing the IOR and Mauritius contribution in the development of this region since the country is heavily reliant on the Ocean for its survival.

Celebrating the second time participation of Japan in the Indian Ocean Conference, the Minister from Japan highlighted the relevance of the venue of the Second Indian Ocean Conference by spelling out the relevance of Sri Lanka in the region. He further spoke of the significance of the values of democracy, freedom and rule of law in bringing prosperity to the region. The Minister from Vietnam spoke of threats to peace such as civil violence, transnational organised crime, poverty – all that can lead to catastrophic consequences.

1st September 2016

Conference Keynote Session

The Keynote Session was chaired by Mr. Prasad Kariyawasam, Foreign Secretary, Sri Lanka and Keynote address was delivered by Mr. S. Jaishankar, Foreign Secretary, India.The session in general focused on reviving the ethos of the Indian Ocean Region. Both the Foreign Secretaries went on to discuss the Challenges in the Indian Ocean: piracy, radicalisation and terrorism in the Ocean littorals, and climate change.

Foreign Secretary of India Dr Jaishankar spelt out the four important areas that India shall focus on in its bid to strengthen the ties of Indian Ocean Region:

  1. a) Hinterland cooperation
  2. b) Maritime cooperation and support
  3. c) South Asia to South east Asia connections
  4. d) Assuming more responsibility – SAGAR vision

Plenary I – Peace

The first plenary session on peace was addressed by Ms Frances Adamson, Foreign Secretary of Australia; Ms Ina Lepel, Director General for Asia and Pacific Foreign Office, Germany and Ms Alice Wells, Acting Assistant Secretary of State, USA.

Analysing the expeditious competition amongst greater number of successful societies in the Indo-Pacific region than in the 20th century, Ms. Adamson assessed that the investments made by nation-states in strengthening their economies and developing their military forces have multiplied. She stressed on the importance of the freedom of sea-water navigation lanes, enhancing engagement vis-à-vis energy and oil transportation, developing Confidence Building Measures (CBMs) in the region, etc. to not only improve the relations within IORA but also accentuate the ties with the global economic order.

Extending gratitude towards India Foundation and the Government of Sri Lanka for inviting a German perspective to the platform, Mr. Lepel stated that despite being a consistent contributor in the region, the German position is overlooked by the nation-states in IOR. She spoke of Germany’s interest in the IOR and that the European states have encouraged the ideals of ‘peace, progress and prosperity’ throughout the globe. In conclusion, Ms Lepel said that greater bilateral, regional and multilateral engagements amongst states in these regions would enhance the pre-eminence of the socio-economic and security ties of the participating countries as well.

Reaffirming the positive assistance of America in IOR, Ms. Wells reiterated the importance of this region as a carrier of regional and international trade. Taking examples from Prime Minister Modi’s ‘Act East Policy’ and ‘Neighbourhood First Policy’, Ms. Wells exclaims the importance of realising regional priorities. The Acting Assistant Secretary of State proclaimed US’ desire to support the endeavour of improvement and peaceful development of region in terms of political, economic, cultural and social footing.

Plenary II – Peace

The second plenary on Peace was addressed by Mr Md Shahidul Haque, Foreign Secretary, Bangladesh; Mr Cho Byung Jae, Chancellor, Korea National Diplomatic Academy, South Korea and Dr Siswo Promono, Director General, Policy Analysis and Development Agency, Ministry of Foreign Affairs, Indonesia.

Speaking for Bangladesh, Mr Haque expressed the relevance and meaning of peace for the country, which he stated was all about cooperation, building alliances for sustainable development. Further, in the light of the visionary leadership of the Prime minister of Bangladesh, Mr. Haque stated that the country is committed to work towards peace and prosperity of the region. During the course of his speech he spoke of the 2030 development agenda and reiterated Bangladesh’s commitment towards maintaining freedom of navigation in over flight and overseas and bays and also the importance that the country attaches to human security when it speaks of security as a discourse.

Mr. Jae began his address by firmly emphasising upon the relevance of the Indian Ocean for South Asia. He spoke of how the Indian Ocean laid foundation for Korean fisheries, the importance of the IOR for Korea’s global exports and imports, the movement of the global community away from Asia Pacific to Indo Pacific amongst other issues that he touched upon. Dr. Promono speaking of the history of the Indian Ocean region said that war and peace have long been part of the history of Indian Ocean, and touched upon the existence of economic ties since time immemorial and the 2000 years of connectivity and culture, to mention a few. He went on to speak on how from the very beginning the Indian Ocean has been open for navigation and trade and that is very good for the community of the region. In conclusion, the speaker made an appeal to the countries in the region to work towards enhancing the peace building measures and cooperating with each other to address the non-traditional security threats.

Plenary III – Peace

The third session on Peace was addressed by Admiral Jayantha Perera, Former Chief of Naval Staff, Sri Lanka and Maj Gen James S Hartsell, Mobilisation Assistant to the commander, US Pacific Command, USA.

The session highlighted on the importance of the IOR from the perspective of trade and security, laying emphasis on the rule based international system as the primary reason for peace and progress in the region.

Plenary IV – Progress

The session on Progress was chaired by Ambassador Ong Keng Yong, Executive Director, S Rajaratnam School of International Studies, Singapore. The speakers were: Mr Tan Sri Rastam Mohd Isa, Chairman and Chief Executive, Institute of Strategic and International Studies (ISIS), Malaysia; Ms Ayesha Siddiqa, Author, Pakistan and Dr Phongsavath Boupha, Former Minister of Presidential Office, Laos.

Ambassador Ong was of the opinion that the history and culture of a region must be used to improve and modify ties among states. The subjects of a state should be better connected through social media which runs beyond the world of academia. To instil a better sense of identity or belongingness amongst the population of the region, he highlighted the need for higher multilateral and bilateral engagements among the states of the region.

Mr. Isa began his speech with the widely accepted comment for the evening that Progress, which can be secured by Peace in the region is and would be the component of leading Prosperity into the region. The speaker delivered on the possibility of creating a common parliament and a better designed inclusive forum, like that of EU, in order to achieve progress via adopting innovative and transformative policies of collaboration and cooperation among the IOR states.

Ms Ayesha Siddiqa stressed that South Asia is a region that would need the IOR at large to solve numerous issues on poverty, development, food shortage, overall economic development, serious natural calamity, climate change, piracy and other shared problems. She spoke of the increasing global competition and the fact that there is greater need to explore the numerous resources of the sea and harness it for the benefit of people.

Dr Boupha restated the relevance of Indian Ocean – the third largest body of water bounded by Asia, through which 50% regional trade passes through. IOR encompasses 32 countries in all which share historical, economical and cultural relations. The former minister of Laos made an analysis, suggesting that the shift in the development of growth and competition towards the Asian continent, if utilised aptly, can contribute towards peace, progress and prosperity in the region.

Plenary V – Prosperity

The session on Prosperity was addressed by Shri Baijayant Jay Panda, Member of Parliament, India; Mr Ajmal Ahmady, Advisor to President, Afghanistan; Ms Sheikh Noora Bint Khalifa Al Khalifa, Entrepreneur, Bahrain and Mr Ruan Zongze, Executive Vice President, China Institute of International Studies, China.

Mr. Panda, tracing the trajectory of globalisation, said that the leading powers that brought globalization about were not looking at a zero sum game arrangement. He spoke of the vast and tremendous range of the IOR, which reflect immense potential of those states that have been lagging behind on this range in the region. The five issues that he highlighted in his address were: connectivity, identity, disputes, terrorism and climate and further stated that trade is interlinked to all these issues. Mr. Panda emphasised the need to build an “Indian Ocean Brand” to achieve the target of a better future.

Mr. Ahmady expressed the concerns that plague Afghanistan. He spoke of the many challenges that the country faces including insufficient growth rate and the structural imbalances that hamper the development. Ms. Sheikha’s address to the conference was primarily focused upon the relevance of ‘blue economy’ in the exchanges between the east and the west. She spoke of the relevance of the deep waters for the countries of the region and also expressed concerns about the need to ensure maritime security, as it is an important factor for the coastal states in the region. She also lauded India for actively engaging with the countries in the region.

Dr. Zongze traced the historical connection of China with the IOR. He spoke of the ties between China and the region in the spheres of history, culture, religion, trade and economics. Further, Dr Zongze argued the case for China being a country of the IOR, contrary to the perception otherwise.

Valedictory Session

Addressing the Valedictory Session of the two days Conference in Colombo, Sri Lankan President Mr. Sirisena said that Indian Ocean plays a vital role in the international economy, international security, sharing of new technology and modern naval activities while facilitating the strengthening of bilateral economic and trade relations between almost all countries in the world.

Talking of peace in the region he said that peace among different nations, reconciliation among nations, brotherhood and security at international level are of paramount importance and reiterated the Sri Lankan government’s commitment to peace. He went on to recall Prime Minister Sirimavo Bandaranaike’s proposal to the United Nations General Assembly to declare the Indian Ocean as a zone of peace. He spoke of Sri Lanka’s geographic location in the center of the ocean to be of strategic importance to the region and described it as a focal point that can promote and strengthen the sharing of modern technology, trade and maritime navigation.

(This article is carried in the print edition of November-December 2017 issue of India Foundation Journal.)

Economic & Strategic Importance of the Indian Ocean

Singapore is the Southern-most tip of continental Asia, one and a half degrees north of equator. And if you try to connect the Indian Ocean to the Pacific Ocean, chances are you will pass by Singapore. So the Indian Ocean is an area of major interest to us.

Singapore had the privilege of hosting the inaugural Indian Ocean Conference in 2016, which was well-received, with participants from 22 countries attending. The theme of the inaugural Indian Ocean Conference (IOC) was “Comity, Culture and Commerce”. The theme of IOC-2017 is “Peace, Progress and Prosperity.”

Peace

It is remarkable that the Indian Ocean, which has been a stage for the exchange of knowledge, culture and religion across the enormous diversity of all our states, for the past 4,000 years, has been marked by peace. If you think about the Pacific or Atlantic Oceans, even the Mediterranean Sea, what makes the Indian Ocean outstanding over the past 4,000 years is the remarkable presence of peace in almost its entire history. And perhaps we should ask ourselves, why is it that the Indian Ocean was an area of peace for so many years? Why is it that we could have merchants from many independent states coming from a very wide diversity of ethnic and cultural backgrounds being able to transact, travel, exchange and trade peacefully?

If you think about it, the first wave of globalisation was conducted in this part of the world. The early civilisations in ancient Egypt, Sumer and Indus Valley arguably owe much of their prosperity to the trade in the Indian Ocean.  Over time, we saw increasingly complex trade routes linking the East African coast to the Arabian Peninsula, South Asia, Southeast Asia and South China. In the 13th and 14th century, this thriving trade was witnessed by chroniclers such as Marco Polo and Ibn Battuta.

Arab merchants facilitated the widespread and peaceful adoption of an authentic and tolerant form of Islam in Southeast Asia.  In fact, Islam in Southeast Asia was achieved through trade and persuasion but never through the sword.  The point here is that continued prosperity in the Indian Ocean is contingent on the Indian Ocean remaining peaceful. Therefore, the converse is that if the stability in the Indian Ocean comes under threat, so does our prosperity.  For a small trading nation like Singapore where trade is three and a half times our GDP, this is an existential issue.

Progress

We all know that trade in the Indian Ocean helped to vastly improve the quality of life of all those who participated in it.  While the fabled overland Silk Route was far more famous, when you think about it, far more people benefitted from the maritime trade in the Indian Ocean.

With seaborne trade, you could trade in bulk goods including cotton cloth, foodstuffs, timber, which could not be loaded onto camels or mules.  So for instance, we see wood, or timber, being shipped from Africa to the Arabian Peninsula, where timber is scarce but needed for the construction of buildings.  Sri Lanka provided high quality peppers and spices that were valued the world over.

This was a form of democratisation of trade.  For the first time, the mass market consumer benefitted from global trade, and it was not just a question of luxury goods such as silks for the elites which were more commonly transported via the overland Silk Road.

Even today, sea transport is still the most cost-effective way to transport goods.  The United Nations Conference on Trade and Development (UNCTAD) estimates that roughly 80 per cent of global trade by volume and 70 per cent by value is transported by sea – and we know that a huge proportion of that flows through the Indian Ocean. And this is also why the 1982 United Nations Conventions on the Law of the Sea, or UNCLOS for short, is of such crucial importance for those of us bordering the Indian Ocean.

The opening up of trade and economies helped to raise the standard of living for all of us.  And because this was a democratised form of trade of commodities, it benefited everyone. It provided a catalyst for the exchange of ideas and technologies, development of infrastructure, and increased prosperity for all of us.

Prosperity

We are now in a new age of uncertainty. You can think of the changing relativities amongst superpowers, or the changing trade patterns. But there is one other factor, and that is what some people have called the Industrial Revolution 4.0.

There is a sense in many countries that middle class wages are stagnating.  There is anxiety about job losses because jobs may become obsolete.  The problem is you see it in the political arena.  You see a rising tide of protectionism and anti-immigration sentiment worldwide – and this happens in all our societies and the tone of political debate reflects this.

Unfortunately, free and open trade has very often been blamed for this anxiety.  But the reality is that we are living through a technological revolution.

There has been near simultaneous advances in pervasive computing, mobile and broadband communications, Artificial Intelligence, robotics, 3D printing, and additive manufacturing and Augmented Reality, in addition to further revolutions in nanotechnology and genomics. All this has completely transformed the way value is created and the way the fruits of these values are distributed. That is why there is this angst and anxiety in our societies.

We need to make the right diagnosis. We need that to come up with the right solution.  In Singapore we believe in making sure that our people are equipped with the right skills, with the tools and knowledge that they need. And therefore it is in a sense a new way of focussing and transforming our education and our training systems. This is the only way to close the gap between a skills mismatch and a jobs mismatch.  If we can do so effectively across the Indian Ocean, then we will be able to ride on the historical advantages of the Indian Ocean as an ocean of peace and as a medium which has transmitted ideas, which has facilitated trade, and which has uplifted all our societies.

Inclusive and sustainable growth is not a zero-sum game.  No nation today can succeed in the age of disruption by erecting walls or barriers, protectionism, or insulation. Instead, we need to go back to the ancient philosophy of the Indian Ocean which is to embrace our interdependence as well as an open and inclusive regional architecture, and eschew attempts at domination. Instead we should focus on interdependence, win-win collaboration and the exchange of ideas, tools and technologies in a fair and just way. So if we can achieve globalisation in this difficult environment, it will give us a chance to leapfrog many other parts of the world. I hope, with some reasonable optimism, that we will be the most vibrant and dynamic economic space in the world in decades to come.

The region has a demographic dividend that has not yet been fully harvested. If you look at the Indian Ocean compared to the Pacific or even the Atlantic, we have a significantly younger population hungry for knowledge, able to utilise the latest digital tools and they deserve our support. All of us must commit to creating this future for them when there will be a new golden age for a new middle class equipped with the necessary knowledge, skills, tools and relationships.

*This article is a summary of the address delivered by Dr. Vivian Balakrishnan,

Minister of Foreign Affairs, Singapore on 31st August, 2017 at the 2nd Indian Ocean Conference at

Colombo, Sri Lanka organized by India Foundation.

 (This article is carried in the print edition of November-December 2017 issue of India Foundation Journal.)

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