World attention has focused on East Asia in the past week with its annual high-level summits. The Indian and Chinese prime ministers were in Brunei among other major leaders, even while presidents Obama and Putin did not show up. The meeting, however, remained an important step for the Asian region.
The Association of South East Asian Nations (ASEAN) comprising countries in the East Asian region, has increasingly become a major economic regional block. It extended its partnerships with Japan, China and Korea creating the ASEAN plus three formation. Politics and economics dictated that ASEAN+3 increase interaction with other nations and an East Asian Summit was developed to follow every meeting of the ASEAN+3. The US and Russia became members of this East Asia Summit. Then, the inclusion of another three countries — Australia, New Zealand and India — was accepted. India became a dialogue partner in 1995 with the ASEAN Regional Forum also.
The formal logic was that these three countries were concerned with the Indian and Pacific Ocean continuities of ASEAN and are an important part of East Asian economic interaction. The geopolitics was that ASEAN wanted some nations to balance China’s influence. Yet others wanted to balance the US, and some Russia. This laid the basis of the East Asian Summit (EAS).
India’s membership of this regional summit has benefits, problems and challenges. As the global economy integrates, the major powers are developing complex interfaces with each other and clearly India cannot be left out. The East Asian Summit is taking steps to create a more integrated East Asian Economic Community that is looking to create a solid Comprehensive Economic Partnership in East Asia that will deepen economic integration. This integration will be based on Free Trade Agreements (FTA), which means that each country that signs these will lower the national protection for their own goods and services, lower tariff rates that were imposed on imports and open their markets for inflow of goods and capital. So far India’s FTA with select ASEAN nations (Malaysia, Thailand, Singapore) was restricted to the flow of goods.
Prime minister Manmohan Singh announced in this summit that India was ready to sign the ASEAN-India FTA with all the remaining countries by the end of this year. The FTA would now extend to services, enabling India’s strong service industry’s entry into East Asia. India also announced that it would open a dedicated mission to deal exclusively with ASEAN affairs.
The question is how good is this economic integration and who does it benefit? Clearly, India has benefitted as its overall trade with ASEAN countries has increased to some US$ 71 billion in 2012 and is targeted to reach 100 billion USD by 2015. However, India has a huge trade deficit as the imports from ASEAN nations far exceed the exports from India. There have been other fears also. For example, the Kerala government expressed concern that cheaper exports of rubber, spices and palm oil products could ruin their domestic markets.
The belief that the FTA in services will allow India to compensate its losses in agriculture by allowing to make up its trade deficit through its services is incorrect because each sector needs to be strong. We cannot allow local agriculture to dwindle since it sustains the livelihood of millions. Services is an elite industry that employs much fewer people, who will benefit. So the way forward is to give further subsidies to those agricultural products that are suffering the consequence of these FTAs so they can survive and reinvent themselves.
The other geopolitical anxiety for India is the aggressive push by China. China’s trade with ASEAN is likely to reach a trillion dollars, with the trade balance in China’s favour. China has asserted its claims over the South China Sea over those of Vietnam and objected to Vietnam offering deep sea drilling rights to India. China also claimed several islands that the Philippines regard as their own, in addition China has long-standing issues with Japan. Others in the Asian frameworks view China with some trepidation. Thus, each country and regional formation has its own agenda vis-a-vis China but also with others.
Several countries would thus like to use India to balance China, since they are all familiar with India-China antagonisms and competition. India, however, has to remain focused on the agenda which serves the people of their country and protect their interest by ensuring that they do not fight other countries’ battles. The only way they can hold their own against China is to make sure their internal vitals in terms of security, economy, and cohesive democratic politics continue to strengthen.
Another issue in India’s Look East Policy is that it should engage India’s own east, which is connected with the ASEAN countries. India has been slow in this direction, since it has to build its economic and security structures in this region. It can for example only revive the Manipur-Mandalay Road if there is peace in Manipur. Again, the project for the Nalanda University was announced at an East Asian Summit.
The ancient significance of Nalanda as the site for Buddhist enlightenment from the 13th to the 15th centuries and its impact on all of East and Southeast Asia remains a symbol of India’s close and common heritage and linkage with the rest of Asia. But despite the assistance given for this university, it has barely moved despite a well-paid vice chancellor. This is because Bihar offers no adequate infrastructure for an international university.
So, besides summits, FTAs and agreements of trade and security architecture, India has simultaneously to make the right connections between its internal and external policies. Many of the ASEAN nations have done this. The removal of antagonisms between ASEAN countries, their close co-operation, their declaration as a nuclear-free zone have all been steps in the right direction.
Maybe, India and South Asia can learn some lessons.
The writer is professor at the School of International Studies, Jawaharlal Nehru University.