Time for a great leap eastwards

The Rao proposal had an instant and successful fallout with India becoming a Sectoral Dialogue Partner of the ASEAN in January 1992 and a full Dialogue Partner in December 1995. In July 1996, India became a member of the ASEAN Regional Forum.

India’s formal interaction with the ASEAN began only in 1992. Considering that its involvement in Southeast Asia had begun immediately after independence in 1947, it had taken decades for it to enter into a full dialogue partnership with the ASEAN.

India’s closed economy, hostile geo-strategic setting and non-aligned foreign policy were just a few reasons for this failure. Its assessment of ASEAN was guided by Cold War perceptions — the ASEAN was seen as an extension of the US security alliance system. Although ties with some core members of this grouping improved in the late eighties, India’s defence spending and blue water navy alarmed the member states.

The fears of Indian hegemony were ultimately assuaged. Unlike China, India’s record vis-a-vis Southeast Asia has been spotless.

The dialogue process with the ASEAN has enabled India to significantly deepen its relationship with member states. It is meant to augment its bilateral ties with its Southeast Asian neighbours.

India’s two sub-regional initiatives — BIMST-EC and the Mekong Ganga Project which include India, Myanmar, Laos, Thailand, Cambodia, and Vietnam as members — are steps taken to forge closer links with Southeast Asia. It seems it is now eager to become a full member of ASEAN, a desire reflected in its diminishing interest in SAARC. A number of multilateral forums have been created to ensure economic cooperation between India and ASEAN. For instance, in the ASEAN-India Business Summit held in October 2002, it was decided to improve the level of economic exchanges.

In addition, both India and ASEAN have identified many non-economic areas of cooperation, like biotechnology, infotech and tourism.

It needs to be stressed, though, that initiating a new proposal each time an Indian minister visits the region is neither pragmatic nor strategically correct. It is far better to stick to a few meaningful projects.

Here China’s example can be emulated. Already ten road networks linking the Yunnan province with the Mekong basin countries, have either been developed or are at a stage of implementation under the Great Mekong Sub-region Development Programme.

In contrast, India has yet to come up with a feasible plan delineating areas to be covered, a timetable for the completion of the projects and an agreement on the funding agency. So far only one project has been accomplished. The delay in the implementation of projects has often had a negative impact on the investors from the ASEAN countries.

Even though the recently released McKinsey Report on trade has painted a rosy picture of India’s potential to increase trade with ASEAN from $9 billion in 2000 to $24-30 billion by 2007, the record of Indian-ASEAN economic ties till date has been modest. The actual inflow of ASEAN investments constitutes a meagre 3.4 per cent of total FDI flows into India.

According to the CII, the two-way trade between India and ASEAN in 1998 constituted 10.05 per cent of India’s total trade and an insignificant 1.28 per cent of ASEAN’s total trade. This indicates a need for India to focus on a well-defined strategy for closer economic ties with Southeast Asia.

The slow progress in economic relations does not detract from the fact that there is a growing understanding between India and ASEAN as witnessed in the recent Summit in Cambodia. However, two crucial trends surfaced: first, the emergence of ASEAN’s perception of India as a reliable partner substantiated by institutionalising the India-ASEAN multilateral dialogue at the highest level and expanding areas of cooperation from limited trade to free trade. Second, China’s strategic move at signing an agreement with ASEAN at the ASEAN Plus 3 Summit for creating a free trade zone — a calculated step towards closer integration with the ASEAN economy. It is difficult to predict the strategic implications of these trends for India’s foreign policy but there is no denying that the ASEAN governments are cautious about China and beneath the bonhomie there does lurk a certain degree of nervousness.

These are turbulent times for ASEAN countries. The failure of ASEAN to respond to new challenges, such as the economic crises, environmental problems and the separation of East Timor has raised doubts about its cohesiveness as a regional grouping. With Islamic terrorist activities on the rise, as the recent Bali bombings indicated, the US and Australia have issued travel warnings to their nationals.

This may cause great loss to the region’s tourism industry and Southeast Asia may begin to be perceived as an unsafe destination for foreign investment. Even the FDI by its leading investor, Japan, seems to be going more to China than to ASEAN. This is an obvious cause for concern. In order to look for other alternatives, the ASEAN is wooing India as never before.

It is in India’s interest to respond positively to this. After all, a weak and unstable ASEAN is not conducive to India’s long-term security concerns. India should play a proactive and more meaningful role in the region’s security concerns, especially with regard to terrorism and transnational crime. It is time for action. India needs to exploit the enthusiasm generated by the Cambodian summit and pay full attention to newly emerging trends in India-ASEAN cooperation.

The writer is associate professor, School of International Studies, JNU. This piece has been written along with Vibhanshu Shekhar