Thursday, November 29, 2012

India's Look East Policy - PART 3

India's Look East Policy(hereafter LEP) was officially defined and articulated in September 1994, by Prime Minister Narasimha Rao in his famous Singapore lecture. He had stressed the point that India's historical and cultural relations with South East Asia were very old and strong and there was nothing new in India looking towards reinforcing cooperative linkages with its eastern neighbours. He laid emphasis on building strong economic and security relationship between India and its eastern neighbours.

What necessitated LEP?

  • Fall of Soviet Union and the resultant change in geo-political context of international system had great impact on India’s foreign policy. India had to rethink its strategies and policies. India felt isolated on political front without Soviet Union.
  • In early 1990s, India went through a serious balance of payment crisis. Due to this, under the aegis of IMF, India had to restructure its socialist outlook and change that to a liberalised market economy.
  • Emerging trend of regionalism and the success of ASEAN, resumption of integration process of EU and negotiations for NAFTA and APEC made India vary of the possibility of getting isolated on global developments.
  • China’s growing relations with ASEAN countries (mid 1980s) under Deng Xiaoping (diplomatic and trade), China’s growing influence on Myanmar and growing insurgency in NE states(Naga etc), Soviet Union’s strong desire to normalize relations with China(under growing pressure in Afghanistan by US backed jihadis), India had to act fast, lest it would have been isolated.

Hence faced with multiple problems, economic and political, India adopted two radically new paths - the domestic policy path of economic liberalization globalization and the external policy path of LEP.

Let's study the LEP on following fronts:

1. Strengthening Bilateral Relations

Through various exchanges of official visits, including at the highest political levels, India tried to explain to the eastern neighbours that India was a modern, peace loving, practical and cooperative country. In bilateral discussions, India's attempt was to enhance political understanding, identify areas of mutual interests and initiate moves to harness these interests. 

(i) Customised & differentiated Foreign policy and bilateral ties with South East Asian countries
  • Newer ASEAN countries - Myanmar, Laos, Cambodia and Vietnam
    • Important features
      • All of these countries joined ASEAN in 90s
      • None of them have democratic political system
      • Economically lagging
      • Close neighbourhood of China 
    • India customised its foreign policy for these newer ASEAN states and balanced its ideological commitment to democratic forces, with that of the pressing strategic and security interests.[Note: Its in this context of change of heart in India's stance, Aang San Suu Kyi, recently commented about being saddened at "India being drawn away during their difficult times".]
    • India created a separate administrative unit, the CLMV (Cambodia, Laos, Myanmar and Vietnam) desk, in the Ministry of External Affairs. Special programmes of assistance and cooperation in diverse fields are being initiated and executed in CLMV (Cambodia, Laos, Myanmar and Vietnam) countries through this unit. [Note: Recent soaps being given to Myanmar is the latest example in this regard]
  • Older ASEAN Countries - Singapore, Malaysia, Thailand and Indonesia, Philippines
    • Greater emphasis on economic and defence ties[Note: Will cover the FTA in later section]
    • Co-operation on Terrorism, UN Reforms, global economic crisis, climate change, maritime security.[Note: Regular maritime exercise called “Milan” with Thailand, Indonesia, Singapore and Malaysia – Helps piracy in the SE Asian region]
  • In East Asia special attention is given to China, Japan and Republic of Korea. 
    • China
      • Rajiv Gandhi's famous visit to China in 1988
      • Confidence building measures - 1993 and 1996 Agreements
      • Trade and investments to continue while border disputes are being settled - appointment of Special Representatives to resolve border disputes.
    • Korea
      • Enhanced its economic cooperation with India – visible in the auto-industry and consumer durable production.
    • Japan
      • Political and strategic nuances of Japan's perceptions about India and its economic downturn did not allow very fruitful bilateral relationship to be developed.
      • India and Japan lobbied together for reforms in the UN and their seats in the Security Council as permanent members in 2005.
      • Bilateral relationship has got a fillip with establishment of "strategic and global partnership" b/w the two countries in December 2006. 
      • The first ever Two Plus Two Dialogue at the senior defence and foreign affairs officials level was held between the two countries on July 2010.[Note: Two plus Two - Defence Min & External Affairs Min - two from each country. lol  these terminologies !! :)]

2. Establishing Institutional Engagement

  • ASEAN 

    • In 1997, India along with some of the South and South East Asian neighbours, also established a sub-regional grouping called Bay of Bengal Initiative for Multi-sectoral Scientific, Technological and Economic Cooperation (BIMSTEC) to promote rapid economic cooperation in the areas of trade, investment, tourism, fisheries, agriculture, transportation links and human resources development.
  • Indian Ocean Rim Association For Regional Cooperation (IOR-ARC)
    • Association of 20 member states was formed in 1997 with an objective to promote sustainable growth and balanced development of the region as a whole, with a special emphasis on economic cooperation.[Note: The USA has been inducted as a dialogue partner of IOR-ARC this year] 
  • Mekong Ganga Co-operation (MGC)
    • MGC initiative is a vehicle for ‘soft diplomacy’ in countries that have had considerable cultural influence from India. Both the Ganga and the Mekong are ancient rivers and the MGC initiative is indicative of the cultural and commercial linkages between the member countries of the MGC. MGC has identified tourism, culture, education and transport & communication as priority areas. Of these, transport is most important.
    • Signatories of MGC have agreed to develop East-West Corridor and ASEAN Highway.
    • Development of transport linkages b/w India's NE States and MGC countries will lead to development of NE region of India, because increased physical connectivity increases activities related to trade and people-to-people contacts.

3. Economic Benefits

  • Increasing trade ties though /balance of trade is negative w.r.t India
    • Economically, India's trade with ASEAN has grown impressively since the pursuance of the LEP – from US$2.3 billion in 1991-92 to US$50 billion in 2009-10. Singapore is India's largest trading partner in ASEAN followed by Malaysia and Indonesia.
    • India-China bilateral trade increased from $3.5 Billion in 2001-02 to around $75 Billion in 2011-12. The two countries have pledged to increase it to $100 Billion by 2015.  Its a good development that we have set aside border disputes and have worked towards increasing our bilateral trade. India expressed concerns with China on the negative BoT and China has assured to improve it.[Note: India insisted China to import more value adding products than just raw materials.]
  • Increasing foreign investments from East Asia
    • FDI inflows into India from East Asia has been increasing in last decade, reaching a figure of US$13.15 Billion in 2008-09. Singapore's share of FDI inflow is the largest, followed by Japan.

4. Strategic Engagement

The first phase of India's Look East policy was ASEAN-centred and focused primarily on trade and investment linkages. The new phase of this policy is characterised by an expanded definition of "East", extending from Australia to East Asia, with ASEAN at its core. The new phase also marks a shift from trade to wider economic and security issues including joint efforts to protect the sea lanes and coordinate counter-terrorism activities. The foreign policy parameters, in this second phase, has been taken "beyond ASEAN" and "beyond economic interests.‟

North East India & Look East Policy (LEP)

  • North East to evolve as the primary domestic constituency for India’s LEP.
  • Only 2% of territory of NE states are contiguous with India, while 98% of its border is with one or the other foreign countries.
  • Peninsular India’s civilizational links with SE Asia has been profound but it’s the NE states with whom SE Asian countries have ethnicity, social-anthropology, botany and zoological relationship.
    • The Ahom race has its counterparts in Myanmar, China, Thailand, Vietnam and Laos. Nagas are spread across borders in Myanmar.
    • People from North east, like SE Asian states are lactose intolerant, non-hierarchical (clan and not caste based) and give uniformly high status to women in society and in property.
  • Areas of investment can be – food processing, agriculture, bamboo and rubber, handicrafts and transportation – jobs for youth and development of region.
  • BIMSTEC, MGC, BCIM – these regional initiatives are relevant to the prospects of the emergence of a cross border region bringing together the NE states and transnational areas in the east.
  • Good relations with Myanmar – economic development of NE states, suppression of anti-India activities on Myanmar soil. Insurgency in NE India can be curbed.
  • Major infrastructure project in pipeline in NE India - Timathi Hydro project, Stilwel Road, Imphal-Mandalay Bus line, India-Thailand-Myanmar Highway, Myanmar-India-Bangladesh Gas pipeline etc

Divergence of India-China on Regional Integration and India's LEP

  • There was an attempt by China to not include India into East Asia Summit(EAS) membership. When that failed, China tried to divide EAS into “core states” where China is the leader and the "peripheral states" with India, New Zealand and Australia. China Premier once commented that “East Asia is for East Asians” with “full considerations to reasonable interests in the region of non-East Asian nations”.
  • On matter of regional integration India’s stance has been (ASEAN +3(China, Japan, South Korea) + 3 (India, Australia, New Zealand) Vs China’s ASEAN + 3 with China as the main channel for East Asia Cooperation.
  • On regional security, India’s proposed for a ‘polycentric’ security concept for East Asia, disallowing any country (such as China) to dominate  the regional security architecture.
  • China’s suspicious view on Asian Economic Community(which India is supporting for) and Pan Asian Trade Bloc. For that matter, China may not support any such regional economic integration which limits its leading role. 

Limitations & Challenges of India's Look East Policy (LEP)

  • Limitations:
    • Connectivity between India and the ASEAN region is still poor. North East India has been consistently ignored in India's LEP. Development of NE states is important for a sustained and meaningful LEP – border management and security, infrastructure development and transport, connectivity with peninsular India and SE Asian countries is important. Of late India has realised this and is working toward bridging that gap in its policy.
    • Even after signing of India-ASEAN Free Trade Agreements, the trade is below potential, especially if seen in comparison with ASEAN’s trade with China or Japan. Investments in each others’ economies remain low(hence need for Free Trade Agreements in Investments for which negotiations are currently on).
    • People-to-people contacts remain at a low level. Visa restrictions continue to prevail, and tourism is below par.
    • Absence of deep engagement with Myanmar, which is not only India’s neighbour—sharing a land border with India—but also a gateway for India to ASEAN. 
    • LEP is moving on two pillars – India ASEAN and India EAS relations. Focus should shift from “policy declaration” to “functional cooperation” i.e. from “vision to action”. Quicker implementation of its various agreements is needed.[Note: There was a report in The Hindu recently that number of projects announced by India in Myanmar has not yet seen the light of the day]
    • Obama once commented .. India should not “look east”, but “engage east” .. as it will increase security and prosperity of all nations in that region.
  • Challenges:
    • Rise of China - China has much deeper economic engagements with India's eastern neighbours and these engagements are going to get stronger - India cannot match.
    • Critical strategic triangle of India-China-US relations - China is worried about growing India-US ties and believes it is aimed at constraining China's strategic presence in the region. China will, in that case, exploit the vulnerabilities and weaknesses in India's relations with its neighbours in South East Asia.

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