India Inc can help to deepen ties with Asean

The Asean summits on September 6-7 followed by the India-Asean Summit and East Asia Summit on September 8 in Vientiane, Laos’ capital, provided the backdrop and platform for India’s high-profile role in the region. While some media reports gave the impression that Indian diplomacy had only one aim, to project Pakistan as the epicentre of terrorism, the reality is India’s focus was both intensive and extensive. A careful study of documents point to further progress in our “Act East” policy. Was it substantial or rather limited in nature

Asean is often seen as a mega talk shop. Its two summits in Laos and related events led to a total of 57 outcome documents, including the principal statement by the chair that ran into 135 paragraphs. But the regional grouping has many solid achievements to its credit in its nearly 50-year existence. It will celebrate its 50th anniversary next year. It continues to register success, albeit gradually, in strengthening regional integration and deepening links, both within its 10 member states and with a wide circle of dialogue partners, including China and India.

The backdrop to the latest summits was marked by some destabilising developments in the South China Sea, largely due to China’s assertive behaviour in recent years, and its rejection of the award by The Hague’s Permanent Court of Arbitration, which was critical of China’s actions. This complex issue has stretched Asean’s unity to the limit, dividing the grouping into those opposed, sympathetic to or neutral on China’s actions. In July 2016, the foreign ministers of Asean and China crafted a common position on this issue, that was reiterated by the heads of state and government in Vientiane. This, however, didn’t hide the fact that Asean leaders remain “seriously concerned” over recent and ongoing developments, and some of them have “concerns” on the land reclamation and escalation of activities by China in the area.

When later the South China Sea issue was discussed by the 18 member states of the East Asia Summit (including the US and Russia), its outcome did not vary much, thus signalling that in the current round of polemics, actions and counter-actions, Chinese diplomacy has scored over the American side. While US President Barack Obama is considered a popular figure, the US approach on the South China Sea imbroglio showed an ineffectual strategy. Uncertainty from the forthcoming US elections is also a relevant factor.

The East Asia Summit meeting disappointed those who saw in this institution the potential to become the region’s apex body for regional coordination and leadership. It deliberated, in a routine manner, on six priority areas — energy, education, finance, global health, environment and disaster management — and Asean connectivity. It also expressed a shared position on the situation in the Korean Peninsula, terrorism and economic integration. But the overall impression was that without greater unity among Asean nations and stronger Asean-US rapport, the EAS may be unable to play a decisive role in the future.

The latest India-Asean Summit took place in this context. “Asean is central to India’s ‘Act East’ policy,” said Prime Minister Narendra Modi, “and our ties are a source of balance and harmony in the region”. India’s traditional reiteration of support for the unity and centrality of Asean was duly reciprocated by Asean’s appreciation for India’s Act East policy and its flagship development programmes like “Make in India”. New Delhi’s calibrated position on the South China Sea issue is broadly appreciated by the Asean side.

On India-Asean political relations, there is justifiable ground for satisfaction. The two partners are also on the same page on countering terrorism and promoting de-radicalisation, though many Asean nations would prefer to stay away from the escalating India-Pakistan tensions.

On economic ties, however, ensuring further progress has been quite a challenge. Bilateral trade is on the decline: it clocked $58.7 billion in 2015, against the $100 billion target set in 2012. Fortunately, the increase in investment flows is a cause of optimism. Finalisation of the Regional Comprehensive Economic Partnership, earlier expected to be done by the end of 2016, could be pushed further into the future. Leaders noted the complexities involved and reiterated the need for a balanced and mutually beneficial agreement. They instructed their ministers and officials to further intensify negotiations “for the swift conclusion of negotiations”, but no deadline was stipulated.

A key aim for Indian diplomacy is to expand connectivity of all types with Asean. Infrastructure connectivity has been the most problematic. Though India’s flagship projects — Trilateral Highway and Kaladan — may not be fully operational before 2020, there is a clamour from Cambodia, Laos, Myanmar and Vietnam that India should keep them in mind. India has, therefore, suggested a joint taskforce on possible extension of the Trilateral Highway to Laos, Cambodia and Vietnam. Asean is aptly viewed by New Delhi as a vital partner for development of the Northeast. India’s offer of $1 billion as a new line of credit for connectivity projects, announced last year, is still under discussion. Asean’s response appears to be rather slow and inadequate. In Vientiane, India also pledged an extra $50 million for the Asean-India Fund.

The overall assessment of the situation in East Asia is that geopolitics dominates the agenda. Having absorbed this reality fully, India is proactively engaged in geopolitical competition, focusing its efforts to enhance synergy with Asean and other like-minded partners like the US, Japan, South Korea and Australia. In addition, it continues to strive for stronger bilateral ties with several Asean nations like Vietnam, Myanmar, Singapore and Thailand. This must also include Indonesia. India’s efforts will succeed more if India Inc steps up to the plate and Asean governments and business leaders match their words with action. The writer is distinguished fellow at Gateway House and a former ambassador to Myanmar