Build our economy to make an impact in Asia

It is a season of transitions. The election of the American President and the selection of the next generation of Chinese leaders are being followed by early polls in Japan.

The American, Chinese and Japanese leaders will have more than an eye on their domestic audiences as they attend the East Asia Summit (EAS) in Cambodia this week. So will Prime Minister Manmohan Singh. Domestic challenges in the United States and China, Japan and India may dwarf external ones. Yet, the summit will be watched closely for signs of realignment and crystallisation of a new security architecture in Asia.
A central element in this emerging configuration is the much avowed desire of the US to remain a key player in Asia. The so-called “pivot” to Asia-Pacific has at least two components.
On the economic side, the US is promoting a Trans-Pacific Partnership (TPP). Signed in 2005 by Brunei, Chile, New Zealand and Singapore, the TPP has drawn the interest of five other countries: Australia, Malaysia, Peru, Japan and Vietnam. The TPP has an ambitious tripartite agenda. First, it aims to conclude a free trade agreement which has provisions for protecting intellectual property. Second, it seeks to create investor-friendly regulatory frameworks and policies. Third, it encompasses emerging issues, including measures to ensure that state-owned companies “compete fairly” with private companies and do not put the latter at a disadvantage.
China sees the TPP as being directed at it. This is not surprising, for the TPP is being promoted when US-China economic relations are acquiring an edge over accusations of unfair trade practices. The US appears to hope that a successful TPP will eventually compel China to come to terms with it — just as Beijing did with APEC and WTO.
On the security side, the US is more explicitly attempting to create a countervailing coalition against China in Asia. Apart from shoring up its ties with formal allies in the region, the US has embraced new partners such as Vietnam. It also looks at a strong partnership with India as crucial to this effort at balancing against China.
The emerging configuration of power in Asia has prompted analysts and observers to draw parallels with the Cold War or with Europe prior to the First World War. Neither of these comparisons is apposite. In contrast to the Cold War where power was concentrated in two superpowers who led their blocs of allies, we are now seeing a situation where power is getting more diffused across the international system. Nor are we witnessing a straightforward contest between an “entente cordiale” of Asian powers and a rising China. Unlike Germany before the First World War, China matters a great deal to the economic vibrancy of Asia.
If there is a parallel, it is with American attempts to build a trans-Atlantic economic, political and security architecture after the fall of the Berlin Wall. This was an architecture from which Russia was deliberately excluded. Russia’s economic free fall during the 1990s ensured that it was in no position to challenge the structures put in place by the US. But China’s position in the coming decades is likely to be rather different.
The analogy of Europe before the First World War is useful in one sense though. It reminds us that great powers are not the only prime movers of international politics. Smaller players can set off systemic crises — as the Balkan countries did in 1914. Similarly, while the American pivot can reassure smaller neighbours of China and enable a stable environment in East China and South China seas, it could have the opposite effect as well. Emboldened by the American security umbrella, one of China’s neighbours may well pick a fight that could go awry. We don’t need to look as far back as 1914. Think of Georgia’s misadventure against Russia in 2008, which was triggered by this dynamic.
In short, Washington’s blueprint for Asian security may not have the benign consequences that are being underlined. An Asian architecture explicitly aimed at China may not be in India’s interests — just as an architecture dominated by China isn’t either. So far, New Delhi has taken an appropriately hard-nosed view of its interests in the emerging arrangements. While it has worked towards closer security cooperation with Japan, South Korea, Australia and the US, India has not embroiled itself in the ongoing maritime disputes. Indeed, it would be unwise for India to join an anti-China bandwagon just when a new generation of Chinese leaders is taking office.
Moving ahead, New Delhi should continue to strengthen its bilateral strategic ties with East Asia countries. Relationships with Japan and South Korea are not only important from the standpoint of regional security. They also hold out the promise of denser economic ties with East Asia. The central problem with New Delhi’s “Look East” policy is that India remains marginal to the integrated chain of supply, logistics and manufacturing in Asia. Unless its economic heft in the region increases, India’s aspiration of being a key player in Asia will remain unattainable. Working towards this is all the more important at a time when the Indian economy is visibly slowing down. Inviting investment from East Asian countries is an essential first step to creating the infrastructure that will enable India to integrate with these economies.
It’s a pity that the Prime Minister’s trip to Japan had to be postponed, for the road to EAS does run through Tokyo.

The writer is a senior fellow at the Centre for Policy Research, New Delhi