#Raisina Files: The quest for economic convergence in Asia and its sea of strategic discord

By Commodore Abhijit Singh

In the coming years, littoral-Asia will be a key determinant of prosperity in the Asia-Pacific region. For long, maritime experts have regarded the waters around Asia as a combination of two dissimilar strategic sub-systems. The Indian Ocean was thought of as a theatre of irregular threats amenable to a collective form of maritime security. The Western Pacific, on the other hand, was perceived to be a domain of intractable geopolitical conflict and warring maritime agencies. Many believed the two sub-regions had so little in common that applying similar solutions to their problems was akin to prescribing the same medication for different physical ailments. Yet, a subtle shift is now underway and a gradual equalisation of challenges is beginning to occur across this vast strategic system. Evidence suggests that the strategic differential between the two sub-theatres comprising maritime Asia is narrowing, with the Indian Ocean littorals beginning to resemble the troubled waters of the Western Pacific.

The rebalancing of security threats, among other things, can be put down to the prevalence of three factors. First, there is a growing maritime militarisation occurring across the Asian littorals characterised by a gradual build-up of naval forces. The modernisation of the People’s Liberation Army Navy (PLA Navy) and other navies in Southeast Asia is matched by a maritime military build-up in India, Pakistan, Iran, Saudi Arabia and other Indian Ocean states.

Second, huge investments are being made in maritime infrastructure in both sub-theatres. China has been leading in the race for infrastructure creation thus far, but others are not far behind. Japan, Indonesia and Thailand have undertaken construction of huge maritime projects, even as India, Sri Lanka, Maldives, Mauritius and Seychelles have expanded their investments in coastal development and the blue ocean economy. This has led to the presence of extra-regional maritime forces, triggering anxiety over the increased militarisation of the littoral spaces.

Third, there has been a gradual expansion of non-traditional threats in both sub-regions. Even though piracy off the coast of Somalia has been successfully tackled, drug-running, arms trafficking, illegal fishing and climate change continue to test the effectiveness of maritime forces on either side of the Strait of Malacca.

Representational image. Getty Images

Representational image. Getty Images

The security conundrum

From New Delhi’s perspective, what is vital is the contradiction between the two main factors that mediate the maritime environment in South Asia. While increasing deployment of modern naval forces near critical choke points in the Indian Ocean Region (IOR) has led regional navies to assume robust postures, new dangers are being posed by non-traditional security threats, which require a collective response. Indian experts are concerned by the modernisation of Pakistan’s navy, the growing deployments of the PLA Navy in the Indian Ocean and China’s reclamation of maritime features in South China Sea. These threats require robust deterrent action by the Indian Navy. But Indian analysts also recognise the challenge posed by non-traditional adversaries, tackling which needs joint and sustained effort. An instructive example is the grave danger posed by ‘hybrid’ forces (non-state actors launching attacks on regular forces). Al Qaeda’s audacious attack on a Pakistani frigate docked at Karachi port in October 2014 led Indian naval planners to strengthen the coastal security architecture, and enhanced consensus in favour of joint surveillance. The militants’ plan to hijack the ship and use it to mount attacks against United States’ and Indian naval forces in the Indian Ocean was foiled in the nick of time. No one, however, is willing to bet on the same result every time.

Despite clearly converging security interests, quality cooperation among regional maritime forces has been hard to engender. This is principally on account of the distrust that exists among powerful nations with strong geopolitical interests in maritime Asia. India and China have been suspicious of each other’s intentions in their primary theatres of maritime operations. Indian analysts regard China’s growing IOR deployments and its announcement of a Maritime Silk Route project as elaborate covers for its military ambitions in the IOR. Some even consider the latter as a strategic ploy for naval access to ports in the South Asian littoral zones, metaphorically described as the ‘string of pearls’. But Beijing has not been welcoming of India’s maritime presence in the South China Sea either. Indian naval ships entering the South China Sea have had to contend with an assertive PLA Navy, intent on underlining its primacy in what it considers to be its regional waters. While outwardly indifferent to Indian presence, the message to Indian naval ships has been clear: “You have entered Chinese waters. You operate here at our sufferance.”

The economic scenario in maritime Asia, however, though stands apart from the security picture. Notwithstanding the strategic impulse that divides the Indo-Pacific, there is a strong economic rationale that binds the region. The discourse in India routinely overlooks the fact that the synergy of maritime initiatives in littoral-Asia is premised on the leveraging of strengths and common regional interests. Not only is there a strong economic dividend to be realised by working in operational sync, pursuing joint projects can also produce substantial diplomatic and cultural gains. Yet, economic opportunities are not being currently taken seriously because nations fear these could compromise national interest and strategic influence in the wider maritime space.

China’s Maritime Silk Road

One such developmental proposal that is yet to pass the litmus test of political consensus is China’s 21st Century Maritime Silk Road (MSR). A key component of the larger Chinese ‘One Belt One Road’ (OBOR) project meant to promote trade, investment, services and infrastructure construction in Asia and Europe, the MSR aims at an economic, diplomatic and cultural integration of littoral Asia. To achieve the project’s stated ends, Beijing has created specific instruments, such as the Asian Infrastructure Investment Bank and a $40 billion Silk Road Fund. These have been received positively by some governments in Asia, but many remain wary of its strategic implications.

To convince potential partners, Beijing has combined the drive to create infrastructure with an effort to increase trade volumes. Last year, China signed an agreement to upgrade its free trade area with the Association of Southeast Asian Nations (Asean). By dovetailing the MSR with a master plan for an integrated Asean community, Beijing has sought to provide greater urgency to its proposal. Among the states that it has most actively courted, India has been the most significant.

Unfortunately, despite numerous attempts to elicit a positive response from India, New Delhi has remained non-committal about the project. Indian policymakers usually point to the lack of specifics on critical projects in the Indian Ocean, but the real concern has been the China-Pakistan Economic Corridor, a critical component of the OBOR that will make Pakistan a critical node along both land and sea routes. The Indian Navy is also wary about the PLA Navy’s growing ship and submarine deployments in the Indian Ocean, which many Indian analysts believe is meant to establish China’s de-facto dominance in India’s strategic backyard. The new Chinese military base in Djibouti has further fuelled Indian fears, convincing many Indian experts that China is stealthily moving to counter Indian influence in the IOR.

For its part, China insists that its investments in IOR maritime infrastructure are motivated by pure economics and that the benefits will accrue equally for all participating states. Chinese academics and experts underscore the MSR’s utility in integrating existing initiatives, including regional efforts, to improve physical connectivity and development opportunities. Consequently, Chinese scholars contest the ‘string of pearls’ theory. A prominent Chinese daily last year noted that Indian fears of PLA military bases throughout Indian Ocean were without factual basis. China, it claimed, has only two purposes in the Indian Ocean: economic gains and the security of sea lines of communication. In other words, access, rather than bases, is what drives Chinese naval deployments in the IOR — ‘access’ that will drive the creation of economic ‘mega-projects’ in the Indian Ocean and South China Sea, and ultimately assist Asian governments in fulfilling their developmental mandate.


Indian initiatives in the Asia-Pacific

Beijing’s win-win propositions in maritime Asia are worthy of empathetic consideration because they are led by the same economic rationale that drives New Delhi’s own outreach in the Asia-Pacific region. India’s trade with Asean and East Asia has grown rapidly. A rising proportion of Indian oil and container shipments now traverses the Straits of Malacca. New Delhi has energy interests off the Vietnam coast and seeks to increase investments in the oil and gas sectors in Southeast Asia. Moreover, India’s Look East Policy, the main policy framework of India’s engagement with Southeast Asia, has a clear economic focus.(1) New Delhi’s regional endeavours include the India-Asean Free Trade Area, Mekong Ganga Cooperation and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation. Today, despite a newly invigorated approach christened, ‘Act East,’ India’s approach essentially remains tilted in favour of economic and cultural reintegration with Southeast Asia.

While New Delhi’s developmental and socio-political agenda is clear, it faces major geographical and infrastructure-related constraints. Many of its initiatives are hindered by lack of connectivity within and beyond the subcontinent. Geographical constraints, for instance, impede India’s land-based foreign trade with China and Myanmar, two of its immediate neighbours. As a result, most of India’s merchandise trade with these countries is thorough the sea. A greater desire for economic synergy is one reason New Delhi has been willing to endorse the Bangladesh-China-India-Myanmar Trade Corridor (BCIM) proposed by Beijing.

While BCIM might be beneficial for India, it may yet be insufficient in overcoming New Delhi’s connectivity problems, unless supplemented by larger joint projects in the common seas. The Modi government is looking to revive former Indian Prime Minister Atal Bihari Vajpayee’s ‘Sagar Mala’ Project. The project aims to enhance overseas trade connectivity by developing new seaports along peninsular India, and envisions ‘port-led development’ of the hinterland as well as special economic zones (SEZs). Indian analysts and policymakers must now consider the potential of MSR to supplement existing arrangements in a manner that can better facilitate seaport and SEZ development. More importantly, there is a need to synergise blue economy initiatives for sustainable development of the littoral zones.

A cultural convergence

There might also be a cultural convergence between the MSR and Indian maritime initiatives in the Indian Ocean. According to Chinese analysts, Bejing considers the MSR to be a cultural project. In this, it resembles India’s ‘Mausam’ and ‘Spice Route’ projects. The former is an academic enquiry into cultural linkages in the Indian Ocean; the latter, a plan to retrace a historical route along Coromandel Coast of southern India where ancient traders plied their wares. Taken together, the Indian and Chinese proposals symbolise Asia’s historic maritime heritage, traditions and practices, lending credence to idea of a resurgent Asia. In particular, the MSR appears well-positioned to integrate Asia economically, creating mutual dependence and greater regional order and stability.

Towards an integrated maritime Asia

Asia’s economic growth in the past few decades has indeed been impressive. Yet, amidst a global slowdown today, the developmental agenda appears under threat. With exports falling and export costs growing, Asian states are looking for new ways to maintain growth rates. Since China is willing to create industrial capacity in its neighbouring states, the MSR appears to be a useful instrument to boost regional growth. (2)

Partnering with Beijing on the MSR could have clear benefits for New Delhi. With Chinese authorities keen to outsource manufacturing to their MSR partners, India’s advantages in terms of low labour costs and raw materials place it in a good position to strengthen its manufacturing base, propagate its ‘Make in India’ campaign, and generate employment opportunities. If India decides to stay out of the MSR, however, it runs the risk of losing the momentum for development. China’s neighbours and MSR partners would be more than willing to make up for India’s absence, thereby negating New Delhi’s advantages.

While integrating maritime Asia has its own risks, especially the possibility of increased competition among regional maritime forces, India must capitalise on the opportunity for vast economic gains. It must do so by committing resources and actions, pursuing free trade and other open economic arrangements, and shaping norms and setting priorities for regional development. It must do all of these, even while deterring adversaries, taking measures to preserve the regional balance of power, and fighting transnational threats like piracy and terrorism. New Delhi must demonstrate that it is willing to seize opportunities and act, not merely in pursuit of narrowly-construed national interests, but also for the greater regional good.

In effect, India must balance ‘benefit and risk’ to find a middle path, a compromise that allows it to pursue two seemingly conflicting goals: ensure strategic primacy in the Indian Ocean, and regional development through economic integration of maritime-Asia.


Other references

(1) For a broader discussion on India’s Look East Policy, see: A.N. Ram (ed.), Two Decades of India’s Look East Policy: Partnership for Peace, Progress and Prosperity (Indian Council of World Affairs: New Delhi, 2012)
(2) Mingjiang Li, China’s “One Belt One Road” Initiative: The Convergence of Strategic Interests and Domestic Imperatives”, in China’s Maritime Silk Route and Asia, Vijay Sahuja, Jane Chan (eds) (New Delhi : Vij Books 2016), p 14

This is part of a series of special essays brought to you by Firstpost ahead of the #Raisina Dialogue that begins in New Delhi on Tuesday. #Raisina is India's first MEA sponsored global conclave on geopolitics and geoeconomics, Firstpost is the media partner.

Updated Date: Mar 01, 2016 07:55 AM