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    Southeast Asia
     Aug 3, 2010
India scores high on pragmatism
By Simon Roughneen

As India sought a way out of post-Cold War economic stagnation, its so-called "Look East" policy was a shot at finding its place in a globalizing world. Initially dominated by the US and later rebalanced by the dramatic rise of China, the new world order coaxed India to enhance its economic and diplomatic links with the growing Asian economies to its east.

The end of the Cold War was the nail in the coffin for India's Non-Aligned Movement (NAM) aspirations, a proposed third way between the capitalist US and now-defunct communist Soviet Union. Without the two superpowers to play off against, the self-deception that NAM was a viable alternative was put to rest. With a stagnant economy fueling widespread poverty, looking east offered not only new markets and trading partners, but models of


economic growth and development as India emerged out of socialist autarky.

"The Asian Tigers to India's east were seen not only as role models for economic liberalization, but also as markets and a new geopolitical sphere - one with which India was more comfortable at that time than it was with a policy of reaching out in unambiguous terms to the West," Sandy Gordon, who teaches at Australian National University and is a founding editor of the South Asia Masala blog, said in an e-mail.

India's economic expansion continues to be impressive, with the International Monetary Fund now projecting 9.4% growth in 2010 and 8.4% in 2011. Like elsewhere in Asia, India has rebounded quickly - compared to the West - from the global economic downturn. India's super-rich have taken their place alongside financial elites elsewhere, and as the country's middle class grows, vast numbers of people are emerging from poverty.

The country is now producing world-class multinational companies such as Wipro, Infosys, Tata and others. However, vast poverty remains, as confirmed by a new "multidimensional poverty index" developed at Oxford University and soon to be harnessed by the United Nations' Human Development Report. This index numbers 410 million Indians living in poverty.

To help these vast hundreds of millions climb the economic ladder, India will likely remain focused on boosting economic links with the Asia-Pacific region. Current projections indicate that this part of the world will remain the most vibrant region and drive the global economy over the medium term. India is now part of the Association of Southeast Asian Nations (ASEAN) regional forum, the East Asian Summit and ASEM, the Asia-Europe Meeting. The free-trade agreement (FTA) India signed with ASEAN in August 2009 has been described as the crowning glory of New Delhi's "Look East" policy.

The main success of "Look East" "is clearly economic", with East and Southeast Asia now key trade partners for India, according to Amitendu Palit, a visiting research fellow at the Institute of South Asian Studies (ISAS) at the National University of Singapore and previously an Indian Finance Ministry official.

However, India's FTA is much more limited than the deal ASEAN signed with China, and India-ASEAN trade is growing from a comparatively low base. While the FTA is a milestone, it needs work, Palit said. "India needs to work with its eastern neighbors for improving trade facilitation and enabling greater export of services.''

Beyond economics, India has extensive defense dealings with Singapore, Australia and Japan, and emerging strategic relationships with Malaysia, Indonesia and Vietnam. As China rises, its nuclear and strategic relationship with the United States fits Washington's lurch from accommodation to confrontation, with Washington perhaps hoping to build up India as a hedge against China's rise in an act of old-school balance-of-power politics.

This strategy has its limits, however, with the US also giving billions of dollars in aid to Pakistan, which India believes is funding jihadis in contested Kashmir and was behind terror attacks on the Indian parliament in 2001 and more recently in Indian cities.

My friend Myanmar
Given that China and Pakistan are long-standing allies, India will naturally seek its own arrangements elsewhere in Asia, and on its own terms. That has been seen most prominently in its amicable relationship with Myanmar's military regime, which is allegedly working with the same North Korea that helped Pakistan go nuclear over a decade ago.

The big picture is that despite India's growth and dynamism, China's military spending is much larger, and has been for some time, meaning that India is falling further behind year by year. With China set to launch its first aircraft carrier in coming years and significantly boost its ability to project power into the Indian Ocean and beyond, India feels it needs to engage with Myanmar, economically and strategically, to counterbalance China, according to K Yhome, associate fellow at the Observer Research Foundation, a think-tank based in New Delhi.

China's new port and pipeline facility on Myanmar's west coast will not only allow it to pipe gas from the Shwe field into its southern hinterlands, but will also involve Beijing building a terminal designed to pipe oil and gas shipments from the Middle East and Africa into China.

This will allow China to avoid the need to send tankers through the heavily congested Malacca Strait and the South China Sea, where US naval power is likely to be dominant for the foreseeable future. Indian energy companies are investing in the Shwe field nonetheless, which is expected to generate almost US$1billion per annum in additional revenues for the Myanmar regime once it comes on stream.

Myanmar is a lynchpin - or "arrowhead" - for the "Look East" policy as it represents the land bridge between India and ASEAN. The two neighboring countries sharing a porous 1,640 kilometer border across which rebel groups have historically crossed at will. Up until 1993, Myanmar's junta supported ethnic and leftist rebel militias in retaliation for India's pro-democracy, pro-Aung San Suu Kyi policy stance towards Myanmar. The policy has since shifted from moralism to pragmatism.

Last week, Myanmar's junta chief Senior General Than Shwe held talks in New Delhi with Indian Prime Minister Manmohan Singh and the two signed agreements to combat the smuggling of arms, drugs and ammunition across their common frontier. They also agreed to cooperate in the fields of information, science and technology - where India and its formidable information technology (IT) sector promises a significant advancement for IT infrastructure and capabilities in tech-challenged Myanmar.

Than Shwe also presumably won much-craved international recognition for the 2010 general elections, the first Myanmar will have held in over 20 years. It is notable that while he was signing agreements with the world's largest democracy, almost simultaneously US President Barack Obama was renewing economic sanctions against his regime. Than Shwe's four-day visit to India notably took place just weeks after he hosted Chinese Premier Wen Jiabao, and thereby reassured New Delhi that their bilateral ties are also important to his regime.

For many concerned about repression inside Myanmar, it was a troubling irony to see the man who ordered Buddhist monks to be arrested, beaten and killed to be feted at Bodh Gaya - the place where the Lord Buddha is said to have found enlightenment. This was compounded, without any apparent embarrassment, on July 27 when Than Shwe - a leader who has imprisoned the world's best-known icon of non-violent political resistance and whose government has been recommended to be investigated for possible war crimes - received a bust of Mahatma Gandhi from the Indian government.

It is unlikely that India's leaders were rattled by pro-democracy protests marking Than Shwe's visit, or by US exhortations that they should put pressure on the Myanmar ruler to ensure a free and fair election and work toward genuine national reconciliation. The desire to improve regional trade links and counter China mean that, as K Yhome put it, "It is unlikely both countries would want to rock their hard-earned relationship in the near future."

Simon Roughneen is a journalist covering Southeast Asia. His website is www.simonroughneen.com.

(Copyright 2010 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

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