Is India’s Act East Policy In Danger Of Stalling?
- In Current Affairs
- 03:45 PM, Jan 23, 2017
- Kishor Narayan
Under the new administration led by Narendra Modi, India in 2014 announced Act East Policy - a new strategic and economic policy to establish new and strengthen old relations with East Asian nations. In lieu of this, the government went on a signing spree inking many new agreements with all major players in the region. However, with changing dynamics in the region and elsewhere, India’s policy might come unstuck with little to show.
Within a year of becoming the Prime Minister in May 2014, Narendra Modi traveled extensively both in the South East Asian and the North East Asian regions. His administration coined a new term “Act East Policy” during the East Asia Summit in Myanmar in November 2014. Act East Policy (AEP) was an evolution of the “Look East Policy” which was in a limbo for more than a decade. While this policy had its detractors claiming that it was an old wine in a new bottle, some analysts claimed that India finally had a strong strategic policy push to help itself evolve into a larger power. The initial two years also had a lot to show for the government in terms of setting up strong bilateral and multilateral relationships with the states in East Asia. However, the policy seems to be in danger of stalling and it’s about time for the Indian government to look for a course correction.
What is the Act East Policy?
Up until 2014, India followed a ‘Look East’ Policy (LEP) – a policy in which India would push for a strong economic relationship with the South East Asian nations. Initiated after the economic liberalization reforms of 1991, it was aimed to provide the much needed impetus for the stagnant Indian economy. However, the Modi administration differed with the policy on three counts. They wanted to expand the relationship to cover strategic interests in addition to economic partnerships, not just in the South East Asian region, but also in the North East Asia and beyond. In addition they wanted a more active indicator of their intent and changed the nomenclature to ‘Act’ rather than just ‘Look’. All these changes signaled a new Indian intent to take an active role in the region by widening the existing relationships.
Right Noise for 2 Years
With an ever-assertive China in the background, India has made all the right noises under the Modi administration for over 2 years now. It is noteworthy that within the first two years, Indian leadership – President, Vice-President and Prime Minister have visited 9 out of 10 ASEAN states. Even in North East Asia and Western Pacific regions, India has entered into a host of bilateral and multilateral agreements.
Strengthening ASEAN relationships
As expected, India’s main focus has been on the Association of the South East Asian Nations (ASEAN) nations. While India has projected the common cultural and religious heritage to showcase themselves as friendly, ASEAN nations have looked at the rare political stability in New Delhi with a hope that India might finally shed its characteristic slow approach and engage in meaningful progressive work. Relations with ASEAN have become multi-faceted to encompass security, strategic, political, counterterrorism, and defense collaboration in addition to economic ties. Cooperation to curb terrorism - especially in the face of rising influence of Islamic State - has assumed priority. Defense partnerships with several ASEAN states have advanced. As part of the ASEAN-India Free Trade Area agreement, India has proposed to construct India-Myanmar-Thailand (IMT) Trilateral Highway connecting India’s North East with Thailand passing through Myanmar. India has also proposed an extension of the highway to connect to Cambodia, Laos and Vietnam at a later date.
North East Asia push
India has been proactive in strengthening its relations with South Korea and Japan. Japan made a never-before concession by signing a civil nuclear deal with India, which is not a signatory of the Non-Proliferation Treaty. In addition, Japan has committed to many infrastructure projects in India, including the construction of the bullet train proposed to run between Mumbai and Ahmedabad. India has actively pitched its Make in India program in South Korea trying to woo corporations like Samsung, LG and Hyundai to increase their already-sizeable presence in India. Amidst all this, Modi was the first Indian Prime Minister to visit Mongolia, thereby initializing a strategic relationship between the two. Mongolia too signed a civil nuclear deal with India thereby allowing its large Uranium deposits to be used in Indian nuclear reactors.
Farther Australasia
Where LEP was limited in its reach, AEP expanded its geographic horizons by reaching out not just to Australia but also to the Pacific island nations. India signed various multilateral treaties with Pacific island nations spread across multiple fields. India’s participation in Malabar naval exercises with the US, Japan and Australia too has continued unabated.
Signs of Weariness
Changing geopolitics ever since the policy was formulated and more so in 2016 has resulted in a few of the East Asian nations witnessing major tectonic shifts in their policies with their neighbors. This is bound to affect the ties India has with these nations.
Mongolia
Post the 2008 global recession and the slowdown in the Chinese economy, Mongolian economy has nosedived. Wasteful spending by the government hasn’t helped them either. In August 2016, Mongolia’s currency Tögrög (also called Tugrik) had the ignominy of being labeled the worst performing currency in the world. China announced that it would come to its rescue by negotiating a $4.2 billion aid to help Mongolia get out of the economic rut that it found itself in. Amidst all this, Mongolia invited Dalai Lama for a religious trip, which resulted in China warning of dire consequences. Dalai Lama’s visit went ahead and in one of the speeches, he even made a veiled political statement aimed at Beijing. What resulted was nothing short of a dragon fury. Beijing stopped all trade with Ulaanbaatar by closing the border posts for goods destined to China and even imposing a surcharge for goods entering into Mongolia. Mongolia realized that it would be tough to survive the winter with stopped trade and no aid package. It reached out to other friendly nations around the world for help including India. While India responded that it was keen on bailing out the Mongolians, nothing much transpired. In fact, Beijing chastised Mongolia for even seeking help from elsewhere. With the clock running out, eventually Mongolia buckled under pressure and assured Beijing that it would not invite Dalai Lama ever again. China had its way and resumed the negotiations for the economic aid. India ended up being the loser for not taking complete advantage of a situation to drive a wedge between China and Mongolia. China’s mistrust of India has grown stronger as India was seen to be fishing in troubling waters but to no avail. Mongolia is now surely in the lap of the Chinese, more than ever.
Myanmar
With the military junta voluntarily giving up power and holding elections for the first time since 1992, Myanmar now has a democratically elected leader heading the state. However, Myanmar has angered its immediate neighbors due to its ‘inhuman treatment’ of the Rohingya Muslims in the state of Rakhine. Myanmar considers them to have migrated from Bangladesh, while Bangladesh rejects these claims. The issue has now grabbed headlines across the region showcasing the highhandedness of the Myanmarese military in punishing the entire population to avenge attacks on military posts by some Rohingya armed groups. Muslim nations in the neighborhood like Malaysia and Indonesia have urged the United Nations to provide justice to the Rohingyas. Under such circumstances, regional cooperation with Myanmar might be a far-fetched idea until Muslim-majority nations feel that the Myanmarese government is falling in line. Such a hostile environment within South East Asia might impede the progress of unilateral and multilateral Indian projects in the region since nations might flatly refuse to conduct business with a Myanmarese government, which has a questionable human rights record.
Vietnam
Similar to Myanmar, Vietnam too started opening up not so long ago and has been trying to forge strong ties with major partners around the world. Similar to other nations in the South China Sea, Vietnam too is concerned about the rise of China and is trying to shore up its defense capabilities. India has been more than willing to help Vietnam by offering to sell ingeniously developed missiles and the discussions are said to be in an advanced stage. Not surprisingly, China has expressed its reservation to this, saying such tactics by India to arm Chinese neighbors would not be allowed. It is a given that Vietnam is no match to China either militarily or economically. Under the circumstances, it is not clear to what extent can Vietnam withhold any pressure by China, if China decides to flex its muscles to teach Vietnam a lesson. This is one relation that India might have to tread very cautiously since India already has a host of lingering issues with China.
China
Although the top leadership in India and China might wish to downplay the differences between the two nations, it is no secret that all is not well between the two rising powers. China has already attempted encircling India by working on the One Belt One Road corridor and the China-Pakistan Economic Corridor projects in addition to establishing strategic relations with Maldives and Sri Lanka. China has been using the classic checkbook diplomacy to lure the small nations in the region to join the Chinese initiated economic projects promising great economic development. For instance, while India has pledged a sizeable amount $500 million to Iran to develop the Chabahar port, China is pumping in a whopping $46 billion into the CPEC project in various forms like grants and loans. India would find it very difficult to match China in spending on economic projects in the region.
United States
United States’ “Pivot to Asia” was a strategy to help establish a deeper footprint in the region. Unlike a hub and spokes model where the United States would be a central pivot to talk to each nation in the region, it decided to create an inclusive, participative network of interdependence, cooperative trade. Outgoing President Obama’s signature deal Trans-Pacific Partnership (TPP) was supposed to be the United States’ response to closely align with all the nations in East Asia as a counterbalance to China in the region. However, due to other major issues in the Middle East and Eastern Europe, the US administration never succeeded in completing the pivot to Asia. With a new administration taking charge in Washington DC which is opposed to the economic deal, the TPP might never see the light of the day. Under the circumstances, each nation in the region might feel hard done by the U-Turn of Washington, and might feel extremely vulnerable by any act of aggression committed by the Chinese. Regional Comprehensive Economic Partnership (RCEP) which was touted as an alternative to TPP by including China and India and dropping out the nations from the American continents might also not see the light of the day due to these apprehensions that the ASEAN nations have towards China. Such a failure to establish a free trade agreement might be a severe blow to India’s wish to maximize trade with the ASEAN nations despite already having a free trade agreement with ASEAN.
Domestic Issues
Back home too, India might continue to face domestic issues that might hamper the government’s idea to provide regional connectivity. The continuing insurgency in Nagaland and the frequent blockades in Manipur carried out by the various Naga groups will prevent carrying out any meaningful trade through the IMT trilateral highway. The rebel groups might even oppose the highway citing migration and destruction of livelihoods. Also, the huge influx of the Rohingya Muslims is already ringing alarm bells in the corridors of power in New Delhi. India might be forced to take a clear position on where it stands on the issue. That a Hindu nationalist party is running the government might complicate the matters if it decides to deport the Rohingya Muslims.
Course Correction
India might feel hard done by the various geopolitical events that are playing spoilsport to its high-stakes policy. However there is still time for India to modify the policy by choosing to minimize the risks. Instead of dealing with all the nations in the region at the highest level, it might make sense to probably categorize the nations based on the level to which they might be willing to maintain ties with India. Nations like Japan, Vietnam and Australia, which are threatened by China both economically and militarily would be the obvious choice for India to enhance its ties with. It may not be prudent for India to bet on vulnerable states like Myanmar and Mongolia. Rather such states should be nurtured along as they try to find a middle ground between satisfying every whim of China and opposing them.
As the Trump administration finds its feet, it may decide not to engage in any major trade deals in the Greater Pacific region. India should not hesitate to go it alone in forging relations with these countries who were betting heavily on the Trans-Pacific Partnership.
South China Sea might continue to hog the limelight and China might be willing to go to any extent to protect its position on the issue of securing the artificial islands that it has militarized despite claiming to the contrary. Although India has merely indicated that the judgment by UNCLOS, which came down heavily on China, should be adhered to, it might be forced to take a clear stand. Such a move by New Delhi will have the capacity of pushing the Sino-Indian relations towards a slippery slope.
India’s pet strategic foreign policy initiative might be a victim of unintended global consequences on which it has no control. Eventually, India would have nothing to show either in terms of strategic advancements or in terms of economic developments. New Delhi will have to be nimble-footed in minimizing the risks while dealing with trustworthy allies in the region. The success of doing so will determine whether the world will look at India as a major power or not.
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