The Old Silk Route, Zuluk, Sikkim
Source: Surajit Roy/Wikimedia
In the last decade Asia’s growth trajectory has perceptibly shifted the global balance away from the western economies towards the Asian economies. Several significant studies have predicted the rise of Asia, and today it is recognised as an important player and an economic powerhouse. With a group of large, medium and small nations increasingly able to generate noteworthy development, and attract international investment, the Southeast Asia region has emerged as a significant economic group on the Asian map. But these expanding economies have not been confined to their borders; inevitably the contiguous South Asia region was part of the phenomena too. South Asia in the meantime was recording its own growth graph, and realised the rich potential offered by its neighbouring region.
This paper starts by briefly tracing the state of regionalism in South Asia and Southeast Asia. The next section examines the extent of physical connectivity that exists in India vis-à-vis South and Southeast Asia. It then goes on to highlight India’s position with regard to facilitating connectivity projects between the two regions and conclude with the challenges that India will need to overcome in order to transform itself into a dynamic bridgehead.
South and Southeast Asia Regional Economic Cooperation
The adjacent regions of South Asia and Southeast Asia have had deep historical links since ancient times, with established routes for the movement of goods and services, along with people. The trans-boundary connections had facilitated intersections of ideas, arts and sciences. Apart from commodities along the spice, silk and tea routes, religious influences were also carried across this region. Indeed both overland and maritime routes were used with varied efficacy over the past centuries. But with the passage of time and the establishment of European colonialism, cross boundary linkages become tenuous. SA and SEA interdependency decreased and new alignments came about, diluting cross border and regional linkages.
Developments in the 20th century led to dramatic changes on a global scale. In the aftermath of the World Wars II the deeply impacted international community became sharply polarised. Even within Southeast Asia, the Cold War divided the region along the two power blocs of the post-war period. It was only in 1967 that the five states of the region (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) got together to form a regional forum, ASEAN, which later expanded to ten members, including Brunei Darussalam in the 1980s and Laos, Cambodia, Myanmar and Vietnam in the 1990s. These Southeast Asian states began to seek a joint platform for common issues, and regionalism began to germinate. The post-colonial period was critical for the newly emerging South Asia states too. Nation-building tasks and bilateral endeavours became the focal issue for them. Regionalism and inter-region cooperation was a distant concern for these newly independent states. Arguably, regional developments in South Asia, unlike in other regions, caused the threat perception emanating from within the region to dismiss the idea of a common platform. Indeed, the earlier physical connectivity that the region had enjoyed was broken off with the partition of the Indian sub-continent and subsequent break-up of Pakistan. The South Asia regional forum, i.e. South Asian Association for Regional Cooperation (SAARC), proposed by Bangladesh, was finally established only in 1985. However, while Southeast Asian countries have increasingly realised the efficacy of regional approaches to accomplish their development goals, SAARC’s achievement has been limited. Its intra-regional trade is far below the expected levels, its infrastructure development remains low and intra-regional connectivity is under developed. As succinctly summarised in the recent Asia Foundation report:
It is currently one of the least integrated regions in the world in terms of trade, infrastructure, water, and energy cooperation. Some progress has been made through regional arrangements such as the South Asian Association for Regional Cooperation (SAARC), the agreement on the South Asian Free Trade Area (SAFTA), and several bilateral agreements, but trade connectivity is below what is necessary to unlock the region’s potential for prosperity….[1]
Given the political differences within South Asia, the common platform of SAARC could never be fully optimised for regional economic growth and development. The lack of political consensus ensured that the economies remain disconnected. Unavailability of cross-border connectivity services made intra-regional cooperation almost stagnant. But given the spurt in economic cooperative initiatives that were being undertaken by regions across the globe, SA did not remain immune to the momentum and in recent years there has been an improvement in developing cross-border overland infrastructure. Limited bilateral agreements have taken place, but several connectivity projects at the sub-regional levels are yet to become operational. In fact while the significant motor vehicles act (MVA) has been signed amongst the four-nation sub-regional group of Bangladesh, Bhutan, India, and Nepal (BBIN) it has not moved beyond the trial run till present, February 2016. In contrast, Southeast Asia, successful in establishing the ASEAN Economic Community (AEC), a single regional market for goods and services, was looking increasingly attractive. The AEC, the third largest economy in the world, represents a USD2.6 trillion market.
There are clear imperatives for the two regions of South and Southeast Asia to engage closely:
With a combined population of more than 1.7 billion in ASEAN and South Asia, integrating ASEAN and South Asia can have profound implications for Asia as well as the world as a whole. The countries of these two regions are very diverse in all aspects. In terms of demographic size, countries vary from highly populous, such as India (nearly 1.2 billion in 2009) and Indonesia (nearly 238 million) to very small ones such as the Maldives (0.31 million) and Brunei Darussalam (0.39 million).…..The different stages of development of these countries are also reflected in their performances in trade in goods and services, FDI inflows and outflows as well as annual consumer price inflation rates. This diversity could be a great opportunity for growth and development if proper cooperation and integration can be achieved among these economies.[2]
India’s Look East Policy, launched in the early 1990s, deepened her ties with SEA, especially ASEAN. India became a sectoral partner of ASEAN in 1992, a dialogue partner in 1996 and a summit level partner at Phnom Penh in 2002. India’s participation in several ASEAN-led institutions like ASEAN Regional Forum (ARF), East Asia Summit and ASEAN Defence Ministers’ Meeting Plus are all a reflection of this deepening of ties. India has interacted with the Association on various issues, from economic exchange to counter-terrorism measures. Both sides have strengthened their cooperation via the ARF and the EAS. During his recent participation at the ASEAN Summit 2015, Prime Minister Modi emphasized India’s active participation in the ASEAN led security dialogue. While some have argued that India has been able to engage deeply with the Southeast Asia region, its physical connectivity has been tenuous. It is also relevant to remember that India is really the bridgehead that connects the two regions of South Asia and Southeast Asia.
India – the Bridge between South Asia and Southeast Asia
Geographically, India is strategically positioned in SA. It is the only state to enjoy direct physical contact with all the states in the region. Its central location within the region allows it to be the bridge between the SA economies such as Bangladesh, Pakistan, and Sri Lanka and the SEA economies. Nepal and Bhutan, the two landlocked states, also can access the SEA region through India.
Over the years there have been several sub-regional initiatives linking up the two regions. South Asia Sub-regional Economic Cooperation (SASEC), Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation (BIMSTEC), ASEAN+1, and the Bangladesh-China-India-Myanmar (BCIM) initiative all have India as a common factor. Not only India, other SA states have also been increasing their linkages to the SEA region. Indeed, as has been argued, ‘trade integration through ASEAN + India FTA and bilateral FTAs such India-Singapore, India-Malaysia, Pakistan-Malaysia will include the service sector and eventually the agricultural sector. Free movement of goods, services, labour, knowledge and capital within ASEAN and South Asia will pave the way for an Asian common market.’[3]Developing economic and connectivity linkages between South and Southeast Asia seems a natural and progressive move towards growth and prosperity. The trade linkages and connectivity between the regions are through land borders, maritime routes and air
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