Introduction
The emergence of trans-regional economic corridors is drawing considerable attention among academia and policy makers. The potential to harness economic growth by creating these corridors is an area where India is showing interest. While looking at the progress of these corridors in the context of South and Southeast Asia, there is a growing awareness of the benefits of such economic measures which will link regions together to promote trade and economic activity along regions that can complement the movement of goods and people, with economic development and growth along specific sectors. The focus on trans-regional economic corridors between South and Southeast Asia brings to attention the changing regional geo-politics and geo-economics within an area that is being seen as the wider Indo-Pacific. Impacted by the rise of China and India as economic powers and also influenced by the US pivot to Asia or rebalancing which keeps the economic focus of the United States on the wider Indo-Pacific region, this region is witnessing profound changes both politically and economically. With the `engine of global economic growth shifting eastwards’, the potential to harness the integration of economic ties across the region is becoming more crucial.[1]
Among the various trans-regional economic corridors in the region, the Indo-Pacific Economic Corridor is still at a very nascent stage. The very conception of the Indo-Pacific Economic Corridor can be traced to the US-India Strategic Dialogue of 2013, where Secretary of State John Kerry referred to the potential of the Indo-Pacific Economic Corridor, in transforming the prospects for development and investments as well as for trade and transit between the economies of South and Southeast Asia.[2]
Origins of the Indo-Pacific Economic Corridor:
With regard to the specific case of the Indo-Pacific Economic Corridor, its origins lie in the increasing recognition of the Indian and Pacific Oceans as one single maritime entity. The Indo-Pacific Economic Corridor is a vision that is clearly embedded in the `US rebalancing’ and `pivot to Asia’ strategy – which began by late 2011/early 2012.[3] One of the core objectives of the `pivot to Asia’ strategy has been to intensify the US role in the wider Asia-Pacific region, with an emphasis on three critical areas – military planning, foreign policy and economic and trade policies. The core focus of the US rebalance strategy is to ensure that within the context of the wider Asia-Pacific, the United States would continue to engage and play both `a larger and long-term’ role.[4] This larger and long-term role was primarily conditioned upon three tenets – first, that international law and norms were to be respected; second, issues relating to free passage and the freedom of navigation were not hindered or blocked. Third, where emerging powers and their neighbours conflicted over unresolved territorial claims, the US began to emphasize the need to approach resolution through peaceful negotiation.[5] As part of this strategic turn towards Asia there are clearly four areas where the US is increasing its activities and engagement – first, in the area of military deployment, the US strategy in the rebalancing aims to deploy in the Pacific and Atlantic sectors military presence to the tune of 60/40 percent respectively. Second, while there is an overall reduction in the US’ global defence expenditure, in the case of East Asia its defence spending would be increased. Third, the increased interaction and focus on East Asia will be critical and remains very much in tune with the rise of China in this region. This shift eastwards is clearly founded on the fact that the global economic growth has actually shifted eastwards and the rise of China has resulted in altering the regional balance making it imperative for the US to seek a role in the larger dynamics of change.[6] Fourth, in the arena of economic integration the emphasis on the recently concluded Trans-Pacific Partnership will remain very relevant.[7]
While these are the efforts from the side of the US in terms of their own interests within the wider region, there are simultaneously developments that are shaping the Asia-Pacific which critically impact this strategic shift by the US. First, the engine of global economic growth has shifted eastwards, particularly with the economic rise of China. Both India’s economic growth and the role played by Japan as a considerable economic power, necessitates a new approach to this region. For the first time all the three leading economic players in the globe are within the Asia-Pacific region. For the US this compels an engagement that will be very crucial to sustaining US economic interest in this region itself. Second, with respect to the growing military capabilities of China, there is some degree of trepidation in the region. Particularly regarding the claims of the Chinese over the territorial disputes in the South China Sea, the US has also been very clear about the issues relating to the `rights of passage’ and `freedom of navigation’. Much of the conflict also relates to the different interpretations of the United Nations Convention on the Law of the Seas (UNCLOS) and the normative shifts that result from such interpretations. Much of the US focus in this context is to engage China into accepting the existing normative positions which is in consonance with other regional players, particularly the members of the ASEAN group, some of whom are claimants to the South China Sea dispute. The recent ruling by the Permanent Court of Arbitration (PCA) on a complaint filed by the Philippines has rejected the right of Chinese historical claims to the South China Sea. This ruling was rejected by China stating that there was no provision for the implementation and that China does not accept the ruling or the veracity of the UNCLOS. The role of states in the region and the US and other players has been to reassert the significance of the UNCLOS and the normative role it played.
From the standpoint of the United States the logic of extending the `Pacific pivot’ to include the coastal areas of South Asia is a critical shift because this links the Indian Ocean, the Bay of Bengal and the Straits of Malacca, Sundah and Lombok into single strategic unit.[8] This linking of the two oceanic extents is actually a clear shift in conventional thinking which mostly tended to view South, Southeast and East Asia as three distinct sub-units of the Asian continent.[9] However, the Indo-Pacific context becomes more relevant while looking at the region as a singular unit given that nearly 55% of the world’s container trade travels through this region. Added to this nearly 70% of ship borne energy transport moves through these waters, which necessitates the perceptional change in how the region is currently being viewed.[10] The recent approach to linking the Indian and Pacific oceans is clearly driven with a focus on the geo-political shifts that are influencing the region.
It is within this context that the Indo-Pacific Economic Corridor becomes relevant – the objective of the United States to link South and Southeast Asia, through a linking of the maritime extents, also opens up the possibility of linking trade and economics among these two regions. If the vision of the Indo-Pacific Economic Corridor gains momentum it will need to be enhanced by building greater physical infrastructure, more regulatory trade architecture as well as human and digital connectivity.[11]
Opportunities Contributing to the Implementation of the Indo-Pacific Economic Corridor:
While the concept of the Indo-Pacific Economic Corridor is relatively new there are several opportunities that can be explored to further this idea into reality. First, the growth of the economies of both South and Southeast Asia are crucial in pushing forward the concept of the Indo-Pacific Economic Corridor. Undoubtedly as the global economic growth has shifted eastwards, there is also a significant change that is visible in these regions. Both South and Southeast Asia play a very significant role in linking the largest economic player in the region, which is China. China’s investments in Southeast Asia stand as the highest while in the case of South Asia it is growing rapidly.[12] Simultaneously there are steps towards establishing greater economic integration in the wider Asia-Pacific through two initiatives – the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). With this growing focus on economic integration, there is a significant opportunity to link the Indo-Pacific Economic Corridor into the larger web of regional economic integration initiatives that are already taking shape.
Second, the logic of the Indo-Pacific Economic Corridor is also driven by certain political changes that will be credible. In this context, one that will remain significant in the years to come are the developments shaping Myanmar which lies at the pivot of both South and Southeast Asia, thereby acting as a critical link between these two regions. Myanmar remains as the land connectivity between India and Southeast Asia which was one of the factors that impacted the India Myanmar ties when the Look East Policy was initiated. As the connectivity issue relating to South and Southeast Asia becomes imperative Myanmar’s political transition will be important.[13] Added to this there is also the question of extending the existing Greater Mekong Sub-region, to link up to Myanmar through the expansion of the East West Corridor – this in effect will link the entire Southeast Asian mainland regions together – from the port of Da Nang in Vietnam through Laos and Thailand to the port of Mawlamyine in Myanmar. Once this corridor is realized the 1,320 kilometer link will be a critical one since it will in essence link two points in the Indian and the Pacific oceans – Mawlamyine lies on the Western coast of Myanmar on the Andaman sea (Indian Ocean) while Da Nang lies in the Eastern coast of Vietnam on the South China Sea (Pacific Ocean).[14]
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