Yet ironically, that’s part of the problem: Even as America’s security role remains the backbone of strategic stability, the economic pillars of US credibility are eroding across Asia.
This offers a bit of a cautionary tale to India.
As I wrote recently in India’s Business Standard, strategically, India has been bottled up in the subcontinent for generations, but it wasn’t always so: Southeast Asia bears the hallmarks of a bygone era in names like ‘Indonesia’ and ‘Indochina,’ and Indian sailors once plied the trade routes from the Indian Ocean to the strait of Malacca.
But as it again ‘looks East,’ India risks being left out in Asia because of the significant mismatch between its lofty strategic goals and more earthbound economic realities.
Make no mistake, India’s strategic connections to East Asia are being restored. Yet this is happening, in large part, because India is widely viewed as a potential — if still very modest — counterbalance to Chinese power. And diplomacy and politics remain the central drivers, not least, for example, in the invitation to India to become a more active player in East Asian regional groups.
But, at the end of the day, strategic intentions alone cannot sustain a larger role for India in Asia writ large. As America is rediscovering, economic content is essential. Greater economic content to India’s relations with East Asia will be required. And investment-related reforms will surely be essential, too, to enhance the flow of goods, capital, and opportunity.
Trade plays a growing role in the Indian economy, and India has signed preferential trade agreements with ASEAN and South Korea. Yet scale remains a handicap: 11.6 per cent of ASEAN’s trade is with China, just 2.5 percent with India. Meanwhile, the backbone of East Asian economies remains integrated supply and production chains to which India is largely irrelevant.
More manufacturing in India’s southern states could mean greater integration into East Asian supply and production chains, or not. Likewise with outbound investment from corporate India: It could, perhaps, transform India’s interactions with Southeast Asia; but, here too, scale remains a handicap.
The business of Asia is still business. And India and East Asia have some distance yet to travel.
Evan A. Feigenbaum is a Senior Fellow at the Council on Foreign Relations.
This article was first published here by the Council on Foreign Relations’ Asia Unbound blog.