Dividends from East

Thinking Aloud

Singapore’s former prime minister, Goh Chok Tong, described India and China as the two wings to balance his aircraft. The Association of South-east Asian Nations adopted his strategy by implementing free trade agreements with both countries on new year’s day. Politically, the two FTAs may be even more significant than they are economically.

When I was researching my new book, ‘Looking East to Look West: Lee Kuan Yew’s Mission India,’ Ranjit Gupta, a former Indian ambassador to Thailand, told me how learning late one December night in 1995 that the ASEAN summit in Bangkok had admitted India as a full dialogue partner, he went to see the Thai foreign secretary by appointment the next morning. “I had to wait about 25 minutes when the door opened and an extremely angry Chinese ambassador burst out. He had dropped in without an appointment and spent half an hour with the foreign secretary.”

China was not accorded full dialogue status until six months later. “China had conveyed its unhappiness and displeasure to ASEAN countries in no uncertain terms” about India’s promotion from sectoral to dialogue partner status. Gupta writes that he “was specifically told that though ASEAN countries were quite unhappy about India’s past attitude and her policies towards South-east Asia, and disappointed at the tardy pace of substantive interaction and lack of focussed interest even after India was made a sectoral dialogue partner, ASEAN had nevertheless decided to upgrade India’s status in the expectation that India would be more proactive in the future.”

Singapore’s foreign minister George Yeo gave a more forthright reason. “We in South-east Asia have no wish to become an adjunct to China’s economy.” That was the logic for Lee Kuan Yew’s courtship of India ever since he first visited Delhi in 1959 and heard Jawaharlal Nehru address a jurists’ conference. He told me during the series of long taped interviews that form the basis of my book, “I liked his style, I liked his sentiments. He resonated with me.”

After Britain withdrew its military forces, Lee urged India, as the ‘Straits Times’ reported, to become “guardian of South-east Asia.” He later switched to India as an economic force whose exports, markets and manufactures would provide a counter to China. His son, Lee Hsien Loong, Singapore’s present prime minister, more ingeniously seeks an FTA that will subsume rivalries by covering not only all 10 ASEAN members but also India, China, Japan, South Korea, Australia and New Zealand.

The India-Thailand FTA supports that hope. The comprehensive economic cooperation agreement that India and Singapore signed in 2005 is even more encouraging. Its ‘pre-establishment’ clause entitles third-country companies registered in Singapore to be treated at par with Indian undertakings. CECA invites the world to invest in India through Singapore on advantageous terms for all parties.

New experience

The budding defence relationship is also noteworthy. Three landmark agreements provide for joint military training, exercises and other professional exchanges, with Singapore upgrading the Kalaikunda air force base in West Bengal ‘on a cost-recovery basis’. But advance on the strategic front is bound to be discreet and discreetly camouflaged. Singapore has military agreements with half a dozen countries, but this is an entirely new experience for India feeling its way out of the years of non-aligned camaraderie.

Defence is one area where India has an edge over China which has built up vigorous commercial and cultural ties without the benefit of any FTA. Sino-ASEAN trade is in the region of $450 million. Chinese exports flood the region. Much of South-east Asia’s commerce is in the hands of ethnic Chinese settlers.

In contrast, India expects trade to go up to $50 billion by next year. Nor is India any match for China’s massive soft power offensive with think tanks, cultural delegations, schools, language teaching and regional specialists. India’s ambassador in Thailand was until recently a Portuguese language specialist.

As ‘Looking East to Look West’ recounts, P V Narasimha Rao looked east in 1991 as the means to an end. It was one of several coordinated moves to go West that didn’t cause an uproar only because of his deft handling. He sent feelers to Taiwan, instructed India’s Washington embassy to establish contact with Israeli diplomats, negotiated sporting ties with still racist South Africa, and made overtures to the anti-Communist American sponsored Pacific armies management seminar and the Asia and Pacific Council. India had always spurned both.

He was setting the stage for the Malabar exercises, the new framework for India-US defence relationship and the 123 agreement by ending India’s 40-year estrangement from the United States. South-east Asia became an end in itself when Manmohan Singh, as finance minister, discovered economic opportunities there. The policy was further confirmed when Atal Behari Vajpayee subscribed to Lee’s strategic logic.

South-east Asia is where India and China met in ancient times. Hence the name Indochina. It could be the new frontier for contesting positions. Though this does not mean the region will witness any of the friction associated with the Himalayan frontier, rival politics will always animate the ‘Asian economic community’ of Manmohan Singh’s dreams.