India needs to rush in as Asean opens its doors

New Delhi launched its “Look East” policy two decades ago, at around the same time that China opened its backyard to Southeast Asia. China’s presence is felt across the region, yet India’s presence is about the same as it used to be a few decades ago. 

New Delhi held a two-day meeting with ministers, officials, private sector representatives and academics from Asean to look for ways to increase engagement with the 10-member regional grouping. The meeting wrapped up yesterday. 

All sides had a very clear vision on how they would utilise the combined population of 1.8 billion – a fourth of the world’s populace – to sustain economic development and growth. If the gross domestic product of Asean countries and India were to be combined, it would be US$3.6 trillion (Bt111 trillion) or 5.7 per cent of the global GDP. This number may look huge, but it only exists on paper and has rarely been transformed into real life. Of course, together they can be a significant growth engine for the global economy, but unfortunately Asean and India still haven’t found a way to come together. 

Trade and investment between Asean and India have grown significantly over the past few years thanks to the economic boom in the sub-continent. In fact, bilateral trade rose by 41.4 per cent in 2010, while direct investment from India in the region rose sharply from $800 million in 2009 to $2.5 billion the following year. 

These figures look good, but they’re not enough. 

Cambodian Foreign Minister Hor Namhong, who is the Asean chairman, urged both sides to speed up the implementation of an India-Asean trade agreement and build infrastructure to facilitate investment. 

While China is able to complete the upgrading and renovation of many roads linking Southeast Asian countries over the past decade, India, Thailand and Burma have yet to make their dream of a trilateral highway come true. This is not including the plan to extend roads eastwards from Burma through Thailand to Laos, Cambodia and Vietnam, which requires more effort and investment. Another project in the pipeline that needs a clear plan is the development of Mekong-India Economic Corridor to enhance economic connectivity between India and nations in the Mekong basin.

Slow progress in connectivity projects from India is caused by many factors. The political process in New Delhi is long and complicated because many development projects require layers of approval from the federal government down to state authorities as well as local participation.

Burma’s political instability due to conflicts with armed minorities along the border is another key factor contributing to the lack of progress in connectivity projects. Burma has yet to set up a road from the west of the country to the east. 

Plus Thailand is also partially to blame because its political difficulties over the past five years have shifted the focus on development projects with neighbouring countries. Also, some administrations have failed to maintain good terms with neighbours on both the east and west. 

However, things are starting to look a bit more positive now, though India still needs to accelerate its cooperation schemes and projects of connectivity with Asean. 

The political situation is showing some improvement in Burma as the new government makes an effort to introduce reforms and form a truce with several armed minorities. Though nobody can guarantee that such cease-fire agreements will last long, it’s better than there being constant clashes. 

Though political conflict in Thailand is still far from over, the current government has enough support to push projects with neighbouring countries to completion.