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Posted on Sustainabilitank.info on May 17th, 2010
by Pincas Jawetz (pj@sustainabilitank.info)

India-China competition dims hopes for regional cooperation.


By HARSH V. PANT
The Japan Times online, Monday, May 17, 2010.
LONDON — Established in 1985, the South Asian Association for Regional Cooperation (SAARC) had its 16th summit meeting in Thimpu, Bhutan, late last month. Apart from the fact that Bhutan hosted its first SAARC summit, there was hardly anything that inspired confidence in this largely moribund organization that is celebrating the 25th anniversary of its founding this year.

Covering at least 1.5 billion people across India, Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan, Maldives and Afghanistan, SAARC is one of the largest regional organizations in the world. But its achievements so far have been so minimal that even its constituents have become lackadaisical in their attitudes toward it. The state of regional cooperation in South Asia can be gleaned from the fact that Pakistani Prime Minister Yousuf Raza Gilani went to Bhutan via Nepal, using Chinese territory in Tibet rather than the straightforward route through India.

Bhutan chose climate change as the theme of the summit, and the eight-nation grouping delivered a Silver Jubilee declaration titled “Toward a Green and Happy South Asia.” The focus, however, was the agreement on trade in services signed during the summit. Intraregional trade in South Asia remains far below its potential despite the member states’ signing the South Asian Free Trade Agreement, which went into force in 2006.

For long, the dominant narrative of SAARC has been how the India-Pakistan rivalry hampers the group’s evolution into something significant. That is now losing salience amid China’s growing dominance of the South Asian landscape.

China entered SAARC as an observer in 2005, supported by most member states; India could do little about it and so acquiesced. Now, much to India’s consternation, Pakistan, Bangladesh and Nepal are supporting China’s full membership in SAARC. China’s rising profile in South Asia is not news. What is astonishing is the diminishing role of India and the rapidity with which New Delhi is ceding strategic space to Beijing on the subcontinent.

Even as China becomes the largest trade partner of most states in South Asia, including India, New Delhi is busy repeating the old mantra of South Asia being India’s exclusive sphere of influence.

Of course, no one takes note of that anymore. Pakistan’s all-weather friendship with China is well-known, but the reach of China in other South Asian states has been extraordinary. Bangladesh and Sri Lanka view India as more interested in creating barriers against exports than in spurring regional economic integration. India’s protectionist tendencies have allowed China to don the mantle of regional economic leader. Instead of India emerging as the facilitator of socio-economic development in Sri Lanka, Nepal and Bhutan, it is China’s developmental assistance that has impact.

India’s attempts to keep China out of the subcontinent have clearly not worked, and it’s time to re-evaluate its South Asia policy. China’s strategy toward South Asia is premised on encircling India and confining her within the geographical coordinates of the region. This strategy of using proxies started with Pakistan and has gradually evolved to include other states in the region, including Bangladesh, Sri Lanka and Nepal. China is entering markets in South Asia more aggressively through trade and investment, improving linkages with South Asian states through treaties and bilateral cooperation.

It is following up on this by establishing a ring of road and port connections in India’s neighborhood and deepening military engagements with states on India’s periphery. This quiet assertion of China has prompted various smaller countries in South Asia to play China off against India. Most states in the region now use the China card to try to offset the influence of India. India’s structural dominance in South Asia makes it a natural target of resentment among its smaller neighbors.

Yet, there is no hope for regional economic cooperation in the absence of Indian leadership. The failure of India to counter China’s rise has made it even more unlikely that such cooperation will evolve productively. As the two regional giants compete with each other in the near future, they will be more focused on relative gains vis-a-vis each other than on the absolute gains that regional cooperation can bestow.

Liberals in South Asia have long taken their inspiration from extraordinary developments in the European Union (EU), arguing that South Asia could also go down a similar path of regional economic and political cooperation.

That comparison is fundamentally flawed, however. The states in Western Europe arrived at the EU only after resolving persistent security dilemmas. And the U.S. security umbrella continues to ensure that European political rivalries do not raise their ugly heads again.

In South Asia, the security dynamics between a large India and its smaller neighbors ensures that the road to economic and political cooperation will be a bumpy one. And that road will become even more difficult to traverse with the emergence of China.

Harsh V. Pant teaches at King’s College London.
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