Events

A bilateral dialogue between IDSA and Institute for Defense Strategy (IDS) of Vietnam was held on May 16, 2013 at IDSA. The IDS delegation was headed by Lt Gen Nguyen Dinh Chien, Director General of the Institute for Defense Strategy. Dr Arvind Gupta, DG, IDSA, chaired the meeting which was also attended by IDSA scholars.

The main points that emerged from the discussion were as follows:

• Due to its strategic importance, the South China Sea issue has become one of the focus areas and has attracted the attention of the international community. Amongst the issues, the territorial dispute over the Spratly Islands is perceived as the most complicated issue.
• China’s maritime strategy roadmap consists of:
  • 2012-2020: Concentrating on restraining the escalation or outbreak of maritime issues; maintaining the status quo; accomplishing maritime mechanisms and regulations, formulating policies and laws in order to facilitate taking back islands and reefs.
  • 2021-2040: Using the national comprehensive strength, and seeking ways to resolve important maritime issues (like the East Sea) and realise the goal of becoming a regional maritime power.
  • 2041-2050: Comprehensive resolution of the maritime issue, fulfilling the dream of reunification of the country and becoming a world maritime power.
• China is rapidly modernizing its armed forces, especially its navy, by putting the first aircraft carrier and the new generation submarines into service; expanding naval base in Sanya and reinforcing the strength of the South Sea Fleet. China has been taking steps to assert its sovereignty in the area unilaterally demarcated by the so called “nine dotted line”, turning a non-disputed area into a disputed one. China has also provoked Southeast Asian countries and created partial conflicts in order to attract the public concerns and attracted the attention of international community.
• The reinforcement of military capability of China has raised anxiety levels among the countries in the region. In the last 20 years since 1992, China’s defence budget had increased 20 times, reached 670 billion RMB (US$ 106.4 billion). China’s PLA modernisation has compelled other countries to raise their defence budget, which may lead to an arms race in the region. For the South Sea Fleet, China has put some large destroyers equipped with new and advanced weapons into service; enhanced the training of naval air force personnel, including fielding the first aircraft carrier Liaoning. China has also planned to build more aircraft carriers, destroyers and missile frigates in order to realize its ambition of becoming a maritime power. Recently, China has intensified naval patrols in the East Sea within the “nine dotted line” in order to affirm China’s sovereignty at sea.
• It was emphasised that as a responsible power, India feels the South China Sea issue should be resolved amicably and Indian leaders have been supporting the idea of peaceful resolution of the dispute.
• India has substantial stakes in the South China Sea as Indian companies have invested in Vietnam’s oil and gas exploration ventures. For India, the prime objectives include safety of Sea Lanes of Communication (SLOC) and freedom of navigation.

(Report prepared by Dr. Rahul Mishra, Research Assistant, IDSA)

Chairperson: Amb (retd) R. Rajagopalan
Discussants: Dr. GVC Naidu, Amb (retd) J.C. Sharma, S.K. Mohanty, Durgesh K. Rai

Highlights of the Paper

Dr. Jagannath P. Panda discussed the newly emerging multilateral power politics in Asia in the context of ASEAN initiated Regional Comprehensive Economic Partnership (RCEP) and the United States led Trans Pacific Partnership (TPP). He argued that central to both the RCEP and TPP is the politics and prominence of ASEAN. He highlighted that several aspects of the Sino-US, Sino-Japanese and US-Japanese dynamics vis-à-vis the RCEP and TPP have been analysed. However, perceptions of India and China regarding the two groupings have not been adequately studied and the paper aims to discuss this understudied aspect, noted Dr. Panda. The paper explained the politics, policy and nuances that India and China attach to RCEP and TPP. Factoring both RCEP and TPP in the ASEAN context, Dr. Panda argued that China’s tryst with the RCEP under ASEAN+6 is an opportunity for India to maximize its ‘Look East’ policy. He added that RCEP is vital to China politically to address the challenges and concerns it faces from the US ‘pivot to Asia’ policy.

He also noted that China has opposed inclusion of India under the ASEAN+6 and thus the sprit of ASEAN in unifying the leading economies of the region has remained unfulfilled so far. Maritime disputes in the region have widened the gap among the ASEAN partners and ASEAN’s six dialogue partners. These maritime disputes have brought into question the ASEAN+6 concept, brining into question if the economic ethos of an East Asian Community would ultimately help reduce the existing political differences. It would be interesting to see how China approaches the politics of RCEP and tries to accommodate India and its interests.

The paper was structured in four parts. First part drew a comparative outline of RCEP and TPP and policy preferences of China and the US on RCEP and TPP respectively. The second part explained the centrality of ASEAN in the politics of RCEP and TPP and presented a scenario of how the politics of ASEAN is offering a new opportunity in East Asia, particularly for two regional players, India and China. The third part discussed the Chinese and Indian perspective vis-à-vis the RCEP and TPP. The fourth part discussed the emerging contours of the political scope and opportunities for China-India politics in ASEAN context.

In conclusion, Dr. Panda mapped three important structural developments in the East Asian regional order that have taken place during the evolution of RCEP and TPP. First, a direct Sino-US rivalry seems to be clearly emerging and the ASEAN community is divided between the Chinese and the American worldviews. Second, the ASEAN-led regional multilateral politics is going to be another important aspect of regional politics, where engaging with ASEAN and its dialogue partners will be the priority for several countries including India. Third, China will continue to place most of its foreign policy thrust on ASEAN and South-East Asia. Even as China’s tryst with ASEAN will continue to be the greater deciding factor in the regional politics, India will continue to emerge as a vital power and RCEP will be a favourable factor for India in this context.

Major points of discussion and suggestions to the author:

• It would be incorrect to assume that RCEP is China led. It is still an ASEAN led process. However, it can be described as China dominated.
• It is debatable whether the TPP is a byproduct of the US ‘pivot to Asia’ strategy. The TPP was formalized much before the enunciation of ‘pivot to Asia’ strategy.
• Little bit of restructuring of the paper is needed; the idea behind the TPP and RCEP and its basic objective should be brought out in the beginning of the paper and then other related issues should be discussed for a better clarity of the issue.
• It would be wrong to draw a conclusion that RCEP will help moderate China’s behaviour towards the regional countries. The cases of China’s approach to Philippines following Scarborough Shoal dispute where China temporarily halted the imports of banana from the Philippines and restrictions on export of rare earths to Japan following Senkaku spat, suggest that China puts aside all trade agreements.
• India is destined to join the RCEP. But it should be opened to join the TPP. India would loose huge market if it does not join the TPP.

(Report Prepared by Dr. Shamshad A. Khan, Research Assistant, IDSA.)

The Institute for Defence Studies and Analyses organised a Round Table on the forthcoming “Sixth IBSA Summit” on May 21, 2013. The discussion chaired by the DG, IDSA, Dr. Arvind Gupta, intended to evaluate IBSA's achievements and performance over the last decade, since its inception in 2003. The participants in the round table included H.E Mr. Carlos Duarte, Ambassador of Brazil to India, Mr. Mark Reynhardt, Counsellor, South African High Commission, Ambassador Rajagopalan, Ambassador Deepak Bhojwani, Dr. Ash Narain Roy, Institute for Social Science, Prof. Abdul Nafey, JNU, Dr. Sachin Chaturvedi, RIS and Ms. Ruchita Beri, IDSA.

Following is the summary of the points highlighted by the speakers:

• The year 2013 marks the tenth anniversary of IBSA as a formal group. IBSA began as a group of three large developing democracies that had witnessed high economic growth in the past decade. The speakers noted that the IBSA grouping is very much trans-regional and represents the changing world order and the basic debates and issues of the developing world.
• Democracy and development are important themes for these countries and these countries are capable of providing development assistance in real terms in the form of sectoral cooperation among the working groups and through the IBSA Trust Fund. The IBSA Trust Fund is a very important aspect of South-South cooperation. It has managed to do well despite its minimal resources and is making a difference in some of the developing countries, especially in Africa. There was a general consensus among the speakers on the need for strengthening and streamlining the IBSA Trust Fund. A major problem of this fund has been the non-expenditure of a large amount of money contributed by the member countries.
• The Round Table highlighted the relevance of IBSA in the light of the emergence of BRICS grouping. IBSA precedes BRICS and there are no grey areas in IBSA like those in BRICS; IBSA is a unique forum where all its members are developing, pluralistic, multicultural, multiethnic, multilingual and multiracial in nature. Since they are two different entities altogether, IBSA and BRICS cannot be compared. The speakers added that IBSA is a group of like-minded countries with very little baggage while BRICS have shown signs of some internal differences among members. It was also argued that while BRICS is a geopolitical grouping, IBSA is a geo-economic grouping.
• At the international level, IBSA countries have exhibited a desire of acting together under the umbrella of multilateral organisations. They cooperate a great deal at the UN; for example, IBSA countries abstained in the UNGA Resolution on Syria as it had not taken their suggestions into consideration. There was consensus among the speakers that the UNSC should be expanded to enable the presence of IBSA at the high table.
• At its tenth anniversary it is time to re-energise the Working Groups and streamline them in order to make them more effective. While on one hand, there has been a qualitative and quantitative leap in intra-IBSA trade over the last decade, on the other hand, bilateral trade between IBSA countries and China has almost tripled. Therefore, there is a large scope for improvement here. There was also a suggestion of speeding up the process of Preferential Trade agreement (PTA) with Southern African Customs Union (SACU) and Mercado Comun del Sur (MERCOSUR) to enhance trade among IBSA countries. A Free Trade Area in the future could also be envisioned.
• It was also argued that the academic capital of the three countries is a great potential that still remains untapped, it could be looked at as the drivers for future summits.
• The participants noted that unemployment is a major challenge for all the member countries and to address the issue it was suggested that the development of Small and medium Enterprises (SMEs) could help to a great extent. The IBSA member countries can help each other by exchanging their best practices in areas of healthcare, pension and urban growth.
• Since the member countries are keen to cooperate on defence and strategic issues, a joint understanding on the issue of piracy on the eastern and western coast of Africa and joint military exercises among the IBSA countries would be vital. It was pointed out that the member countries could work together in the area of ocean governance as there is a need to ensure secure movement of goods across the seas.
• IBSA membership should be restricted to the current three member countries. They agreed that the desire of other developing countries to join the grouping may be obvious due to several reasons but any expansion of the membership could sideline the purpose of the creation of the grouping.
• It is time for IBSA to introspect and streamline its agenda; it needs to increase interactions on people to people level. The major challenge before IBSA is whether it is viewed as a legitimate group by other developing countries. IBSA’s footprints have been very visible during the last decade and the speakers cautioned against writing the obituary of the group.

Some of the points that came up during the discussion include:

• IBSA countries should look into implementing and operationalising the projects on their own with funds being handled by them rather than through the UNDP.
• Member countries should ensure delivering on their commitments and they need to stick to the grouping’s core competencies.
• An incremental approach is the best way forward for IBSA. There is also a need to harness the soft power of these countries to bring about further cooperation.
• IBSA could explore the possibilities of instituting IBSA fellowships, IBSA Chairs etc. Thus far, the role of academia and think tanks has only been marginally realised. Smilarly, IBSA has not been able to streamline the role of the civil society. It could engage the civil society in its working to enhance its effectiveness.
• Increasingly, IBSA is being taken seriously by the western countries. The declarations of the IBSA summit demonstrate that it is gaining more confidence to pronounce its goals and agenda.
• IBSA and BRICS need not necessarily be seen as opposing to each. They could each preserve their uniqueness and complement one another. IBSA could explore the possibility of a development bank along the lines of BRICS development bank.

Compiled by Keerthi Sampath Kumar and Saurabh Mishra