Economics can always open the door to politics. ‘That Myanmar could defy the Chinese [by cancelling the hydroelectric project],’ wrote the Indian scholar Sreeram Chaulia, ‘is being seen as a sign that political space exists for the United States to work as a facilitator of the democratisation process in Myanmar.’ The November 2011 visit of US Secretary of State Hillary Clinton to Myanmar and Prime Minister Manmohan Singh’s visit in May 2012 brought confirmation that India has been playing a quiet but effective role in promoting greater engagement with Naypyidaw.
India cannot and should not seek to outdo China in appeasing the military junta. Its natural instincts lie with the Burmese democrats, Aung San Suu Kyi and the former students for whom it has, over the years, shown its support. With Washington signalling a willingness to take Naypyidaw’s political openness at face value, the stage is set for the region’s democracies, especially India, to open Myanmar’s windows to the world. China will be watching closely.
On the whole, therefore, India’s engagement with its neighbours is, as it emerges from the foregoing narrative, both multi-pronged and less negative than many, even within India, assume. It is an engagement that is at the same time conducted bilaterally, regionally under the ambit of SAARC, and through what one might call subregional or even trans-regional mechanisms such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), which includes some SAARC members and some ASEAN ones, or the Indian Ocean Rim Association for Regional Co-operation (IOR-ARC), which pulls together eighteen countries whose shores are washed by the Indian Ocean, including some South Asian nations and several on other continents. Since I have focused so far on the bilateral relationships, I will briefly discuss SAARC, leaving our cooperation within each of the other two multilateral frameworks to Chapter Five.
SAARC is an organization which has been quietly working to touch the lives of the people in South Asia without many Indians knowing much about it. Its most significant attribute is arguably what is increasingly being accepted as the asymmetric participation by India, as SAARC’s largest member. New Delhi’s increasing willingness to give far more than it takes from SAARC has also been the most important factor in strengthening intra-regional cooperation. SAARC’s most significant shortcoming, on the other hand, is Pakistan’s continuing hostility to India, which has often held progress on South Asian cooperation hostage to the bitter resentment of Islamabad. While this did, for several years, severely limit SAARC’s potential, the other members have grown progressively impatient with Pakistani intransigence on some issues, and there is increasing talk of certain initiatives (such as a possible South Asian Free Trade Area, which Pakistan has resolutely opposed) proceeding with the involvement of just those members who are keen, rather than awaiting a consensus of all.
In this, Indian generosity is key, and in recent years New Delhi has not been found wanting. Not only has India’s manner of discharging our commitment to this grouping inspired other SAARC member states to take initiatives on regional projects, but it has helped transform SAARC from a declaratory phase to an implementation drive that is at last gathering momentum. India has contributed nearly $200 million for the SAARC Development Fund (several multiples of all other countries’ contributions put together) and enabled its operationalization. It is not yet widely known that India has also devoted considerable resources and political effort to setting up a world-class university as a direct SAARC project — the South Asia University in South Delhi, open to students from the eight SAARC members at an affordable (i.e., subsidized) cost. India is the largest contributor to the development of this university, chipping in over $230 million out of a total cost of some $300 million. The university has already started classes in temporary buildings pending the construction of its greenfield campus.
With increasing regional engagement on core areas of development, especially health, education, energy, agriculture and infrastructure, awareness about the effectiveness of SAARC in delivering the fruits of development to South Asians at the grass roots has begun to increase. These regional activities have enabled a large constituency of South Asians to be connected and benefit from basic infrastructure in health, education, food and infrastructure, hitherto unavailable to them. Consequently, there has been an exponential increase in intra-regional tourism and people-to-people exchanges, though there remains scope for very much more growth in these areas.
SAARC’s transformation from declarations to actions has also generated interest among non-SAARC states, with nine observers — including, intriguingly, China — formally expressing their intent to engage with SAARC. Intra-regional cooperation has strengthened physical connectivity, helped overcome the challenges of the global economic crisis and the food crisis, and is encouraging greater cooperation in articulating a common SAARC position at many international forums.
I would like to believe that SAARC’s evolutionary path towards economic prosperity in South Asia, though slow, is irreversible. Of course, we are all conscious that political setbacks can derail, or slow down, economic progress. But with increasing economic interdependence among member states, heading in the future towards a SAARC Customs Union, a South Asian free trade area or even, one day, a single SAARC currency no longer appears to be completely unrealistic.
As this broad-brush survey of opportunities in India’s immediate neighbourhood suggests, it is time for New Delhi’s dealings with its neighbours to be driven by both self-interest and magnanimity. The cliché of ‘win-win’ solutions can easily apply in the situations I have described, particularly if India extends its economic dynamism beyond its own borders and shares its burgeoning prosperity with the lands around it.
As India has benefited enormously from its own ability to participate in the global economy, so too will its neighbours benefit from access to and participation in India’s economy. It is shocking — no milder word will do — that just 5 per cent of South Asia’s trade is within the SAARC region, and that a region with 22 per cent of the world’s population produces barely 6 per cent of its GDP. (The World Bank has even declared South Asia to be the world’s least economically integrated region, with countries spending far more than they need to on goods they could have imported from within South Asia. A recent report titled ‘Cost of Economic Non-Cooperation to Consumers in South Asia’ contends that further trade integration among South Asian economies could yield $2 billion to consumers.) Changing this must be a priority; promoting regional prosperity will go a long way towards persuading India’s neighbours that they have a stake in its success. This will require giving India’s neighbourhood the same priority that Indian foreign policy has traditionally accorded to major powers like the United States and China, and balancing its understandable interest in global strategic issues with a regional focus on matters of trade, water resources, disaster management and cross-border movements of populations. The integration of India’s border states with their foreign neighbours’ economies would offer a win-win for both.