A Report of Discussion on ‘Southeast Asia: A Strategic Region for Competition and Power Rivalry’
By CSEAS Staff
September 6, 2020
On September 3, 2020, the Center for Southeast Asian Studies (CSEAS), Jindal School of International Affairs, O.P. Jindal Global University (JGU) organized a discussion on the topic ‘Southeast Asia: A Strategic Region for Competition and Power Rivalry’. The discussion was chaired by Dr. Nehginpao Kipgen, the Executive Director of CSEAS. The panel consisted of Dr. Shankari Sundararaman, Professor at Jawaharlal Nehru University, Dr. Stephen R. Nagy, Senior Associate Professor at International Christian University, Dr. K.V. Kesavan, Visiting Distinguished Fellow at Observer Research Foundation, and Dr. Lina Gong, Research Fellow at Nanyang Technological University.
Akash Sahu, Research Assistant at CSEAS, welcomed all the speakers and briefly introduced the theme of the discussion and how Southeast Asia became the theater for rivalry between great powers.
India’s Act East Policy and the Potential Benefits and Challenges for Southeast Asia
Dr. Shankari Sundararaman said that Southeast Asia has been the theater for power dynamics for decades. Starting from the 11th century and during colonial times, Southeast Asia was a significant region as it was geographically at the center of trade and power rivalries.
The works of Antony Reid have well-articulated that Southeast Asia has always been at the crossroads of trade and power rivalries. After decolonization, the region was a major ground of power rivalry between the superpowers up until 1991 when the Cambodian conflict came to an end. For a decade and half after the Cold War, Southeast Asia saw a rise in multilateral processes extending beyond ASEAN to other regional players. We need to recognize that ASEAN and Southeast Asia is a diverse region having small, middle, and large states.
The Southeast Asian countries have preferred to have an independent foreign policy to maintain their strategic autonomy. At the same time, it will be a challenge for the Southeast Asian states to maintain their strategic autonomy being at the center of major power rivalry.
India’s policy toward the region started with the Look East Policy (LEP) in 1992 with an economic platform. Now there has been a shift from the LEP to the Act East Policy (AEP). In the initial phase, the motive of the LEP was economic integration mainly with the ASEAN countries along with security cooperation with states like Malaysia visible as early as 1993. The current AEP, launched by the Modi government in 2014, has two dimensions to it.
At the level of domestic politics, the government had to project a shift from the old to the new. In November 2014, when the AEP was announced, it was exhibited as an action-oriented policy aimed at completing the pending agreements. It was directed at the promotion of three Cs – Commerce, Connectivity, and Culture – in the region.
A major difference between the LEP and the AEP is that the latter covers areas beyond the ASEAN member states. This policy indicated that Southeast Asia will not be neglected by India, but beyond Southeast Asia, India would seek to intensify its relations with countries of East Asia and the Asia-Pacific. It is even interesting to note that while India has been moving eastwards, China on the other hand has been moving westward with its Belt & Road Initiative (BRI).
Currently, India’s trade with ASEAN along with East Asia and the Asia-Pacific has increased, although the aimed targets have not been achieved. In the area of connectivity, there has been a lack of delivery and the set targets have not been attained. In the security sector, India propagates the idea of acting east and linking west with projects like SAGAR. This highlights the importance of maritime security in the region and the notion of India’s approach to the Indo-Pacific finds similarity to the AEP.
There are certain maritime challenges in Southeast Asia like the South China Sea (SCS) dispute. On several occasions, India along with the states of Southeast Asia have emphasized on the importance of inclusiveness as well as the United Nations Convention on the Law of the Sea (UNCLOS) for maritime security and stability in the region.
In the SCS dispute, India will not play a direct role but supports a resolution on the basis of the UNCLOS. India’s primary focus is the Indian Ocean and the Pacific is secondary. With its AEP, India will continue to support the core security process of ASEAN. India’s relations with states like Japan and Australia will also help in shaping its policy.
At present, the AEP is also supported by India’s approach to the Indo-Pacific which is being referred to as “Act Indo-Pacific” rather than just Act East. ASEAN will remain the primary area of concern. These areas will be critical for India’s AEP as well as in the larger context of its foreign policy.
US Engagement in Southeast Asia
Dr. Stephen R. Nagy thanked the CSEAS, JGU and other members present at the discussion. He began by stressing that his discussion is book ended by pre- and COVID-19 pandemic and that he would focus on four areas: economic, security, diplomatic relations, and the principal initiatives of the US with its Southeast Asian counterparts. He ended his four major areas by bringing up potential Black Swans that could disrupt US relations with Southeast Asia.
When we think about the position of the US in Southeast Asia, one has to look at the economic interests. The economic relation between Southeast Asia and the US goes back to at least 1998 where the bilateral trade and investments between the two regions stood at about $80 billion in terms of two-way trade. Since then, the economic cooperation has witnessed a steep rise over the decades, wherein the investments and trade value has gone up to $272 billion in the year 2018-2019. This reflects a lot of future potential growth; however, from a critical point of view, the economic relationship has been underdeveloped.
This claim is set against the relationship that Southeast Asian countries have with their northern trade partner, China, with whom the trade and investments value stood at about $280-290 billion in the year 2018-2019. These numbers provide a clear picture that Southeast Asian countries are more dependent on China in terms of trade and security. Japan is considered the most trusted partner of the region, which was also reflected in the survey conducted by the Institute of Southeast Asian Studies.
The second most important factor with respect to economic interests within the region is attributed to the Free Trade Agreement, the Regional Comprehensive Economic Partnership, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which the US is not a part of. Each agreement excludes the US, a fact that will erode its long-term security in the region.
One can draw conclusions from these multilateral treaties and trade policies that Southeast Asian countries and its partners can move forward without the involvement of the US in the region.
The third factor with respect to economy was the BRI, the Chinese investment and the digital infrastructure. These investments and initiatives fundamentally reshape the existing structure in the region, which is also not in the best interest of the US. The digital infrastructure will become more critical as this technique is less expensive, easy to deploy, and accrues more benefit for recipient nations.
In the post-COVID-19 era, China is going to decrease investment in hard infrastructure and redirect focus and resources on digital infrastructure. This will also impact the relations between the US and the Southeast Asian countries.
With respect to security, there are two categories: traditional and non-traditional issues. Traditional security issues for the US involve sea lanes of communication (SLOCs) and the SCS. Specifically, the critical SLOCs that transport, energy resources, imports and exports throughout the region, and most importantly, the US naval presence in the region.
The non-traditional security issues are the areas where there is greater US cooperation and interest. Non-traditional security issues include illegal fishing, piracy, dealing with human and drug trafficking, uncontrolled migration, and climate change. Only time would tell whether these securities will see radicalization of Southeast Asia that could affect US interests regionally and globally. Regardless, the US must emphasize and pay attention to these issues as they may be highly destabilizing.
The last aspect of security interests was the rules-based order, where the US must try to forge a consensus with other countries within the region to control some behavior of certain states.
Diplomatic relations is one area where the US has nuanced understanding of the interests of the region. First, the US has a sustained and enduring interest in ASEAN centrality, cohesion, consensus, and decision making. This diplomatic interest from the US point of view is important so as to push back against greater power politics in the region and breaking up of difficult areas in consonance with ASEAN members.
The second pillar of diplomatic relations is the alliance partners. Today, Southeast Asian countries have the US as an alliance partner, but these alliance partners are not written in stone nor should they be taken for granted. These countries can be termed as wavering partners, wherein, we can see that Indonesia is constantly trying to balance the US-China relations. On the other hand, Thailand strategic interests continue to diverge away from the US, which makes it difficult for the US to keep that alliance in its present form. Malaysia keeps moving back and forth between the US and China.
Another crucial aspect of the US engagement in the region is the principal initiatives, such as the Indo-Pacific strategy: a strategy which is constantly evolving and continues to adopt more Japanese rhetoric such as ASEAN centrality and infrastructure and connectivity.
The signature initiative under the Trump administration has been this Indo-Pacific strategy. There are initiatives such as principal security network, economic prosperity network, Asian edge initiative, clean network program and Blue dot network.
There is also the Australian-Japan-US trilateral relationship; however, all these initiatives are comparatively small scale as opposed to the Chinese initiatives. Without any money inflow, resources, or infrastructural initiatives from the US, the region will look toward China and Japan instead.
The COVD-19 pandemic has led to huge economic repercussions in the US with 20% contraction in the economy in terms of GDP. In post-COVID-19, it will be interesting to see how the US is going to engage in the region financially and in terms of defence and strategy. It is going to be challenging for the next administration.
The US-China relations post-November election will depend on the trade competition between the two, and how the Southeast Asian countries will react to it. China would be the dominant nation which will help the region in seeking stability, particularly post-COVID-19 if there is no radical change in the US position.
If Biden is elected, then he might focus on multilateral relations in the region and focus on the Trans-Pacific Partnership which will likely be good for the region. We should be cautious with regards to continued dysfunction of governance and deep social division in the US as it will distract the US from the initiatives in the region and ultimately will weaken the US position and interests in the region.
Currently, the relation between the US and Southeast Asian nations is moving in a positive trajectory but there are a lot of headwinds on the way given the pandemic and the 2020 US presidential election.
Japan’s Economic Assistance and Ties with Southeast Asian Countries
Dr. K.V. Kesavan stated that Japan’s economic assistance to the Southeast Asian countries is an important and vast subject. Firstly, what is the importance of the region itself? ASEAN has always been a major component in Japan’s diplomacy. The countries in the region have been handling relations with Japan very well. In comparison with China and South Korea, with regards to war time memories, Southeast Asian countries have reconciled with Japan to interact from primarily an economic front.
One major effort by Japan was the reparations. Japan gave reparations to the countries for damages caused during World War II, and these continued until the 1960s. The importance of these agreements was that Japan agreed to give capital goods and industrial plants to these countries. Since the countries were poor, the reparation and industry plants were very useful for them. Therefore, reparations were the first form of economic interactions between Japan and the Southeast Asian nations.
In 1955, Japan joined the Colombo plan, which was important for furthering economic ties. In the next year, Japan sent technicians to countries in the region. But, more importantly in the years 1971, 1972 and 1974, there were anti-Japanese protests in Southeast Asia. By then, Japan was a strong economic power in the world and the Southeast Asian countries were wary of Japan. To address this, in 1977, Japan developed the Fukuda doctrine. According to the doctrine, Japan would not choose a military path, and the military would have no place in the relations with Southeast Asia. Japan would also develop trust in developing relations with these countries.
Japan emphasized that Indo-China and ASEAN countries should co-exist, and would improve these ties and broadly develop economic ties. In 1985, famous Japanese manufacturing companies and other companies developed bases in Southeast Asia which gave rise to more ties and interactions between the two parties. Japan did not only produce for domestic consumption, but their exports were also highly valued.
Japan was the top most aid giver, and Southeast Asia was a preferred region for Japan. Moreover, from the 1990s, Japan started getting involved in the political issues of the region. The Cambodian crisis is a case in point and Japan became a very important stakeholder in the negotiations of the crisis. After that Japan progressed toward its Mekong policy. It extended aid to the Mekong countries over the years.
There have been growing interactions amongst the countries and Japan has been trying to balance China in these countries. A case in point is Myanmar. Even in the case of Vietnam, it is an important trading partner of Japan.
The Mekong diplomacy is very important for Japan and the countries in the region. India’s AEP merges with Japan’s in its Mekong policy. After the 1990s, Japan entered a new phase. There was a shrinking of Japanese aid and Southeast Asia also did not get much assistance. But even in this scenario, towards the end of the 1990s, in 1997, Japan provided a lot of aid during the financial crisis to countries in the region.
From the 2000s, political instability was growing in Japan and the economic aspect was affected. From this period, China also started emerging. The BRI is a very important aspect in this change in the region. As a leader, Prime Minister Shinzo Abe had a very clear view about what Southeast Asia meant for Japan. Japan has also been powerfully supporting the Indo-Pacific concept.
In its ties with Southeast Asia, the emergence of China can be considered as a trigger for Japan, as China has taken over Japan in trade, and has also caught up with Japan. In terms of economic assistance, the BRI is making a very important impact in the region.
Nevertheless, Japan’s role in Southeast Asia has been very successful. War legacies have been taken care of properly and there is no bitterness in the relations. However, in the present times, Southeast Asian countries would not like to be pushed to a situation where they have to make a choice between Japan and China.
China’s Policy and Strategy in Southeast Asia
Dr. Lina Gong focused China’s engagement in Southeast Asia since the accession of President Xi Jinping in 2012. She noted the general trend of greater emphasis on China’s engagement with its neighbors including the Southeast Asian nations. Southeast Asia has been important for China since the normalization of relations in the 1990s with the latter being the ‘window’ for China’s engagement with the wider Asia-Pacific through regional mechanisms such the ASEAN Regional Forum, ASEAN+ and East Asia Summit. The region has been a theater of power politics since the time of the Cold War until today for various great powers.
The region is important for China economically; China became the region’s largest trading partner around 2008-09. Additionally, ASEAN became one of the largest trading partners for China in 2020. While economic relations feature heavily, the tested engagements in the realm of security cannot be discounted. Being the signature of China’s recent economic diplomacy, the BRI is making inroads in the Southeast Asian region.
The region is a key segment of one of the two BRI routes – the Maritime Silk Road. There is China’s increased investment in Singapore, Laos, Indonesia, and the Philippines in the non-financial sector. However, the salient issue was the idea of debt-trap diplomacy. Since 2017, the media has increasingly associated the idea with the BRI. Nevertheless, other studies suggested the contrary with debt levels toward China, with the Philippines being less than five percent of the total debt. The total debt rate of Cambodia was 30 percent of the GDP, while the average rate of the rest of the developing countries is about 50%.
The BRI projects could lead to increased debt burden, but not to an exceptional level. Other concerns associated with the BRI included environmental and governance issues. However, some countries were able to renegotiate their deals like Malaysia and Myanmar, and also the delayed infrastructure projects were resumed in Indonesia.
Modern traditional security revolves around the SCS dispute which gained traction around 2010. Despite differences, there is a common consensus among scholars that China has become less reluctant to defend/assert its interests in the disputed bodies of water. This dispute has strained the bilateral relationship with the Philippines and Vietnam leading to standoffs at the Scarborough Shoal (2012), Second Thomas Reef (2013) and China-Vietnam Oil-Rig Crisis. These situations also impacted the ASEAN-China relation with the organization unable to release a post-summit statement in 2012 due to differences on the SCS issue.
Nevertheless, China was able to maintain a stable relationship with the other ASEAN member states barring a few issues. The two-way relationship is quite broad with the SCS issue only being a part of it.
The Non-Traditional Security (NTS) issue has been a venue for China to de-escalate tension. Two landmark events laid the foundation for China-Southeast Asia cooperation in NTS: the Asian Financial crisis of 1997, and the SARS epidemic of 2003. Later, further cooperation was formalized through the joint declaration of NTS in 2002 and the signing of an MOU in 2004. It was renewed twice in the following decades. However, lately there has been an increasing trend in interactions of NTS for emergency management for natural hazards and diseases in the region. China signed an MOU with ASEAN on the same. Furthermore, China pledged $8 million toward disaster management.
With the COVID-19 pandemic, there is a general trend of a multi-level engagement by China in pandemic response in Southeast Asia:
The COVID-19 pandemic has created opportunities and strengthened interactions between the otherwise hardliner conservative militaries. Differences are being more pronounced in some issues between China and Southeast Asia. In some instances, China thinks of itself as defending their rights while the Southeast Asian nations view it as the former being more assertive.
History plays a factor with the Chinese support for communist insurgency during the Cold War, which still lingers in some groups of Southeast Asian societies. Other powers also play a role in the region such as the US which acts as a counterbalance to China in terms of security. Japan, EU, South Korea, and Australia also provide competition to China’s economic diplomacy.
While Southeast Asia is more welcoming to Chinese engagement due to shared emphasis for economic cooperation; they, however, remain cautious and can defend their interests. The region has repaired some of its strained relations and the COVID-19 has highlighted the role of NTS and provides new opportunities for cooperation.
Vote of Thanks
Mihika Kothari, Research Intern at CSEAS, thanked the chair, the speakers, and the audience for making the program a success. She also thanked the JGU administration and the IT team for their support.
The report is prepared by CSEAS staff members – Shivangi Dikshit, Sanjana Dhar, Vikas Nagal, Dishant Choudhary, Hariharan C, Avirat Parekh, and Harsh Mahaseth, and edited by Dr. Nehginpao Kipgen in consultation with the speakers.