In pursuit of mutual prosperity
Bangkok Post, Thailand
In pursuit of mutual prosperity
Stronger India-Asean economic ties emblematic of the general resurgence of Asia as a global powerhouse.
16 August 2010
Asia’s re-emergence as a global economic powerhouse is creating a greater degree of economic interdependence while at the same time helping to increase regional security among the Asean member nations.
"The process of integration that is undertaken through FTAs is not just economic, but is closely tied to the shape the evolving regional security architecture may take in the future," Pinak Ranjan Chakravarty, the Indian ambassador to Thailand, told a recent seminar attended by a delegation of high-profile visitors from India.
He cited the example of the core members of the 10-member Asean grouping as having deep engagement with other regional powers through Asean+3 (which includes China, South Korea and Japan) and Asean+6 (which adds India, Australia and New Zealand to the other three and is also called the East Asia Summit, or EAS).
Mr Chakravarty, speaking at a seminar entitled "Look East: Gateway to the New World Economy - India, Asean and China", said that corresponding to these two expanded groupings were two regional trade agreements called the East Asia Free Trade Agreement and the Comprehensive Economic Partnership in East Asia being pursued in parallel.
He said Asia’s various economic and security groupings were becoming so popular that other members such as the United States and Russia were keen on joining them.
"You may have seen the recent reports of interest shown by other countries such as Russia and the US to be part of regional security arrangements. In fact, in discussions in Hanoi, Asean seems to have gravitated towards expanding the EAS to allow the US and Russia in," said Mr Chakravarty.
He said this renewed attention to the region reflected its success in creating new models of both rapid economic growth and pragmatic coexistence despite political divergence and pluralism.
Asia today as a region is beyond boundaries, as all companies, be they operations in Thailand, India or elsewhere, should look outward and embrace their greater neighbours, as they present unique opportunities to revitalise historical links and build upon them to create a dynamic, contemporary relationship within this region, said Mr Chakravarty.
As for India, he said that country remained committed to participating actively and constructively in consolidating regional integration and shaping the emergence of an Asian economic pole. "Let me conclude with what our prime minister, Dr Manmohan Singh, said when he visited Thailand in October last year to participate in the India-Asean Summit, and I quote: ’Our engagement with the Asean countries is a key element of India’s vision of an Asian economic community that is based on an open and inclusive architecture. India wishes to partner with Asean in realising this vision on the basis of mutual benefit, mutual prosperity and mutual respect’," said Mr Chakravarty.
This has been most visible in the field of trade, where the various FTAs and other agreements have led to a vast surge in two-way commerce between India and Asean members.
India has undertaken a "Look East" policy that has led to a steadily deepening engagement with Southeast Asia since the 1990s. This policy was started in 1992 with the Sectoral Dialogue Partnership with Asean, which developed into the Full Dialogue Partnership in 1995. An important landmark was achieved when this was taken to its highest level with the first India-Asean Summit in 2002. A special Asean-India summit is now being organised for 2012 to mark 10 years of this partnership.
Mr Chakravarty said India’s "Look East" policy was perfectly complemented by Thailand’s own "Look West" policy and that tangible results could be seen. For example, Indian trade with Asean has steadily grown to US$48 billion at present, and it is set to receive a further boost with the India-Asean Agreement on Trade in Goods that took effect on Jan 1. Negotiations are currently being held to include the service and investment sectors in the agreement as well.
In recognition of connectivity as a key stimulant to economic growth and integration, he said India was also working on several projects to establish a road network, railway links etc for ease of connecting India, especially its Northeast, with countries in this region, "though I would say that we are yet to realise our full potential in this area".
Mr Chakravarty said not only would India benefit from this greater degree of integration among Southeast Asian nations, but also Asean members could better tap the vast opportunities available to them from entering the Indian market as well.
He cited the changing situation in India, from an eight-year wait for a landline in the old days to the current situation of some 20 million mobile phone subscribers added each month, creating one of the largest and fastest growing markets in world.
The benefits of the mobile revolution have helped farmers and rural people, as evidenced by a study that showed for every 10 mobile phones added per 100 people in a typical developing country, gross domestic product (GDP) grows an additional 0.6% per capita.
Mr Chakravarty said the the pace of the change seemed much quicker in Asia, where the two large economies of China and India and the dynamism of Southeast Asia have captured the world’s imagination. "No wonder then that the 21st century is being increasingly labelled the Asian Century," he said.
Mr Chakravarty said he would also venture to suggest the emergence of Asia might in fact be considered more of a "resurgence", since Asia has played a predominant role in the world economy since ancient times.
"As you perhaps already know, until the 18th century more than half the world’s GDP came from China and India. In the second half of the 20th century, first Japan and then the so-called Asian Tigers - Taiwan, Hong Kong, South Korea and Singapore - led the way, transforming their economies to booming, export-led ones. Thailand experienced world’s highest growth rates for a few years prior to 1997," he said.
"More recently, the global economic meltdown that we have been witness to has not only triggered reform of the global economic and financial architecture, but also led to global power structures shifting from the West towards Asia. While in the initial stages of the crisis, much energy was spent by analysts in debunking the theory of decoupling, today China and India are widely considered engines of growth that have led others on the road to recovery."
Commenting on India’s economy, Mr Chakravarty said the turnaround that started late last year had now been consolidated. Recently released figures for last year’s fiscal fourth quarter ending March 31 show strong growth of 8.6%, taking full-year growth to 7.4%, thus beating expectations. The Chinese economy has also returned to its pre-crisis high-growth trajectory.
The turnaround, coupled with the outlook for India’s future, is nothing short of an opportunity for the goods and services sector.
"Our effort is to create a knowledge economy based on innovation. While this would in turn boost our own manufacturing capabilities, this would also harness complementarities with the manufacturing strengths that several countries in this region enjoy. To give you an example, the vast automotive industry of Thailand now seems to be relying increasingly on auto components from India," said Mr Chakravarty.
In broader terms, India’s resurgence is widely seen as creating a vast zone of expanding peace, stability and prosperity that will have a calming influence in the region and beyond, he added.
