The Hindu : Blossoming of India-ASEAN ties

Online edition of India's National Newspaper
Monday, Sep 08, 2003

Opinion

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Blossoming of India-ASEAN ties

THE INDIA-ASEAN Business Summit was perhaps the right forum for Prime Minister Atal Bihari Vajpayee to articulate his views on forging closer ties with the Southeast Asian nations. Relations with the regional grouping have been cemented and strengthened over the past six years — with India first becoming a dialogue, and then a summit, partner. A broad framework for a comprehensive economic cooperation agreement with ASEAN has been worked out and should be signed at the forthcoming Bali summit in Indonesia. It is now recognised, more or less, that the role of governments is that of a facilitator and promoter of a liberalised trade regime. Mr. Vajpayee was not indulging in exaggeration when he proposed a $30 billion target for India-ASEAN trade by 2007, compared with the $10 billion level of today. Achieving this target demands greater interaction between the Government and various business sectors to create a congenial environment for enhancing trade and investment. Both India and the ASEAN countries have been traditionally dependent on the United States and the countries of the European Union for trade. The challenge before India and the countries of Southeast Asia, aside from raising the level of two-way trade between themselves, is to forge a broad agreement to complement each other and adopt a joint strategy to increase their combined share of global trade.

If the ASEAN countries have been looking more closely at India from the mid-1990s, it is because of the relatively buoyant performance of its economy. When a sub-continental country with a population of one billion achieves a six per cent GDP growth rate over a reasonable period, it is bound to attract attention. The Southeast Asian countries were also quick to seize opportunities offered by a liberalised Indian economy. This Indian performance coincided with the unprecedented East Asian crisis, and the severe recession into which many ASEAN economies plunged from 1998. Even now, some of them have not fully recovered from that downturn. In addition, ASEAN has to contend with a two-tier structure, with the more developed member-countries, Singapore, Malaysia and Thailand, having to coordinate their efforts and manage their economic relations with new entrants like Vietnam and the least developed economies in the region, Cambodia, Laos and Myanmar. It is a challenge for partner countries in a regional bloc to learn to deal cooperatively with different approaches for different levels. India has adopted the right approach of providing a line of assistance to the less developed Southeast Asian economies to enhance trade besides offering technical and technological cooperation.

It is not as though India-ASEAN relations have been free of problems or irritants. The tensions between India and Pakistan have their spillover effects. Although some of Pakistan's friends in the regional grouping have been trying to upgrade its status, India and its friends have managed to keep it out. ASEAN is evidently not keen on becoming another arena for the staging of animosities, accusations and controversies between the two South Asian neighbours. Now that India and ASEAN have a clearer vision of the future of their relationship, the Bali summit should provide the opportunity not merely to ink another agreement but to set ambitious but achievable targets in trade and investment. The leaders must identify areas of cooperation and collaboration on global issues, including those related to the World Trade Organisation and the future of the United Nations. ASEAN has, further, been trying to balance its trade and overall ties between its two giant neighbours — China and India. It seems that at last the `Look East' policy India enunciated in the early 1990s has started paying dividends.

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