Thursday, August 21, 2014

ASEAN: Analysis Of Multilateral Relations

Through the signing of the Bangkok Declaration on August 8th, 1967; the Association For Southeast Nations (ASEAN) was established1. The ASEAN member-States includes all Southeastern Asian nations such as Vietnam, Cambodia, Myanmar, Thailand, Laos, Singapore, Malaysia, Indonesia, and the Philippines.

In relation to the ASEAN, there are three main topics that are addressed in this article:

1. Considering the growing interests of the United States (U.S.) in the region, what is the strategic impact to the ASEAN Nations?

2. Will China be able to keep its position in the economic, military, and political areas in relation with the ASEAN with the U.S. directly challenging it?

3. Where does India stand as a partner in this multilateral power politics in its “Look East Policy” in relation to possible Chinese aggression?

For all parties, there has been a rhetoric playing out that westerners are coming to the region soon. This partly has to do with the U.S. Pentagon stating that it is to re-position 60% of its naval assets to the Asia Pacific to contain the growth of China which it is viewing as a competitor in all areas2. In addition, it is well known that the U.S. has a concrete military relationship with Northern Chinese Sea states; South Korea, Japan, and the Republic of China (ROC) or “Taiwan”.

Is the U.S. likely to encircle China as it has already bases in Afghanistan as well as Tajikistan in the west and now only needs nations in the ASEAN or India to fulfill its objective of containing Chinese growth? This was recently demonstrated in U.S. Secretary of Defence Hagel’s visit to India calling for partnership to the point of joint arms building where the U.S. is number one or two in this area for exports3. The need for the U.S. to build a partnership with India as we move along was also echoed by the U.S. Assistant Secretary of State for South and Central Asia Biswal4.

The U.S. is not a member of the ASEAN and the centrality of regional economics comes into play as most of the ASEAN member-States are dependent on China for its economic needs and trade. In fact, every member-State of the ASEAN has China as the number one trading partner in either exports or imports and sometimes both according to the data collected by the Observatory of Economic Complexity at the Massachusetts Institute of Technology (MIT). The U.S. and the ASEAN are seen more as partners than allies5. Furthermore, the U.S. is not perceived to be an “all weather friend” of many Southeastern Asian nations if we take the histories of the U.S. in the region for example such as the U.S. invasion of Vietnam in the 1970’s. Its interests are more focused on trade where China has crossed the pre-requisite of trade in establishing diplomatic relations and now has vested military interests on the shipping lanes of the East China Sea, South China Sea, and even to the Indian Ocean with its partner Sri Lanka.

The ASEAN nations are also finding partners outside of their alignment to counter any possible future U.S. and Sino influence. If there is a conflict or war between any of the ASEAN and U.S., there are only two powers in the region that the ASEAN nations can rely upon for support if the U.S. pursues a military campaign in the area; China or India. Considering the U.S. goals in the region of containing China, it is not perceivable to foresee a China-U.S. military campaign against the ASEAN. In this scenario, one may ask where the other regional power; India, stands between the power games being played out by the U.S. and China in the ASEAN region. India follows the principles of “Panchsheel” as does China meaning there is a strict policy of non-interference in other nation’s internal matters.

However, both India and China realise the need to protect their interests in the ASEAN region. India has adopted a “Look East” policy in order to build better relationships with not only ASEAN nations, but also nations in the North Chinese Sea such as Japan or the Koreas. Some may also state that the “Look East” policy is one that is derived out of international power politics in containing Chinese growth and U.S. interests in the region. Thailand/Laos

Some of the ASEAN nations have made their intention clear in terms of seeking allies. For example, Thailand has stated that the ASEAN and China are its closest allies according to its National Institute Development Administration (NIDA)6 due to the unfriendly attitude of the U.S. and European Union (E.U.) attributed to the coup d’├ętat in the nation. The coup d’├ętat in the nation and establishment of a militia junta is also one of the reasons why Thailand prefers communist China over democratic India as China supported the military government as democracy failed. The U.S. Department of State requested all political options to be used to bring democracy back to Thailand but this was to no success7. Some will argue that the present situation is an aberration that was the result of bad governance and sooner or later the country will revert back to democracy as is known.

China won a big financial partner with Thailand and has invested $23 Billion USD to set up a railway system between the two nations8. China has done the same with Laos in being its largest investor to win over hearts by investing in railway systems connecting several Southeastern Nations with China by land9. In addition, Vietnam has also backed the Thai Junta considering the support the military governments then gave Vietnam when it went through its wars in the 1970’s against the U.S.10 Here, it is clear that the ASEAN are cooperating with each other despite their differences which will be of great importance if we were to see another “Vietnam” play out with the U.S. re-positioning to the Asia Pacific. In addition, Thailand may be the end of the bridge beginning from Japan between ASEAN and U.S. friendly as Thailand is a major trading partner of Japan also. Japan has also stated it would like to have better relations with ASEAN11.

While one may be able to conclude that Thailand has chosen China over India as an ally as it outbid India in development projects, it must be realised that India and Thailand maintain ancient relationships12 although this would not be a factor if a war broke out today between India and China. Cambodia

The Kingdom of Cambodia (Kampuchea) and China have built up relations although China supported the genocidal Khmer-Rouge 13. India has better relations with Cambodia as India’s Ministry of External Affairs states that Indo-Cambodian ties go back to the 1st century AD and where there is a large Indian presence in Cambodia today with ancient Hindu temples, etc14. In addition, both nations are part of the Non-Aligned Movement (NAM) and bi-lateral trade in various areas including military exchanges continue to this day. In fact, it is estimated that in 2011, trade was $107.07 Million USD between the two nations. While this may not be a large number as India’s trade with Thailand, which is allied with China, is estimated to rise to $16 Billion USD by 201515, Cambodia remains a strategic nation for trade. This is because of the economical hold Cambodia has over the west as the number one importer of Cambodian goods is the U.S. at $3.3 Billion USD which allows Cambodia to strategically leverage trade ties with other nations through increasing/decreasing prices, etc16.

Furthermore, there is very little political engagement with Cambodia by other powers and their relations with the Kingdom of Cambodia are fragile. Current U.S. President Obama was the first U.S. President to visit Cambodia in history which can largely be attributed to the Cold War17. His visit symbolises the American foreign policy of starting to “Look East”. Thus, Cambodia has aligned itself closer with India which would be intuitive in the “Look East” policy to tap into Cambodia further. This is in contrast to the notion that Thailand is aligning with China despite increased trade with India. Furthermore; this is a nation where the U.S. or other powers have little influence at the government levels. While China has invested into hydro-energy projects in Cambodia, its past support of the Khmer-Rouge of assisting in training the Pol Pot tends to haunt the diplomatic relations till this day.

Cambodia does not have these issues with India as India assisted in funding the Khmer-Rouge trials and remains a good friend of the nation. Myanmar

Looking at Myanmar or formerly known as Burma, there is a deep rooted relationship with India as Burma used to be part of the British Indian Empire. Currently, Myanmar is a Constitutional Republic lead by Head of State Thein Sien. There is a great popular opinion with the civilians of Myanmar against China which plays into India’s interest18 but it is just that; popular opinion. While China could not implement its economic development projects in Myanmar such as a railway which it did with Thailand19, it is one of the largest financial partners of China. When we look at the U.S. influence in Myanmar, it is one that is building but is not comparable to the one China or even India maintains. The U.S. would like to improve relationships with Myanmar with the current Head of State20 through measures such as easing sanctions on exports21. Looking at the trade statistics of Myanmar, it is more regional than international as the number one buyer of goods is Thailand and the number one country that exports into Myanmar is China22.

India has also stepped up economic ties with Myanmar23 and maintains a slight margin in buying Burmese goods but Thailand is the largest importer of goods at Myanmar accounting for an overwhelming 44% of all Burmese exports. As previously mentioned, Thailand is closer with China due to investment projects as well as historical ties and current support of the Thai Junta so would not be overreaching to come to a conclusion that Myanmar falls under that alliance. In addition, Myanmar is an exporter24 of gas as there are pipelines linking Burma’s deep water port of Kyaukphyu to Kunming in the Yunnan Province of China carrying 1.87 billion cubic meters of gas to China in the first year of existence. So, Myanmar is not dependent on China in that sense but its interests in trade certainly are more with China rather than India as MIT has noted 40% of imports come from China and India only maintains a 2% margin over China in Myanmar exports where India is at 17% and China 15%.

“As in the past, so in the future, the people of India will stand shoulder to shoulder with the people of Burma, and whether we have to share good fortune or ill fortune, we shall share it together.” – First Prime Minster of India Hon’ble Jawaharlal Nehru

While India has a historical relationship with Myanmar which has stood the test of time, it has become more of a ground for competition between India and China in recent times. Bourne out of facts at hand, it would seem that China is the natural financial ally of Myanmar. Realising this, India has not only stepped up economic relations with Myanmar but is engaging Myanmar on the military front by assisting its military as it remains concerned over Chinese installations in Myanmar with the latest established on the Coco Islands, only 20km from India’s Andaman and Nicobar Islands. It is also important to point out that proscribed organisations such as the United Liberation Front for Assam (ULFA) have set up bases in Myanmar although the government has assured it will not tolerate this. Therefore, Myanmar is a nation where the competition between India and China can be highlighted as each is competing for full partnership which is only advantageous to the government of Myanmar. Vietnam

Looking towards the South China Sea where many of the disputes with China arise, especially with the Spratly Islands, Vietnam is a key player in these issues. While the Chinese government due to its policies supported the “Viet Cong” and other Vietnamese communist forces against the U.S., times have changed and control over major oil fields have come into play. While Vietnam’s number one import; refined petroleum at 8.8% 25 from Russia and Venezuela of all imports is just like most other of the ASEAN, it is also a major exporter of crude oil as due to its sovereignty on the Cuu Long Basin. This is the area where the most formidable disputes between Vietnam and China lay; in the South China Sea where India has also stepped in26 as it has voiced its support for Vietnam in this dispute27. In exchange for support, Vietnam has also offered several oil blocs in the South China Sea to India28. This has certainly irked China as its government newspapers have warned India to stay away from the South China Sea disputes29. However, it is very important for India to have a position there as key shipping lanes shift from the Pacific Ocean to the Indian Ocean through these seas. Due to the Vietnamese War, the U.S. has not been able to form full diplomatic relations with Vietnam as the first high ranking official to visit Vietnam was just this month; by U.S. Chief of Army Staff (COAS) General Dempsey30 just as U.S. President Obama was the first U.S. Head of State every to visit Cambodia. In addition, the Philippines is allied with Vietnam in South Chinese Sea or West Philippines Sea disputes31 so it will be difficult to see Vietnam side with China or the U.S. in case of conflict despite its dependency on China as it accounts for 28% of Vietnamese imports referenced by the same source at MIT earlier in this section. Philippines

The Philippines is a very close ally of the U.S. and has allowed the U.S. to set up bases in the nation as well as station thousands of troops to surround China32. In fact, it might be the “best friend” of the U.S. in the ASEAN. As mentioned, the disputes with China and the Philippines go beyond economics or trade as there are key sea shipping channels in the region and land disputes with regards to the Spratly Islands. With regards to India, the Philippines is stepping up relations due to the mutual goal of containing China3334. It is interesting to note that while the Philippines has many disputes with China, the number one importer of Filipino goods is China and China is number one source of Filipino imports as it accounts for 13% followed by Japan at 11%. The main buyer of Filipino goods and the Philippine’s main supplier is China35. It must also be noted that while the U.S. may not have leverage with Vietnam, the Philippines is close with Vietnam due to mutual sea disputes36 as Vietnamese Ambassador to the Philippines H.E. Truong Trieu Duong has stated they can share the sea if it is won over from China so there may be a strategic advantage angle to open Vietnamese doors through the Philippines.

This multilateral relationship with the Philippines might pose a threat to anti-U.S. nations as well. In regards to any conflict, the Philippines will automatically side with the U.S. against China as it has forged deep military relationships with the U.S. in mutual efforts to contain Chinese growth and has voiced its anger over the oil blocs in the South Chinese Sea and West Philippines Sea. The Filipino experience with India is one that is still developing as Philippines President Hon’ble Gloria Arrayo visit to India set up a Joint Commission on Bilateral Cooperation where its inaugural session was held in March 15th 2011 chaired by the Foreign Minister of the Philippines. Thus, military or political relationships with India are not ‘bonafide’ yet so to speak and the nation would count more on its partners in the North Chinese Sea which are aligned with the U.S. in case of conflict. Indonesia

The ASEAN in the shipping lanes connecting the Indian Ocean with the South Chinese Sea to the Pacific Ocean are of upmost importance as well economically, politically, and military. Indonesia; home to the world’s largest Muslim population has strong objections to Chinese interests in this critical area of the world by adding additional military units near the claimed maritime borders of China37. Economically; Indonesia is a major oil exporting nation as according to the International Energy Association (IEA), it was 10th in the world for oil exports in 2009 as it is reported there are 60 oil fields in the nation but only 22 have been tapped according to BPMigas Vice Chairman Abdul Muin, leaving a large room for expansion. Indonesia also exports coal to China and Japan38. In this way, Indonesia has a very strong economic base in the energy sector to challenge China directly. Towards this end, many have pointed out Indonesia needs to expand ties with India39 due to cultural ties and Indonesia has requested greater military ties to this effect40. Due to its disputes with China, Indonesia may be more willing to be a military ally of India. Indonesia does not fall within the U.S. nexus in the Northern Chinese Sea with Japan and South Korea as there disputes over investments and even within the ASEAN; Indonesia only resolved a maritime dispute with the Philippines after 20 years. Singapore

Singapore maintains very close cultural ties with India. Economically; it is the financial hub for not just the ASEAN but for the world as some compared it is an alternative to Switzerland Banks due to the ease in taxation rules. Economy thrives with Chinese metal traders41, approximately 5000 Indian Businesses investing in Singapore Firms42, and U.S.-Singapore Free Trade Agreement (FTA) Pact influencing trade between the two nations rising over 60% in the past decade43. Militarily, Singapore maintains the same balance but with a slight tilt towards India and the U.S44. It holds yearly military exchanges and drills are held with India4546 while China is seeking better military relations with Singapore due to its strategic location47. With this sense, one could conclude that Singapore would play a neutral role in any event of a conflict as it is assisting the U.S. since the nation supports the U.S. Dollar and holds nearly $1.3 Trillion USD in its foreign reserve banks48, supports Chinese investments into Singapore, and supports India due to its cultural ties. Malaysia

Last but not least, Malaysia, is of great importance in the ASEAN. Malaysia also has a large Indian Tamil population such as Singapore and has had government officials who were of Indian Tamil origin. However today, Malaysia is military aligned with China and the recent downing of a Malaysian Jet MH370 will not affect any ties according to China49. Malaysia is also dependent on China for most of its trade while it exports to Singapore many electronic goods50. With the U.S., Malaysia is not the worst of partners but is not the best as the U.S. has criticised its human rights record lately51. In any altercation, it is almost certain that Malaysia will be on the side of China unlike its bordering neighbor Singapore which performs a neutral balancing act against China. Conclusion

China has a great deal of clout over the ASEAN because of its trade relations. India is not a natural exporter of goods so it is not able to dominate through trade but is engaging the ASEAN on all other fronts realising the need to build partnerships in the area if it is to stay up par with Chinese growth. As previously mentioned, the U.S. has realised this as well and is trying to contain China militarily but is currently aligned with more North Chinese Sea nations such as Japan, South Korea, and the ROC rather than the ASEAN nations. Japan has called for closer cooperation between the ASEAN and Japan towards this end for the sake of multilateral cooperation52. However, the main problems that could arise in the region is over territorial disputes with China getting increasingly aggressive and assertive in this region so the ASEAN will be a extremely important area strategically in all areas as we move forward.

Eurasia Review By SAAG (South Asia Analysis Group) By Dr. Parasaran Rangarajan

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