Australia and the Asia-PacificR. James Ferguson © 2005
Lecture 10:
South Asia and the Indian Ocean:
Cooperation or Institutionalised Conflict?
Topics: -
1. The Significance of India
2. The Tangled Web of South Asian Affairs
3. India’s Regional and Global Role
4. IOR-ARC and BIMSTEC: Slow Ground-Work or Stalled Regionalism?
5. India as a Key Player in the Asia-Pacific Region
6. Resources and Further Reading
1. The Significance of India
There will not be time in this subject give due credence to all the countries of South Asia. For reasons of time, we will focus on India and its regional impact on South Asia and the wider Asia-Pacific. India remains a great seminal civilisation, representing one of the great continuities in Asia, a source of three of the world’s great religions (Hinduism, Jainism, Buddhism), and a major influence on Southeast Asian art, culture and literature for the last 2,000 years. India and China, mutually, were the great external influences on Southeast Asian kingdoms down to the 18th century (indigenous civilisations were also diverse and culturally rich), and formed part of an extended trade network which reached from eastern Africa to Japan (see Chaudhuri 1990). These Indian travellers brought with them the great religions (Hinduism, Buddhism, and along with Arabic traders, Islam, often in the more eclectic version of Islamic Sufism). This traditional impact can be seen in the Hinduism of Bali, the great architectural temples of central Java, and in the role of the Hindu epic myths, the Ramayana and the Mahabharata, in shaping Malay dance, shadow theatre (Wayang Kulit) and story-telling. Brahmanism was the first Indian religion to flourish in Java - it was followed in the 5th century by Buddhism (Saksena 1986, p160). Some of these cultural ties have been partially redeveloped since the 1950s, with numerous exchanges of cultural delegations, and dance and puppet troops, though India has to be careful to avoid any sense of cultural imperialism (Saksena 1986, pp166-7).
In modern times, India, like China, was the source of a diaspora of traders and immigrants who spread out into the Indo-Pacific and the world. Overseas Indians (sometimes called Non-Resident Indians, NRIs) are found in Malaysia (comprising 8-9% of the population), Singapore (comprising 7%), Burma, Hong Kong, and as far afield as Fiji, Australia, east Africa and South Africa, with small groups found in Indonesia and Thailand. A small but active Indian population is also found in the United States, Europe and Australia (Gordon 1993, pp98-9), and form part of an ‘intellectual’ export in many professions as well as scientists, academics and IT experts. Elsewhere Indians have been labourers, farmers, and merchants, e.g. in parts of Southeast Asia and Fiji. Most of these groups, of course, like the Chinese diaspora, are second, third or fourth generation residents, and wish to view themselves as nationals of Malaysia or Singapore etc. (Suryanarayan 1995, p1207). Certain comparisons can be drawn with 'overseas' Chinese. The Chinese diaspora has been a source of massive reinvestment back into China, with an estimated $44 billion of foreign capital invested between 1970 and 1993 (Suryanarayan 1995, p1219). Comparatively, investment back into India by Overseas Indians has been quite small, though government programmes in the 1990s have tried to attract this capital into the country (‘FDI approvals’ increased from around around $384 million during the late-1980s to approximately $3 billion during the late 1990s, see Balasubramanyam & Mahambare 2003). At the same time, it must be remembered that, excluding Hong Kong and Taiwan, there were in the early 1990s at least 26 million overseas Chinese in Southeast Asia, while there are only several million Indians in the same region (Suryanarayan 1995, p1221). Likewise, there are some cultural factors for these differences: -
But India too has its Diaspora, why have they not sought to invest in India? The differing composition of the ethnic Chinese and Indian Diasporas provides one reason for the differences in the volume of FDI from them. Although there are no precise data on the exact size and composition of the ethnic Chinese and Indian Diaspora, evidence suggests that, whilst the Indian Diaspora is located mostly in the United States, the United Kingdom and other western countries, the Chinese Diaspora is mostly located in East Asia. And while the Indian Diaspora, especially so in the United States, mostly belongs to such professions as education, health services, science and engineering, the Chinese Diaspora is much more business oriented. The opening up of China to trade and FDI appears to have provided the Chinese Diaspora an opportunity to extend and or shift its business interests to China and take advantage of relatively low cost labour and land in China. The Indian Diaspora with its lack of business interests has for long opted for the portfolio variety of investment, principally bank deposits. The sudden withdrawal of such investments was one of the proximate causes for the economic crisis India experienced in 1991.
The one notable exception here is the participation of India's Diaspora in the Silicon Valley and the spectacular growth of India's export-oriented software industry. The Indian software engineers and entrepreneurs in the Silicon Valley appear to have successfully utilized India's endowments of highly trained but relatively cheap engineering talent (Balasubramanyam & Mahambare 2003).
Alongside these traditional influences lies the reality of India as a significant nation in world affairs and especially in the Indo-Pacific region (see lecture 1). India (the Republic of India (Hindi Bharat), which received its independence from Britain in 1947, emerged as a poor nation greatly in need of economic and industrial development. In general terms, India has made massive strides in increasing food and industrial production. However, though poverty has been reduced, some 36% of the population still lives in extreme poverty, defined in terms of minimum calorific intake, therefore suggesting the metaphor of the half-full, half-empty glass in developmental terms (Kumar 1999). With a population growth rate of 2.1% and a population of now over 1.08 billion, these problems remain pressing, especially in supplying meaningful jobs for all levels of society (Gordon 1993, p40; DFAT 2004; DFAT 2005). One of the main aims of Indian policy has always been not just to increase GDP, but also to ensure through various welfare policies that economic growth lifts the everyday quality of life of Indians from sub-human conditions (Arora 1996a, pp1546-7).
Indian communities form a vigorous part of many Asian and western societies:
Little India, Singapore (Photo Copyright R. James Ferguson 1999)
This is a crucial component of political stability for India, not an option. In India there is a widespread recognition that poverty exacerbates existing social, religious, ethnic and class tensions, and that environmental sustainability has to be linked to human development. The reduction of the suffering of the poor was a key element in the political and intellectual construction of the modern Indian state, and was emphasised by both former Prime Minister Nehru and Mahatma Gandhi as a true measure of independence and legitimacy (Kumar 1999). In spite of strong political consensus on the need to eradicate poverty, its gradual alleviation has been exacerbated by the growing gap between expectations and the limited delivery by governments of an improved quality of life to all sectors of the population, especially among the young (Singh 1994; Kumar 1999). Further serious reduction of poverty in India, as suggested by Government policy, will require annual growth of 6% GDP (sustained over a decade), combined with deepened provision of minimum services (water, health care, education, public housing assistance, food security, road infrastructure), and special attention to poor and 'socially disadvantaged groups' (Kumar 1999). Through 2003-2005 GDP growth rates of 6.5-8.6% indicate that this is not impossible (DFAT 2004), depending on future international trade flows. Indeed, Indian sources have become rather up-beat on the idea of 'outshining China' within 15 years, and have projected hopes of sustained growth through 2006-2020 (India Times 2005).
At the same time, the potential of India must be grasped. It is the second most populous nation on earth, has control of most of an entire subcontinent with substantial agricultural and economic resources, and had a quite substantial education and transport infrastructure (largely developed in its modern form on the basis left by the British), and is now developing selected areas of high technology and research (computing, nuclear and missile technology, plus new areas of research in medicine and pharmaceuticals). India also has enormous problems - a large poor population with a relatively high growth rate, vulnerability to seasonal rains, fluctuating patterns of poverty and vulnerability, plus ongoing religious and social conflicts. Yet these negative images should not be taken as a permanent condition. Indian agriculture has enormous potential - 57.15% of its land is arable, compared to 10% for China (Arora 1996a, p1550) - yet China supports a larger population. Here China's agricultural policies, which started their modernisations in the countryside, are seen as generally more effective than the Indian approach (Wang Hongyu 1995, p551), though India has now become largely self-reliant in food production. India's further steps in its 'green revolution' (use of irrigation, balanced use of farm inputs such as seeds, fertilisers and agricultural credit) could make use of some of China's experience, while trying to limit negative environmental impact (Wang Hongyu 1995, p552; Gordon 1993, p39; Ramachandran 1996).
Rural Orissa: Sustainability or Relative Poverty?
(Photo copyright R. James Ferguson 2002)
Likewise, there are considerable mineral resources in India (especially coal and iron), and India has about 40% energy self-sufficiency (Dobbs-Higginson 1993, p173) though certain imports, including oil, are essential. This reliance imported oil and gas has led to a new phase of 'energy diplomacy' whereby India has sought to improve its relations with Persian Gulf countries including Iran (Alam 2000). Likewise, there may be future prospects for China-India cooperation in gaining access to Central Asian resources, especially after a new round of improving economic relations between the two countries through 2003-2005 (Vatikiotis & Hiebert 2004).
India (Map courtesy of PCL Map Library)
The other resource is India's population. A growing ‘middle class’ (estimated anywhere between 12% and 40% of the population, 100 to 350 million, Dobbs-Higginson 1993, p174, p178) with disposable cash for commodities has meant that business groups around the world are wondering whether there can be an Indian-miracle, just as there was an economic miracle in East Asia. It is this class that also provides the main investment and capital saving source within the country (Dobbs-Higginson 1993, p178). Here comparisons are often made with China, which has experienced much higher economic growth and foreign investment during the 1980s and 1990s (Arora 1996a, p1572). China, of course, began its economic reforms earlier (1978 verses 1992), but both countries are still striving to integrate themselves further into the world economy (Arora 1996a, p1545). However, there is no guarantee that the middle class can continuously expand in countries such as India, which may wish to bypass the kind of 'destiny' suggested by demographic transition (Rogers et al. 1997, p47). The 'consuming class' may comprise only 150 million, with only some 6 million with the sustained interest and wealth for expensive foreign brand-named goods (see Tharoor 1998 pp280-282; For high projections as a neo-colonial desire to open Indian markets, see Rayan 2000). Yet, India has some distinct advantages in global terms. For example, the main business and nation-wide language in use is English (though there are seventeen official state languages in India, plus hundreds of dialects, Dobbs-Higginson 1993, p175), and a large segment of India is educated to a high standard in a system rather similar to Britain’s (for the need to further bolster primary education to maintain social reform, see Datta-Ray 1998).
This has resulted in a relatively high technical and scientific research base, which has since 1947 managed to build a large Indian indigenous industrial capability, and to develop weapons systems including tanks, attack helicopters, a light combat aircraft, a range of short and medium range missiles, and a strong nuclear industry. It has developed its own weather and telecommunications satellites, and India plans by the year 2006 to land an unmanned vehicle on the moon. Indian technology can provide most of its own telecommunication systems (Dobbs-Higginson 1993, p184). India has since moved in a major role in programming and software development, as well as beginning to explore a role in cost-effective research and development centres for medicine and other high technology areas, a move supported by the Indian government through 2002-2005 (see Bagla 2003).
India in the past had followed a somewhat socialist and government-guided economic path, especially under the early leadership of Jawaharlal Nehru, who looked to the Soviet Union to some extent as an economic model (Dobbs-Higginson 1993, p181; Arora 1996a, pp1548-9). Yet India also has a strong trading and entrepreneurial tradition, has established stock exchanges, a strong legal and accounting system (Yahya 1995, p36; Dobbs-Higginson 1993, p174, p197), and even under the early protected economy, a group of important businessmen grew rich 'behind the shelter of the world's highest trade barriers' (Dobbs-Higginson 1993, p181). Its economy can now be described as market oriented mixed economy (Arora 1996a, p1549), with a trajectory towards a more open market.
India has also been able to retain a formal democratic structure, both at state and national level, in spite of a range of problems ranging from literacy through to corruption and dispersed political violence. There are both advantages and disadvantages in India's democratic tradition: -
India, no doubt, is better recognised as far as its political, legal and judicial institutions and their democratic strengths are concerned; but India has always been slow in adapting to changes unlike China which has been quick in learning from past mistakes and adopting changes compatible to future needs. There is no doubt that the democratic institutions, the Press, the Opposition parties provide checks and balances by compelling the government in power to modify the ongoing plans to formulate new people-oriented policies and take preventive measures whenever required, but the role played by disciplined leadership possessing an ideology capable of mobilising people - workers, peasants and intellectuals - in the nation's restructuring and economic modernisation can also not be ignored. How these two aspects are reconciled would probably determine the course of further progress in both China and India (Arora 1996a, p1574)
India from 1947 was an independent voice in world affairs. Beginning in a period when India lacked the wealth and ability to arm itself, Indian leaders turned to diplomacy to help ensure their country's security (Saksena 1986, p19). Abutted by China to the north, and having a somewhat socialist orientation under Nehru, India opted for neutrality and then non-alignment, refusing to enter the bipolar contest between the superpowers in the Cold War. In spite of some serious courting by the US, India, though a democracy, resisted the temptation to enter the fold of the anti-communist US alliance which ringed the USSR, China, North Vietnam and North Korea. This stance meant that India emerged as one of the main leaders of the Non-Aligned Movement (NAM), nations mainly in the third world which refused to enter into the networks of the first or second worlds (i.e. the West and the Communist block). Alongside Egypt and Indonesia, India sought to influence these nations to promote an independent path to development, and to reduce global tensions.
The main aims of India's non-aligned aspirations can be summarised as: -
(a) the pursuit of peace, not through alignment with any major power or group of powers, but through an independent approach to each international dispute or conflict situation; (b) liberation of the people still under colonial rule; (c) the maintenance of freedom, both national and individual; (d) the elimination of racial discrimination; and (e) the elimination of hunger, disease and ignorance which affect the greater part of the world's population; and (f) economic development through international cooperation. (Saksena 1986, p20)
Yet this pacific and totally non-aligned role could not be fully maintained during the heights of the Cold War. This was largely due to India's strategic position. To her north, India had borders with a nuclear-armed Communist China, and even Tibet, taken over by Chinese forces in stages between 1950 and 1959, represented an armed Chinese presence to her north. India was forced to accept the reality of China's control of Tibet, though Nehru had some sympathy for the exiled Tibetans and for the Dali Lama's position (see Tenzin Gyatso 1990). By 1970s, the diplomatic relations with China improved, and ambassadorial relations were resumed in 1981 (Wang Hongyu 1995, p546). In fact, activist Tibetans and Tibetan sympathisers formed one remaining irritant in Indian-Chinese relations in the 1990s (see the 'official line' expressed in Wang Hongyu 1995, pp553-4), though these tensions have been reduced through 2003-2004 (Vatikiotis & Hiebert 2004, p12). India and China did engage in a short sharp border war in 1962 concerning China's need to build a strategic road into Tibet through territory controlled by India. In the long run, India had to develop special relations with first the Soviet Union/Russia, and then increasingly with the U.S. and improved trade relations with the European Union (2000-2005), to secure her domestic and international goals (see below). Current U.S. policy through July 2005 seems to accept India as an emerging 'great power' in regional terms, and has accepted that India has a major role to play in the U.S. global security agenda. The EU, likewise, taken as a whole, is a major trading and investment partner: -