The Impact of the President's Trip to India and East Asia
Principal Deputy Assistant Secretary, Bureau of South and Central Asian Affairs
Remarks as prepared
I’d like to thank the U.S. Embassy, Indian High Commission and both the Indian and American Chambers of Commerce for putting on this important panel discussion and asking me to speak today. I’d also like to thank Ambassador Pillai of the Institute of South Asia Studies along with Ambassador Ali and Professor Bajpai for their participation here as well. It is great to be back in Singapore. As Secretary Clinton noted last December, “few countries punch as far above their weight as Singapore, and the United States continues to look forward to working together to support economic growth and integration [across Asia].” My visit today is emblematic of that wider U.S.- Singapore partnership.
I first began my experience in India in 1992, as a junior political officer based in New Delhi. Two decades of experience watching India’s progress teaches you to be patient with the ups and downs of decision making in Delhi – but viewed in this decades-long context, there’s no question regarding the country’s upward trajectory, and that’s a trend line that’s powerfully in the interests of the United States.
We have witnessed a positive and transformational change over these two decades, most dramatically evident in the Indian economy. With cutting edge companies like Bharti and Infosys, the Indian economy has undergone a defining change. The days of the license Raj are long past, replaced now by an Indian economy that is directly linked to global markets around the world and vital to our own economic prosperity and competitiveness.
President Obama’s November trip to India turned out to be one of the most successful trips ever taken by an American president to South Asia. I’d like to highlight a few of the accomplishments that showcase our broad agenda and the new dimensions of our global strategic partnership.
President Obama set his stamp on the U.S.-India agenda with his declaration that our relations constitute an “indispensible partnership” for the 21st century. As President Obama said in his November 8 speech to the Indian Parliament, “For the first time ever, our governments are working together across the whole range of common challenges we face.” Indeed, he went on, “The United States not only welcomes India as a rising power, we fervently support it, and we have worked to help make it a reality.”
The President’s accomplishments around his visit illustrate how we are taking the U.S. relationship with India into new and uncharted territory:
- Headlines went to our endorsement of a reformed UNSC that includes India as a permanent member
But there was also significant progress on defense sales and our security partnership:
- finalizing the $4.1 billion sale for ten C-17 Globemaster heavy lift aircraft, a transaction that builds on
- the 2008 purchase of six C-130J transport aircraft by the Indian Air Force, future potential for large scale cooperation in this area. The first C-130J just arrived in India last week. Both acquisitions demonstrate India’s resolve to build a military capacity that meets its expanding strategic horizons.
- Recent weeks have also seen intense discussion of India’s tender for a new Medium Multi Role Combat Aircraft (MMRCA): Two American companies are competing for this $11 billion tender to provide 126 aircraft to the Indian Air Force. Such a deal would revolutionize our military relationship and highlights our willingness to share with India the most advanced technologies.
- Secretary Locke is in India this week at Aero India and underscored the importance of high technology trade to our knowledge based economic partnership.
- In the area of non-proliferation, we concluded an important MOU on global nuclear security issues, under the auspices of India’s Global Centre for Nuclear Energy Partnership
- US support for India’s full membership in the four multilateral export control regimes (Nuclear Suppliers Group, Missile Technology Control Regime, Australia Group, and Wassenaar Arrangement)
- Reflecting our confidence in India’s non-proliferation credentials, we removed India’s space agency (ISRO) and its major Defense Research Organization (DRDO) from the Commerce Entities List, with positive implications for space and defense cooperation
- Completed the governmental understandings required for implementation the U.S.-India civil-nuclear cooperation agreement and welcomed India’s intention to ratify the Convention on Supplementary Compensation this year. This last step is a critical piece of the 7 year U.S.-led effort to bring India into the mainstream of the international market for civil nuclear technology.
We also advanced several other joint initiatives that illustrate how our partnership is advancing in almost every area of government endeavor.
- Launched U.S.-India Open Government Dialogue
- Clean energy: robust private sector synergies, along with gov-to-gov collaboration like the bilateral Partnership to Advance Clean Energy or PACE and a new MOU on shale gas.
- Agreed to convene a higher education summit in June
- Human security: work together to develop, test, and replicate transformative technologies – “an Evergreen Revolution.”
- New trilateral cooperation to advance economic development in regions of shared interests such as Afghanistan and Africa. Reflects both India’s rise as a more much consequential actor in international politics and the ways in which that development helps to advance U.S. interests.
THE PROMISE OF AN INTEGRATED ASIA
So what does a global strategic partnership between the United States and India mean for Singapore, Southeast Asia, and the Asian continent writ large?
One area of U.S.-India cooperation in which we see great potential is furthering India’s engagement with East Asia; working together to strengthen the bonds that tie our nations – the world’s largest and oldest democracies – with the economic and social dynamism that exists from Seoul to Jakarta, and from Singapore to Manila.
To echo what Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell said recently, “we think that India's role in the Asian-Pacific region stands to be one of the most important new developments over the course of the next decade."
We’ve moved from a transatlantic century to a transpacific century in which the rise of Asia has already started to define the 21st century. As the fulcrum of geopolitics moves to Asia, India plays a critical role in U.S. strategy. India, of course, has long been an Asian power in its own right – and the signs of India’s cultural influence can be seen throughout the region. As Under Secretary of State for Political Affairs William Burns stated in an address last year, “It is natural for India to "look East," where its soft power -- long visible everywhere from the temples of Angkor Wat to the food courts of Singapore to the crowds flocking to see the best of Bollywood -- is increasingly complemented by its economic power.”
We welcome the fact that other large Asia-Pacific democracies – Indonesia, Japan, Australia, and South Korea – are also engaging more closely with New Delhi and cooperating more systematically on security issues. Likewise, it is no coincidence that the President began his trip to four Asian democracies with a three-day stay in India.
Engaging the region has been a priority for New Delhi, which launched a “Look East” policy in the early 90’s. But this engagement has acquired new velocity thanks to India’s economic rise. Like President Obama, Prime Minister Singh made his own Asia Pacific trip last year, visiting Japan, Vietnam and Malaysia in October. India has played a positive role in regional multilateral bodies, such as the East Asia Summit and ASEAN, with which it concluded a free trade agreement in 2009. It is especially notable that India has developed close economic and security relationships with Australia, Japan, Korea, and significantly Singapore, which holds regular military exercises in India.
But beyond these stalwart neighbors, other Asian nations have also garnered attention from New Delhi of late.
After years of underwhelming trade statistics, India has now begun to engage the Philippines as a key Pacific partner. Philippine Airlines recently announced a non-stop flight to Delhi beginning in March, after a 16-year hiatus in direct air service between the two nations. Reflecting its burgeoning Business Process Outsourcing (BPO) sector, the Philippines has attracted a strong presence from the top 20 Indian BPO firms.
Indian-Indonesian ties also continue to improve, with economic relations as their mainstay. Following a year in which India hosted summits with a all five of the UNSC P5, it is significant that the chief guest for last month’s Republic Day celebration was the President of Indonesia. This visit highlighted the two countries’ strong economic relationship, while increasing nascent political and cultural ties and holding the promise of a major increase in investment, especially in India’s infrastructure sector.
We strongly welcome this recent progress in East Asian and Southeast Asian bilateral relations with India, and hope New Delhi will further build on these steps, adopting a “Be East” policy that seeks to expand its market and security integration across the region and enhance its role in Asian multilateral fora. For example, a “Be East” policy might entail India seeking an increased role in the East Asia Summit (EAS), and developing further political relations with East Asia that match India’s vibrant trade and investment growth in the region.
The United States, I should mention, is interested in working with India and other members of the East Asia Summit to make it the premier forum for Asia-Pacific leaders to discuss pressing security and strategic issues. And it’s worth remembering that President Obama has announced that he plans to attend the 2011 East Asian Summit in Indonesia, providing an occasion for the U.S. and India to deepen our dialogue about security and economic architectures in Asia.
Coming back to Singapore and seeing how much this region has benefited under the ASEAN umbrella prompts me to take a comparative glance at the South Asian Association for Regional Cooperation (SAARC). India was a cofounder of SAARC (with Bangladesh) in 1985. SAARC has increased India’s regional trade, and provides New Delhi with a platform for discussion and technical agreements, but the organization has yet to reach its full potential. India championed the South Asian Free Trade Area (SAFTA), which we see as an important opening to foster greater trade flows among SAARC members and enhance trans-national collaboration on goods tradable with other countries, including the United States. The observer roles of China, Japan, Korea, Australia and the U.S. have helped expand SAARC’s brand across the Pacific, but we see much more that SAARC could do.
Later this evening, I fly to Bangladesh—a country that helps to bridge South and South East Asia. Regional cooperation, specifically greater strategic partnership with India, is a key objective of the Government of Bangladesh – one that my government strongly endorses. On issues ranging from counter-terrorism to food security to academic exchange, India and Bangladesh share common goals and can reap mutual benefits for millions in South Asia. Owing to its geographic position, Bangladesh also seeks to develop trade links to Southeast and East Asia. Bangladesh was recently chosen to host the headquarters of BIMSTEC (the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation). We welcome this initiative.
Today, for the first time, almost all the countries on India’s eastern periphery – Sri Lanka, Bhutan, Bangladesh, and Nepal – have democratically elected governments in place, stabilizing South Asia and helping India to think more ambitiously about its role in other Asian forums like ASEAN, ARF and the EAS that are further away. In a Washington D.C. speech last September, Indian National Security Advisor Menon enunciated India’s approach to this region, stating that an “open, balanced, and inclusive security architecture in Asia would be a goal” – such an architecture would benefit both the United States and India.
Although the region’s vast geography will always play an important role in economic and security cooperation in Asia, it would be wrong to think of India as merely an Indian Ocean power. It’s worth remembering that the southern part of India’s Andaman and Nicobar Islands lie closer to Ho Chi Minh City and equal distance from Guangzhou than they do from New Delhi. India in this sense sits at the gateway to the Pacific – the Straits of Malacca. I again quote India’s National Security Advisor, who, on the eve of the President’s trip stated: “India and the USA have viewed each other across the Eurasian landmass and the Atlantic Ocean. We get a different perspective if we look across the Pacific, across a space that we share and that is vital to the security and prosperity of our two countries.” India is a Pacific nation.
In the United States’ engagement with the countries of South Asia, one of our overarching objectives is to facilitate new linkages and opportunities for ALL the nations in the region. Reinvigorating trade and commerce between India and Pakistan, for instance, can provide extensive benefits to both countries and the vibrant societies that seek to flourish within them.
Increased economic openness across South Asia, including between India and Pakistan, will generate new economic opportunities for one of the world’s youngest and most vibrant populations. At the moment, South Asia is one of the least economically integrated regions in the world. While accounting for nearly 23 percent of the world’s total population, the region’s share of global GDP is less than 3 percent. In terms of trade linkages, SAARC stands in sharp contrast to regional forums in East Asia.
The pace of economic integration in the Asia Pacific region over the last two decades was unprecedented and serves as an example for other regions. It should, and I believe it can, be replicated in South Asia.
Just as the private sector did in ASEAN, trade associations such as the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) can play a significant role in improving trade relations between India and Pakistan.
Recently, FICCI set up two “Made in Pakistan” business and product exhibits in India, which were well-received. FICCI now plans to organize similar “Made in India” exhibitions in Pakistan for which it is closely working with the Federation of Pakistan Chambers of Commerce and Industry.
Clearly, there is pent up demand for trade between Indian and Pakistan, as demonstrated by the volume of trade that transits third countries to avoid restrictions or endures the cumbersome offloading and reloading that occurs at the land border. Some analysts estimate that trade between India and Pakistan could be ten times what it is currently if both Government’s work together to relax economic restrictions on cross-border trade.
To provide context, official bilateral trade between India and Pakistan reached $2.75 billion in 2009 from $215 million in 2001, and those numbers will only grow as India’s consumer class balloons.
Clearly, the potential for creating new regional synergies is there. With this in mind, I’d like to close with a quote that addresses both the desire and the potential for closer India/Pakistan relations: As Indian Prime Minister Manmohan Singh said in 2007, "I earnestly hope that relations between our two countries become so friendly and we generate such an atmosphere of trust between each other that the two nations would be able to agree on a treaty of peace, security and friendship. I dream of a day, while retaining our respective identities, one can have breakfast in Amritsar, lunch in Lahore and dinner in Kabul. That is how my forefathers lived. That is how I want our grandchildren to live."
The United States shares this hopeful vision for the future of business and people-to-people ties in South Asia. Indeed, I would argue that India’s emergence as an Asian power – which President Obama celebrated in his visit to Delhi – will only benefit from faster progress in social and economic integration in South Asia. Both are trends that are strongly in the interests of the United States.
With that, I’d like to invite any questions for the panel.