The Asia Rebalance: Why South Asia Matters

Robert O. Blake, Jr.
Assistant Secretary, Bureau of South and Central Asian Affairs
Remarks as Prepared for Delivery
House Foreign Affairs Committee, Subcommittee on Asia and the Pacific
Washington, DC
February 26, 2013

Thank you very much, Mr. Chairman, and thanks as well to the Ranking Member and members of the committee for inviting me here today.

Before I begin I wanted to quickly congratulate the Committee on the reorganization of the Subcommittee to include South Asia together with East Asia and the Pacific. Many of the policies we have been promoting in the region over the past few years reinforce the subcommittee’s new organizational structure, so we see this as a positive development that will help us better address the challenges and opportunities presented by this dynamic part of the world.

One quick note: the South Asia region that I cover consists of India, Nepal, Bangladesh, Sri Lanka, Bhutan and the Maldives; so while Afghanistan and Pakistan of course play a large role in South Asia, my remarks here today will focus mostly on India, the Asia Pacific, and greater connectivity between the two. This is also reflected in the more comprehensive written statement I have submitted for the record.

To fully understand why South Asia matters, we need to first look at the Asia Pacific as a single geographically coherent space; one that not only ends on our own shores, but also expands westward to encompass the Indian subcontinent. Much of the history of the 21st century will be written in this broader Asia-Pacific region, projected to become home to over 5.2 billion people by 2050. That history will have a profound impact on the people and the economy of the United States.

Any discussion of South Asia has to start with India. It is one of our most trusted and valuable partners in the region, and really the foundation upon which greater regional economic cooperation and expansion will be built. Our relationship, from our burgeoning trade, to defense sales and exercises, to our growing education and clean energy partnerships, has never been stronger.

Just think about how far India has come in the past 20 years, with a GDP 10 times what it was in 1993. What was then a closed economy is now the United States’ 13th largest trading partner in goods. By 2025, India is projected to become the world’s third largest economy.

With that growth will come enormous resource constraints, particularly in infrastructure. Current estimates suggest that 80 percent of the infrastructure required to sustain and support India in 2025 has yet to be built. We see an enormous opportunity in this growth to deepen our commercial partnership with India, working together with American companies to build the airports, power plants, water and sanitation systems, and fiber optic networks of India’s future.

Simply put: American companies are open for business in India.

Although the U.S.-India relationship is a topic that could easily take up our entire afternoon, I’d like to quickly shift our focus to India’s immediate neighborhood, a region where prospects for economic growth loom larger than anywhere on Earth. Thanks in part to Burma’s recent political and economic reforms, we now see unprecedented opportunities for trade and engagement between South and East Asia.

Nowhere are those opportunities more pronounced than along the emergent road, air, and sea links between India, Bangladesh, Burma, and the rapidly expanding economies of the Association of Southeast Asian Nations, or ASEAN.

In the past year alone, trade between India and the countries of Southeast Asia has increased by 37% percent. This emerging “Indo-Pacific Economic Corridor” isn’t just a boon for the region; it also provides American businesses with substantial new markets.

Mr. Chairman, just a few words in closing. We are bullish on the future of this region, but we are also clear-eyed about the challenges that we face – the threat of terrorism, as we saw again this past week in Hyderabad; regional rivalries; nuclear proliferation; refugees; human trafficking; and the potentially catastrophic effects of global climate change.

But the architecture of cooperation we are building together with the countries of the region is helping meet those challenges. And we continue to view South and South East Asia, including the Indian Ocean, as a crucial driver for America’s economic growth and prosperity throughout the 21st century. We must continue building the regional and bilateral partnerships at the heart of a more stable, prosperous, and democratic Asia Pacific, so that our own country can continue to grow and prosper in the 21st century.

So thank you again for the time, Mr. Chairman. I’ll now look forward to taking any questions.