Geopolitics without geoeconomics, a fool’s errand

  • IASbaba
  • September 20, 2022
  • 0
International Relations
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  • Over the past few years, New Delhi has managed to emerge as a major pivot of the global Indo-Pacific grand strategic imagination, avoided the temptations to militarise/securitise the Quad (Australia, Japan, India, and the United States), and has ensured that the Association of Southeast Asian Nations (ASEAN) states do not feel uneasy by the ever-increasing balance of power articulations in the Indo-Pacific.

Indo-Pacific (IP) Region:

  • The term ‘Indo-Pacific’ has gained currency as a new construct in recent times. The Indo-Pacific provides a geographic and strategic expanse, with the two oceans being linked together by the ten ASEAN countries.

Significance of Indo-Pacific region for India:

  • Strategic significance: Indio-Pacific is a multipolar region, contributing more than half of the world’s GDP and population. A stable, secure, and prosperous Indo-Pacific Region is an important pillar of India’s strategic partnership with the other countries especially USA.
  • Mineral Resources: Maritime territories have also emerged as depositories of vital resources ranging from fish stocks to minerals and offshore oil and gas. The South China Sea, for instance, is estimated to hold some 10 per cent of the global catch of fish as well as 11 billion barrels of oil and 190 trillion cubic feet of gas.
  • Economic Growth: According to a report of the Asian Development Bank (ADB), countries in the Indo-Pacific produce over 60% of global GDP, making the region the largest single contributor to global growth.
  • Commerce: The region consists of many of the world’s vital choke points for global commerce, including the Straits of Malacca which is very critical for the growth of world economy.  The Indo-Pacific region also stands at the intersection of international trade, with around 32.2 million barrels of crude oil pass through annually and 40% of global exports come from the region.
  • Maritime Trade: Pacific islands are strategically significant from New Delhi’s point of view as they sit astride important sea lines of communication through which important maritime trade is conducted.

Chinese threat and increasing presence:

  • The Chinese regime claims that it has historical ownership over nearly the entire region, which gives it the right to manufacture islands, declare defensive perimeters around its artificial islands, and to chase ships from other nations out of the South China Sea. The International Court of Arbitration at Hague rejected this claim in 2016 but China rejects the authority of PCA, Hague.
  • China’s increasingly active presence in the Indian Ocean region as well as its efforts to expand geopolitical reach in Asia and beyond by the use of trade and military Demand rule-based order to secure India’s interests and free trade. In the present time, the control of sea lanes and ports would be the game.

What New Delhi is missing:

  • And yet, New Delhi’s vision for the Indo-Pacific appears half-baked. Policymakers in New Delhi today do not appear to appreciate the inescapable linkages between geopolitics and geoeconomics.
  • China’s share in global trade today is 15% and India accounts for 2%.
  • India’s decision to take to the Indo-Pacific and Quad in a big way while unwilling to join two of the region’s key multilateral trading agreements goes to show that geoeconomics and geopolitics are imagined and pursued parallelly in New Delhi, not as complimenting each other.
  • The most recent example is India’s refusal to join the trade pillar of the Indo-Pacific Economic Framework (IPEF) while deciding to join the three other pillars of the IPEF — supply chains, tax and anti-corruption, and clean energy.
  • India’s move to stay out of IPEF, a U.S.-sponsored soft trade arrangement at best, comes two years after India walked out of the negotiations on the Regional Comprehensive Economic Partnership (RCEP) which came to effect earlier this year. Both the agreements lay at the heart of the Indo-Pacific and could potentially shape the economic character of the broader Indo-Pacific region.

A regressive step, China factor:

  • There are several reasons why New Delhi’s decision to stay out of various regional trading agreements is a regressive policy decision.
    • For one, the absence of the world’s fifth largest economy from various regional trading platforms will invariably boost China’s geo-economic hegemony in Asia.
  • Given the growing fear in India about the negative implications of China-India trade, it is important to have a nuanced view of this.
    • For one, the fear in India of China dominating the Indian market is not entirely unreasonable.
  • The reality is that despite the military stand-off on the Line of Actual Control (LAC), India-China trade has only increased in the past year.
    • Therefore, if it is not possible for India to avoid trading with China; it is better for India to deal with the issue sooner rather than later .
  • The optimism that many of the foreign investments and businesses in China would relocate to India after COVID-19, did not materialise.
    • Most of them went to countries such as Vietnam thereby highlighting the fact that we need to get our house in order; joining some of these multilateral trading arrangements will force us to do precisely that.
  • if India is indeed serious about its maritime grand strategy, which cannot be solely military in nature, it needs to get the states in the region to create economic stakes in India (something China has done cleverly and consistently) and vice-versa.
    • More so, without creating economic stakes with the states of the region, India’s ‘Act East’ policy will revert to its earlier avatar — ‘Look East’.

Way forward:

  • New Delhi should rethink its geo-economic choices if it is serious about enhancing its geopolitical influence in the region. Given that India has not closed the door on the trade pillar of the IPEF, we have an opportunity to rethink our position.
  • India should also rethink its decision not to join the RCEP and seek to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) from which the U.S. walked out and China is seeking to join.
  • India should also proactively lobby to become a part of the Minerals Security Partnership, the U.S.-led 11-member grouping to secure supply chains of critical minerals.

Source:  The Hindu

Previous Year Questions

Q.1) In which one of the following groups are all the four countries members of G20? (2020)

  1. Argentina, Mexico, South Africa, and Turkey
  2. Australia, Canada, Malaysia, and New Zealand
  3. Brazil, Iran, Saudi Arabia, and Vietnam
  4. Indonesia, Japan, Singapore, and South Korea


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