Indian politicians and diplomats have become increasingly active over the last few weeks in courting their counterparts in Southeast Asia. They have come as part of their country’s Look East Policy, which aims to complement its existing economic linkages with the west with those in the other direction.
The objectives underlying the Look East policy include the need for greater energy security, a stable Burma and better opportunities for Indian firms in the region. A secondary objective would be the development of the impoverished north eastern part of the country. The first two objectives are intricately linked, since discoveries of oil and gas in Burmese territory has brought about rivalry between India and China for control of and access to the precious hydrocarbons which are expected to be necessary to sustain the currently high levels of economic growth both countries are currently enjoying. However, to secure the oil it is important for there to be a stable government and, at the moment, the violent and repressive military junta is the only one available. What India above all fears is the breakdown of order which leads to the mass movements of refugees, many of whom might be armed and willing to continue their struggle for autonomy as a cross-border activity. This, after all, was the situation at the close of the nineteenth century, when the colonizing British took the opportunity offered by rebelling and refugee Burmese to extend their empire by conquering that country.
Trade and investment are generally two-way processes and Southeast Asian governments are keen to discover what India can offer them. It is clear that Indian firms can prosper in the region because of cultural similarities, open economies and the benefits of very late industrialization; it is less clear why the host states should prefer Indian firms rather than, for example, Chinese or Korean ones. This perhaps explains why a recent announcement has been made that India is prepared to assist the Thai government with its plan to introduce nuclear power into its energy security mix. India is also offering the perhaps less than enticing prospect of permitting Thai firms to assist in the north-east of India, owing to similar cultural antecedents. More alluring is the prospect of a future Free Trade Agreement between India and ASEAN, which would open up India’s middle class consumer market which is potentially of enormous value. Many of Southeast Asia’s agricultural products would find welcoming homes in the newly bourgeois homes of India’s urban classes. There will, as ever, be winners and losers resulting from this.
