China has not been particularly comfortable with the Trump Administration’s repeated use of the term ‘Indo-Pacific’ instead of ‘Asia-Pacific’ (off late, it has been quite scathing in it’s criticism.
The term ‘Indo-Pacific’ which has been used for a few years, now gained more attention after a few developments: During Trump’s Asia visit in 2017, during the course of which he visited Japan, Vietnam and attended the ASEAN Summit, he used this term on more than one occasion.
Before his India visit in October 2017, former Secretary of State, Rex Tillerson, too articulated his vision for a ‘Free and Fair Indo-Pacific’. Tillerson while pitching for a greater role for India in the Indo-Pacific, also highlighted the need for preventing . Said the Former US Secretary of State:
‘We need to collaborate with India to ensure that the Indo-Pacific is increasingly a place of peace, stability, and growing prosperity — so that it does not become a region of disorder, conflict, and predatory economics.”
The use of the term ‘Indo-Pacific’, was followed by the revival of the Quad Grouping (India, Australia, US, Japan). Senior Officials of these four countries, met on the eve of the East Asia Summit held in Manila, and discussed ways to strengthen cooperation for promotion of a ‘Free and Fair Indo-Pacific’.
There have been a number of meetings between representatives of Japan, US and India to discuss a wide range of issues such as maritime cooperation, connectivity and strengthen collaboration between these countries
China’s criticism of Indo-Pacific and Quad
China dismissed the Indo-Pacific as an ‘attention grabbing idea’, while the Quad too has been criticized by Beijing. Foreign Minister, Wang Yi while commenting on the Quad said: no shortage of headline grabbing ideas” but they were “like the foam on the sea”, that “gets attention but will soon dissipate”
Indo-Pacific narrative did lack a vision
One issue on which it is hard to disagree with Beijing, and those skeptical about the ‘Indo-Pacific’, is the fact that countries who have joined hands for promoting a Free and Fair Indo-Pacific (as a sort of counter narrative to China’s Belt and Road Initiative), did not have clarity in terms of enhancing connectivity and economic linkages. They have met on a number of occasions to discuss connectivity projects and a myriad of other issues but nothing substantial has emerged so far. This according to many has been one of the main reasons for the Indo-Pacific narrative not being taken seriously by even US allies. The other problem off course has been Trump administration’s differences with allies like Japan and South Korea on economic and geo-political issues.
US roles out an economic vision for the Indo-Pacific
At the Indo-Pacific Business Forum, organized by the US Chamber of Commerce, Secretary of State Mike Pompeo articulated a broader economic vision for the Indo-Pacific, while also speaking about the likely role of US in promoting cooperation
First, Pompeo yet again reiterated the US desire for a Free and Open Indo Pacific, and how the US was fervently opposed to the hegemonic tendencies of certain countries (in a clear reference to China)
Second, at a time when a number of countries such as Malaysia, Sri Lanka are beginning to question the financial feasibility of Belt and Road related projects, Pompeo’s words are significant. It may also be pointed out, that his address at the US Chamber of Commerce was made days before he began his Asia trip (which included visits to Malaysia, Indonesia and Singapore)
Third, Pompeo spoke about the 113 Million USD investment in areas such as digital economy, energy, and infrastructure. Pompeo dubbed this investment, as a ‘…down payment on a new era in US economic commitment to peace and prosperity in the Indo-Pacific region’.
Fourth, the US Secretary of State also spoke about the potential role of the US private sector in promoting economic growth, prosperity and cooperation in the Indo-Pacific. In an interview to CNBC, Pompeo stated:
“We want private industry with the assistance of the United States government, understanding that we’re going to support this effort, we’re going to have private industry go in and develop relationships. When American businesses come to these countries, they’ll thrive’
China’s reaction to Pompeo’s speech
China was dismissive of the US commitment towards Indo-Pacific, Chinese foreign ministry spokesman Geng Shuang stated that even in the past, there has been talk of cooperation between Japan, US and Australia working jointly for developing infrastructure, but so far not much has been achieved.
While there is absolutely no doubt, that an alternative narrative is needed to China, US also needs to be more predictable in terms of economic and strategic relations with key players in the Indo-Pacific. One of the US’ closest allies in the past, Japan has been extremely uncomfortable with not just the tarriffs, but also on Trump’s handling of strategic issues (such as the North Korea Issue)
The example of Indian and Japanese Companies in South Asia
If differences can be ironed out, there is clear space for companies of different countries, to work together in the Indo-Pacific. India-Japan have already taken the lead in Sri Lanka and Bangladesh (two countries likely to play an important role in the Indo-Pacific). In Bangladesh, Marubeni and Larsen and Toubro shall work jointly for supplying electrical and mechanical railway systems for Phase 6 of the Dhaka Mass Rapid Transport. In Sri Lanka, Petronet along with Japanese companies is setting up an LNG Terminal near Colombo (L&T has already been working with Marubeni for setting up a 400 MW gas plant in Habibgant district, Bangladesh). Petronet will hold 47.5 per cent stake in the project while Japan’s Mitsubishi and Sojitz Corp will take 37.5 per cent stake, while the remaining 15 percent stake will be held by a Sri Lankan company.
In conclusion, Pompeo’s emphasis on the need for greater transparency in investments, US support for areas such as technology in the Indo-Pacific, and a more pro-active role for the private sector in the Indo-Pacific — all make sense. A lot will depend upon Donald Trump’s approach on critical geo-political and economic issues, and whether he is able to take along key allies such as Japan. A lot will also depend upon relations of countries, especially Japan and India, with China. In recent months, Japan and India have been trying to recalibrate economic ties with Beijing (A number of Japanese companies are in fact participating in the BRI). While this in no way implies, that the narrative of the Indo-Pacific will lose its relevance, it does remain to be seen whether Japan and India would put it on high priority.
Pompeo’s speech is interesting, it remains to be seen how companies from other countries react and whether they explore the possibility of investing in big ticket connectivity projects.