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The Geo-economics of India-Vietnam Engagements in the Indo-Pacific Region (Part 1)

05/11/2018


The Geo-economics of India-Vietnam Engagements in the Indo-Pacific Region (Part 1)


Dr. Faisal Ahmed*

Abstract: The Free and Open Indo-Pacific is a geo-economic connotation of the strategic role that the countries in the region are looking forward to. It aims to create a mutually interdependent system which envisages a win-win situation for all stakeholders. Each country has its own approach, unique assertions and national orientations, which is shaping their state behavior in this geopolitically vibrant Indo-Pacific region. The countries generally adopt a geo-economic or a geo-strategic or a combination of both approaches to interpret the geopolitical significance of the Free and Open Indo-Pacific region for themselves. In the context of Indo-Pacific region, this paper examines the geo-economic gravity of the India-Vietnam engagements. Moreover, this paper also outlines the patterns of India-Vietnam trade and discusses about the export, import, commodity-wise trade and growth rates over the years. In a later section, this paper identifies and analyses various geo-economic enablers and the challenges and the way ahead pertinent to them. These geo-economic enablers identified in this paper include strengthening defence and security cooperation; exclusive economic zones issues in south china sea; need for joint patrolling and its continuity; impact on the global value chains; impetus on cyber security; construction of army software park; diversification of trade basket; policy attention on small and medium enterprises; and, need for capacity building in services sector. The paper argues that besides these enablers, a focus on institutionalizing people-to-people contact can be very helpful in deepening bilateral inter-linkages. Such geo-economic endeavors by the different countries of the region will in fact help establish the much solicited Free and Open Indo-Pacific.  

Keywords: Indo-Pacific, FOIP, India, Vietnam, Geo-economic  

 

1. Introduction

The concept of “Free and Open Indo-Pacific” (FOIP­) is a geo-economically conducive ideation for redefining the regional architecture of the Indian and Pacific Oceans countries. In fact, both Tokyo and Washington are key proponents of this conceptualization. Japan is looking forward to promote FOIP as a strategy aimed toward developing a regional and global liberal order.[1] Also, President Donald Trump has described FOIP as “a place where sovereign and independent nations, with diverse cultures and many different dreams, can all prosper side-by-side, and thrive in freedom and peace”.[2]

The increasing geopolitical significance of the Indo-Pacific region will consequently lead to the emergence of Asia, where key Asian economies like China, India and the members of Association of Southeast Asian Nations (ASEAN) will play a strategic role. The ocean diplomacy in the Indo-Pacific is characterized by both geo-strategic and geo-economic considerations. It global outreach in terms of population, resources, transit routes, emerging markets, mega congregations, and huge market potential has eventually turned the Indo-Pacific into a ‘blue-eyed region’ of the globe.

The bio-geographic Indo-Pacific region has gained more geopolitical prominence in recent years. The United States, China, Japan, India, Vietnam and other ASEAN countries have also shown interest of deepening mutual engagements in the Indo-Pacific region. Whereas countries like Vietnam, the Philippines, India and Japan have become apprehensive of China’s geopolitical maneuvering in the South and East China Seas as well as the Indian Ocean Rim, others like the United States and Australia too have been adopting a cautious diplomatic approach by envisaging a larger role for themselves in the region. For instance, Das (2013) examines India’s defense-related agreements with the Association of Southeast Asian Nations (ASEAN) while Chacko (2012) has analysed a regional vision for India in the Indo-Pacific. Prasad (2017) has discussed about the role of India, Japan in the Indo-Pacific. Moreover, Pant (2018) has discussed about the strategic relationship between India and Vietnam. Moreover, in the discourse on the region, there are several nomenclatures being used today viz. Indo-Asia-Pacific, Asia-Pacific, and the Indo-Pacific itself. Chong and Wu (2018) have tried to examine the relation between Indo-Pacific versus Asia-Pacific.

Further sections of this paper examines the approaches adopted by various stakeholder countries, and focuses on the bilateral trade and geo-economic enablers that defines the economic and strategic architecture of India-Vietnam engagements.

2. Transnational Approaches to Indo-Pacific Geopolitics

The countries have largely adopted a geo-economic or a geo-strategic or a combination of both approaches to interpret the geopolitical significance of the Free and Open Indo-Pacific region for themselves. Scott (2013) discusses about the geopolitical and geo-economic importance of South China Sea with respect to India’s role and examined India’s strategic approach toward it. Ahmed (2012) has argued that “among the various issues covered under the United Nations Convention on Law of the Sea (UNCLOS), like those pertaining to navigation, marine environment protection, transit regimes, and continental shelf (that is, a seabed adjacent to the shore of a state), the one on exclusive economic zones (EEZ) is highly relevant in this context”. Also, for easing geo-economic tensions in the South China Sea understanding the necessity for mutual interdependence is the only way ahead and a challenge as well.[3]

On the other hand, United States too has emerged as a major stakeholder in the South China Sea. In the current scenario, a message has gone into the global domain that with FOIP, the United States’ vision is to counter China’s growing geopolitical influence in the region. This however has to change and must be retracted. This is because even President Trump is looking forward to prosperity, freedom and peace in the region. Moreover, Japan is also looking forward to promote a liberal policy regime in the region. ASEAN is also looking toward FOIP as a comprehensive strategy which is not only security-related, but also geo-economic in approach. India and Vietnam decided to work joint for a free and open Indo-Pacific. After the bilateral meeting between Prime Minister Narendra Modi and the Vietnamese President Tran Dai Quang in New Delhi in March 2018, it was decided that the two countries would deepen defence and security cooperation, and work toward establishing a rule-based security architecture in the region.[4]

The role of Japan is also crucial in determining a strategy for FOIP. Garge (2016) examines Japan and India cooperation and their role in maritime security in the region. Also, Lee and Lee (2016) discusses that the Prime Minister Shinzo Abe called for formation of a “democratic security diamond” to safeguard the Indo-Pacific region. The coordinates of this quadrilateral will be Australia, India, the United States and Japan within which all the Indo-Pacific countries would be there and their freedom of navigation would be protected too. In April 2018, the Vietnamese efence minister visited Japan and discussed on bilateral security engagements as well as those pertinent to strategic alignments the Indo-Pacific region.[5]

The strategic scenario and the regional architecture emerging in the Indo-Pacific has ramifications for other stakeholders as well including Europe and Australia as well. Esteban (2018) argues that with the positioning of China and India, the term Asia-Pacific has become obsolete, while the use of Indo-Pacific has gained favour across the spectrum. He also argued that China’s Belt and Road Initiative has immense potential, but also expressed concerns over China’s military activities in the Indo-Pacific. The author argues that the European diplomacy must support inclusive regional initiatives which follow standard international norms, and asserts that that the FOIP Strategy can be a good platform for the same.

Moreover, Ha (2018) looks into ASEAN as a factor in Australia’s Indo-Pacific Outlook and has appreciated the efforts made by them in the ASEAN-Australia Special Summit held in February 2018 in Sydney. The author also argues that though Australia endorses the conceptualization of Indo-Pacific it does not undermine the importance of ASEAN in its foreign policy.

Indian approach in the Indo-Pacific region is also all-encompassing, though the focus has been more toward strategic and security considerations. However, with the policy attention being given to Act East Policy, the geo-economic perspectives are also being closely considered. Bajpaee (2017) discusses about India’s geopolitical approach towards the Indo-Pacific region as well as ASEAN’s strategic role. He explains India’s geopolitical approach in the Indo-Pacific region through the Look East and the Act East policies. The author argues that India has transformed its approach from economic domain to more strategic driven domains in the Indo-Pacific region. Garge (2017) has also discussed about two significant approach of India in this context. First is to increase the outreach of India in northeast Indian Ocean and second is to gain a larger strategic positioning of India in Southeast Asia and in the Pacific.

Also, there are many academic studies in the context which have focused on trade and strategic engagements between India, Vietnam and other stakeholders in the Indo-Pacific region. Alam (2015) has discussed about the bilateral trade between India and ASEAN and identified complementarities. Collin (2013) discusses about ASEAN-India naval cooperation with special reference to Singapore and Vietnam. The author discusses the South China Sea issue and argues that there are different geopolitical circumstances faced by Singapore and Vietnam. The author also argues that in terms of naval cooperation, India fits into ASEAN’s grand geopolitical strategy in the region. Also, the author identifies the military and technical collaboration between India and Vietnam as being the most promising. Further, there are studies like Raghurampatruni (2012) which largely looks into the trade and economic aspects of India-ASEAN relations, in which Vietnam too is a significant stakeholder. Earlier, Vu and Asher (2009) wrote about the bilateral relations between India and Vietnam and examined their economic performance since 1990. They argue that India needs to improve business environment, infrastructure and social expenditure; while Vietnam needs to focus on services sector and FDI.

Moreover, the Indo-Pacific region as well as India-Vietnam relations are also redefined in terms of their common approaches in mega trade blocs like the Regional Comprehensive Economic Cooperation (RCEP) i.e. ASEAN+6, in which both China and India along with ASEAN countries are the key and, stakeholders. Also, the literatures on FTA for the Asia-Pacific have also shaped up the discourse on key issues affecting India-Vietnam engagements as well. Some such studies which discusses about RCEP, TPP, and their challenges, prospects and potential, and those which can be potentially cited include Mathur et al. (2016); Das et al. (2016); Gantz (2016); Ahmed and Singh (2016); Wignaraja (2015); and, Hidayat (2013). These studies largely have a trade, economic and geo-economic connotations of looking at the congregational aspects of the Indo-Pacific region. (Part 2)


* Associate Professor and Chairman, International Business Area, FORE School of Management, New Delhi, India

[1] “It’s too early to write off the Indo-Pacific strategy”, Article by Stephen R. Nagy, The Japan Times, July 24, 2018

[2] Asia Maritime Transparency Initiative, CSIS, Available: https://amti.csis.org/making-foip-appealing-southeast-asia/

[3] Ahmed, Faisal (2012). “Easing Geo-economic tensions in the South China Sea”, The Financial Express, November 14, 2012

[4] “India, Vietnam to work jointly for free, open Indo-Pacific”, The Indian Express, March 4, 2018

[5] “Japan-Vietnam Defense Relations in the Indo-Pacific Spotlight”, Prashanth Parameswaran, The Diplomat, April 11, 2018, Available: https://thediplomat.com/2018/04/japan-vietnam-defense-relations-in-the-indo-pacific-spotlight/

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