As the Association of South-East Asian Nations (Asean) ended their annual summit in Cambodia on Friday, utterly divided over how to deal with China and its debatable ownership of parts of the South China Sea, Singapore’s prime minister wrapped up his visit to Delhi the day before, having charmed the national elite by stating that India must ramp up its presence in the region.
Prime Minister Lee Hsien Loong, son of the country’s great leader, Lee Kuan Yew, was certainly the flavour of the week here last week, rubbing shoulders with everyone from Prime Minister Manmohan Singh to the heads of the chambers of commerce, foreign policy analysts and security czars.
He celebrated the massive increase in bilateral trade (from $9 billion to $22 bn) and investment (from $1.3 bn to $17.15 bn from Singapore and from $3 bn to $23.4 bn from India) since the Comprehensive Economic Cooperation Agreement was signed in 2005 (thereby making Singapore the second highest source of foreign direct investment into India), congratulated the 4,000-odd Indian companies which’ve relocated there, invited India to join the regional comprehensive economic partnership and felt himself at home enough at the Taj Palace hotel to even inspect the public lavatories.
Certainly, his command performance at the Singapore symposium organised by the Aspen Institute was an exercise in how to woo a foreign audience. As one business honcho after another pleaded with Prime Minister Lee for lessons in how to make India — or at least Delhi — into another Singapore, Lee, displaying both humility and knowledge of the complex diversity of India, spoke of the need to create trust so that inclusive growth between the “varnas” or castes could be married with the pursuit of excellence.
Pulls & pushes
The island nation’s strategic location and amazing infrastructure makes Singapore the perfect springboard into the rest of the region, whose 600 million population will become a common market in 2015. But Asean is also being wooed by several other groupings, from the China-led Trilateral Agreement (between China, Korea and Japan, who in May announced talks to kick-start a free-trade area between them), the East Asia Summit led by Japan (in which India, US and Australia are also members), and the Trans-Pacific Partnership led by the US.
Elsewhere in the US and Europe, growth is stubbornly refusing to pick up, and even in China and India, the story continues to falter. In Asean, by contrast, according to Reuters, offshore mutual funds rose to $26 bn in March, three times from the crisis-point in 2008, while funds dedicated to China fell by 30 per cent below the pre-crisis levels, to $87 bn.
So, when Asean foreign ministers failed to agree in Phnom Penh last week on how to deal with China over the ownership dispute in the South China seas (Cambodia and Laos did not want a criticism of China, while the Philippines and Vietnam, both of whom have had public disagreements with it, wanted an anti-China mention), foreign investors began to shiver in nervous anticipation.
In the Asean Regional Forum (ARF) security summit that followed, India and the US jumped into the quarrel, emphasising the freedom of navigation on international maritime routes. India’s OVL has a stake in South China Sea waters claimed by both Vietnam and China and the US has been facing off with Beijing in that area for some time.
According to S D Muni, professor of South Asian studies at the National University of Singapore, the island nation’s enhanced interest in India is a manifestation of the region’s unspoken fear of being boxed in by China. “Asean, led by Singapore, has too much at stake with China, both in terms of security and economic issues, which is why it wants another regional power like India to raise its profile,” Muni said.
With the Federation of Indian Chambers of Commerce and Industry leading the celebrations later this year at the Asean Business Forum, which will also mark 20 years of the India-Asean partnership, and Prime Minister Lee and other Asean heads of state expected to attend, opportunities for increasing engagement are only expected to grow. A CECA review is on the cards. Meanwhile, with Myanmar opening up, Singapore’s location as an entrepot for risk-averse Indian businessmen will only go up.
Manish Singhal, in charge of the Asean region at Ficci, pooh-poohed naysayers who believe the twain of India and Singapore cannot meet because of their hugely different size and population, by pointing out that since India lives in its towns and villages, this is where the learning can begin.
“If India can transform its five-million population towns into those like Singapore, then India’s future is secure,” Singhal said.