In the beginning there was the EEC. Then there was the EC. Asean was invented soon thereafter. Then, partly in response, came Nafta (the North American Free Trade Association). | |
| There are other acronyms as well, such as Saarc/Safta and Mercosur, not to mention Comecon in the old days of communist dominance of Eastern Europe. All signify the desire and the need of countries to band together for economic reasons. |
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| India, which is the pre-eminent economic power in South Asia, has not been able to make much of a go of Safta. It has, therefore, been trying for some years now to get into some sort of arrangement with Asean. |
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| This is the so-called "Look East" policy, which was inaugurated when Narasimha Rao was Prime Minister and Manmohan Singh was the finance minister. Asean has not responded with much enthusiasm. To be sure there is some progress, but so little as to be of no practical consequence. FTAs with individual countries like Thailand, however,seem to be doing a little better. |
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| It is in this overall context that the Prime Minister's call on Tuesday,at the third India-Asean Business Summit, for the formation of a regional community of nations, to be called the Asian Economic Community (AEC), must be judged. |
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| The AEC will comprise Asean, China, Japan, South Korea and India. As the Prime Minister pointed out, it will be a truly formidable grouping, which will be able to more than hold its own in trade and other negotiations with the West. |
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| Given that global integration is rapidly being preceded by regional integration,it makes sense to think big and aim for such a major grouping. |
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| Anything smaller really doesn't make much sense, either economic or political,when weighed against the cost, time, and effort that would be required to put it together. |
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| If such a group comes into existence, it will make the world approximate George Orwell's three groupings in his book 1984 (Oceania, Eurasia, and Eastasia). A coincidence, surely. |
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| What would India have to do domestically to make the grouping come into being? The answer was given by Asean when India first knocked at its door: lower tariffs to our levels, encourage FDI the way we do, have more business-friendly labour laws, get your public finances into shape, improve your infrastructure to match ours""these were some of the things indicated. |
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| In short, if you want to be one of us, be like us. Since then, India has done quite a lot to become like them, but not enough. It needs to do a great deal more before it makes sense for Asean, Japan, Korea, and China to allow India into the club they are forming. |
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| India has come up with a good idea. Now it must do what it needs to do at home""reform the economy in a manner that allows businesses to prosper and grow. |
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| But it is unlikely that this government, burdened as it is by the Left and its shibboleths, will be able to deliver very much in that direction. |
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| Nor is it genuinely convinced about the need for reform as it does not believe""despite evidence to the contrary""that economic liberalism helps the poor. |
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