To Take A Stand
By Rafael M. Alunan III
Divided by land, connected by sea
I just returned the other day from a trip to India on the invitation of Johnny Chotrani, Chair of the Philippine-India Business Council (PIBC) of which I’m a member. We met with the ASEAN-India Business Council (AIBC), the Federation of Indian Chambers of Commerce Inc. (FICCI), and the Chamber of Indian Industry (CII). The trip had a dual purpose: it included matters pertaining to the Philippine Council for Foreign Relations (PCFR), which I chair, and where Johnny’s a member. I met with Philippihne Ambassador to India Dondon Bagatsing, our Defense Attaché and officials of India’s Ministry of External Affairs (MFA).
ASEAN-India trade, tourism and investments have a lot of room for improvement. Although our ASEAN neighbors, linked by Asia’s land mass to India, are far more advantaged than us, collectively, we haven’t done enough to scale up business ties. ASEAN brings in better results from other regional blocs and bilateral ties where we’ve been successful in gradually reducing and eliminating trade and investment barriers. India has yet to benefit from ASEAN’s nominal GDP of $3.1 trillion and per capita income of $4,747.
There are two billion people between India and ASEAN that haven’t been leveraged to-date. We lack an economic partnership to create the policy and business environment needed to step up B2B linkaging and performance. Toward that end, the Regional Comprehensive Economic Partnership (RCEP) between India, ASEAN and its six FTA partners (China, Japan, India, South Korea, Australia, and New Zealand) is being rushed with another ministerial meeting slated this month. The arrangement is also open to any other external economic partners, such as nations in Central Asia and remaining nations in South Asia and Oceania.
ASEAN-India trade has grown from $43.9 billion in 2010 to $81.33 billion in 2018. Indonesia, Malaysia, Thailand, Vietnam, and the Philippines account for 82% of total ASEAN trade with India. While the ASEAN imports over $1.2-trillion worth of goods from all over the world, India supplied only about two to three percent of ASEAN’s total imports; while its imports from ASEAN accounted for about 12% of total. India’s FDI flows to ASEAN were only $1.8 billion, or around 1.5% of total FDIs. Greater market access by both sides require amending negative lists in certain sectors and the successful conclusion of RCEP and other trade agreements.
The Philippines is at a disadvantage. It’s not part of the Asian land mass compared to the rest of ASEAN (except for Indonesia and Brunei). But we’re connected by water: the Indian Ocean flows through the South China Sea and into the Pacific Ocean. India-PH joint ventures in the country could radiate to back to India and to the Asia-Pacific region, which accounts for around 84% of our country’s total exports. Shipbuilding, pharmaceuticals, land transports, artificial intelligence, space programs, and technical services are potential areas of cooperation.
Toward that end, AIBC and FICCI discussed a range of initiatives for this year and next:
• the 2nd India-ASEAN InnoTech Summit, Nov. 21-23, in the Philippines.
• MEDEX 2019, Oct. 9-11, in Myanmar.
• the 19th Vietnam International Textile and Garment Industry Exhibition, Nov 20-23, Ho Chi Minh City.
• the 5th ASEAN-India Expo and Summit, 3Q 2020, Ho Chi Minh City.
• and Expo 2020, Dubai
Subsequent meetings with India’s MFA and our Embassy focused on India’s “Indo-Pacific” concept, a term that gained currency in light of the strategic competition between the US and China. I wanted to know if there was alignment in the thinking of India, the US, Japan, and other countries friendly to the Philippines. My understanding is limited to a military construct where those countries opposed to China’s militarization of the South China Sea and Belt-Road Initiative invites strategic pushback. Apparently, India’s still in the process of crafting its own architecture by its think tanks, bureaucracy, and national leadership.
Its foundations rest on a cooperative approach for these priorities: integrated economies, sustainable development of marine resources or blue economy, rules-based maritime order, international law and military deterrence. Its pillars would likely be maritime cooperation, trade and investments, connectivity, socio-cultural, science and technology, and the UN’s social development goals. As such, various study and technical working groups have been organized to design the master plan. India has set up the Indo-Pacific Division in the MFA and is setting up a Center for Indo-Pacific Studies at a leading university.
If it hasn’t been done yet, our Department of Foreign Affairs should set up its own Indo-Pacific desk and tap the services of think tanks like the PCFR to help craft an integrated approach for strategic alignment with the world’s leading economic and military powers. After obtaining official approval of the strategic plan, joint working groups on sectoral cooperation, e.g., maritime security, trade expansion, medical services, should be organized. All that eventually will require Executive-Legislative approval leading to an Indo-Pacific summit to formalize our alignment.
PCFR is well-placed to conduct appropriate studies for the Departments of Foreign Affairs (DFA) and National Defense (DND) and the office of the National Security Adviser (NSA) for the country’s future Indo-Pacific policy. It’s composed of four sectors: diplomatic, security, economic, and academic. Its members are former senior leaders in their respective fields of expertise. PCFR has been conducting valuable Track 2 dialogues with its counterparts in China; helped craft the National Security Policy and National Security Strategy for the NSA; and is currently helping the DFA and DND in an advisory capacity. PCFR is currently working on local and global think tank tie-ups.
One area of interest to me is the Indian-manufactured Brahmos — a medium-range ramjet supersonic cruise missile that can be launched from submarines, ships, aircraft, or land-based launchers. With Brahmos, we could protect our entire EEZ and back up our maritime assets out there. The good news is that India has recently approved its version of Foreign Military Sales, whereby foreign customers could procure defense articles at the same price as the Indian Armed Forces. Credit terms approximating Official Development Assistance could be negotiated. My advice is to get this pronto.
Rafael M. Alunan III served in the cabinet of President Corazon C. Aquino as Secretary of Tourism, and in the cabinet of President Fidel V. Ramos as Secretary of Interior and Local Government.
