Indias straight-talking on China and its nuclear tests have propelled it to the top of Southeast Asias radar screen but analysts say the economy, not a nuclear arsenal, is the key to regaining its fading influence in the region.
The world ignored Maos China as long as it held to the dictum that power flows out of the barrel of the gun. Once Deng Xiaoping put economic growth in the forefront and raised visions of a trillion dollar economy, it sat up and took notice of Beijing, an Asian diplomat in Singapore told India Abroad.
Asean (Association of South East Asian Nations) would ideally like to see Chinas power and influence balanced by a powerful but benign India. But Chinas economic profile looms so large while India, despite its greater promise, is seen as merely stumbling along.
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Southeast Asias economic troubles gave Delhi the ideal chance to project itself as the next major economic destination. If the BJP (Bharatiya Janata Party) government in Delhi had unveiled a major economic programme before it unleashed its blasts, the world would have been a bit slower to condemn the blasts. That is the reality, he said.
Even so, Asean has on the whole reacted cautiously although the tests run directly into its ambitions to install a South East Asia Nuclear Weapons Free Zone. While Thailand, Malaysia and Indonesia have been critical, others like Singapore have chosen to keep their protests private or been muted in their criticism. And Asean, it is quite clear, is not in favour of sanctions on India.
Analysts note that India has a reservoir of goodwill and deep cultural linkages to most of Indochina and the Malay archipelago, most of which it has lost by default even as Chinese power and influence gained in the region.
Malaysia and Indonesia, along with most of Southeast Asia except Brunei, have seen their economies controlled mostly by ethnic Chinese. Today, Malaysia is adjusting its pro-Malay Bumiputra policies to level the playing field and Indonesia last month appointed its first-ever ethnic Chinese government minister.
Culturally too, old suspicions are crumbling. Both countries are far more relaxed about teaching of the Chinese language in schools. In contrast, Malaysia has been perceived to be consciously trying to play down its deep cultural linkages to India in favour of an Arabisation of its Islamic culture. By an odd quirk, its Chinese-majority Singapore that is Indias staunchest ally within Asean today.
Analysts say Beijing gained substantial goodwill last year when Japan led the efforts to put together a bailout package for Thailand. China was quick to step in with substantial aid. It has similarly offered to help Indonesia, now the regions No.1 worry.
Today, Southeast Asias economic prospects depend to a large extent on a single factor: China keeping to its promise that it will not go for a substantial devaluation of its yuan currency. If it devalued, the act would substantially wipe out this regions economic competitiveness and send it further into a downturn.
A lot of Chinas growth - and jobs - depend on exports. China is under pressure at home to devalue the yuan. For the moment, it is holding out. Southeast Asias fortunes will depend to a large extent on how and the manner it does that, former World Bank managing director Gautam Kaji told IANS.
Kaji pointed out that Beijing was trying to improve its competitiveness the responsible way - by restructuring the economy, shedding inefficient public enterprises and seemingly willing to pay the political price of restructuring. Such acts have won it tremendous mileage.
Time and again, senior Indian government figures travelling through the region have been told by their Asean counterparts privately that they would like to see India grow rapidly to its full potential and act as a counterweight to China.
Yet it took years of knocking on Aseans doors before New Delhi was accepted as a full dialogue partner and, alongside, admitted into the Asean Regional Forum (ARF). And it is nowhere near being admitted either into APEC or the Asean Asia Europe Meetings (ASEM.
New Delhis inability to deliver on its promises, the conflicting signals on economic policy that it frequently gives out and its general preoccupation with nasty domestic politics have sent deeply negative signals to a region that has focussed its energies on rapid development of its economy and people.
No more is the disappointment writ larger than in Singapore, which led Aseans first real investment forays into India with a massive investment in the industrial park in Bangalore but subsequently failed to get permission for the SIA-Tata joint venture airline.
Visiting Singapore as foreign minister, I K Gujral spoke confidently about being able to push through the proposal, declaring himself personally in favour of open skies. Yet, as Prime Minister subsequently, he could not deliver on the promise, deeply hurting his own credibility.
Says one leading Indian business figure here: Its common knowledge that few countries are comfortable about opening the domestic aviation sector to foreigners. Yet, Gujral blotted his image by promising too much and then being unable to deliver. Can you imagine (ex-Chinese foreign minister) Qian Qichen putting himself in that kind of situation ?
Today, Singapore, with its huge investible surpluses and mixed record with its China investments, is hesitant to move too deeply into India. Parameswara Holdings, the investment arm of the Singapore Indian Chamber of Commerce and Industry (SICCI), has little to show for its India investments amid shareholders pressure to show results.
Says a SICCI board member: Theres a feeling that our money is better spent investing in the region. After all, there are such wonderful opportunities with many good companies going cheap in Malaysia and Thailand because of the crash. We cant just sit around and wait for India to get its act together.