Sunanda K Datta Ray: The flag also follows trade

WHERE MONEY TALKS

Who would have thought that the hope regarding India's Asian destiny that this column expressed only the other week would come to fruit so soon?

But at their last meeting at Cebu in the Philippines, the foreign ministers of the Association of Southeast Asian Nations (Asean) decided to include India in the first East Asian Summit (EAS) to be held in Kuala Lumpur in December.

Caught up in the excitement of Pope John Paul II's death, Prince Charles's wedding and Wen Jiabao's visit, the Indian media glossed over this news. But only a balanced Concert of Asia with India in a lead role can save the region from hegemonic control or unproductive squabbling.

The various agreements with China highlighted the politics of economics but trade does not always follow the flag. The flag "" in the sense of political understanding and arrangements "" also follows trade.

There can be two outcomes, for instance, of meeting the target to increase Sino-Indian trade to $ 20 billion by 2008 and $ 30 billion by 2010.

First, the United States' replacement by China as India's major trading partner is bound to profoundly affect New Delhi's diplomatic and strategic perceptions.

Second, China's dependence on the US will be reduced if India's burgeoning middle class provides a virtually bottomless market for inexpensive Chinese consumer goods. As economic ties expand, both Asian nations will rethink their views on the political map of Asia and the world.

China's outburst of anti-Japanese sentiment makes this doubly necessary. Often described as an economic giant but a political pygmy, Japan, with the world's second largest economy, has invested heavily in the Asean countries.

It also has a huge financial stake in China. But Japan's geopolitical role is uncertain, largely because of its reliance on the US for security, its tense relations with China and timidness abroad. Only a modest number of Japanese companies operate in this country while bilateral trade seems stuck at a measly $ 4 billion.

Here, then, is opportunity for a democratic, booming India, projected to emerge as the world's third largest economy in 30 years, to thrust out.

The very fact that the Asean foreign ministers did not lump India with Australia and New Zealand, the two other candidates for EAS membership, indicates confidence in a land that has left the Hindu rate of growth far behind.

As Singapore's foreign minister, George Yeo, announced, India alone qualifies for membership on the three counts of substantive relations with Asean, full dialogue partner status, and accession to the Treaty of Amity and Cooperation.

Australia and New Zealand do not. Nevertheless, Malaysia's Deputy Prime Minister, Najib Razak, wanted all three countries excluded if Australia and New Zealand were not accepted.

The reason is beyond me. I can only put it down to the many complexes from which so many Asians suffer.

An obvious reason for welcoming India's entry into an organisation that includes, apart from the 10 Asean members, China, Japan and South Korea, is the scope for improved intra-Asian trade. Recovering from the financial collapse of 1997-98, intra-Asian trade went up from 38 per cent of world trade to more than 47 per cent. The 23 per cent growth in 2003 raised the figure to an impressive $ 1,863 billion.

It would be pointless to pretend that India plays the part expected of its size, population, history and industrial base in this commerce. As noted already, trade with Japan is abysmally low.

Trade with Singapore, India's steadfast friend in south-east Asia, accounts for the bulk of the $ 13 billion India-Asean trade. Clearly, there is huge scope for improvement, and India owes it to itself to make a far more determined effort to capture construction, infrastructure and pipeline projects throughout the region.

Also to reap economic dividend from the long years of political support extended to countries like Vietnam, Cambodia and "" earlier "" Indonesia and Malaysia.

Do modern Malaysians even know that only because of their sensibilities, India declined Singapore's request in 1965 to train its armed forces?

The second reason for recommending India's involvement in the EAS is that there is no continental organisation for the entire landmass stretching from the Mediterranean to the South China Sea.

Perhaps, Asia's western half "" the Arab lands, Israel, Iran, and Turkey, which would much rather be European, and the central Asian republics "" has to be excluded. But even eastern Asia, from India on, is saddled with a large number of overlapping and virtually moribund organisations.

We are all familiar with Saarc's travails. Many other entities, some more shadowy than others, like the India-Japan Global Partnership, the Indian Ocean Rim Association, the Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperation group, the Greater Mekong Cooperation scheme and many more, lurk only in files stored away in foreign ministries from Dhaka to Manila.

But there is nothing with a pan-Asian membership or a mandate to link economics with politics to enhance continental security. India's proposal of an Asian Economic Community (shortened to JACIK from Japan, Asean, China, India and South Korea) remains a pie in the sky.

The nearest Asia has to a security organisation is the Asean Regional Forum, which predictably proved helpless in safeguarding the rights of smaller claimants like the Philippines to the Spratly Islands.

That debacle warned of the dangers that can crop up if power is not balanced and individual nations not brought under the purview of collective discipline.

Now is the time to address these problems. In a few years it may be too late.