The Tribune - Spectrum


Sunday, August 10, 2003

Taking economic relationship beyond rhetoric
Raghubansh Sinha

Beyond the Rhetoric: The Economics of India’s Look East Policy
edited by Frederic Grare and Amitabh Mattoo. Manohar in association with Centre de Sciences Humaines and Core Group for the Study of National Security, JNU. Rs 500.

Beyond the Rhetoric: The Economics of India’s Look East PolicyTHE changes that came about in international politics as a result of the end of the Cold War exposed the limited vision of the Indian foreign policy. India then sought to give a new thrust to its diplomacy. Economic consideration became part of its new diplomatic realities. Strengthening economic relationships with the nations of South-East Asia was one of the top priorities of the Congress government led by the then Prime Minister Narasimha Rao in early 90s.

As the region came into focus, literature on it proliferated, though only few scholars cared to delve deeply into what came to be popularly known as India’s ‘Look East Policy’. Moreover, the 1997 Asian financial crises had vital lessons for India, which considered the East Asian countries models for economic growth and structural reforms.

As such, Beyond the Rhetoric: The Economics of India’s Look East Policy is sure to be welcomed by scholars and others interested in India’s relationship with the countries of South-East Asia. Essays by eminent scholars of the region focus on the economic aspect of India’s foreign policy, particularly with reference to ASEAN and the nations of the Far East.


This volume examines the potential for strengthening the economic relations between India and members of the ASEAN, as well as the manner in which structural problems facing the Indian economy could undermine these relations. The various essays also seek to draw some lessons from the Asian financial crisis.

Tracing India’s compulsions, Isabelle Saint Mezard has convincingly argued that the ‘Look East Policy’ was a "strategy to deal with both regionalism and globalisation" that were evolving simultaneously in the early days of the post-Cold War period. India’s position was made more vulnerable by the decline in the influence of earlier "trans-regional multilateral fora such as the Group of 77, UNCTAD and NAM". The resumption of the integration process of the EU and the negotiations for NAFTA and APEC gave India the impression that it was in danger of isolation in the global economy, says Mezard.

Mukul Asher, Rahul Sen and Sadhna Srivastava point out that India is not a "direct competitor for ASEAN export-led economies, particularly in the manufacturing sector" and "ASEAN’s limited domestic market" makes India, with its huge consumer market, a viable economic partner. What is lacking is detailed analysis of this aspect, which would have added to the significance of the book.

Studying trade complementarity, Atul Sarma and Pradeep Mehta point out the existing mismatch between "demand structure and supply conditions" and suggest a corrective path based on "right set of trade promotional initiatives" "for several complementary products were not traded at all between them and wherever traded, their market presence was mostly insignificant".

Baladas Ghoshal in his analysis of the Indian diaspora argues that the creation of a "borderless nation, linked by blood" needs a strong and "resurgent India". He feels that the NRI community needs networking and a strong global organisation so as to benefit from each other’s strengths and contribute to the resources of the mother country.

What catches ones attention is the shrill warning by Manmohan Agarwal and Dipankar Sengupta: "There is no economy that has invested heavily enough in India to have a stake in the stability of the rupee. Alternatively, important economic powers might conjecture that assistance should not be provided, as an India weakened economically after a currency crisis, might be more willing to make concessions."

India is still fine-tuning its ‘Look East Policy’ of which BIMST-EC (Bangladesh, India, Myanmar, Sri Lanka, Thailand – Economic Cooperation) at the sub-regional level and ASEAN and IOR-ARC (Indian Ocean Rim – Association for Regional Cooperation) at the regional level form important parts.

Influential countries within the ASEAN and outside have attempted to limit India’s area of influence to South Asia. A focus on this aspect would have enriched the readers about political realities of ASEAN.

Though the emphasis of the book is rightly on the economic aspect of India’s ‘Look East Policy’, it would be short-sighted to see India’s ‘Look East Policy’ in purely economic terms. The essence, no doubt, is economic, but geopolitical focus has and will continue to have a predominant role in India’s evolving relationship with the nations of South-East Asia and those of the Far East.

India and the nations of South-East Asia have much to learn from each other. An efficient work culture has become part of the culture of South-East Asia while democracy and liberal tradition have yet to take root there. On the contrary, the largest democracy in the world has still to imbibe their work culture if the economic relationship between the two regions is to go beyond rhetoric.