While back home a resurgent Rahul Gandhi continues to accuse Prime Minister Narendra Modi of unleashing two torpedoes — GST and demonetisation — and destroying SMEs and taking away the jobs of millions of Indians in unorganised sectors, the Indian PM loomed large at the 31st Asean summit in Manila this week. Addressing the Asean Business Forum, he told the leaders with his usual gusto how his government had done away with 1,200 outdated laws and improved the environment for doing business which has resulted in India jumping 30 places on the World Bank’s Ease of Doing Business Index, the highest for any country last year. Stressing that the “task of transforming India is proceeding at an unprecedented scale”, Mr Modi did a hardsell on all the transformative initiatives his government had undertaken in the past three years and tried to create a buzz about India, inviting investment from the Asean region. He became the first Indian PM to visit the Philippines in 36 years and the only one to have visited all Asean members in three years of his tenure, giving teeth to his “Act-East” policy. In his speech to the Indian diaspora, he referred to Lord Buddha, the Ramayan, Mahatma Gandhi and India’s peacekeeping role, and underlined India’s centuries-old historical and cultural links with the Asean region. Surprisingly, US President Donald Trump, much maligned and much misunderstood at home and abroad, whom he was meeting for the third time on the margins of the Asean summit in Manila, seems to have become his big admirer. Though there wasn’t another jadu ki jhappi, their firm handshake, big smiles and positive body language said it all.
Mr Modi has refrained from calling him by his first name Donald so far, but it seems the NaMo-Potus (President of the United States) romance is deepening! At a similar summit in Myanmar in 2015, the then US President, Barack Obama, had called Mr Modi “a man of action.” This time, heaping fulsome praise on Mr Modi, Mr Trump said: “He has become a friend of ours. He is doing a great job. A lot of things were solved, and we will continue to work together.” Mr Modi thanked Mr Trump for speaking highly about India whereever he went. He also claimed that “India-US ties are becoming broader and deeper… and that India and the US can work together beyond the interests of India, for the future of Asia and for the welfare of humanity.” He also promised that India would try to “live up to the expectations of the US and the world”. A very ambitious vision and high hopes indeed! Only time will tell what it will actually entail, and how far will India really go to fulfil such expectations! The US President seems to have hit on a simple idea for balancing US trade and creating jobs in America — he unhesitatingly asks Amer-ican allies and friends to buy more American weapons systems. He has done that during his visits to Saudi Arabia and Japan. A statement read out at the White house after the Modi-Trump meet in Manila suggests the same. Besides referring to the pledge to enhance defence cooperation as major defence partners, it also mentions the resolve that “two of world’s great democracies should have the world’s greatest armies”. It was the clearest American support yet for India’s global role as an economic and military power.
Obviously, the “hesitations of the past” are now history. In the 45-minute bilateral meeting, regional and international issues were discussed. Notwithstanding the Modi-Trump bonhomie, the rough sailing which commerce minister Suresh Prabhu encountered in his discussions in Washington last month indicate that serious differences persist in the approaches of the two countries on several issues related to trade, business and investment. We have different perceptions on terrorism, Pakistan and Afghanistan as well. The references to strategic partnership and commitment to a free and open Indo-Pacific region are similar to the US-India Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region announced during President Obama’s visit in January 2015. However, Mr Trump’s preference to refer to the region as “Indo-Pacific” suggests an American keenness to make India an integral part of the regional dialogue. An official-level meeting of the representatives of the United States, Japan, India and Australia on the sidelines of the Asean summit, ostensibly to discuss China’s growing economic and military clout in the region and its increasing assertiveness vis-a-vis its neighbours has been hyped up by the media as the relaunch of the “Quadrilateral”. China had protested against the Quad in 2007 and has reacted promptly to the Manila parleys of Quad officials, hoping that it won’t be directed against any third country. Some commentators have gone to the extent of saying the Quad will “help secure” the Indo-Pacific region. Such an assessment might be premature. A reality check will reveal that none of the Quad members can afford to take an overtly anti-Chinese posture nor can they do so as a group. In 2016, the US imported Chinese goods worth $416 billion; China enjoyed a surplus of $346 billion.
Without the relatively cheaper Chinese goods, Walmart will have to close down, resulting in the loss of thousands of jobs! China holds more than a trillion dollars in treasury bonds in the US. No sane US President will precipitate a crisis in America’s relations with China. Even at the height of tension between China and Japan on the Senkaku islands, the US hadn’t taken a pro-Japanese stand. During his recent visit, Mr Trump lavished Chinese President Xi Jinping with ample praise and Mr Xi too gave him royal treatment. Mr Trump’s visit resulted in MoUs for deals worth $250 billion — this is bigger than the total of all pledges he has received from all countries since he became President! When the chips are down, Mr Trump may embrace Mr Xi’s idea that the Indo-Pacific was big enough for both China and the United States. Remember, during his first visit to China, Mr Obama too had floated the idea of a G-2; the idea hasn’t died; it still remains a distant possibility. Notwithstanding their territorial dispute, the Sino-Japanese annual trade has hovered around $400 billion, heavily in Japan’s favour. China has been Australia’s biggest trading partner for the last eight years; it is the largest importer of Austr-alian wines, besides iron ore and milk. China-Asean trade is around $400 billion; imports from China amount to 17.5 per cent of total Asean imports. The Asean- China Free Trade Area, with a combined population of over two billion, is the world’s largest free trade zone. China’s investment in Asean is expected to rise to $150 billion by 2020. The “Quad” can, at best, act as a pressure group to encourage China’s adherence to a rules-based regime in the Indo-Pacific region; it cannot and should not challenge China’s rise.
