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Indo-Pacific: Strategic theatre of growing political, economic interest

Placing Quad in the Indo-Pacific seems critical to tackle the Chinese aggressive stance in the region

Richa Sharma Apr 07, 2022
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Indo-Pacific: Strategic theatre of growing political, economic interest

As a geopolitical keystone, the Indo-Pacific holds significance for regional and extra-regional powers. While the geographical expanse of the region is still debated, it is widely believed as a stretch from the coast of East Africa, across the Indian Ocean, to the Western Pacific, i.e. the West coast of the US. Primarily a maritime stretch, it has emerged as a major conduit for economic infrastructures such as trade and energy.  

The region is vast, undefined and densely populated and is home to some of the world’s fastest-growing economies. With more than 4.3 billion people (2020) living in the countries surrounding the Indo-Pacific, the region holds more than one-third of the entire world population with a wide variety of races, cultures and religions.  

Although a weaker arm of the Indo-Pacific, the Indian Ocean and the Indo- Pacific are connected strategic theatre. Around 80 percent of the world’s maritime trade passes through the Indian Ocean through strategically important choke points like the Strait of Hormuz. In this context, the political and economic interest in the region is ever increasing, especially of the maritime powers such as the US, China, Australia, India, Japan and the ASEAN. 

Security and peace are imperative to realize the full potential of this maritime expanse. Considering that the region is the future of development, it only makes sense to invest and mark a regional presence in the Indo–Pacific.  

Ocean of opportunity 

The Indo-Pacific has emerged as a fulcrum of global trade and energy supply. Two-thirds of the world’s container trade passes through the region. The region is also extremely rich in marine and mineral resources, presenting a substantial opportunity for economic development and specialist minerals required for energy transition. The Indian Ocean alone accounts for 16.8 percent of the world’s proven oil reserves and around 30 percent of the proven natural gas reserves. The region is also responsible for 35 percent of the global fish capture which in turn has created a successful basis for export industries in a number of countries like India and Indonesia which accounted for 4.6 percent of global frozen fish exports in 2019. 

Trade traffic in this region has increased tremendously over the past decade, with almost 90,000 vessels in the world’s commercial fleet transporting 9.84 billion tonnes per year. The Indo-Pacific has become a centre of global energy demand as the countries in South and southeast Asia continue to struggle to fulfil energy requirements. Studies suggest that this growth in demand will make the regional states dependent on energy imports, raising annual net import expenditure to over $300 billion in 2040. Thus, the energy sector presents a significant opportunity for foreign investment. An estimated $2 trillion is required to meet energy requirements of South East Asia alone by 2040. 

As vital shipping ports and important choke points of the Indo-Pacific maritime expanse, major powers including America are constantly seeking to gain influence in the region. Some of the important ones worth mentioning are: a) Strait of Hormuz which carries 88 percent of the Persian Gulf oil to the world. b) Bab-el-Mandeb has the capacity to cater 3.3 million barrels of oil per day from the Persian Gulf. c) The Sunda and Lombok Straits are normally counted as alternatives in the event of closure of the Strait of Malacca which is an equally crucial chokepoint in the Indian Ocean. 

Regional dynamics 

In order to understand the geopolitics of the region, it is important to look at the key players, each with different strengths, capabilities and capacities. China’s revival of the Maritime Silk Route can be seen with its heavy investments in ports surrounding Africa to ASEAN economies; the deployment of massive military, paramilitary and civilian assets in South China and the East China Sea has been raising concerns. China’s refusal to accept the “final and legally binding” 2016 ruling by the Law of the Sea Tribunal exacerbates the challenges facing security and cooperation in the Indo-Pacific. However, despite the political challenges, major East Asian economies like Australia, South Korea and Japan enjoy a trade surplus with China. For example, Japan and South Korea rely on China for manufacturing high-tech components required for the production of smartphones. This trade trend continued even under the Covid-19 pandemic wherein ASEAN remained the largest trading partner for China. 

Japan’s Indo-Pacific strategy is purely economical. Former Prime Minister Shinzo Abe developed a coherent vision that is, “Free and Open Indo-Pacific”. The Senkakus/Diaoyutai dispute between China and Japan may be one of the greatest challenges facing Japan post-Abe. Today, the Japanese vision of Indo-Pacific is trifold- a) the promotion of rule of law, b) promotion of connectivity through infrastructure to achieve prosperity, c) maintaining peace and security through capacity-building, humanitarian relief, disaster management and addressing piracy issues.  

Blue Dot Network 

While Japan continues to work with both, challenging China in the East China Sea and working closely with the US, ASEAN and the EU, the former continues to promote Quad in order to deter the Chinese BRI in the region. As a part of the Japanese Quality Infrastructure Investment, the government launched a flagship land and sea corridor. Furthermore, the US, Australia and Japan launched Blue Dot Network -- a multi-stakeholder initiative to build quality infrastructure. 

Placing Quad in the Indo-Pacific seems critical to tackling the Chinese aggressive stance. While this informal alliance continues to intensify security, the Chinese presence in the backyard is conspicuously speaking of a geopolitical tussle. In this context, Quad perceives ASEAN as the core of a multipolar Indo-Pacific and vice-versa. For instance, ASEAN desperately needs access to public goods (vaccines) and the Quad countries stepped up in an attempt to work in close cooperation with ASEAN while keeping a check on China. 

As a critical player in the region, South Korea continues to strengthen ties with both the US and ASEAN economies. The creation of the Korea-South and Southeast Asia Business Coalition seeks to enhance the regional commercial ties within the region. An estimated $151.3 billion trade with ASEAN makes it a key player for the formers’ regional diplomacy. Although the ASEAN countries look at Indo-Pacific as a consociation model, South Korea looks for ways to cooperate with the region while prioritizing the West. That said, China still remains South Korea’s biggest trading partner but is aware of the growing Chinese presence in the East China Sea. In the present government’s new foreign policy initiative called the NSP (New Southern Policy), South Korea seeks to diversify its economic and strategic relationships. As part of Official Development Assistance, Vietnam received the most grant aids loans and multilateral assistance amongst the ASEAN members. 

Countries in the Indo-Pacific share many common concerns; hence the issues concerning security, peace, stability and prosperity must be holistically assessed. Maritime Domain Awareness is necessary for Indo-Pacific security. Equal access as a right under international law for the use of common spaces on sea and in the air requires multilateral diplomacy. Ultimately, it is important to realize that tremendous potential exists for increasing trade in many East Asian economies that could endorse the idea of agile governance to enhance shared economic and non-economic interests. 

(The writer is a Geopolitical Risk Analyst at Max Security Solutions, Mumbai. Views are personal. She can be contacted at richasharma14946@gmail.com)

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