India’s ‘Look East’ Policy

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by Ramtanu Maitra

on 16 Oct 2011

Last month two important events occurred in Southeast Asia related to India’s “Look East” policy. One event had direct input from New Delhi; the other was the doing of Myanmar’s military junta. Both events could be of major significance for India’s emergence as a regional power, and both are tied to the two-decade-old “Look East” policy initiated by the late Indian Prime Minister P.V. Narasimha Rao. Both developments generated quick and surprised reactions from China, a pointer to Beijing’s uneasiness over their implications.

India’s Vietnam Gambit

On Sept. 15, the Indian news media reported that New Delhi had dismissed Chinese objections over its oil exploration projects in two Vietnamese blocks in the disputed South China Sea, saying the cooperation with Vietnam was as per international laws and India would like it to grow. Petro Vietnam — the trading name of Vietnam’s Oil and Gas Group (PVN) — entered into a joint venture with India’s ONGC to develop Blocks 127 and 128 after ONGC bought BP’s assets in the project in 2006.

Beijing got hot under the collar because in its book of claims, these two blocks lie in the disputed area where China claims its territorial right over the Paracel and Spratley islands. But Vietnam, Malaysia, the Philippines, Taiwan and Brunei disagree; they maintain that they have partial or full claim over the area, as well. The dispute remains a subject of discontent between the “rising peaceful” China and its smaller southern neighbours, and how it will be resolved is anyone’s guess.

Hanoi says the objection to the proposed joint venture between the PVN and the ONGC to develop Block 127 and 128 is even more irrational than Beijing’s claim to the Spratleys and Paracels. These blocks are not located in the disputed area, Hanoi insists. “Vietnam reiterates that cooperation projects in oil and gas between Vietnam and its foreign partners, including those in blocks 127 and 128, lie within its exclusive economic zones and continental shelf and are completely under Vietnamese sovereignty… in line with the 1982 UN Convention on the Law of the Sea and with international practices, as well as with multilateral and bilateral agreements to which Vietnam is party,” Vietnamese Foreign Ministry Spokesman Luong Thanh Nghi explained in an official statement.

Beijing counters that the blocks are, indeed, situated in the disputed area. On Sept. 15, Chinese Foreign Ministry spokesperson Jiang Yu said at a press conference in Beijing: “I would like to reaffirm that China enjoys indisputable sovereignty over the South China Sea and the islands in the region. China’s stand is based on historical facts and international law.” According to Jiang, the 1982 UN convention “did not give any country the right to expand their own exclusive economic zone and continental shelf to other countries’ territories” or negate “a country’s right formed in history that has been consistently claimed.”

Answering a question on ONGC’s planned involvement in the exploration, Jiang Yu said: “Our consistent position is that we are opposed to any country engaging in oil and gas exploration and development activities in waters under China’s jurisdiction.”

More recently, Vietnam President Truong Tan Sang’s Oct. 10 arrival in New Delhi on his first visit to India points to the momentum behind enhanced Indo-Vietnamese ties. The Indian media reported that the visit is intended to help deepen Hanoi’s strategic and defense ties with New Delhi. At the time of writing, no official announcement of such “strategic and defense” ties has been made and the media reports indicate that the agenda for President Truong’s talks with Indian Prime Minister Manmohan Singh includes fisheries, animal husbandry and trade.

However, some analysts claim Hanoi and New Delhi are ready to raise the level of the “new strategic partnership” announced four years ago, with talk of India selling Hanoi supersonic cruise missiles and training the Vietnamese in the use of nuclear power for peaceful purposes.

Vietnam is seemingly determined to become a nuclear power generation nation. In early September the Japanese government restarted talks with Vietnamese officials on a 1 trillion yen ($13 billion) project to build two reactors in southern Vietnam. It should be noted that India has been talking about assisting Vietnam in the development of a civilian nuclear power program for more than a decade, and an agreement in this area during President Truong’s visit was discussed.

India’s New-found Confidence

One may take sides on whether Blocks 127 and 128 are located in disputed territory or not, but that’s beside the point. China has always made it clear that it would object to exploration, or any such activities, by Vietnam, or the Philippines, or any of the other claimants of that general area, and that it would under no circumstances back away from any of the claims it has laid in the South China Sea and East China Sea. China is now a mighty economic and military power and, over the last year or so, has brought patrol boats and maritime vessels into the area to convey that message.

All this was known to India. And it also knew that, like Tibet and Taiwan, the South China Sea disputed area is an extremely touchy subject in Beijing. Then, why did New Delhi agree to participate in a joint venture with the PVN and draw a bucket full of diplomatic discontent from Beijing?

It seems that the initiative with Vietnam is an effort on India’s part to get out of its South Asia cocoon and participate actively in Southeast Asia as a partner. This is an extraordinary development in the sense that such monumental decisions were not only wholly unexpected from the battle-fatigued Manmohan Singh government, but that it is taking place in light of two other developments.

The first one is India’s growing interaction with China, a giant neighbour of Vietnam, in many areas. The other is the signing of the India-Afghanistan strategic partnership that took place during Afghan President Hamid Karzai’s recent visit to New Delhi. That agreement, if consummated, could bring India into Afghanistan in a big way, further antagonizing China’s “all-weather” ally, Pakistan.

As one Indian analyst pointed out recently, these are very important decisions indicative of a well-thought-out Indian strategy for an incremental increase in Indian activism in areas that are of interest and concern not only to India, but also to the US. That New Delhi is in sync with Washington is likely. On Oct. 9, US Secretary of State Hillary Clinton told the Press Trust of India that India’s leadership will “help to shape” positively the future not only of South and Central Asia, but also of the Asia Pacific, urging New Delhi not just to “look East,” but to “engage East.”

Shift in Myanmar

The second boost to India’s “Look East” — or “Engage East,” to use Sec. Clinton’s terminology — policy is a distinct reshaping of its own polity by Myanmar, India’s eastern neighbour and a gateway to Southeast and Far East Asia. At the time of writing, President Thein Sein’s imminent visit to India had been announced. Although former President General Than Shwe visited India last year, this visit is taking place in a significantly changed environment. Myanmar is no longer a purely military regime; but it is not a full-fledged democracy, either. Last November’s elections ushered in a civilian government with an elected parliament under a new constitution. The reins of power, however, remain firmly in the grip of the military brass.

Nonetheless, there are indications that Myanmar’s powers-that-be are no longer willing to remain tied to the leash that would force them to continue with the old policies. For instance, on Sept. 30, President Thein Sein told the Myanmar Parliament that the US $3.6 billion Myitsone dam construction will be stopped to respect the will of the people. Construction of the dam began in 2009 and the project, which consists of seven dams and would have been Myanmar’s largest hydropower project, would have the capacity to produce 6,000 megawatts of electrical power, if completed.

Most, if not all, of that power was to be sold to China, the main investor in the project. The dam site is located within the Mizoram-Manipur-Kachin rainforest region and, if completed, the project would have flooded an area the size of Singapore, inundating approximately 766 square kilometers of the pristine rain forest, its opponents claim.

Without taking side on the issue, it is important to realize that the Myanmar authorities’ decision to call off the dam construction is a major step, involving as it does the distinct possibility of antagonizing Beijing. China is the major contributor to Myanmar’s infrastructure development besides being an economic and military giant that shares a long border.

Those who oppose the dam claim that water releases from these hydroelectric dams would have depended entirely on the electricity generating needs of the electricity buyer. All seven dams of the Irrawaddy Myitsone project would serve China’s electricity needs, not the downstream agricultural, transportation or health needs of Myanmar. The Chinese engineers running the dams would decide how much water to release downstream, and when, listening to the orders from Beijing, not Naypidaw (the new Myanmar capital), Burmese critics claim.

Not surprisingly, Beijing immediately demanded an explanation, warning of “legal issues” after Myanmar put a halt to the project. China’s Xinhua news agency said that Vice President Xi Jinping has called for the two countries to settle the matter through friendly consultations. Lu Qizhou, president of the China Power Investment Corporation, told Xinhua that his company has invested a huge sum of money in the Myitsone hydropower project and strictly observed all laws and regulations in both countries.

Subsequently the Chinese state media quoted Myanmar Foreign Minister Wunna Maung Lwin saying that his country hopes to increase cooperation with China on matters of mutual benefit. The minister met with his Chinese counterpart, Yang Jiechi, and Vice President Xi Jinping in Beijing. However, the Myanmar authorities have stuck to their decision to abandon the dam, at least for now.

The postponement of the Myitsone dam is, of course, an internal matter of Myanmar. Nonetheless, it indicates a shift in Myanmar’s policymaking strategy. Prior to this incident, and before the November elections, the military junta stuck to a path that would benefit the country but, equally importantly, would not cause any friction with Beijing. Myanmar accommodated India well enough but, again, such accommodations were subject to the clause that they must not antagonize Beijing.

That situation has posed a dichotomy within Myanmar in terms of its sovereignty. It is likely that Myanmar will be working toward resolving that conflict without causing friction with either China, or India. It is now for New Delhi to seize the opportunity provided by Myanmar’s new-found polity and strengthen it by actively “engaging East.”

The author is South Asian Analyst at Executive Intelligence Review

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