4 - Economic Co-operation and Integration: Building Blocks of Security

Summary

Geopolitics versus geoeconomics. It is often argued that today the latter has taken the centre stage of international relations. Whether it is true is a debatable point. However, it is apparent that economic interests are seen to be dominant in relationship between countries even as the role of politico-security factors remains largely undiminished. In present times, as was broadly true in the past, it is not just military strength but also the economic well-being and wherewithal that lends to a country a sense of stability and security. The goal of human security, which all countries aspire to reach, cannot be attained without economic security. In the opposing pulls and pressures caused by the universal trend towards globalization on the one hand and regional economic integration on the other, countries need to strike an appropriate balance between the two. Regional co-operation in trade and economic matters can create a sense of interdependence and security, which does not remain confined to merely governments and state players, but permeates to the people-to-people level. Both India and the countries of Southeast Asia are seized of this reality and are tailoring their trade and economic policies accordingly.

INDIA–SOUTHEAST ASIA RELATIONS: THE ECONOMIC IMPULSE

With respect to the renewed intensification of India–Southeast Asia relations in political and economic field, it will be hard to pin down what inspired the other first. Is it the thawing in political relations following the end of the Cold War (and the Cambodian conflict) or is it mutual attraction for market place and economic complementarities? In any case, a strong economic impulse contributed to a rediscovery of each other and to the beginning of a process of integration. It is a fortuitous coincidence that even in the ancient past, trade had played the leading role in bringing India and Southeast Asia together. Today, history seems to repeat itself.

In just a decade since starting a serious dialogue, with a focus on expanding economic relations, India and ASEAN signed a framework agreement for developing comprehensive economic co-operation including a free trade agreement in October 2003. This marked a rapid rise in the trajectory of their relations. That year two-way trade exceeded US$12.1 billion.