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  • Economic Relevance of Quad as a Regional Strategic Forum

    Economic Relevance of Quad as a Regional Strategic Forum

    The QUAD, a grouping of the United States, Japan, India, and Australia, began as a “Tsunami Core Group,” an impromptu group formed in response to the devastating Boxing Day tsunami of 2004. This core group brought together the four nations to swiftly mobilise and coordinate multilateral disaster relief and humanitarian assistance operations. The first meeting of the initial QUAD took place in May 2007 during the ASEAN Regional Forum (ARF) meeting in Manila. The meeting was characterised as an “informal grouping” that discussed themes of mutual interest to the dialogue participants (Buchan & Rimland, 2020). The group was established to deal with the immediate challenges posed by the tsunami and was never intended to become permanent. However, early cooperative efforts sparked a debate about QUAD’s overarching goal. When Australia withdrew from the QUAD in 2008, it ceased to exist. It was revived in 2017 against the backdrop of an increasingly assertive Chinese posture, and the emergence of the idea of the Indo-Pacific as a single maritime zone.

    The first QUAD meeting, after its revival, happened on 12 November 2017, when the four ‘like-minded’ partners discussed seven key issues: the rules-based order in Asia; freedom of navigation and overflight in the maritime commons; respect for international law; enhancing connectivity; maritime security; the North Korean threat and non-proliferation; and terrorism (Jain, 2022). The QUAD aims to bring diverse perspectives together in a shared vision for a free and open Indo-Pacific, and it strives for a region that is free, open, inclusive, healthy, and anchored in democratic values.

    Economic Potential

    There are numerous reasons to increase economic engagement within the QUAD nations—the four countries, with a combined population of over 1.8 billion people, represent a quarter of the world’s population and over $30 trillion in GDP. In 2018, trade between the four countries totalled more than $440 billion, with nearly $6 trillion in trade with the rest of the world. QUAD intends to use both public and private resources to construct high-quality infrastructure in the Indo-Pacific region. According to the MEA’s website, since 2015, QUAD partners have invested more than $48 billion in regional infrastructure development. The commitment of the QUAD to regional infrastructure development can be strengthened by integrating India into the existing ‘Australia-Japan-US Trilateral Infrastructure Partnership’ and by broadening their reach into the Indo-Pacific region (“Fact Sheet: QUAD Leaders’ Summit,” n.d.). Except for India and the United States, the remaining two countries are also Regional Comprehensive Economic Partnership (RCEP) members. This shows that, notwithstanding territorial and security differences, trade and commerce are still the primary focus (“Economic Dimension Key to QUAD Success”, 2021). Further, the Covid-19 pandemic has harmed the global economy, including the QUAD nations, in areas ranging from employment to investment. Thus, by bolstering their economic ties for greater freedom and cooperation, the group will facilitate a faster recovery from the pandemic’s effects.

    The Indian Ocean, not the Indo-Pacific, is central to India’s vision. In the short term, India’s engagement with the Indo-Pacific framework will be primarily diplomatic and economic and will be constrained by the Indian Ocean’s strategic primacy and constraints on its sea-power projection

    QUAD and the Indian Economy

    India’s strong economic ties with the QUAD economies are reflected in its bilateral trade volume with each member. During 2019-2020, these three economies accounted for 15% of India’s total trade. The United States contributes the most with 11%, followed by Japan and Australia, with 2.15 and 1.6 per cent, respectively. Further, India already has a free-trade agreement with Japan, which was implemented in 2011, and negotiations with Australia and the United States are ongoing. India can now use this critical multilateral forum to help facilitate trade negotiations and increase economic activity with member economies (“Economic Dimension Key to QUAD Success” 2021).

    According to Lunev and Shavlay (2018), the emergence of China, the expansion of India’s economic and strategic clout, and, most importantly, the growing importance of the Indian Ocean as a strategic trade route carrying nearly two-thirds of global oil shipments and a third of bulk cargo, have entailed a shift in the security architecture from the Asia-Pacific to the Indo-Pacific. These factors have contributed to the rise of regional stakeholders advocating for a free and open Indo-Pacific, resulting in the re-establishment of the QUAD. However, India’s maritime interests and strategies are at odds with those of the other QUAD members. The Indian Ocean, not the Indo-Pacific, is central to India’s vision. In the short term, India’s engagement with the Indo-Pacific framework will be primarily diplomatic and economic and will be constrained by the Indian Ocean’s strategic primacy and constraints on its sea-power projection.

    The South and East China Seas, the Western Pacific, and the Indian Ocean are of particular concern to the United States and Japan. Unless and until these disagreements are resolved, QUAD’s effectiveness as an entity will be called into question

    Tokyo Summit 

    The Tokyo Summit is the QUAD Leaders’ fourth interaction since their first virtual meeting in March 2021, in-person Summit in Washington DC in September 2021, and virtual meeting in March 2022. The Tokyo Summit took place against the backdrop of the ongoing Russia-Ukraine conflict and its repercussions. The joint statement issued following the QUAD summit in Tokyo on May 24, 2022, is more comprehensive than the first three summits. It has attempted to clarify the broad framework for cooperation by outlining eight specific areas. These include Peace and Stability; Covid-19 and Global Health Security; Infrastructure; Climate; Cybersecurity; Critical and Emerging Technologies; QUAD Fellowship; Space; and Maritime Domain Awareness and Humanitarian Assistance and Disaster Relief (HADR) (Luthra, n.d.). A comprehensive QUAD joint statement and the launch of the Indo-Pacific Economic Framework (IPEF) are key developments of the Tokyo summit. QUAD leaders also announced a maritime initiative to combat illegal fishing at the Tokyo summit, and a pledge to invest $50 billion in infrastructure in the Indo-Pacific to combat China’s growing power (“QUAD Joint Leaders’ Statement”, 2022).

    The QUAD has long been criticised for lacking a common purpose or a substantive agenda. Furthermore, none of the objectives cited as reasons for bringing the four states together are unique to the QUAD. Other actors and institutions in the region already exist for these purposes.  Thus, there is a need for QUAD partners to better articulate their distinct rationale for cooperation and collaborative efforts.

    India is a key player due to its naval power and strategic location, and should thus be an active participant. However, there are differences in areas of interest among the QUAD nations, complicating its effectiveness. The South and East China Seas, the Western Pacific, and the Indian Ocean are of particular concern to the United States and Japan. Unless and until these disagreements are resolved, QUAD’s effectiveness as an entity will be called into question. While India is frequently portrayed as the holdout — and has recently been the most vocal — objections have come from other countries as well. The potential impact on Sino-Australian relations continues to make some in Australia nervous. Beijing’s reaction has factored into American caution as well, as has the preference for a trilateral format (Madan, 2017).  

    India requires investment, attractive financing for infrastructure, technology, and access to key raw materials, particularly rare earth elements, among the QUAD nations. QUAD’s other members are looking for market access and dependable investment destinations. Broadening QUAD’s current strategic focus to strengthen economic ties under the partnership’s auspices would be a win-win situation for all countries involved in such a scenario.

    Bibliography

    Buchan, P., & Rimland, B. (2020). Defining the diamond: The past, present, and future of the quadrilateral security dialogue. Defining the Diamond: The Past, Present, and Future of the Quadrilateral Security Dialogue | Center for Strategic and International Studies. Retrieved July 22, 2022, from https://www.csis.org/analysis/defining-diamond-past-present-and-future-quadrilateral-security-dialogue 

    “Economic Dimension Key to Quad Success.” 2021. The Statesman. February 23, 2021. https://www.thestatesman.com/opinion/economic-dimension-key-quad-success-1502953752.html.

    “Fact Sheet: Quad Leaders’ Summit.” n.d. Www.mea.gov.in. https://www.mea.gov.in/bilateral-documents.htm?dtl/34319/Fact+Sheet+Quad+Leaders+Summit.

    JAIN, Purnendra. 2022. “India’s Changing Approach to the Quadrilateral Security Dialogue.” East Asian Policy 14 (01): 56–70. https://doi.org/10.1142/s1793930522000046.

    Lunev, Sergey, and Ellina Shavlay. 2018. “Russia and India in the Indo-Pacific.” Asian Politics & Policy 10 (4): 713–31. https://doi.org/10.1111/aspp.12430.

    Luthra, Girish. n.d. “Forward from the Tokyo Quad Summit and IPEF.” ORF. https://www.orfonline.org/expert-speak/forward-from-the-tokyo-quad-summit-and-ipef/.

    Madan, Tanvi. 2017. “The Rise, Fall, and Rebirth of the ‘Quad.’” War on the Rocks. November 16, 2017. https://warontherocks.com/2017/11/rise-fall-rebirth-quad/.

    “Quad Joint Leaders’ Statement.” 2022. The White House. May 24, 2022. https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/24/quad-joint-leaders-statement/.

    Rahman, Mohammad Masudur, Chanwahn Kim, and Prabir De. 2020. “Indo-Pacific Cooperation: What Do Trade Simulations Indicate?” Journal of Economic Structures 9 (1). https://doi.org/10.1186/s40008-020-00222-4.

    Feature Image Credits: Resilinc

  • Quad 2.0: Can it be a win-win for the four Democracies

    Quad 2.0: Can it be a win-win for the four Democracies

    China’s GDP expanded from USD 6 trillion in 2010 to USD 14.3 trillion in 2019. It has had exponential growth over the last three decades, with an average GDP growth rate of 9.23% from 1989 to 2020. Although the impact of the COVID pandemic pushed its GDP into decline and negative (-6.80%) in the first quarter of 2020, it has rebounded with a growth of 5% in the third quarter. It’s military spending, officially, is more than three times that of India, unofficially maybe five times or more. China has become one of the key players in the Indo-Pacific as a significant part of its economic activities depend on this region.

    The Indo-Pacific has replaced the Trans-Atlantic as the epicentre of global politics. Its importance to the global order is multifarious. In economic terms, one half of the world’s commercial influx goes through the Indo-Pacific sea routes and the Indian Ocean carries two-thirds of global oil shipments. Besides, a few of the biggest military spenders are part of the region. China’s hostile actions and policies have agitated the US, Japan, Australia and India. A shared concern over the expansion of China’s political and military clout was fundamental to the revival of the Quadrilateral Security Dialogue (Quad 2.0), on the sidelines of the ASEAN summit in Manila, in 2017.

    Quad is seen as cooperation between four large democracies that share the idea of an open and inclusive Indo-Pacific

    There is growing speculation over what the re-emergence of the Quad means. On the one hand, it is seen as cooperation between four large democracies that share the idea of an open and inclusive Indo-Pacific; on the other, a strategic alliance towards keeping China’s assertive actions in check.

    The Quad: Overcoming Intransigence

    The Quad is a mechanism that enables a dialogue on regional security issues between the four countries. Its revival, this year, reflects an intersection of strategic interests: that of an open and inclusive Indo-Pacific and a rules-based international order. The Quad came together in November for the naval exercise – Exercise Malabar – in two phases, in the Bay of Bengal and the Arabian Sea. The exercise, in its 24th edition, is the biggest so far and has sent significant strategic signalling to China.

    The Quad should be considered less as a formal alliance and more as a mechanism built on existing bilateral and trilateral partnerships between the four countries. It first emerged as a cooperative response to the 2004 tsunami, when the four navies were involved in providing humanitarian and disaster relief. Despite strong support from Japan and the US to formalise the group, it disbanded with Australia and India backing out in 2007, due to concerns about China’s reaction to the grouping. This gave rise to multilateral partnerships among the four countries.

    Between the four democracies, there are three trilateral and six bilateral partnerships. Trilaterally, Japan, India and Australia first came together in 2015 to discuss shared concerns over maritime security in the Indo-Pacific Region and freedom of navigation in the South China Sea. More recently, the three countries agreed to develop a supply chain resilience program for the Indo-Pacific Region amid growing recognition of their excessive, economic reliance on China.

    Bilaterally, the US and India signed the Basic Exchange and Cooperation Agreement (BECA) on October 27 that gives India access to American geospatial intelligence that will be useful for precision guidance of its missiles. Further, India-Australia ties have strengthened over the last few years with their initial 2+2 dialogue in 2017 and with Australian participation in India’s Milan exercise in 2018, focusing on interoperability between navies in the region.

    China and the Quad

    Over the years, the Indo-Pacific has emerged as a region of strategic importance. As China expands into the region, its actions have created tensions with the Quad members.

    Sino-Indian relations:  India-China relations have touched rock-bottom since the clashes on the LAC in Ladakh.  China’s intrusions and violations along the LAC have been backed up by significant massing of PLA forces, for the first time in 40 years. India’s strong actions at the LAC and subsequent sanctions and banning of Chinese IT applications have signalled that India is not shy of escalating its response. China’s actions are seen as part of its coercive strategy to India’s refusal to back China on BRI, and its vehement opposition to CPEC. It sees India’s closeness to the USA and its coordination in the Quad as a threat to China’s strategic interests.

    China’s increasing influence in the Indian Ocean Region (IOR) has raised India’s concerns. It has always been wary of ties between Beijing and Islamabad, which intensified with the launch of the China-Pakistan Economic Corridor (CPEC) in 2013. The Chinese-operated Gwadar port off the Arabian Sea in Pakistan, which can be used by the Chinese navy to establish a submarine presence in the region, did not rest well with India. Such a port would also help China with its ‘Malacca Dilemma’. Other ports of such concern are Hambantota in Sri Lanka and Kyaukphyu in Myanmar. Though China claims these ports are of economic significance, these are also militarily strategic ports that give it an advantage in the IOR.

    In light of these issues, a revived and active Quad will benefit India’s strategic interests. The partnership could affect China in two ways. First, China would face increased competition in the IOR from India that now works with strong allies. Second, with the recent imposition of the technology ban, China stands to lose a large market for its products.

     Japan-China relations: Over the past few years, the situation in the South China Sea (SCS) has worsened with China’s land reclamation activities and militarisation of islands. Japan sees the South China Sea as key to its security because of its crucial sea lanes vital to its trade and economic health. It is also wary of China’s ability to influence the energy supply chains, which East Asia is dependent on, and the PLA’s movement in the Indo-Pacific region that could affect regional security.

    Despite its renewed trade with China and the recent signing of the RCEP, increased tensions in the SCS has forced Japan to support revival of the Quad. China’s increased naval and air activities in the South China Sea makes the Quad and its possible expansion into Quad Plus even more relevant for Japan.

    China-Australia relations: Australia backed out of the Quad in 2007 primarily because it was concerned about how China would view it, and the possible impact it might have on their bilateral trade. By 2017, China became Australia’s top export destination, and this trend has continued through 2019, pushing Australia into a dangerous economic dependency with China. Further, Australia’s 2016 White Paper called out China for its coercive behaviour in the Indo-Pacific, identifying the South China Sea and the Southern Pacific as vital strategic regions.

    Australia’s economic dependence on China is high and this is unlikely to change despite the strong statements from prime minister Morrison.  Australia’s strong stand against China is also seen as emanating from American pressure. Australia actively supports Quad as it sees an increasingly powerful China working to change the world order. Australia is also a member of the newly signed RCEP, the new economic grouping that will be dominated by China. While Australia has hedged its economic interests by signing the RCEP, its strategic and security priorities are linked to the Quad.

    China-US relations:  China’s rising military power is now seen as a threat to American power and the liberal world order. Since 2011, American strategies and policies have focussed more on the Indo-Pacific. This shift in focus has strengthened its ties with Japan, Australia and India. Tensions between the US and China have increased since then and the 2018 trade war not only aggravated their relations but also kept the rest of the world on an edge.

    With a strong Quad partnership, the US expects to regain and strengthen its influence in the Indo-Pacific. For China already hit hard by the US trade war, more setbacks will accentuate the problems. Moreover, with a more focused Quad led by the US, China’s efforts to project its power and influence in the Indo-Pacific region will come under pressure.

     Conclusion

     A few aspects about the Quad remain unclear. First, its intent is still uncertain because the respective countries have to evaluate their relations with China if they want to make the bloc official. Second, if it were to be official, to what extent would it serve the interests of the member countries? Third, is the Quad a concert of democracies to contain China? Last, will it coordinate with other members in the Indo-Pacific region, that is will Quad translate into Quad Plus?

    China’s actions have managed to bring the four countries closer.  China, however, has scored a success when the RCEP (Regional Comprehensive Economic Partnership), the world’s largest plurilateral trade agreement was signed on November 15th. Both Japan and Australia are members of the RCEP. Many see this as a setback for India and America, and an important building block in a new world order, in which China calls the shots all over Asia. It puts in doubt the viability of SCRI (Supply Chain Resilience Initiative), an effort by Quad members to create an alternative to Chinese domination of supply chains.

    The nature of China’s challenge to the global order and the Indo-Pacific is geoeconomics in design, as evidenced by its Belt and Road Initiative and its recent success in RCEP. The Quad will need to go beyond security cooperation.

    While security and military cooperation will help in checking China’s aggressive approach, it must be recognised that this alone will be an incomplete strategy. The nature of China’s challenge to the global order and the Indo-Pacific is geoeconomics in design, as evidenced by its Belt and Road Initiative and its recent success in RCEP. The Quad will need to go beyond security cooperation.

    The conclusion of RCEP maybe China’s gain, but it is important to recognise the fact that ASEAN is the main driver of RCEP. In attempting to balance China, ASEAN and Japan have kept the door open for India to re-join the RCEP. It is possible that the US, under the Biden presidency, may revive the TPP (now proposed by Japan as CATPP, Comprehensive and Progressive Agreement on Trans-Pacific Partnership), which could balance the RCEP. The Quad, in this context, will continue to be very relevant for peace and security in the Indo-Pacific.

     

  • India-Australia Strategic Partnership: Leveraging Aerospace Capacity

    India-Australia Strategic Partnership: Leveraging Aerospace Capacity

    Category : India India’s, Military, India-Australia Relations
    Title : India-Australia strategic partnership: Leveraging aerospace capacity
    Author : M Matheswaran 02-06-2020

    The forthcoming virtual summit between Indian Prime Minister Narendra Modi and Australian Prime Minister Scott Morrison assumes considerable significance for an India-Australia strategic partnership, particularly as it comes against the backdrop of heightened friction with China for both countries. Enhanced defence cooperation between the two countries could be an important signal to Beijing of the costs of overly assertive strategic behaviour – whether in the Himalaya or in trade. For some years, defence cooperation has largely focused on the naval relationship. Now is the time for enhanced air-power cooperation.

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