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24 November 2015,

Prime Minister Modi at the ASEAN-India Summit and in Singapore

Ambassador Neelam Deo, Director, Gateway House, comments on the key takeaways from the 13th ASEAN-India Summit and from Prime Minister Modi's visit to Singapore.

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Prime Minister Narendra Modi attended the 13th ASEAN-India Summit in Kuala Lumpur, Malaysia on 21 November. He then visited Singapore from 23-25 November, where he delivered the 37th Singapore Lecture.Ambassador Neelam Deo, Director, Gateway House, comments on the key takeaways from the summit and the visit.Virpratap Vikram Singh (VS): … So on this note we will move onto the diplomatic front, with Prime Minister Modi having had a very busy week. He attended the G20 Summit in Turkey, he was in Malaysia for the ASEAN Summit and wrapped it all up with a state visit to Singapore. Interestingly enough, while Narendra Modi was there to give the 37th Singapore Lecture, it came just two weeks after the 36th Singapore Lecture, which was given by Chinese President Xi Jinping. This event is yet another point in the coinciding schedules of the two leaders. What do you make of this?
Neelam Deo (ND): Within the ASEAN community, the country that has been most supportive of India’s association with ASEAN, and bringing India into the ASEAN fold in the same way as ASEAN’s other partners, like South Korea or Japan or China or the United States – Singapore has special significance for India’s relationship with ASEAN.I think it was inevitable that there would be some focus on the Prime Minister’s 37th Singapore Lecture and the preceding one by President Xi. Of course both spoke about their own relationship with Singapore, and the role that Singapore has played in expanding Chinese and Singaporean relations and in the India and Singapore relationship. So in some ways there is a parallel. The Minister Mentor Goh Chok Tong once said that ASEAN was like a jumbo jet. One wing was China and the other wing is India. And actually Singapore has played that kind of role, because Singapore began to work with China before it was a member of the WTO, before it had opened itself up to the West more completely. And it was always the argument of Lee Kuan Yew and Goh Chok Tong to work constructively with China and to engage with China. So President Xi recalled some of this past relationship, and then spoke about the future.But he made some assertions which came up in a different way during the ASEAN meeting and during Prime Minister Modi’s address – and these related to the South China Sea, where President Xi was firm and assertive that the sovereignty over the South China Sea was Chinese, and it was indisputably so. In other words, they are not even willing to talk about it. So he made that clear.On the Indian side in the Prime Minister’s address as well as in discussions during ASEAN, President Obama of the United States also made the point that freedom of navigation through the South China Sea has to be protected – that these disputes, the maritime disputes, should be settled peacefully and that the rights of traversing the maritime sphere cannot be curtailed in this manner. So it is interesting that China chose to make this assertion in Singapore, because of course everyone would pay attention, just as the Indian Prime Minister also chose to make the Indian position clear in these two addresses.

Other than that of course, in some ways there were similarities. Both look to Singapore as a highly successful economic model, and would like to avail of its special expertise in certain areas and hope that there can continue to be a constructive economic relationship.

VS: Right. As you mentioned, Modi used the Singapore Lecture to reinforce the strong relations that India has with ASEAN and the Pacific nations, both the historic and recent relations. And as you said, this was reflected in both his speeches- in ASEAN and the Singapore Lecture. But it’s interesting to note that the relationship between the ASEAN countries and India hasn’t progressed as one might have hoped. While in this summit you saw the creation of the ASEAN Economic Community, India is still waiting for ASEAN to ratify an FTA on services. How is India going to ensure that it is not left out of these growing economic relations, like the TPP and this newly formed AEC, in the future?

ND: So I think India is not sure what kind of relationship it seeks in the trade and economic sphere, globally, but also with ASEAN. The relationship with ASEAN has been quite constructive, and it has made progress, but it has not made the kind of progress that it could have. And it definitely has not made the kind of progress that ASEAN-China relations have made.

But I think we have to recognise that much of this is in the reticence from the Indian side. For instance, we have decided to review all our trade agreements, because there is this sense that we have not benefitted as much as our partners have. That may well be true in a statistical sense, but it’s past time for India to recognise that trade and trade agreements are no longer about the lowering of tariffs, which is what all the FTAs that India has signed are about. Trade tariffs on most commodities, most goods, in most countries, have already fallen very low and are likely to go further with or without trade agreements, with or without progress, even in the WTO. The whole game has become about being a part of the global logistics value chain. India is not really a presence in these production lines which traverse countries, which cross continents. So some of the inertia in the relationship – really the fault lies on the Indian side.

25 years ago, ASEAN decided that they would move into an ASEAN community. And I think they were conscious and quite recognised that the progress has not been as rapid as they would like. But still, they have moved from barely any trade in these 25 years, to 20% intra ASEAN trade. It’s not a bad figure for economies which are all roughly at the same level of economic and industrial development. They are not the same, obviously Singapore is very different from Vietnam which is very different from Malaysia. But they have made measureable progress.

The India-ASEAN free trade agreement in services was signed only last year actually, and the process of ratification by all the members of ASEAN has begun. Some countries like the Philippines have concerns that it will impact their own service industries, because there are areas where both India and Philippines are actually quite successful, particularly things like the BPO. But more than that there are other services, more advanced, more sophisticated.

So it is time consuming, but I think we really need to reflect in India – what is our view? How much globalisation are we willing to go ahead for? Because it’s not going to come without any pain in any sectors. There will be losers, and we have to decide whether that is worth our while, in terms of if you are not there, you get left further behind, as these mega trade agreements get concluded – whether it is TPP, whether it is TTIP, whether it is the ASEAN Community which is now coming into being. So in order to be a full player in all of these things, we will have to prepare ourselves to be a member. That is to say we will have to harmonise our labour policies, environmental policies, our trade tariffs, the quality considerations that would come into providing parts of a product. And as countries move up in the value chain, then of course the very sophistication of that product requires even more harmonisation of quality standards and precision processes.

So some of the inadequacy of progress really is our own reticence. And I think we have to make both the intellectual assessment of the value of not just bilateral trade, but of globalisation- of being part of the entire process that the global economy is now tending towards.

VS: Thank you, Neelam.