APISA 5 Full Paper Draft Version Not for Citation

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1 APISA 5 Full Paper Draft Version Not for Citation Regionalism in Europe and Asia in the 21 st Century: A Comparative Appraisal Prithvi Ram Mudiam, Department of Political Science, University of Hyderabad, India The European Union (EU) was generally and justifiably considered a role model for regional cooperation and integration in the 20 th century. However, this paper seeks to argue that EU cannot be considered a role model for the rest of the world for regionalization in the 21 st century primarily because the experience of the last decade seems to suggest that the endeavours towards regionalization in EU have more or less reached their limits whereas Asia seems to hold up possibilities and potentialities for regionalism both in terms of depth and breadth which EU could not even contemplate let alone attempt. Historically, India and China were the two largest economies in the world from the year 1 till 1820 before the post-renaissance and industrial Europe came to dominate the world through colonialism and imperialism. It is now the turn of Asia to reestablish its natural dominance. The resurgence of Asia and the decline of Europe in the 21 st century are, therefore, the twosides of the same coin. Further, it is now a widely acknowledged fact that the economic and strategic nucleus of the world has shifted from the Atlantic to the Pacific over the last six decades thereby downgrading the role and importance of EU to the world economy. The relative decline of the power and prestige of the United States as a result of its serious economic problems at home and its strategic overreach in Afghanistan and Iraq have considerably loosened the economic ties between the United States and the EU and the two now increasingly see themselves as competitors in many areas. It also needs to be kept in mind that the idea of regional cooperation in Europe came up after nearly four hundred years of continual warfare, conflict and strife including two World Wars and a Holocaust. The fear of communism was also a major stimulus for the regional initiative in Western Europe. In contrast, Asia turned to regionalism much more quickly than Europe and after relatively fewer intra-asian conflicts. Also, fear of extra-regional threat played considerably lesser role in Asian moves towards regionalism compared to Europe. Limits of European Regionalism In more specific terms, the limitations of EU for regional cooperation in the 21 st century are many and fundamental in nature. The rejection of Maastricht treaty by several major European countries and the acceptance of Euro as common currency only by 15 member states indicate that there are definite limits beyond which regional integration in Europe 1/5

2 cannot proceed. Besides, the largest country in Europe namely Russia does not seem to figure in the EU s conception of regionalism in Europe. By deliberately leaving out the country with the largest endowment of natural and human resources in Europe, the EU has imposed on itself the biggest limitation on its own future growth and significance. The EU is an energy deficit region and its dependence on outside sources to fuel its economy is already critical and this is going to get worse in the coming years. The reluctance to let Russia into EU, which could be the best way of ensuring the latter s energy security given Russia s huge reserves of oil and natural gas and its physical proximity to the EU and the EU s inability to influence Middle Eastern oil exporters in any way to ensure for itself an uninterrupted supply of oil at a reasonable price makes it greatly vulnerable to fluctuations in oil prices and its supply thereby reducing its economic significance for the world economy. The British ambivalence towards EU is manifested in its late entry into the organization. Its half-hearted participation in it is primarily due to an imperial hangover and the fear of being overshadowed by other European countries like Germany and France. Germany, on the other hand, seems to be a reluctant leader given its Nazi past and pacifist constitution. The hesitation in admitting Turkey into EU seems to suggest that there are definite cultural limits to the expansion of European regionalism. The failure of EU in handling the crisis in former Yugoslavia has underlined the fact that the continent is in no position to set its own house in order and hence a common foreign and defence policy for EU in the global context appears unlikely in the foreseeable future. Europe too has many unresolved problems like Gibraltar, Cyprus and Northern Ireland which could prove to be a drag on fresh regional initiatives in Europe. The Potential for Regionalism in Asia The possibilities for regional cooperation in Asia in the 21 st century, on the other hand, are much more varied in nature and vaster in scale than hitherto imagined in the realm of regionalism. It is, at this juncture, pertinent to explore the broader economic, strategic and cultural context which necessitates and facilitates the emergence of an open regionalism with unprecedented possibilities and potentialities in the Asian region. The Economic Dimension It is striking that the open regionalism of Asia-Pacific is driven by pressures of globalization and many states of the region see it as their first line of defence vis-à-vis more advanced economies and also as the means of maximizing the economic benefits offered by an increasingly interdependent world economy. It is also pretty obvious that this regionalism is largely driven by market forces, often independent of state control. It is, therefore, fair to argue that the regionalism of Asia-Pacific has acquired its own economic logic and momentum partly driven by the states but mostly sustained by non-state actors and forces, both economic and political. The focus in Asia-Pacific is so much on economics that APEC calls its participant countries member-economies rather than member-countries. The Asia-Pacific constitutes the largest possible region in the world both in terms of territory and population. In terms of territory, some of the largest countries in the world like the United States, Russia, China, India, Indonesia and Australia constitute the region with all the attendant advantages. In terms of population, some of the largest populated countries like China, India, United States, Russia and Indonesia are located in the region. This means a large work force and a large consumer market. In addition, India and China have a younger population compared to an aging Europe and North America and both countries are poised for a demographic dividend provided they manage to impart education and skills to their huge manpower. It is the fastest growing region in the world with China averaging about 10 per cent and India about 9 per cent annual growth rate over the last decade and a half and likely to sustain it in 2/5

3 the decades to come. China and India were able to remain largely unaffected by the slowdown in the world economy following the financial crisis in the United States by focusing on their large domestic economies and huge stimulus packages. It is hardly any surprise that the world looks to the two Asian giants to pull the world economy out of the woods. Besides, the strong economic performance of Southeast Asia and Indo-China over the last decade adds considerable weight to the Asian economic profile. Asia also possesses huge untapped potential which can sustain this growth rate for decades to come. Apart from India and China, South, West and Central Asia have just started on their journey of development, diversification and can be expected to maintain fairly high growth rates for a long time. The availability of cheap energy and the reliability of its supply are central to the development and prosperity of any modern state. Oil and natural gas are the two cheapest, easily extractable and transportable sources of energy in the contemporary world. In geopolitical terms, it is Asia that contains the largest reserves of oil and natural gas in the world which could help sustain the continent s current high growth rates for a long period. It is a well known fact that most of the known reserves of oil and natural gas in the world are located in West, Central and Southeast Asia. Factors like geographical proximity, absence of political considerations and long term reliability could make an Asian axis of oil an attractive option for the energy-surplus and energy-deficient states in Asia. This can potentially erode the American strategic preponderance over West and Central Asia and the domination of oil trade by the American dollar and pave the way for euro and yen dominated energy trade. Asia also commands vital sea and land routes that are critical for global economic activity and they can also play an enabling role in facilitating regional initiatives in Asia-Pacific. For instance, 40 per cent of global trade passes through the Indian Ocean, including 70 per cent of the total traffic of petroleum products. The importance of the so called New Silk Route for enhancing land connectivity between West, Central, South and Southeast Asia hardly needs any elaboration. The region, therefore, provides innumerable opportunities for geo-economic linkages in terms of sea lanes, land routes and pipelines which will facilitate deeper integration and dense economic networks. The regionalism of this kind tends to weaken the territorial aspect of development and reinforce its functional side. To top it all, the Exclusive Economic Zone (EEZ) that the states of Asia-Pacific region (whichever way one defines it), command would be several times larger than their land area and provides them with access to vast resources that sea and sea-bed can offer. These economic assets of the Asia-Pacific region, actual as well as potential, fit into a favourable strategic milieu which is conducive to their collective exploitation for common benefit through the instrument of regionalism. The Strategic Dimension The strategic scenario in Asia too, it can be argued, is conducive to regional initiatives in the continent. All the great powers of the contemporary world, actual as well as potential, such as the United States, Russia, China, India and Japan have a presence and stake in the region. The balanced presence of all major powers in Asia-Pacific, which seems to be the preference of the smaller states of the region as well, is likely to ensure that no single power or coalition becomes dominant. This very balance, both in terms of security and economic growth, could have a calming effect on all major stakeholders in the region and could act as a restraining and reassuring influence. The creation and maintenance of public good in the region is vital for sustaining open and market-oriented economies which, in turn, are crucial for maintaining high growth rates and general prosperity of the states in Asia-Pacific. All major powers have a stake and responsibility in this respect. Security of sea lanes from terrorism, failed states and piracy is a common and collective responsibility of all states in the region. No single state or group of 3/5

4 states has the capacity or the resources to undertake this task single-handedly. Hence there seems to be no alternative to a multilateral and cooperative approach to the issue of public good among the states of Asia-Pacific. The conflict prone areas such as Taiwan, North Korea and South China Sea in the region do raise political temperatures from time to time. However, these conflicts are largely local in nature and are unlikely to pose a threat to regional stability and prosperity. The necessity of regional cooperation for sustaining economic growth in the region could in fact help to blunt the sharpness of political differences over these issues and help to resolve them amicably over the long run. The economic and strategic factors analyzed above mesh with the broader cultural milieu of the Asia-Pacific region which is largely Asian and hence consistent with values like harmony and cooperation, which in turn, could facilitate moves towards regionalism. The Cultural Dimension Similarity and compatibility of culture in Asia could facilitate both economic cooperation and strategic understanding among the states of Asia. The cultural influence of India and China in a broad and historical sense on the Asian continent over the millennia is widespread and largely positive. Historically, Asia witnessed less bloodshed and intra-asian conflicts were far and few between. The culture of restraint and moderation that the Asians cultivated over centuries could stand them in good stead in pursuing regional initiatives. The Panch Sheel agreement between India and China in 1954, the Asian Relations Conference of 1946 and the Bandung Conference of 1955 could be cited as examples of such efforts in the past. It is the presence and operation of these economic, strategic and cultural factors that create the broader context for the emergence of a unique kind of regionalism in the Asia-Pacific. The Open Nature of Asian Regionalism Regions normally tend to be exclusive and hence closed. But in Asia-Pacific, given the sheer size and diversity of the region, regionalism, of necessity, tended to be open, inclusive, multiple and interlocking. Asia-Pacific region alone can boast of three huge and significant regional organizations like Association of Southeast Asian Nations (ASEAN), South Asian Association for Regional Cooperation (SAARC) and Shanghai Cooperation Organization (SCO). ASEAN covers a land area of 4.46 million sq km with a population of 600 million people and in 2010 its combined nominal GDP grew to US$ 1.8 trillion. SAARC covers a land area of 5.1 million sq km, a population of 1.6 billion (2009 estimate) and a combined GDP of US$ 4.4 trillion (2009 estimate). SCO covers an area of over 30 million sq km with a population of 1.4 billion people. The open nature of regionalism in Asia-Pacific enabled these regional organizations to see each other not as competitors but as complementary which, in turn, facilitated trans-regional cooperation. The three major trans-regional arrangements namely Asia-Pacific Economic Cooperation (APEC 1989), ASEAN Regional Forum (ARF 1993) and East Asia Summit (EAS 2005) unmistakably represent these trends and aspirations. APEC focuses on economic issues and works to raise living standards and education levels through sustainable economic growth and foster a sense of community and an appreciation of shared interests among Asia-Pacific countries. Its members account for approximately 40 per cent of world s population, 54 per cent of world s gross domestic product and 44 per cent of world trade. ASEAN Regional Forum seeks to become an effective consultative Asia-Pacific Forum for promoting open dialogue on political and security cooperation in the region. ARF encourages multilateral and bilateral dialogue and consultations, transparency promoted by the exchange of information relating to defense policy and the publication of defense white 4/5

5 papers and the networking developed among national security, defense and military officials of ARF participants. EAS is a forum for dialogue on broad strategic, political and economic issues of common interest and concern with the aim of promoting peace, stability and economic prosperity in East Asia. It is an open, inclusive, transparent and outward-looking forum, which strives to strengthen global norms and universally recognized values. Though these organizations can be criticized for being too large, diverse and unwieldy, it is necessary to appreciate the fact that they reflect the complex nature of the region and its aspirations. What they lack in terms of cohesion, they gain in terms of openness and inclusion. A vast, diverse and complex region like Asia-Pacific cannot aspire for the benefits of regional economic cooperation and security with a conventional approach to regionalism and should be willing to experiment, innovate and think big. A region is not an a priori geographical and cultural entity but is constructed by political necessity and imagination. So it is plausible to argue that the model provided by EU for regional cooperation in the 20 th century has reached its limits whereas the potential for regionalism in Asia is so much more varied and on such a vaster scale that the latter is well advised to look to build its own model, in its own way and at its own pace. This will help bring Asia back to the centre-stage of world politics and economics in the 21 st century after two centuries of Western domination which is seen by many as an aberration. However, the attitude of India and China towards the region and each other is going to be a crucial component in this unfolding Asian drama of global proportions. It is no exaggeration to say that the nature and trajectory of Sino-Indian relations will largely determine the course and content of the regional initiatives in the larger Asia-Pacific region. If the mutual suspicions and rivalries persist between the two Asian giants, then there is a definite danger that they will balance each other out in Asia to the advantage of the West in general and the US in particular. If, on the other hand, China and India develop a genuine understanding between them, willingly recognize and accommodate each other s vital interests in the region and be guided by a long term vision of Asian resurgence in world affairs, then the 21 st century will undoubtedly belong to Asia. There are signs that India and China understand this though it is not clear how far each will go in accommodating the other. China is currently India s largest trading partner. China is granted Observer status in SAARC and India in SCO. Both are members of ARF and EAS. India now has an Observer status in APEC and could be on its way to full membership. India and China are working together on climate change, at the UN and at forums like BRICS and WTO. Whatever is the nature of Sino-Indian interaction in the future, it goes without saying that the regional fora in Asia-Pacific will be the arena where the Sino-Indian political drama will play itself out over the next few decades determining not only the course of politics and economics of the region but also that of the world. Asia, therefore, is at the crossroads of history. It is on the cusp of regaining its past glory and marching into a great future. However, it takes wisdom, vision and will to convert possibilities into realities. Prithvi Ram Mudiam PhD (LSE) Associate Professor, Department of Political Science University of Hyderabad, Hyderabad , India prmss@uohyd.ernet.in 5/5