HERITAGE FOUNDATION EVENT PANEL I: U.S. AND INDIAN FOREIGN POLICY PERSPECTIVES

HERITAGE FOUNDATION EVENT PANEL I: U.S. AND INDIAN FOREIGN POLICY PERSPECTIVES SPEAKERS: MR. SHANKAR BAJPAI, FORMER AMBASSADOR OF INDIA TO PAKISTAN, CHINA, AND THE UNITED STATES; MS. LISA CURTIS, SENIOR RESEARCH FELLOW, SOUTH ASIA, ASIAN STUDIES CENTER, THE HERITAGE FOUNDATION; MR. ASHLEY J. TELLIS, SENIOR ASSOCIATE, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE MODERATOR: WALTER LOHMAN, DIRECTOR, ASIAN STUDIES CENTER, THE HERITAGE FOUNDATION WEDNESDAY, MAY 23, 2007 MR. LOHMAN: Well, we're ready to get started again. Welcome back. Again, I'm Walter Lohman, director of the Asian Studies Center here at Heritage Foundation. I think one thing that the discussion this morning underscored is that the nuclear deal has really allowed policy makers to begin thinking bigger on U.S.-India relations. Over the years, I think it's fair to say that the relationship has been classified in various boxes -- you have the India-Pakistan box; you have the India-China box; you have nuclear box, trade box, Kashmir box -- and I think the nuclear deal has allowed us to think beyond that. And to help us get outside of the boxes today, we have quite a distinguished panel here. Ambassador Shankar Bajpai is former India -- former Indian ambassador to Pakistan, China, and to the United States, and he's chairman of the Delphi Group, an independent think tank, and has been so since its founding in 1994. Ambassador Bajpai is going to give us an overview of how U.S. and India relate to the world and to identify regions where he sees the greatest opportunity for our cooperation. We're going to then turn to Dr. Ashley Tellis, who is senior associate with the Carnegie Endowment, specializing in national security, defense and Asian strategic issues. Dr. Tellis was most recently on assignment to the State Department as senior adviser to the secretary of political affairs. As such, he was intimately involved in negotiating the civil nuclear agreement. Dr. Tellis will talk to us specifically about East Asia, Southeast Asia, China and the Indian Ocean -- again, U.S. and India relations and their interests in those regions. Lisa Curtis is with the Heritage Foundation. She's our resident expert on India and South Asia. Before coming to Heritage, Lisa worked for Chairman Richard Lugar on the Senate Foreign Relations Committee. Lisa served in the State Department Southeast Asia Bureau, CIA, and U.S. embassies in Islamabad and New Delhi. I can't tell you how lucky we are to have Lisa at the Heritage Foundation and here to give us her take on developments in the region today. Lisa will address U.S.-India interests to India's west, particularly Pakistan, Afghanistan, Iran and Central Asia.

*_MR. TELLIS:_* Thank you, Walt. I was asked this morning to speak about U.S. and Indian interests in the region east of India, and I'll focus on three quadrants -- Northeast Asia, Southeast Asia and the Indian Ocean -- in fairly quick order. I have only a goodnews story to tell, because at least in these three parts of Asia, Indian and the U.S. interests are remarkably congruent. In fact, if you break up the scheme of things analytically to look at objective strategies and tactics, you find a remarkable degree of complementarity with respect to objectives and strategies and, at best, minor differences on tactics, at least as far as these three quadrants of the world are concerned. And so let me get quickly to -- to each of them. When one looks at Northeast Asia, there is really only one issue that dominates the calculus of both the United States and India and that, as Ambassador Bajpai pointed out, is really the rise of China and how one manages the growth of a new consequential power -- clearly a power that will dominate the (code?) of the global system in the coming years. How does one create a set of relations with this country that are productive for all the entities concerned? And when one looks at this central question, it's remarkable to see that U.S. and Indian objectives are virtually identical; that is, both countries have interest in making certain that China's integration into the larger global system is fundamentally a peaceful integration that does not in any way alter the characteristics of Asia as a whole. That is, Asia as an open system, accessible to countries both within the region and countries outside. And from this objective, you find the strategies pursued by the United States and India also remarkably similar. Both countries are bending backwards to avoid designating China as an adversary prematurely. Both countries want to try and achieve a modicum of cooperation, especially in the area of economics, because that is the most productive avenue available to both countries today, without in any way forgetting that there is a certain degree of political wariness. And so the fact that there is rising economic interdependence between China and the United States, and increasingly, China and India, existing against a backdrop of what is an unextinguishable political wariness, provides an interesting example of a situation that is identical in terms of the challenges that it poses both to India and the United States. And so the strategies that both sides have followed towards China also kind of are broadly comparable. It's an emphasis to build on those elements where cooperation is possible in the near term, and the area of economics provides the most obvious opportunities, while trying to manage political differences in a way without letting them become central to the management of the relationship. And this is true both for the United States and for India. And so there is a dimension of investment and a dimension of insurance that both states are, in a sense, pursuing simultaneously. The investment strategies are bilateral -- that's working with China as best one can, but also strengthening relations with a variety of countries on China's periphery. And this

effort to strengthen relations with countries on China's periphery -- and for the United States, Japan and India become central to this calculus; for India, the United States and Japan become central to this calculus -- shades off into the insurance dimensions of the strategy. And so when one looks at Northeast Asia in particular and steps back, one sees U.S. and Indian objectives as being virtually identical, except for the fact that both these countries occupy different locations in the international system. Their strategies are broadly comparable, and the tactics actually are almost identical to each other. When one goes further south, looks at Southeast Asia, for example, you also see a remarkable complementarity in U.S. and Indian objectives and strategies. What are the objectives here? I think there are two broad objectives that the United States and India share with respect to Southeast Asia. The first is to prevent the Southeast Asian countries from becoming strategic dependants of China. It's not in American or Indian interests to have Southeast Asia's autonomy abridged by a large and growing China, and so there is a common interest in making certain that the political independence enjoyed by the various Southeast Asian states, in a sense, survives. There is a second objective which is complementary to the first, and that is the Southeast Asia economic performance, which has been remarkable in the last 20 or 25-odd years, provides opportunities both for the United States and India. The United States sees only benefits from deepening its trade relations with various key centers in Southeast Asia. For India, Southeast Asia is increasingly the linchpin of its own look-east strategy. And so both at the level of politics and at the level of economics, there is once again a remarkable complementarity of objectives and of strategies. Both countries, the United States and India, have tried to develop as close a set of relations with various Southeast Asia countries, while being very careful not to take the form of being an overbearing regional presence. The United States has deferred to Southeast Asian countries in the management of their own region. It has not tried to confront the Southeast Asian states with a choice between the United States and China, and India has been very careful in its own relationship with various Southeast Asian states, first bending backwards not to import the problems of its own South Asian region into its relations with Southeast Asia, and being present to Southeast Asia without in any way being overbearing. And so once again, when one looks at the U.S. and Indian relationship towards the Southeast Asian writ large Southeast Asian states writ large, you find a remarkable degree of similarity. Let me make one last point on the relationship between these two -- between these two entities: the area of the military. Southeast Asia is important to the United States and to India in the military dimension, but for different reasons. And yet, in our management of military ties with the Southeast Asian states, from a U.S. perspective, the U.S. has bent backwards to tread lightly. The same is true for India. Even though it is seeking a variety of military relations with Southeast Asian states, these are fundamentally driven by the logic of cooperative security. Where India does not want to push the Southeast

Asian states to accept a larger military presence than the Southeast Asian states feel more comfortable with, even though India's own geographic proximity and the superior quality of its military capabilities would make a real difference to the region, if required. When one looks at the last quadrant which I was asked to focus on, the Indian Ocean, again one finds a complementarity that is quite remarkable. But, as Ambassador Bajpai pointed out, there is also one important difference. The Indian Ocean is intrinsically valuable for India, because it is essentially a frontier, a maritime frontier from which any entity can access the Indian landmass. The Indian Ocean is extrinsically valuable to the United States. It's important, but it's important as intermediary vehicle to reaching other goals. And so this difference in the relative importance of the Indian Ocean to Indian and American security must be appreciated. But having said that, the objectives that both countries have are absolutely identical. The first objective is that both countries would like to preserve the Indian Ocean as essentially an open commons, a commons that is safe, where freedom of navigation and SLOC security are protected, in order that trade, particularly energy trade, moves through the ocean spaces unhindered. There's a second objective, and that is both the United States and India do not want the Indian Ocean to become an avenue for the transit of materials relating to weapons of mass destruction and other delivery technologies. Both the United States and India have an interest in preventing the island states of the Indian Ocean from either becoming unstable to the point where their instabilities are exported abroad or their internal weakness invites external assistance. And by external assistance, the most important calculation that exists, both in the mind of U.S. and Indian defense planners, is Chinese external assistance. So just like Southeast Asia, the Indian Ocean is seen as an area where an open ocean that is safe and free of undue influences, that abridge the autonomy and the physical security of the region's states, end up being a goal that is shared by both the United States and India. Does this mean that everything is hunky-dory and that we can, in a sense, uncork the champagne and go home? No, because the principal differences that arise between the United States and India in all these three areas really have to do with reconciling tactics. And the reconciliation of tactics becomes an issue not because of mean-spiritedness on either side but because some of the issues are genuinely complex and cut against the grain of a lot of history. And a very good example that highlights how differences in tactics sometimes prevent us from reaching the convergence we seek is the Proliferation Security Initiative where both the United States and India are agreed that this initiative, at this point in time in political

history, is essential for strengthening the global nonproliferation order. Yet for India, the PSI poses a very specific challenge, because its intellectual and legal pedigree is still unclear. And because India's very awkward position of being neither a formal nuclear weapon system nor a formal non-nuclear weapon state, but rather a state that is neither fish nor fowl, a legally non-nuclear weapon state with nuclear weapons, puts it in a very awkward position where it could itself become an object of the activities undertaken as part of PSI. And so managing this peculiar contradiction and distinction is a good example of how, even when there are strategic convergences and there is operational congruence, tactical issues sometimes become difficult to resolve, and a lot of our diplomacy and energies have to be focused on resolving problems of these kinds, because they are in some sense legacy issues that come from the past. And in another sense, they are good representations of what is involved in the evolution of the new international system, where, as one breaks out from institutions that served a certain purpose in a previous order but are not entirely replaced by new institutions that serve the interest of the new order, you end up basically in this moment of transition where you constantly have to adjust, and adjust very uncomfortably. Thank you. (Applause.) *_MR. LOHMAN:_* (Off mike) -- maybe I'll start with the first question. I wonder if you could address the situation in Burma, and the reason why I raise that is because I think it tests a lot of what particularly Dr. Tellis mentioned about congruent interests and tactics -- congruence of interest and divergence of tactics -- because in a lot of ways, it touches on a lot of our common geostrategic interests. Burma isolates ASEAN, really. It doesn't isolate it, but it -- but it serves to it serves as a problem in its reaching out, overall, to the world. The Chinese influence there, to the extent there's competition between India and China in Burma, it would appear that the Chinese are winning in a very big way. And so Burma even becomes more closely aligned with Chinese objectives in the region. Yet we have two very different approaches. I wouldn't advocate our approach, necessarily, as it's been to date. I think it's largely a posture, more than it is any sort of coherent policy, if you're judging by impact. But I wonder if you could comment on the situation there generally, our interests, and what India can do to -- to right the situation. *_MR. TELLIS:_* Burma is actually a fascinating case where you have tensions in two different policies coming to a head. The preference that both the United States and India have, on one hand, for democratic regimes that respect human rights and, on the other hand, the need to protect one's own geopolitical interests on your periphery. And Burma is the case where both these preferences, which are strongly held in both countries, in a sense come into collision.

Until very recently, until about three years ago, Indian policy towards Burma was congruent with our current policy preferences towards Burma. That is, the Indians basically had nothing to do with the military regime; they kept them at arm's length. They were strong supporters of -- of Suu Kyi and the democratic resistance, and they realized that the consequences of their policy was that the Burmese ended up being even more closely tied, interdependence on China, which posed -- (first affected?) their geopolitical interests, because there was enhanced Chinese penetration, as consequence, without giving the Indians any hope that their democratic preferences stood any chance of success. And so about three years ago, they basically decided to change course, and it was a gutwrenching debate within the Indian government about the wisdom of doing so. But I think the pragmatic calculation won out over the -- what you would think of as the high principle, and they decided that the best way to limit Chinese influence in Burma was to give the Burmese an alternative. And I'm not convinced that the Chinese have, quoteunquote, "won" in Burma yet. And the reason why I say that is because the Burmese have always had a very strong preference for their own independence, and they're more than happy to play the Indians and the Chinese off against each other in order to protect that independence. Where we do have an issue, though, now, is with the United States, because the United States, which has absolutely no geopolitical stakes and no economic stakes in Burma, has taken the view that policies towards Burma should be centered primarily on the democratic imperative. And this runs afoul, of course, of the latest turn in Indian policy where, although there's agreement that yes, you know, democratic regimes that respect human rights ought to be the first preference. One, they don't believe that civil society in Burma is strong enough to eject the military regime on its own. And given that fact, they've simply made the calculation that they are better off trying to limit Chinese penetration, rather than pushing their policy behind the encouragement of democracy, which doesn't stand a chance of success in the near term. And so this is, I think, what is at the heart of the U.S.-Indian disagreement on Burma. *_MR. LOHMAN:_* Ambassador Bajpai, you have a comment on -- *_MR. BAJPAI:_* I think he's answered the question. I would emphasize the point that he has made that one shouldn't underestimate the extent to which China has been positioning itself, and all of modern Burma could be under its sway very easily. Then you have the sea facilities that it is acquiring through costly economic presences -- enormous. But against that is we should remember the Burmese are a very proud people -- they're not going to succumb to outside, least of all Chinese, pressure -- and that have been looking to India. And that's one of the reasons why we have to be pragmatic, rather than idealistic about it. And -- (inaudible) -- frankly, also because of our own insurgency situations in Northeast India, where we find the Burmese not only helpful, but we can't actually access that territory without going through Burma. So it's really a tricky question, as he says, where your national interest requires you to turn a blind eye to all kinds of things you would otherwise deplore.