Regionalisation of World Politics - 2 | PSIR Optional for UPSC (Notes) PDF Download

APEC: Asia Pacific Economic Cooperation

Asia Pacific Economic Cooperation (APEC) is a regional economic forum established in 1989, which includes the US, Japan, China, Australia, Indonesia, and Thailand. It aims to create a free trade area in the Asia-Pacific region, facilitating seamless trade in goods and services through harmonization of regulations, trade facilitation by cutting red tape, developing common standards, and reducing transaction costs. APEC has three unique features: open regionalism, soft regionalism, and massive participation by the private sector.

• Open Regionalism: APEC is an example of open regionalism, which means it has a minimum institutional structure compared to closed regionalism, such as the European Union. Closed regionalism is characterized by a highly institutionalized framework and tight norms. APEC's members are known as member economies rather than state parties, and it includes China, Taiwan, and Hong Kong as member economies.
• Soft Regionalism: APEC follows a bottom-up approach, with countries determining voluntary targets. This soft regionalism allows for flexibility and adaptability, making it a low-risk venture for its member economies.
• Massive Participation by the Private Sector: Another unique feature of APEC is its massive participation by the private sector, which helps drive economic growth and development in the region.

Objectives of APEC
APEC's primary objective is to create a free trade area in the Asia-Pacific, making it the most efficient area in terms of ease of doing business. It was first proposed by Australian Prime Minister Bob Hawke and currently has 21 member countries.

APEC's Three Pillars

APEC focuses on three main areas:

• Trade and Investment: APEC aims to promote free trade and investment among its member economies.
• Business Facilitation: APEC works towards easing the process of doing business in the region by cutting red tape and developing common standards.
• Economic and Technical Cooperation: APEC encourages economic and technical cooperation among its member economies to facilitate growth and development.

APEC represents 60% of global GDP and 40% of the global population. It has played a constructive role in global trade, especially since the deadlock in the World Trade Organization (WTO).

Future Prospects
The future prospects of APEC largely depend on US-China relations. Geopolitics has recently overshadowed geo-economics, as seen in the lack of a communique at the recent APEC summit in Papua New Guinea. The hope for APEC's future lies in the G20 communique and its member economies' commitment to free trade and cooperation.

India's Importance for APEC and its Membership Prospects
India has been applying for membership in APEC but has not been granted it yet. APEC countries believe that India needs to further liberalize its economy, reform labor laws, improve infrastructure, and develop skills. However, India is essential for APEC due to its fast-growing economy, emerging knowledge-based economy, and potential to balance China's influence in the region.

Advantages for India
Joining APEC would benefit India by providing an alternative in case of WTO's collapse or the failure of the Regional Comprehensive Economic Partnership (RCEP). India currently has a Free Trade Agreement (FTA) only with ASEAN, and APEC membership would expand its trade opportunities.

Challenges for India's Membership
India faces several challenges in its pursuit of APEC membership, including reluctance from its bureaucracy to change, divisive politics, and pressure to liberalize its agricultural sector. India also has concerns about its trade deficits with APEC countries.

Recommendations for India

• India should move away from protectionism and work towards becoming more competitive. Joining APEC would be a significant step in India's Act-East policy, making it a crucial player in the region.
• APEC is an essential economic forum that promotes free trade, business facilitation, and economic and technical cooperation among its member economies. India's membership in APEC would be mutually beneficial for both parties, and it is crucial for India to continue lobbying for its inclusion in the organization.

ASEAN: Association of South East Asian Nations

The Association of South East Asian Nations (ASEAN) is considered the most successful model of regional integration in the third world. Established in 1967, ASEAN initially comprised five original countries: Singapore, Malaysia, Thailand, the Philippines, and Indonesia. Today, it has emerged as the seventh-largest economy in the world and is predicted to become the fourth-largest by 2050.

Difference in the approach of the EU and ASEAN
While the European Union (EU) imposes numerous conditions on member countries, even in the domestic sphere, ASEAN follows the ASEAN way, which is based on Panchasheel – non-interference in domestic affairs and respect for sovereignty and territorial integrity. The EU is a supranational organization, while ASEAN is international. Both EU and ASEAN are communities; however, ASEAN does not have a single currency model, opting for a currency swap arrangement instead.

Comparison between ASEAN and SAARC
ASEAN and SAARC (South Asian Association for Regional Cooperation) are both examples of regional integration in the third world. However, while ASEAN is considered the most advanced example, SAARC is viewed as the worst. ASEAN has achieved a high degree of peace and stability in the region, despite its diverse population, various territorial disputes, and the presence of organized crime. In contrast, SAARC has struggled to make progress, with ongoing conflicts between India and Pakistan hindering regional integration.

India and ASEAN relations

India's relationship with ASEAN has evolved over time, with the two becoming strategic partners in 2012. They have entered into various agreements, including a free trade agreement in services in 2015. Connectivity is the key focus area between India and ASEAN, with major projects such as the Kaladan Multimodal Transit and Transport Project and the India-Myanmar-Thailand Trilateral Highway in progress.

Challenges and opportunities for the future of ASEAN

• ASEAN faces several challenges as it moves forward, including the ongoing US-China rivalry, potential wars in the South China Sea and Indian Ocean, and internal issues like regional divides, governance challenges, and the problem of corruption. However, ASEAN also has opportunities for growth, particularly in terms of regional security and economic development.
• ASEAN has been a very successful model of regional integration, with intra-ASEAN trade accounting for 25% of the total trade of member countries. In comparison, intra-SAARC trade has stagnated at 5% of the total trade of South Asian countries. ASEAN's success can be attributed to its pragmatic approach, which emphasizes flexibility, consensus-based decision-making, and informal norms. As a result, ASEAN has not only contributed to the peace and prosperity of its own people but also to the entire region in Asia Pacific.   

SAARC: South Asian Association for Regional Cooperation

The South Asian Association for Regional Cooperation (SAARC) is a regional organization of South Asian nations. Established in 1985, its main objective is to promote peace and prosperity in the region. However, SAARC has been in deadlock since 2016 after the Pathankot attack in January 2016, and the regional integration in South Asia is considered to be one of the least successful examples in the world.

Features of South Asia

• High poverty rates: South Asia has the largest number of poor people in the world.
• Vulnerability to natural disasters: The region is highly susceptible to various natural disasters.
• Nuclear war vulnerability: South Asia is extremely vulnerable to nuclear war due to the presence of nuclear-armed countries like India and Pakistan.
• Security threats: The region faces various conventional and non-conventional security threats, such as human trafficking, organized crime, and religious extremism.
• Great power politics: South Asia's strategic location makes it highly vulnerable to great power politics.

History and Principles of SAARC

SAARC was the brainchild of Bangladeshi President Zia-ur-Rehman and was established in 1985. The main objectives of SAARC are to promote peace and prosperity in the region. The organization is based on the principles of Panchsheel, which emphasize respect for sovereignty and non-interference in domestic affairs. Decision-making in SAARC is done by consensus.

Achievements and Failures of SAARC

• Compared to other regional organizations like the European Union (EU) and the Association of Southeast Asian Nations (ASEAN), SAARC has not achieved much. Intra-regional trade has stagnated, and the idea of a South Asian Free Trade Area (SAFTA) is still far from reality. 
• However, there have been some achievements, such as the SAARC satellite, South Asian University, South Asian food bank, South Asian film festival, South Asian milk grid, and South Asia Federation Games.

Reasons for the Failure of SAARC

• The primary reason for SAARC's failure is the strained relations between India and Pakistan, the two largest countries in the organization. However, there are also structural problems with SAARC, such as the negative mindset that surrounds the organization, a lack of external push factors, and the asymmetry in size and power among the member countries. 
• Additionally, decision-making by consensus has proven to be problematic, and the lack of connectivity and trust deficit between India and Pakistan has hindered regional integration.

Future Prospects of SAARC

• The future of SAARC appears bleak, as India-Pakistan relations are at their worst, and India is focusing on other regional organizations like BIMSTEC. Once the China-Pakistan Economic Corridor (CPEC) becomes a reality, Pakistan may lose motivation to pursue regional integration with South Asia. 
• Additionally, China's interest in joining SAARC may further complicate matters, as India is opposed to China's entry into the organization.

SAARC has not been successful in achieving its objectives of promoting peace and prosperity in South Asia. The strained relations between India and Pakistan, along with structural problems within the organization, have hindered regional integration. The future prospects of SAARC remain uncertain, and it is crucial for the member countries to address these challenges to ensure the success of regional cooperation in South Asia.

BIMSTEC: Bay of Bengal Multi-Sectoral Technical and Economic Initiative

BIMSTEC is a strategic initiative by India aimed at consolidating its relations with other South Asian countries and integrating with the economically dynamic region of Southeast Asia. This initiative was established in 1997 with four countries - Bangladesh, India, Sri Lanka, and Thailand. Myanmar joined later in the same year, followed by Nepal and Bhutan in 2004. BIMSTEC currently consists of 1.5 billion people and has a combined GDP of $2.7 trillion. The economies in this region are growing at a rate of 6.5% despite the global economic slowdown.

Significance of BIMSTEC
BIMSTEC holds geostrategic significance as it brings India closer to three strategic regions: the Bay of Bengal, the Mekong region, and the Sub-Himalayan region. With SAARC not progressing due to Pakistan-related issues, India aims to bypass Pakistan and strengthen its ties with other South Asian nations by replacing Pakistan with Thailand in BIMSTEC.

Principles of BIMSTEC

• BIMSTEC is based on the principles of Panchsheel and serves as an addition to bilateral and other regional cooperations rather than being a substitute. The initiative has 14 priority areas, and although it has been languishing, India has recently realized its importance. 
• The establishment of a secretariat in Dhaka during Manmohan Singh's tenure and the invitation of BIMSTEC to the BRICS summit in Goa by Prime Minister Modi are examples of India's renewed interest in the initiative.

Challenges and Future Prospects of BIMSTEC

• The future of BIMSTEC is uncertain and depends on the future of India-China relations, as well as India's relations with its neighbors like Nepal, Sri Lanka, and Bangladesh. The Rohingya issue also poses a significant challenge to the initiative. 
• While countries in the region are negotiating Free Trade Agreements (FTA), they face issues such as protectionist economies, inadequate physical infrastructure, poor ease of doing business, and domestic instability in countries like Thailand. Sustained efforts by India are needed to overcome these challenges.

BIMSTEC as an Alternative to SAARC

• BIMSTEC cannot be considered a complete alternative to SAARC, as improving relations with Pakistan is essential for India's integration with West Asia. 
• However, BIMSTEC can be seen as a complementary initiative that helps India strengthen its ties with other South Asian countries and integrate with the economically dynamic region of Southeast Asia.

Conclusion

In conclusion, Asia-Pacific regional organizations like APEC, ASEAN, SAARC, and BIMSTEC play vital roles in promoting economic growth, regional integration, and peace in their respective regions. While APEC and ASEAN have been successful in achieving their objectives, SAARC faces significant challenges due to strained India-Pakistan relations. BIMSTEC, however, holds promise as a complementary initiative to SAARC, allowing India to strengthen its ties with other South Asian countries and integrate with economically dynamic regions in Southeast Asia. As global economic and political landscapes continue to evolve, these organizations will need to adapt and work together to ensure regional peace, prosperity, and cooperation.