Global Challenges to South Asia; speech delivered by Asanga Abeyagoonasekera Director General INSSSL, at the joint panel discussion by Pakistan HC Colombo - INSSSL on "SAARC its Impediments a
His Excellency, the High Commissioner of Pakistan, our Chairman, Secretary of Defence, Distinguished panelists, distinguished guests, ladies and gentleman.
I would like to begin my paper with a quotation from late Lakshman Kadirgamar from one of the brilliant lectures he delivered, the 10th Lal Bahadur Shastri Memorial Lecture "The road from New Delhi to Islamabad is strewn with the boulders of history. Powerful compulsions and influences, domestic and foreign, unpredictable events seem to render futile the well-meant attempts of a few individuals, from time to time, to move those boulders.”
My paper will examine the historic context, the new world order, poverty and the youth potential, weak points of intersection, weak institutions and finally a recommendation.
Beneath the veneer of any nation the bleaker tides of strength that lies, is its history, culture and geography. Since geography teach us about manmade borders and natural frontiers, it is vital to understand the landscape, seascape along with the socio-cultural backdrop of the region when discussing a topic such as “Global Challenges to South Asia”.
One of the fundamental challenges our societies face is the heavy baggage passed to us from history. The historical circumstances under which we were born have been cumbersome in advancing cooperation within South Asia. During the British colonial rule in the Indian subcontinent, a handful of British administrators (less than hundred thousand) were able to rule over entire Indian population. Irrespective of their advanced military technology, this largely lied in their capacity to divide the targeted population and co-opt locals to becoming British allies. This “divide and rule strategy” was similarly employed in Sri Lanka, and the ethnic discrepancies that followed the communal discrimination, perpetuated by the British continue to overshadow the Sri Lankan nation, involuntarily enumerating the levels of inter-group trust and social capital of the nation to be in weak levels.
New world Order and its affect to South Asia
When many scholars predicted the poor prognosis of Brexit, Britain choose to leave the EU. When most predicted that Trump’s policies on nationalist values will fail, today it has emerged victorious. With his call to put “America First”, Donald Trump’s foreign and economic policies will head towards nationalism. Nigel Farage and Marine Lepen will follow this nationalist approach emphasizing the importance of nation-states and borders. While the global superpower will reset its policy description on “Pivot to Asia” in the coming months, it’s important to analyze how it will affect the South Asian region.
Unarguably, the new world order has begun with interchanged roles. United States, the leader of the free world and the architect of globalization is advocating nationalism to close its borders; whilst China, who earlier spoke of national values, is now a key proponent of globalization. As President Xi mentioned in Davos,
“There was a time when China also had doubts about economic globalization, and was not sure whether it should join the World Trade Organization. But we came to the conclusion that integration into the global economy is a historical trend. To grow its economy, China must have the courage to swim in the vast ocean of the global market. If one is always afraid of bracing the storm and exploring the new world, he will sooner or later get drowned in the ocean. Therefore, China took a brave step to embrace the global market. We have had our fair share of choking in the water and encountered whirlpools and choppy waves, but we have learned how to swim in this process. It has proved to be a right strategic choice”.
Thus, the first challenge at the face of South Asia is apprehending this volatile global order.
Poverty eradication
South Asian politics has failed miserably after colonial independence in terms of development and eradicating poverty. Out of 1.8 billion in South Asia, close to 256 million people are living in poverty. According to the Poverty and Equity Data Bank, the people living between $1.90 and $3.10 a day in Pakistan is about 43.6%. In India and Bangladesh it is over 50%. Sri Lanka which celebrated its 69th independence, last week, has a 27% poverty rate. Poverty, thus, is the common enemy of the region, and for this very reason, HE President Sirisena, rightly declared 2017 as the year of eradicating poverty, in Sri Lanka.
Further, according to research carried out by Ipsos/Mori’s ‘What Worries the World’ survey, which includes input from thousands of people in 25 nations, nearly two thirds of the global population believe that their country is heading in the wrong direction. The same poll also explores concerns at the heart of people’s growing discontent. By far the greatest worry is employment, which was highlighted by 38% of all respondents. This has been a constant theme ever since the poll was launched in 2010, when 51% of citizens highlighted it as a concern. Next in line are concerns about poverty and social equality (38% globally).
Given the volatile global political order, what will happen if the new US administration decides to take back a percentage or fully the outsourced jobs in South Asia? Automation could also take back many jobs. Recollecting that, we have the largest youth bulge as a region in comparison to other regions in the world, one could question what opportunities does this leave our youth? The youngest population in the world has to be given opportunity; and our own capacity has to be developed as nations to advance our own industries. We can utilize this youth talent to make our region developed and affluent.
Note worthily, over the past decade, the region has focused on improving overall health and primary education levels and upgrading infrastructure; and as the latest WEF-GCI report notes, the richest economy in the region is Sri Lanka, which has a stable score. Education remains Sri Lanka’s main strength according to the report comparatively with other regional countries. Thus, in the journey of eradicating poverty, education plays a key and a sustainable role in terms of allowing social mobility and enhancing standards of living. The region should focus on advancing the steps that are already taken in this venture in overpowering our common enemy, poverty.
Weak points of intersection
Unfortunately, South Asia also has very low inter-regional trade comparing to other regions. ASAEAN’s trade within and outside the region is high and it is predicted that ASEAN-China trade will hit $1trillion in 2020 from $600b in the present day.
Due to the recent incidents, critics have viewed SAARC as a dead regional block. However, I think that it’s too early to contend the death of SAARC, since it is very much alive. For those who say SAARC is dead, it is vital to look at Europe and how long it took for true regional integration, especially to get two major economies, Germany and France, together. Integration is a long-term process and SAARC leaders need a strong, optimistic vision in this journey. It is vital to create an integration-friendly environment while respecting bilateral differences. Thus, just because certain values are questioned time to time, we cannot come to absolute conclusions. On another note, it is vital to remember that, “bilateral ties” can still flourish and move forward even when “multilateralism” is threatened. The Pakistan Sri Lanka Free Trade Agreement (PSFTA) came into force in 2005. Since then, the total trade between Sri Lanka and Pakistan tripled to $462 Million in 2013 from 2005’s $158 Million. Bilateral trade will soon reach $1b.
We cannot continue to speak about conflict every day. It is vital to focus on education, innovation, which are two important areas in terms of future growth of the region.
In this regard, the free movement of people is a priority, since direct connectivity is a precursor for trade growth. However, unfortunately the South Asian security environment is still fragile for a visa free zone, which is a large barrier in bringing about such inter-connectivity. Thus, investment in security is essential to create such an inter-connected environment, at least during the next 10 years.
In this light, it is vital to note that economic corridors are an important, but often overlooked aspect. Pakistan-China Economic corridor (CPEC) is a great project which will benefit millions. Notably, Bangladesh, Bhutan, India, and Nepal (BBIN) signed a Motor Vehicles Agreement will “promote safe, economical, efficient and environmentally sound road transport in the sub-region” and will help to create “an institutional mechanism for regional integration.” it may increase trade within the South Asia region by nearly 60% and trade by the region with outside partners by more than 30% over current levels. According to media reports, Bangladesh imports about $25 million worth of goods from Bhutan and exports around $2 million to that country. Nepal exports $35.6 million worth of goods to Bangladesh and in turn imports $26.41 million.
Since, South Asia has an economic value of around $2.5 trillion, Chief Executive Officer and Managing Partner, KPMG, India noted that, the sheer size of this market, itself is useful in global bargaining. He proclaimed, “Imagine what can be done” if the region connected through Bangladesh to South-East Asia, a market of similar size. The density of accountants in Sri Lanka and India could turn the region into the world’s accounting powerhouse. Natural resources, including gas and hydro-electricity, transport and textiles are all vital areas for regional cooperation.
However, Samir Saran, Vice-President of the Observer Research Foundation (ORF) in India, noted that,
“We have not done enough as the largest market in the region to promote regional connectivity.” For too long, India has been looking to the West rather than the East – “we feared getting our feet wet.” As the existing global order of free trade stumbles, South Asia needs to create her own trading arrangements. “Regional integration is no longer an option; it is a compulsion,”
Lakshman Kadirgamar said "It is clear that SAARC cannot succeed without India, but the other States must help India to participate wholeheartedly." This I have clearly explained on the Modi Doctrine explaining “The centerpiece of PM Modi’s foreign policy is the Neighborhood first strategy to improve relationship with its neighbors” Practicing this we had Indian PM visit after 30 years in March 2015.
In this regard, improving points of intersection between nations should be a priority for the nations in the South Asian stage.
Weak State Institutions
One of the pressing concerns within South Asia is its weak institutional structure and this has rendered the regional integration as well as development obsolete. Joseph Nye, in his commentary on American power in the 21st century describes the distribution of power as a three dimensional chess game. On the top chessboard, military power is largely unipolar, and the U.S. is likely to remain the only superpower for some time due to its military power. But on the middle chessboard, economic power has already been multipolar for more than a decade, with the U.S., Europe, Japan, and China as the major players, and others gaining in importance. For instance, China’s “One Belt One Road” (OBOR) initiative has the potential to be the world largest platform for regional collaboration. The bottom chessboard is multiplex world; and this realm consists of cross-border transactions that occur outside of government control. It includes diverse non-state actors, transferring sums larger than most national budgets, and, at the other extreme, terrorists transferring weapons or hackers threatening cyber-security. It is important to note that terror outfits such as ISIS and Hezbollah are now capable of considerable ideological power.
Ergo, one of the key external security challenges at the face of the region is the spread of religious extremism. We should reject dehumanizing individuals and groups and seeing them as the “other.” We tend to view Islam as a block, at the face of the misinterpreted religious ideologies by self-radicalized, terrorist groups; and fail to appreciate the astonishing milieu and diversity within Islamic culture and traditions. It is vital treasure these historical values and undermine one’s hatred towards a religion.
Moreover, due to this power diffusion from State to non-state actors, it is equally vital to strengthen our state institutions. The pathology of weak institutions in the South Asia stage threatens the entire region, economically, politically and socially, with direct implications to its security infrastructure. Weak state institutions breed corruption, and according to recent CPI data Sri Lanka has drifted away and has become one of the most corrupt nations in the world, at the 95th place. Although our other Asian counterparts such as Singapore have fared well, most South Asian nations has a higher ranking in the CPI, which indicates high levels of corruption. President Sirisena clearly stated few days ago the importance of fighting corruption and clearly he is the only leader who could achieve this clearly.
Recommendations and Concluding Remarks: Technocracy, not a panacea, but a viable solution to face the global challenges
Given the pressing concerns I have highlighted above, Technocracy can be argued to be a viable model in resolving the issues besetting the region. Senior Research Fellow, Parag Khanna, from LKY school says “increasingly, Asians favour pragmatic, outcome-oriented governance, and prefer to be ruled by civil servants rather than politicians” a prediction that Asia could turn to technocrats and depart western democracy. Liberal democracy will be seen by Asian’s as a model that does not deliver efficient results. Asia could drift towards a technocracy a model operated by technical experts and expert government servants which deliver quick results. China has clearly proven its success utilizing this model, by uplifting 625m people out of poverty, in comparison to 100 liberal democracies around the world. Singapore is an East Asian miracle performing through a meritocracy, with its high results of delivering value to the public. The Public health, water safety, education, infrastructure and all economic indicators are at remarkably high levels; and the concept of a technocracy will be something to import to our region. Thank you!
