US wants Free and Open India Pacific (FOIP) to counter China’s OBOR. But, is the American project good for India?

By: | Published: October 10, 2018 2:44 AM

While advancing ‘Made in China’ is a core objective of the Belt and Road Initiative, ‘America first’ appears to be a similar objective for the Free and Open Indo-Pacific. This is hardly the way the FOIP can expect to become inclusive, as India and many other countries would want it to be

The FOIP would require substantive efforts by the US to dispel the notion that it is a primarily economic project, and is not a security-driven, anti-China agenda.

The Donald Trump administration is devoting considerable attention to the Free and Open Indo-Pacific (FOIP). It is probably the only regional project that has received sustained attention from the US President Trump and his team—the President himself spoke of the Indo-Pacific at length on two specific occasions within nine months of each other. Both were high-level business forums involving large numbers of American and regional business leaders leaving little doubt about America’s intention to project the FOIP as a major economic initiative.

For most observers, however, the FOIP, till now, is an initiative for gathering a group of ‘like-minded’ countries into an anti-China alliance. From the US perspective, such countries include its military partners in the Asia-Pacific region, such as Japan and Australia, as well as a major strategic partner like India, whom the Trump administration recognises as a defence partner. In fact, India’s inclusion in the US FOIP is inevitable, given the Indo-Pacific’s visualisation as a geography engulfing the Indian Ocean.

Today, Japan, Australia and India are clearly the three most important strategic allies of the US in Asia, and any US plan to counterbalance Chinese influence—particularly the ambitious Belt and Road Initiative (BRI)—requires the active support of all the three.

The impression of the FOIP being a US-led anti-China alliance, strengthened by enthusiastic security experts upholding its sanctity by alluding to security groupings like the Quad (the Quadrilateral Security Dialogue, between the US, Japan, Australia and India), can create exactly the same problems for it as the BRI is suffering from. Poor Chinese diplomacy and lack of substantive engagement with partner countries have anointed the BRI as a project for expanding Chinese geostrategic influence in the garb of economic connectivity. More and more countries have begun developing reservations about the BRI, particularly its opaque project financing terms and the concession in strategic autonomy as a price for Chinese funds. Several small countries looking to develop internal infrastructure and becoming part of global supply chains find Chinese funds the easiest source of investments. Negotiating capacities of most of these countries are limited and, as a result, they are unable to secure financing deals without agreeing to tough conditions. Several critics of the BRI have argued that availability of alternative sources of financing for infrastructure would have reduced the dependency of smaller countries on Chinese funds. These critics further argue that a multi-country initiative such as the FOIP can make a difference. Unfortunately, it’s not that simple.

Two serious problems confront the FOIP. Resumption of the Quad (quadrilateral) security dialogue between the US, Japan, Australia and India after a 10-year hiatus, and US President Trump’s articulation of the FOIP at the last APEC Summit in Vietnam, were nearly back-to-back developments in November 2017. The FOIP could hardly avoid being identified as an anti-China military grouping, more so given the great enthusiasm with which the Quad and Indo-Pacific were declared integral by a host of security commentaries. The identification was particularly awkward for India and Japan. Notwithstanding their multiple issues with China, neither country is keen on seeing committing to a distinct anti-China regional agenda, ostensibly because they need to keep working with China in their own economic and global interests. It is hardly surprising, therefore, that India has emphatically asked for an ‘inclusive’ Indo-Pacific, while not committing to a US-Japan-Australia infrastructure partnership, and not agreeing to upgrade the level of Quad consultations from the level of Joint Secretaries to Secretaries.

In addition to being perceived as an anti-China security alliance, the FOIP is also being seen as an attempt by American businesses to get greater access in regional markets. The Trump administration has announced strategic investments worth $113.5 million in the Indo-Pacific, with particular emphasis on expanding digital connectivity, energy security and sustainable infrastructure. It also announced new cooperation efforts with Japan, Australia, India and Mongolia. The industries for strategic investments are ‘industries for future’ where the US is locking horns with China in expanding global market presence. The cooperative projects announced, such as the ‘Strategic Trade Authorisation Tier 1 Status’ to India for export of high-technology items by American firms, and LNG agreement with Japan, indicate efforts by the US administration to secure greater market access for American businesses in key regional markets such as India and Japan. Such market access in recipient countries is focused on areas that can provide American businesses control over production of strategic assets like energy. Isn’t this exactly what Chinese investments in the BRI are criticised for?

While advancing ‘Made in China’ is a core objective of the BRI, ‘America first’ appears to be a similar objective for the FOIP. This is hardly the way the FOIP can expect to become inclusive, as India and many other countries would want it to be. Indeed, an ‘inclusive’ FOIP is inherently counter-intuitive for a US administration that prefers handling economic relations bilaterally. It is doing so with all the core partners in the FOIP such as India, Japan and Australia. Expecting an inclusive economic construct from a US administration focused on bilateralism is far-fetched.

The FOIP would require substantive efforts by the US to dispel the notion that it is a primarily economic project and not a security-driven anti-China agenda. As an economic project, it needs to establish intentions of pursuing collective benefits for the region, as opposed to just those of American businesses. Otherwise, it could well turn out to be an initiative that begins looking ‘crooked’ in much the same way as the BRI.

-The writer is Senior Research Fellow and Research Lead (Trade and Economic Policy) at the Institute of South Asian Studies in the National University of Singapore. Views are personal amitendu@gmail.com

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