Economy /
Competitive Connectivity in the Indo-Pacific
Competitive connectivity is the nature of geopolitics in the 21st century. Rarely do nations fight militarily over borders. And even though war may erupt at any time, day-to-day geopolitics consists far more in the tug-of-war to control supply chains, trade routes, and advanced technologies than in war over territory. In no region is competitive connectivity more at play than in the Indo-Pacific.
First, let me explain the rise of the Indo-Pacific within the greater Asian region and the even broader Afroeurasian realm. Scholars of the pre-colonial world of the 13th through 15th centuries coined the term “Afroeurasia” to denote how Africa, Europe, and Asia constituted the known world. These were the three pillars of the world economy linked by maritime trade and terrestrial Silk Roads. But for the past 500 years, the forces of colonialism and the Cold War splintered the Afroeurasian system. Now, thirty years after the collapse of the Soviet Union, Afroeurasian networks have been confidently revived.
The term “Indo-Pacific” aptly captures the geostrategic dimensions of this revival. Over the past twenty years, Japan and India’s deepening relations – both economically and diplomatically – led to a conceptual convergence around the usage of this vocabulary, which the US and European powers have subsequently adopted. There is indeed an organic unity to the Indo-Pacific domains. They are the largest maritime trade corridors in the world, and their many states have become each others’ largest trading partners.
The geographical zone indicated by the term “Indo-Pacific” is too broad to be characterised by a single structure. From the Gulf to the Pacific Rim, there are actually multiple geographically discrete yet connected sub-systems. In the Indian Ocean, I expect a multipolarity driven by India and Western powers to be the abiding norm given the growing confidence of the Indian Navy and the presence of major Western forces in the waters. In the Western Pacific, Chinese expansionism with its naval presence and island seizures combined with the stepped up American and “Quad” (US, India, Australia, Japan) activities make the have made the South China Sea in particular more unpredictable and potentially dangerous.
Power dynamics are non-linear. America’s reallocation of forces to the region and the coalescing of formations such as the Quad and AUKUS have quickly become a durable feature of the region’s power structure and will shape Chinese behaviour and the geopolitical environment more broadly. We can imagine both a stalemate rooted in deterrence as well as a conflict whose resolution will determine the major features of the order in the region.
Europe can return to Africa and Asia not as a colonizer but as a commercial partner. Europe today represents high standards and quality of goods, and a shared agenda of economic, political, and social modernization for the post-colonial world. In an environment that has been widely characterized as protectionist, Europe is to be commended for pursuing free trade agreements with Japan, ASEAN, and India in order to advance its commercial penetration in the region. The European Union has also made smart initial moves towards competing with China for influence in developing Asian countries through the EU-Japan Partnership for Sustainable Infrastructure Finance. This is also the agenda of the “Build Back Better World” initiative announced by G7 leaders this past summer, and Europe’s recently articulated “Global Gateway” strategy. In all such proposals, what is happening is that the West is realizing it must “put its money where its mouth is.” Again: competitive connectivity.
Deepening trade and investment ties between Europe and the countries of West Asia, Central Asia, South Asia, and Southeast Asia will be crucial to promoting a multipolar Asia, one not dominated by either the US or China. At present, many countries are ensnared in China’s “debt-trap diplomacy” have high outstanding debt to China and face the prospect of debt-for-equity swaps such as the case of Sri Lanka’s Hambantota Port.
Working together with multilateral agencies, Western powers can bring down the interest rates these nations pay for vital loans and thus create a marketplace to replace the Belt and Road Initative’s near monopoly on lending to fragile states in Asia. China may be a first mover in investing in and lending to these countries, but Europe can help these countries manage this investment to modernize, diversify their economies, grow their GDP, attract more investment from a wider spectrum of countries, and pay down their debts to China. This kind of technical assistance can only come from patient European powers.
The Indo-Pacific’s geopolitical future is demonstrating the intensification of relations characteristic of an ever more tight regional system. Both friction and coalitions are evidence of a system, one whose internal dynamics drive the region as much or more than external forces. To be relevant and have influence in the Indo-Pacific region, one has to be present across the geographies from West Asia to East Asia.
Both subregions of Asia are also severely climate stressed, creating opportunities for European firms to deliver technology solutions from solar and wind power to water desalination. Europe leads the world in sustainability investments, and exporting its model will ensure a more sustainable and prosperous Indo-Pacific.
It is therefore not too late for Europe to engage even more proactively across the Indo-Pacific. To the contrary, what I call the “fourth wave” Asian economies – South and Southeast Asia, from Pakistan and India through Thailand, Vietnam, Indonesia, and the Philippines – are among the youngest and most dynamic societies in the world. Their youth are eager to embrace 5G and broadband, social media and gaming, online marketplaces and virtual currencies. As European governments promote citizen friendly data regulation and consumer friendly mobile banking technologies, Europe has a superb opportunity to play a strongly constructive role among Asia’s next generation.
