Speech by George Yeo, Minister for Foreign Affairs, at ISAS Conference on 8 Nov 2006 - South Asia in the Global Community: Towards Greater Collaboration and Cooperation

South Asia in the Global Community: Towards Greater Collaboration and Cooperation

1. In a strange way, we seem to be returning to the past. Take Singapore as an example. Strand by strand, we have been recovering all the old links which created modern Singapore - our links to the rest of Southeast Asia, to China, to India and, now, to the Middle East. As a city-state, it is natural that we should experience first what larger polities would eventually also pick up.

2. In Southeast Asia, we are rediscovering the connections which made the region an intelligible area of cultural and historical study before the Western powers carved it up. Like pre-colonial Southeast Asia, ASEAN remains a diverse collection of big and small countries alternately influenced by China and India, benefiting from the East-West trade.

3 South Asia was completely dominated by the British Raj for some 200 years. In many ways, the Raj was an inheritor of the Mughal Empire. The British influence in India was so deep and profound, one could even argue that the British Raj was Indian, and that today's South Asia is but a collection of its successor states. When Singapore was negotiating the Comprehensive Economic Cooperation Agreement with India, I remarked half in jest to my Indian friends, but half seriously, that we were only restoring the position of the Raj when trade and investment between the Sub-Continent and Singapore flowed freely according to the same laws and standards. China is fast becoming India's biggest trading partner which was of course the position in the 19th Century. The China trade was of the greatest strategic importance to the East India Company and, after it was wound up, to the British Indian Government directly. Singapore grew on that trade and became the headquarters of the British Empire in Southeast Asia safeguarding the Straits of Malacca and Singapore.

4. Unlike South Asia and Southeast Asia, Northeast Asia consisting of China, Korea and Japan was much less thoroughly colonized. The Western powers dominated China but their presence was concentrated in the concession areas, mostly along the coast. Japan, after Meiji, tried to be like a Western power but failed. The transformation of Northeast Asia began at the periphery, Japan first, then the Newly Industrializing Economies of South Korea, Taiwan, Hongkong and Singapore, before spreading inland. The four Special Economic Zones which Deng Xiaoping started in 1980 were all at or near port cities which experienced a strong Western presence. Not long afterwards, Shanghai resumed its old position as the dragon's head. Now the growth in China is spreading back to its ancient heartland around the cities of China's great plains and river basins.

5. In examining the role of South Asia in the global community of the 21st century, we need this perspective of time and space. Although history never repeats itself in the same way, the deep tendencies are persistent. The geography has not changed; the climate, maybe a little. Cultural characteristics do change but slowly. The populations are an order of magnitude bigger today but the relative sizes have not changed that very much. What has changed dramatically is technology, but the ability of a society to acquire new knowledge and apply it to production and security has its roots in that society's past.

6. Against this backdrop, let me now talk about South Asia in the global community at three levels. First, the dynamics within South Asia itself. Second, South Asia vis-a-vis the West. And, third, South Asia in larger Asia, which will be an important theme in this century.

7. Within South Asia, it is likely that the fragmentation which began with the end of Empire has reached its limit - Partition in 1947, the establishment of Bangladesh in 1971, the Tamil separatist movement in Sri Lanka and other relatively minor ones elsewhere. Now technology and globalisation are re-connecting the parts. As one South Asian diplomat remarked to me recently, if China could find creative solutions for Hongkong, Macao and Taiwan so that economic activities could carry on, why can't India and Pakistan find a creative solution for Kashmir? Indo-Pakistan trade which is reaching $1b can easily become $10b which will still be quite small. The sad fact is that South Asian cooperation is held hostage to India-Pakistan relations. However, despite all kinds of difficulties, trade in South Asia will become freer year by year. As with China, change is flowing in from outside. The influence of Indians who studied, worked or lived overseas has been a great help. The NRIs who return home create bubbles of India's future, in the IT companies and campuses, in the industry and trade associations, in the new suburbs. Now India has become a pace-setter for all of South Asia in a positive way. What India does, Pakistan watches carefully and follows. I remember many years ago the Pakistan Finance Minister telling me in Lahore that he listened to the Budget Speech made by the Indian Finance Minister live on radio. An India that is economically strong must be a challenge to its neighbours. Just as Southeast Asian countries are galvanised by China's rapid strides, India's strides will energize all the other countries of South Asia. This competitive development is good for the world.

8. However, there is a counter-trend which, if mismanaged, can create a lot of problems. I am of course referring to Jihadist extremism. If the madness in the Middle East gets worse, Pakistan, India and Bangladesh will all be affected. If the Sunni-Shi'i divide widens, both Pakistan and India will feel the shocks. We are fortunate that President Musharraf has been steadfast in the fight against Jihadist extremism after Sep 11. As for India, there is a wisdom in the civilization which enables it to digest extreme tendencies and dilute their poison. On the whole, therefore, except for the border lands between Pakistan and Afghanistan, I am not pessimistic about the ability of South Asia to contain the problem of Jihadist extremism. As has repeatedly been the case in history, Iran will play a significant role in maintaining the peace in the lands beyond the Khyber.

9. Let me now move to South Asia's relationship with the West. Because India is not viewed as a competive challenge to the West the way China is, India's strategic relationship with the US, EU and Russia will not be as complicated as China's. This is a great advantage. The fact that India is a democracy is also a plus. The large NRI communities in the US and Europe (principally the UK) are a major asset. As a major successor state to the British Empire, India enjoys a special position in the English-speaking world. India's companies can internationalise easily. Many ethnic Indians hold senior positions in Western MNCs. Outside South Asia, Indians, Pakisanis, Bangladeshis and Sri Lankans feel close to one another, attesting to their common cultural heritage. In Singapore, all are considered Indians because their ancestors came here before British India was divided. India's relationship with the old Soviet Union continues with Russia. This is not surprising because it was a relationship based not on ideological considerations but on geostrategic reasons. While India is happy to strengthen its links with the US and Europe, it will never want to be too dependent on them especially for military technology. Looking ahead, India will be able to maintain good relations with all the major Western powers. This, in turn, will provide a better environment for peace and development in the Sub-Continent.

10. It is the part South Asia plays in the re-emergence of Asia that tells the most interesting story. Asia is more than half the world. Its strong growth is changing the face of the whole world. In this drama, the resumption of India and China as two major poles is re-drawing the global political and economic map. Both are continental nations having by far the largest populations on earth with enormous reservoirs of human talent. Historically, separated by high mountains and vast deserts, the two civilizations interacted sparingly and only with difficulty. Except for 1962, there was never a major war between them from the beginning of time. Except for the Buddhist heritage, there are few common reference points in their relationship. Where India and China met in a significant way, it was in Southeast Asia which became a separate civilizational area buffering the two. In more recent times, India and China met again under a Western ascendancy, first British, later American. Today the common terms of interaction are Anglo-Saxon - contract laws, accounting standards, corporate structures, the common jargon of business schools and the English language.

11. The common Buddhist heritage will be revived in the coming years, if nothing else, because millions of Buddhists from Northeast and Southeast Asia will want to visit the holy sites in South Asia and the economic gains from religious tourism will bring great benefits to local people in all the countries of South Asia. The influence of Buddhism on human civilization is largely benign and beneficient. It is an easy subject to talk about unlike discussions about the interactions of Christianity, Judaism and Islam. Next week, a seminar on the relevance of the Buddhist heritage to 21st century Asia will be held here in Singapore. President Abdul Kalam of India, for whom this subject is a passion, will be taking part live by video-conference.

12. The improving relationship between India and China will be a hugely positive factor in the development of Asia, second in importance only to the relationship between the US and China. The current border talks, the reopening of the Nathu La Pass, the rapidly expanding trade account, the explosive increase in bilateral exchanges - all this are but a prelude to a major re-encounter of two civilizations on their own terms. It is only natural that Southeast Asia will be an important venue for this re-encounter. To be sure, it will not all be smooth as no encounter of such a scale can be. Along the way, there will be disappointments, distrust and recriminations. All this we must expect when large forces are in play. There will always be an element of strategic rivalry between them which the smaller countries around them will carefully analyse and which the other major powers will try to turn to their advantage. The East Asia Summit is a way of encouraging the development of India-China relations in a direction beneficial to everyone.

13. However, as of now, and for many years to come, it is Japan and Korea which will be able to benefit South Asia more in terms of technology, marketing and industrial management. Cities like Singapore and Hongkong will offer models of municipal management. It is no longer fantastical to envision an Asia well connected by road, rail, air and electronic links permitting the easy movement of goods and people across its length and breadth. The roads and railways which China and India want to connect to Southeast Asia will in the end link them both.

14. One can therefore be very optimistic about the coming cooperation and collaboration between South Asia and East Asia. Let me now complete the picture for Asia by talking briefly about South Asia's links with West Asia and Central Asia. Here again, there is nothing new. We return to the arena of the Great Game. Kissinger has always argued that the foreign policy of the British Empire was often dominated by the strategic needs of British India. As India's economic power grows, so too will its political influence and strategic weight. India should not unnecessarily entangle itself in the horribly complex politics of the Middle East for there is no profit in that. But India can always be a force for peace and stability. India's relationship with Iran will always be important. The millions of South Asians working in the Middle East have become indispensible to the booming economies there. At a serious conference like this, I should not talk about the influence of Bollywood but it is pervasive. As for Central Asia after the collapse of the Soviet Empire, India is gradually becoming a player, a role which China which moved first has come to accept.

15. Let me end by going back to the internal politics of South Asia. This is critical. South Asia can only play a major role in global politics if the Sub-Continent itself is not embroiled in its own conflicts and there are any number to choose from if one is looking for them. In recent years, the picture looks a little more hopeful. SAARC can play a more important role if some of the basic distrust in the Sub-Continent can be reduced. Realistically, this will take time. India has perforce to take the lead although it would be unfair to put the entire burden on India.

16. All said, if the past is a guide to the future, we can be fairly optimistic about the contribution of South Asia to the global community along many dimensions.