The reach of China in other South Asian states has been extraordinary. India's protectionist tendencies have allowed China to don the mantle of regional economic leader. The sooner Indian policy makers realise this and take steps to redress this the better, writes Harsh V Pant.
Established in 1985, the South Asian Association for Regional Cooperation is having its 16th summit meeting in Thimpu, Bhutan, which started on Wednesday. Apart from the fact that Bhutan will be hosting its first SAARC summit, there is hardly anything that inspires confidence in this largely moribund organisation that is also celebrating the 25th anniversary of its founding.
Covering at least 1.5 billion people across India, Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan, Maldives and Afghanistan, SAARC is one of the largest regional organisations in the world. But its achievements so far have been so minimal that even its constituents have become lackadaisical in their attitudes towards it.
The state of regional cooperation in South Asia can be gleaned from the fact that Pakistani Prime Minister Yousuf Raza Gilani reached Bhutan via Nepal, using Chinese territory in Tibet rather than the straightforward route through India.
Bhutan has chosen climate change as the theme of the summit, and the eight-nation grouping is likely to deliver a silver jubilee declaration entitled 'Towards a Green and Happy South Asia'. The focus, however, is likely to be on the agreement on trade in services to be signed during the summit.
Intra-regional trade in South Asia remains far below potential despite the member states signing the South Asian Free Trade Agreement that came into force in 2006.
For long, the dominant narrative of SAARC has been how the India-Pakistan rivalry hampers its evolution into anything of significance. That is now rapidly losing its salience with China's growing dominance of the South Asian landscape. China entered SAARC as an observer in 2005, supported by most member states. India could do little about it and so acquiesced. Now, much to India's consternation, Pakistan, Bangladesh and Nepal are supporting China's full membership in SAARC.
China's rising profile in South Asia is no news. What is astonishing is the diminishing role of India and the rapidity with which New Delhi is ceding strategic space to Beijing on the subcontinent. Even as China is becoming the largest trade partner of most states in South Asia, including India, New Delhi is busy repeating the old mantra of South Asia being India's exclusive sphere of influence. Of course, no one even takes note of it anymore.
Pakistan's all-weather friendship with China is well-known, but the reach of China in other South Asian states has been extraordinary. Bangladesh and Sri Lanka view India as more interested in creating barriers against their exports than in spurring regional economic integration. India's protectionist tendencies have allowed China to don the mantle of regional economic leader. Instead of India emerging as facilitator of socio-economic development in Sri Lanka, Nepal and Bhutan, it is China's developmental assistance that's having a larger impact.
India's attempts to keep China out of the subcontinent have clearly not worked, and it's time to re-evaluate its South Asia policy. China's strategy towards South Asia is premised on encircling India and confining her within the geographical coordinates of the region.
This strategy of using proxies started with Pakistan and has gradually evolved to include other states in the region, including Bangladesh, Sri Lanka and Nepal. It is entering markets in South Asia more aggressively through both trade and investment, improving linkages with South Asian states through treaties and bilateral cooperation. Following this up by building a ring of road and port connections in India's neighbourhood and deepening military engagements with states on India's periphery, China has firmly entrenched itself in India's backyard.
This quiet assertion of China has allowed various smaller countries of South Asia to play China off against India. Most states in the region now use the China card to balance against the predominance of India. Forced to exist between their two giant neighbours, the smaller states have responded by a careful balancing act.
India's structural dominance in South Asia makes it a natural target of resentment among its smaller neighbours. Yet there is no hope for regional economic cooperation in the absence of Indian leadership. The failure of India in countering China's rise has made it even more unlikely that such cooperation will evolve productively.
As the two regional giants compete with each other in the near future, they will be more focused on their relative gains vis-à-vis each other than in the absolute gain that regional cooperation can bestow.
Liberals in South Asia have long taken their inspiration from the extraordinary developments in the European Union, arguing that South Asia can also go down a similar path of regional economic and political cooperation. However, that's a fundamentally flawed comparison.
The states in Western Europe could arrive at the EU only after resolving their persistent security dilemmas. And the US security umbrella continues to ensure that European political rivalries do not raise their ugly heads again.
In South Asia, the security dynamics between a large India and its smaller neighbours ensures that the road to economic and political cooperation will be a bumpy one. And after the emergence of China, that road will be an even more difficult one traverse.
Harsh Pant teaches at King's College London.
