US-China competition and South Asia

The competition is preventing Pakistan’s economic connectivity and natural resource extraction prospects as well

The US-China competition is casting a dark shadow on the South Asian security and economic integration. Ever since the US has chosen India as a regional surrogate in its ‘Contain China’ policy, the region has suffered a continual security dilemma and economic fragmentation. It is worth understanding how being in the cross hairs of the US-China competition, countries like Pakistan are confronted with the security dilemma of keeping up with the arms build-up by regional hegemons, like India. The disproportionate focus on security and geopolitics deprives South Asian countries of an economic integration which is the pre-requisite for actualising the true geo-economic potential of the region.

The US had started courting India since early 2000s starting with the strategic partnership in civilian nuclear tech, space, missile defence and hi-tech areas under the rubric of famous Next Steps in Strategic Partnership in 2004. Since then the US has made several exceptions for India in Missile Technology Control Regime, exports licensing and nuclear cooperation. India has been facilitated in achieving waiver in Nuclear Suppliers Group allowing it to develop its very ambitious missile programme. Other than that India has signed four foundational agreements with the US — LEMOA (2016), COMCASA (2018), BECA (2020) and General Security of Military Information Agreement (GESOMIA 2002).

The Indo-US military cooperation has given a carte blanche to India to expand its ambitious missile, nuclear and space defence programme giving it a clear edge over its neighbours which in turn suffer from security dilemmas vis a vis a regional hegemon. To address these dilemmas, countries like Pakistan are forced to continually upgrade their missile and strategic defence capabilities fuelling a needless and costly arms race.

The unfortunate fact is that the US paranoia about China and its rub-off on its client state India has instilled a feeling of hubris in it. That feeling leads to policies that promote conflict, proxy warfare and arms race at the cost of regional trade and economic integration. Compared to ASEAN and EU whose intra-regional trade is 23% and 75% respectively, the intra-regional trade in South Asia is a measly 5%. How can a region develop when it does not trade internally? Another negative impact of the US-China competition is the Indian propensity to isolate Pakistan economically by stonewalling all connectivity initiatives. SAARC was a very useful regional cooperation and integration forum which is lying dysfunctional due to Indian non-cooperation. Several attempts by Pakistan to reinvigorate SAARC have withered on the vine of Indian obduracy.

Instead of making use of geography as a connector India has started sponsoring circuitous connectivity initiatives deliberately bypassing Pakistan. Three such initiatives include India-Myanmar-Thailand (IMT) Corridor, International North South Transport Corridor (INSTC), and India-Middle East-Europe-Economic Corridor (IMEC) which are being actively pursued by India to the total exclusion of Pakistan. This exclusion also suits external powers inimical to China-Pakistan Economic Corridor (CPEC) that view East West Economic Corridor (EWEC) — linking India, Pakistan, Afghanistan, Central Asia and West Asia — as a threat.

There are other emerging security and economic alliances in the Indo-Pacific region that are a direct consequence of the UA-China geopolitical competition close to South Asia. These alliances include Quad (Australia, India, Japan, USA), AUKUS (Australia, UK, USA), Trilateral Security Alliance (Japan, Philippines and USA). There is an emerging economic alliance called Indo-Pacific Economic Framework (IPEF) which ostensibly seeks to bind Quad members in an economic union but in actual fact is an attempt to fob off the criticism levelled at the overly militaristic nature of the US-led Indo-Pacific alliances.

The US-China competition is preventing Pakistan’s economic connectivity and natural resource extraction prospects as well. The anti-CPEC paranoia has led to proxy warfare by Indian intelligence agency RAW through terrorist entities like TTP and BLA/BLF. The insurgencies spawned in KPK and Balochistan are aimed at stonewalling CPEC and other regional connectivity initiatives that might redound to the advantage of Pakistan and its development partners like China.

The mineral-rich areas of KPK’s merged districts and Balochistan’s districts like Chaghi, which large copper and gold deposits, have remained the focus of international exploration efforts but the security environment has prevented Pakistan from optimising the full exploration potential of these mineral-rich regions. Out of 30 mineral exploration blocks in merged districts of KPK, only 6 have been opened so far for exploration primarily due to security concerns. Same is the case with oil and gas exploration blocks like Wali West in Bannu (KPK) and the most promising Kohlu Block 28 in Balochistan which has lain unexplored since last 33 years.

The minimum oil and gas well drilling density in case of Balochistan (0.24) and KPK (0.51) indicates the low exploration imprint untapped energy due to security threats and associated costs. Apart from mineral resource and oil exploration prospects Pakistan is suffering the impact of geopolitical rivalry in the shape of lost connectivity potential with Central as well as West Asia. Road, rail and digital connectivity corridors like Termez-Jalalabad-Peshawer that could connect South Asia with Central Asia reducing the freight time and cost by fifty per cent have not taken off the ground due to a destabilised Afghanistan and lack of funding interest by Western donors.

The US-China rivalry is creating negative incentives for Western powers and their ally India for keeping South Asia away from regional trade and economic integration. A sanctioned Iran, destabilised Afghanistan and insurgency-prone Pakistan apparently serve the selfish interests of competition driven geopolitics pursued by global powers and their regional surrogates like India. The trade and economic connectivity eludes South Asia, leaving it at the mercy of confrontational jousts for geopolitical one-upmanship.

The fruits of regional peace and connectivity are apparent as daylight. It is up to India to see the futility of a confrontational stance in the service of a global power that denies itself and the region the benefits of regional integration, and to make a strategic reset in its geopolitical orientation in line with its putative strategic autonomy notion in order to usher in a South Asian economic renaissance.

Published in The Express Tribune, April 21^st, 2024.

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