Home / News / America pivots south, to India. Could Bhutan be next?

America pivots south, to India. Could Bhutan be next?

Bhutan might not yet be on a U.S. president’s agenda but a much anticipated return visit to India earlier this week by U.S. President Barack Obama may signify that South Asia is, like Southeast Asia, finally getting some well-deserved U.S. attention as part of the so-called American rebalance – or what was once known as the “pivot” – to Asia. Who knows? Bhutan might be next.

That’s a welcome change as America and America’s policymakers wake up to the obvious, namely that there is more to Asia than China, and that an Asia strategy is more than a grab bag of programs seeking to match China’s efforts.

Yet, in his State of the Union address to the American public last week, Obama gave short shrift to Asia, while proclaiming past successes and outlining an agenda for further improving the U.S. economy.  “The shadow of crisis has passed,” he declared, “and the state of the union is strong.”

Pointedly, the U.S. president chose not to use his 70-minute, annual address, to explain what can be a critical part of his economic agenda. That is, increased engagement and strengthened trade relations with the entire Asia-Pacific region, including nations, such as India, that rarely make the U.S. headlines.  Too often, East Asia alone has seemed the predominant focus of the U.S. policy pivot eastward. Understandably, there might have been no mention of Bhutan, but there also was no mention even of his then upcoming visit to India.  Americans may well have wondered where their president had gone so soon after concluding his State of the Union address.

Now, fresh from India — the first time a sitting U.S. president has visited that nation twice — Obama has some easy explaining to do when he lands back in Washington.  Indeed, a real opportunity for expanded engagement is at hand, as ties improve between the United States, the world’s oldest democracy, and India, the world’s largest democracy.

U.S. State Department statistics about the benefits of U.S.-India trade provide a rationale and a context for why Obama was back in Asia, and in India in particular:

-U.S.-India bilateral trade expanded from $19B in 2000 to $95B in 2013, with U.S. goods exports to India totaling $35B, supporting an estimated 168,000 U.S. jobs.

-Cumulative Indian investment in the United States totaled US$9B in 2012, supporting 100,000 jobs.

-More than 850,000 Indians visited the United States in 2013, and more than one million Americans visited India, the largest group of international tourists.

-Approximately 100,000 Indian students, the second-largest group of foreign students, studied in the United States for the 2012-13 academic year, contributing more than US$3B to the U.S. economy.

With the International Monetary Fund expecting India’s economy to grow by 6.3 percent in 2015 and by 6.5 percent in 2016, outpacing that of China, there is good reason for the U.S. pivot to head southward, to India. These figures will grow if reforms take hold in India. And, Bhutan could well provide a gateway for some enterprises to India.

But, India should be only one part of comprehensive U.S. engagement with an Asia-Pacific region that is wary of China’s growing assertiveness, particularly in the South China Sea.  China is already engaged across the region, economically of course, but also through development assistance, cultural exchanges, and educational programs.

What might an expanded U.S. pivot to all Asia – a rebalance of the rebalance if you will – include?

First, the United States must embrace a “business pivot” that goes beyond the large China marketplace, and that looks to opportunities that exist in South Asia and Southeast Asia.  Already, U.S. investment in Southeast Asia surpasses that in all four BRIC nations – Brazil, Russia, India and China – and can be built upon. This would entail a concerted effort to “geographically rebalance” U.S. efforts across the region, with a particular emphasis on strengthening economic ties with India and Indonesia among others.  Longtime allies with which the United States has defense ties, including Japan, the Philippines and South Korea, must also be reassured that the United States is here to stay.

Second, the Obama administration and U.S. Congress must work to advance trade and commercial efforts that work for all involved.  A bipartisan effort is needed to ensure adequate resources for a trade policy and a U.S. Foreign Commercial Service that benefits small businesses, not just big multinationals.  Additionally, Washington must also set an example for the rest of the world by ensuring that intellectual property rights are protected, and that tax policies do not discourage business success by its own citizens, particularly American entrepreneurs, whether working directly in Asia or exporting product from America.

Third, U.S. companies must also do their part by acting responsibly in every market they operate.  This may well entail going beyond the letter of the law in such emerging markets in Southeast and South Asia as Bangladesh, Cambodia, Myanmar and Sri Lanka, where regulatory deficiencies make it challenging to operate, but where U.S. investment and good practices can have a significant impact.

A central benefit of peace and stability in Asia—a stated goal of the U.S. rebalance to the region—is greater commercial opportunities throughout Asia. Trade and economic ties can be part of the means to a strategic solution in the region, and not just the ends.

State visits to India, State of the Union addresses, and participation in Asia’s annual array of summits may provide for beautiful photos, but what really matters is the hard work that follows.  America certainly matters to Asia, but building the support of the American people and U.S. Congress for strengthened economic and trade ties with not just India but the entire Asia-Pacific region — including the smaller nations of South Asia such as Bhutan, Sri Lanka and Nepal — will also require U.S. leaders who are serious about also explaining and showing that Asia matters to America.

 

 Contributed by 

Curtis S. Chin and Jose B. Collazo

 

Curtis S. Chin, a former U.S. ambassador to the Asian Development Bank, is a managing director of advisory firm RiverPeak Group. Jose B. Collazo is a Southeast Asia analyst and an associate of River Peak Group. 

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One comment

  1. Development practitioner

    While the US may pivot to India and the rest in the region, China may pursue its ‘one belt, one road’ initiative. This is too heavy a rebalance weight for a country like Bhutan to handle knowing how much balance and neutrality and respect for such a growth the “big boys” maintain when it comes to pursuing their geostrategic goals.

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