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Address by the External Affairs Minister Shri Pranab Mukherjee at a function jointly organized by the Embassy of India in Jakarta and the Indonesian Council on World Affairs

June 18, 2007

Dr. Arifin M. Siregar, Chairman of the Governing Body of the Indonesian Council on World Affairs and Distinguished Guests,

It gives me great pleasure to be here today to address this distinguished and knowledgeable gathering on the topical subject of India's growing engagement with East Asia.

I have chosen to speak on this topic for a number of reasons. As many of you would be aware, India has undergone significant changes over the last decade and a half. During the same period, the international order has seen a profound structural transformation. Consequently, the foreign policy of India has had to re-formulate its priorities.

Among the major changes, the economic story is well known. India has achieved an average growth rate of 9% in the last three years and hopes to push it even further. Driven so significantly by domestic consumption, we have had to create our own model of growth. There is perhaps no precedent for change taking place on such a scale within a democratic framework. An era of 10% growth, which appears within sight, clearly calls for a different approach, given that closer integration with the global economy is a sine qua non for most developing countries. Expanding foreign trade and attracting greater foreign investment flows requires recalibration and reallocation of our energies. We have also taken note of the shift in the economic centre of gravity of the global economy towards the Asia Pacific region. Amidst this scenario, energy cooperation, with particular emphasis on supply and distribution in the long term, is among the subjects acquiring greater salience in our thinking.

In this context, East and South-East Asia have come to assume an important place in our policy priorities. Talking about this region, one of its unique, yet universally recognized features is the importance we attach to mutual respect and peaceful coexistence between nations. Within the nations themselves, the importance given to family values, culture and traditions needs no elaboration. When we talk about a family or comity of nations, it is understood in the right perspective. The freedom of expression which we espouse finds reflection in the strong democratic system that prevails in our countries. An inclusive government, responsive to the concerns of our peoples, gives us the needed energy to deal with the diverse and pluralistic societies our countries represent. Our shared historical traditions give us yet another reason for working together.

India's policy towards ASEAN nations and the nations of the Pacific was conceived in the context of various factors, including national interest, security concerns and economic imperatives. This policy was prompted by significant changes in the global political and economic scenario and by our own adoption of economic reforms and liberalization. ASEAN's economic, political and strategic importance in the Asia Pacific region and its potential to become a major partner of India in trade and investment were significant elements in our approach to the region. India's "Look East" policy can thus be described as the search for political and economic convergence with this most dynamic region of Asia which, through its emergence as an economic powerhouse of the world economy, provided India with a model worthy of emulation.

India has pursued its "Look East" policy and developed multi-faceted relationships with countries of the ASEAN region and the South Pacific within a multilateral as well as a bilateral context. We have been actively engaged with the ARF and as a Full Dialogue Partner of the ASEAN since 1996 and have been having annual summits since 2002. India also participated in the East Asia Summits held in Kuala Lumpur and Cebu in December, 2005 and January, 2007 respectively. We signed the "India-ASEAN Partnership for Peace, Progress and Shared Prosperity" at the 3rd India-ASEAN Summit in Vientiane in November, 2004. The Agreement envisages strengthening cooperation in the UN and the multilateral fora, including the WTO, combating international terrorism, transnational crimes, human trafficking, cyber and economic crimes, sea piracy and cooperation in capacity building. It lays stress on the development of regional infrastructure and intra-regional communication links to facilitate greater movement of goods and people cooperation in science and technology.

The resurgence of Asia in political and economic terms has been accompanied by the rise of powerful economic forces unleashed by globalization and the trend towards regional economic integration. Our engagement with East and Southeast Asia in the political and security arena has been accompanied by progressive economic integration in terms of Free Trade Agreements and Comprehensive Economic Cooperation Agreements with countries of the region. A Framework Agreement on the FTA between India and Thailand was signed in 2003 and the Early Harvest Programme is being implemented since 1st September, 2004. A Framework Agreement for an FTA with the ASEAN was concluded in 2003. India concluded a Comprehensive Economic Cooperation Agreement with Singapore in June, 2005 and has established a Joint Study Group for examining the feasibility of a similar agreement with Malaysia. With Indonesia too, we have signed an MoU on the Establishment of a Joint Study Group to examine the feasibility of a similar arrangement. A Regional Trading Arrangement is currently under negotiation With China and negotiations are underway on bilateral Comprehensive Economic Partnership Agreements with Japan and the Republic of Korea.

India also participated in the first East Asia Summit (EAS) held in Kuala Lumpur in December, 2005. The Summit was a historic event which marked the beginning of a process that could define the future architecture of the region. India believes that the long term goal of the EAS should be the creation of a prosperous community of nations built on shared values and interests. At the Second East Asia Summit held in Cebu in January, 2007, the agenda of the forum was widened to include a number of areas including regional collaboration on poverty eradication, energy security, education, natural disaster mitigation, working together on the Doha Development Agenda, furthering economic development and regional integration and cooperation in ensuring regional security.

As a consequence of India's increasing economic engagement and integration with the Southeast Asian and East Asian region, the share of East Asia Summit countries in India's total trade increased from 18% to 26% between 1991 and 2006. The total volume of India's trade with the 16 East Asia Summit countries amounted to US $80.1 billion in 2006. These developments should also be viewed in the context of the vision articulated by Prime Minister Dr. Manmohan Singh during the India-ASEAN Business Summit in New Delhi in October, 2004, envisaging the establishment of an "Asian Economic Community", which would be the driver of growth and economic integration in the entire region.

A significant aspect of the cooperation, both bilateral and through multilateral institutions like the ASEAN Regional Forum (ARF), has been the growing cooperation on security issues fostered through dialogue and practical measures, as well as through the establishment of legal frameworks. The ARF is the only political and security dialogue forum in the region. It helps us engage with a broader range of countries and work towards the goal of ensuring regional peace and stability. For its part, India has, for many years, consistently urged the ARF to take up discussions on international terrorism. We have also engaged countries of the ASEAN, the Far East and the Pacific bilaterally on this issue that remains one of the principal security challenges of our times.

Our security cooperation has focused notably on maritime security, which is a vital issue of common concern to all of us. India has entered into bilateral arrangements with Thailand and Indonesia for joint coordinated patrols by the three navies in the Bay of Bengal at the mouth of the Malacca Straits. We are also ready to contribute to capacity building of littoral states in the area of maritime security. The participation of the navies of Southeast Asian countries in the bi-annual MILAN exercises has also fostered closer regional cooperation on maritime security issues. India also signed the Treaty of Amity and Cooperation at the Bali Summit in October, 2003.

Apart from the main ASEAN forum, India engages with various ASEAN countries in different frameworks. There is the context of our membership of Mekong-Ganga Cooperation and then the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). The MGC focuses on cooperation in culture, tourism, human resource development, education, transport and communication. BIMSTEC has chosen to focus on trade and investment, technology, transport and communication, energy, tourism and fisheries. It plays the role of bridging countries of South and South East Asia, with the North East region of our country as the centre of this bridge. We see great value in pursuing cooperation through all these forums.

Let me also take this opportunity to make brief observations about our ties with Indonesia and individual East Asian countries.

India and Indonesia are large pluralistic democracies in Asia with a mutual stake in each other's progress and prosperity. Our relationship is endowed with unique characteristics. Perhaps there is no other country with which India shares so much in common in terms of geography, size, diversity, historical and civilizational ties as it does with Indonesia. Indeed, soon after we attained independence, our two countries worked together to spread the message of freedom amongst the oppressed peoples of the world. Together, we wrote the concluding chapter of colonialism. Based on a similar world view, we have crafted an enduring friendship founded on mutual respect and cooperation. I particularly wish to congratulate the leadership of Indonesia for the immense strides that have been made by this country in building democratic institutions and placing the economy firmly on the road to recovery and growth.

In November 2005, H.E. President Susilo Bambang Yudhoyono and Prime Minister Dr. Manmohan Singh opened a new chapter in our bilateral relations by establishing a New Strategic Partnership and identifying a range of areas for enhancing cooperation for the mutual benefit of our two countries. Indonesia is today also India's third largest trading partner in the ASEAN. Our bilateral trade reached US $4.79 billion in 2006, representing a growth of 22% over the trade figures for the previous year. More than trade, however, Indonesia has been crucial for India in developing ties with the ten members of the Association of South East Asian Nations (ASEAN). This is important because building ties with ASEAN has been a principal objective of our "Look East" policy, conceived in the early 1990s.

As India's largest neighbour and a key emerging player in the international arena, China remains an important priority of India's foreign policy. The rapidly growing trade and economic exchanges between the two countries are pointers to the fact that India and China are now constantly engaged in mutually rewarding pursuits on the basis of a wide array of complementarities. Frequent high level visits have further contributed to developing mutual trust and understanding. While we remain fully conscious of our outstanding differences with China, including on the boundary question, the basic paradigm of our approach is to seek an all-round development of ties, without allowing these differences to define the agenda of the relationship. At the same time, we remain committed to proactively address these differences through peaceful dialogue on an equal footing.

While some degree of healthy competition between the two countries is inevitable, particularly in the area of trade and commerce, we believe that there is enough space and opportunity in the region and beyond for both India and China to grow together. In our view, the India-China partnership is an important determinant for regional and global peace and development, and for Asia's emergence as the political and economic centre of the new international order. It is with this realization of the long term, global and strategic character of India-China relations that the leaders of the two countries decided to establish a "Strategic and Cooperative Partnership for Peace and Prosperity" during the visit of the Chinese Premier H.E. Mr. Wen Jiabao to India in 2005.

India also attaches high priority to strengthening relations with Japan and there has been a visible transformation in the political ambience of the relationship on both sides. Our bilateral relations reflect a new found dynamism propelled by the landmark visit of Prime Minister Koizumi to India in April, 2005 and the visit of Prime Minister Dr. Manmohan Singh to Japan in 2006. Japan is increasingly looking at its relations with India from a strategic perspective. Both our countries are now engaged in the process of deepening our Global Partnership in the 21st Century through high level visits, expanding economic relations and growing mutually beneficial exchanges in energy, science and technology, defence, cultural and academic fields.

The main emphasis of our relations with the Republic of Korea is to consolidate and intensify the present positive trends in our engagement and reiterate that India remains committed to pursuing a long term cooperative partnership for peace and prosperity. We seek to impart greater substance to our economic partnership through enhanced trade and investment flows, and also encourage Korean investments in various sectors, including infrastructure, steel, shipbuilding, hydrocarbon energy resources, biotech, pharmaceuticals, etc.

Singapore was one of the earliest of our partners in the ASEAN to realise the implications of the economic reforms India began a decade and a half ago. Our partnership has greatly encouraged India's stronger participation in Southeast Asian and East Asian structures since then. At the bilateral level, a Comprehensive Economic Cooperation Agreement was concluded in 2005 which has had a significant positive impact on our trade and investment relations. Today, Singapore is our largest trading partner in the ASEAN with a bilateral trade volume of US $13 billion in 2006.

India and Malaysia have been linked together by historical and cultural ties that go back centuries. Both countries effectively symbolise "Unity in Diversity". Malaysia is our second largest trading partner in the ASEAN with a bilateral trade volume of US $6.58 billion. Malaysian companies are active in India's infrastructure sector and Malaysia is also home to the largest Indian community in Southeast Asia.

Our relations with Thailand have moved beyond traditional areas of culture and commercial interaction to cooperation in security, defence, science and technology, and a movement towards free trade. Thailand was the first country in the ASEAN with which India signed an FTA Framework Agreement in 2003 and it is today our fourth largest trading partner in the ASEAN.

Vietnam is a key partner of India in the ASEAN. We have always enjoyed close and cordial relations, the foundations of which were laid by Prime Minister Jawaharlal Nehru and President Ho Chi Minh more than fifty years ago. Our bilateral relationship is founded on genuine goodwill and mutual respect. India is committed to assisting Vietnam, along with Laos and Cambodia, in the spirit of South-South cooperation, both bilaterally and in the context of the 'Initiative for ASEAN Integration', which seeks to narrow the development gap among the members of the ASEAN.

We are committed to building a multifaceted relationship with the Philippines, encompassing a broad-based development of relations in the political, economic and security fields. The Philippines could emerge as an important partner for trade and investment and a number of Indian IT companies have established a presence there.

In conclusion, let me state that India remains committed to further intensifying its relations with this region. The pursuit of regional economic integration, emphasis on South-South cooperation, promotion of societal links through cultural cooperation and educational exchanges, as well as an increased focus on security cooperation and countering threats to national security will remain important pillars of our engagement with East Asia.

I thank you all for providing me this opportunity for sharing India's latest perspectives on its Look East policy. I am happy that I have been able to do this here in Indonesia, a country with which our relations go well back in time and where an active future beckons us all to build further on time-tested foundations.

I thank you.

New Delhi
June 18, 2007

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