Imagine in the near future, the coronavirus pandemic has forced South Asian countries to remain shut to the rest of the world – but a ‘travel bubble’ allows movement of people, labour, and goods between India, Bangladesh, Sri Lanka and other countries in the region. Much like the travel bubbles that we are witnessing between New Zealand and Australia and among the Baltic nations.
If India were to initiate such a travel bubble, it would affirm its position as a regional elder, patroller of the seas and borders, and an economy ready to trade during desperate times.
The raging Covid-19 pandemic and the idea of travel bubbles have provided India with a unique opportunity to fulfil its long-held dream of becoming South Asia’s benevolent hegemon.
In New Delhi, one administration after another has tried to facilitate South Asian integration on the plank of more connectivity and intra-regional trade. But their efforts have been consistently bogged down by lack of inter-ministerial coordination, bureaucratic delays, inefficiency, and shortage of funds.
With most South Asian economies currently frozen due to the Covid-19 pandemic, India not only gets to reignite animal spirits in the region but also make South Asia genuinely integrated. For now, there is no tangible benefit in including Pakistan, because the political and material costs of such an inclusion continue to remain too high.
Travel bubble and New Delhi’s political statement
In countries that are at a similar stage of pandemic recovery, governments are fast adopting travel bubbles – allowing intra-regional travel even as they remain closed to the rest of the world. India too can initiate a travel bubble as and when it has sufficiently recovered from the impacts of Covid-19.
The travel bubble will be India’s moment to make a political statement that unleashes its drive to reimagine South Asian integration. Although, a South Asian bubble as proposed by New Delhi is just the first in a series of steps required to imagine the new South Asian regional order.
In the nearly 500 years of global history, there have mainly been two pre-conditions to become a “benevolent hegemon” and write the new global order. A hegemon needs to provide global public goods – such as patrolling of high seas, and a broad spectrum of security guarantees — and maintain an open economy to absorb all excess global supply. Both the Great Britain and the United States followed this model.
Writing South Asian order
If a middle power – such as India – wants to establish a regional hegemony, it would need to meet these two conditions — provide its services and be an open economy. To achieve them and emerge as the South Asian hegemon, New Delhi must take the following five steps.
First, bolster regional trade. As compared to the Asean bloc – where intra-regional trade accounts for about 23 per cent of the total trade – intra-regional trade “accounts for barely 5 per cent of South Asia’s trade”, according to the World Bank. So, India should unilaterally lower tariffs and non-tariff trade barriers for all its neighbours – even if they don’t reciprocate. Whether we like it or not, keeping your market open is the only way to build a hegemony.
Now, to make such a major trade policy more politically feasible, the agreement should have exceptions written into it. Don’t make it too complicated, and write in some exemptions for poorer states such as Bihar and Uttar Pradesh. Thus, by design, there will be more trade facilitation between Maharashtra and Gujarat with Bangladesh and Sri Lanka.
Second, India will be required to provide various global public goods to its neighbours such as manning all border check posts and patrolling the seas and inland waterways. More importantly, New Delhi will have to help develop a fair regulatory apparatus to manage South Asian projects, trade and investment disputes, and other issues as they might emerge. The organisation tasked to achieve this must be self-regulatory with all the necessary powers to enforce the various provisions of the agreements.
Third, a lot of India’s neighbourhood connectivity projects – from the India–Myanmar–Thailand Trilateral Highway to the Kaladan Multi Modal Transport Project – have moved at a snail’s pace because of lack of funds. India must launch a global infrastructure fund that raises money for all regional infrastructure projects, and its investors could be the various sovereign wealth funds across the world. New Delhi should not only provide the necessary financial guarantee but also adopt realistic deadlines.
Fourth, New Delhi could further extend some of its domestic programmes to the neighbourhood. For instance, the UDAAN scheme, which aims to develop regional airports in India, can be extended to cities in the neighbourhood. Delhi should not just give them loans to develop airports – but the Airport Authority of India can launch projects in these countries with revenue-sharing contracts in place. Such domestic initiatives in the realm of waterways, energy, and digital connectivity can also be extended to the neighbourhood.
Fifth, for all of the above-mentioned proposals to succeed, New Delhi would require a fundamental administrative reform. It needs to dump all notions of ministerial coordination and create a separate ‘neighbourhood integration ministry’. This ministry should have complete jurisdiction over any matter pertaining to connectivity, trade, and commerce in the neighbourhood, thereby effectively leaving the commerce, railways, or power ministry with no real veto.
Views are personal.