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South Asia’s Strategic Context: Priorities For The Next U.S. President

Insights from U.S. Ambassador Teresita C. Schaffer.

Ambassador Schaffer, as one of the U.S. State Department’s foremost experts on South Asia, your diplomatic service has spanned 30 years with posts in India, Pakistan, Bangladesh, and Sri Lanka. You have described India’s foreign policy of one of “strategic autonomy.” Please elaborate on this characterization vis-à-vis Prime Minister Narendra Modi’s leadership and in the context of the U.S. rebalance to Asia.
Two themes have dominated independent India’s foreign policy from the start: its determination to retain regional primacy and to exercise a policy that is beholden to no other country. Judging by his first year in office, Modi remains committed to both these policy drivers. He has pursued regional primacy with a tough policy toward Pakistan but a more accommodating one toward India’s other South Asian neighbors. He has made a big push for improved relations with the world’s large powers – especially for bigger economic relations. He has reached out energetically to the United States. He has also sought to expand India’s trade and investment with China, Japan, and the EU. He wants to work with all the major powers in Asia, but not get caught up in other countries’ problems with one another. In the past two decades, India and the U.S. have increasingly found that their interests in peace and prosperity in Asia push them toward similar policies. This is the key to India’s place in the U.S. rebalancing toward Asia.
What are the strategic implications of the P5+1 Iran nuclear deal for India?
India’s rapidly growing economy depends critically on energy imports. India’s largest import is crude oil; interestingly, its largest export is refined petroleum. Iran has historically been a major oil supplier for India. Iran is also a country with which India has important historical relationships, and India’s substantial Shia Muslim population makes Iran an important political touchstone. This explains India’s strong support for the P5+1 nuclear deal, and its hope that nothing will interrupt it. India needs a strong economic relationship with the United States, but it also needs to be able to expand its economic ties with Iran for both economic and political reasons. The nuclear agreement, if it goes through, will remove much of the tension between these two goals.
Foxconn – the world’s largest electronics contract manufacturer of products including Blackberry, Apple iPhone and iPads, Kindle, Playstation, Xbox One,  etc. – recently announced plans to create one million jobs and build 12 new factories in India by 2020. How does this move reflect India’s role in Asia’s regional economic competition?
What it reflects at this point is India’s hope for increasing its role in Asia’s manufacturing scene. India’s economic surge since 1990 was largely built on services, with manufacturing playing a smaller role than in the other “Asian tigers.” The Modi government has been eager to change this situation, and instituted a program called “Make in India.” The official who administered the program explained it to me as largely aimed at creating the institutional infrastructure for a big boost in manufacturing – capacity building for a better qualified industrial labor force, the policy environment that would make it easier for foreign manufacturing enterprises to invest, and so on.
This is a good approach, but the important thing is implementation. There is a built-in tension between the effort to unleash the power of the private sector and the traditional preference of the Indian bureaucracy for maintaining control. The Foxconn investment could help bring the needed transformation about.
How would you assess Sri Lanka President Maithripala Sirisena’s reforms, and what is your outlook for the country’s post-August 17 parliamentary elections?
When Maithripala Sirisena was elected president of Sri Lanka in January, he stressed constitutional change. He passed constitutional amendments that shift Sri Lanka closer to a parliamentary government and re-institute the independent commissions intended to prevent abuse of governmental power.
Prime Minister Ranil Wickremesinghe now heads the largest party in parliament following the August 17 election. He is likely to pull together a working majority including some sympathizers from within the opposing party, the Sri Lanka Freedom Party, which is Sirisena’s political home. The new government faces four major issues:
  • Economic policy: This is Wickremasinghe’s strong suit, and badly needed.
  • National reconciliation after decades of civil war: Wickremasinghe’s heart is in the right place, but he will have a tough job turning words to action. Former president Mahinda Rajapaksa, who lost the January election but is now leader of the opposition, will be quick to accuse him of selling out to foreigners and/or Tamils.
  • Political turmoil: The quest for a working majority will involve political defections. The government will need discipline and cleverness to avoid being whipsawed by a determined opposition that has nothing to lose.
  • Foreign policy: The United States and India are pleased with the results of the election. But don’t expect a Sri Lankan turn away from China. The ties between Sri Lanka and China have run deep for 65 years. The U.S. and India need to work toward a cooperative relationship with China in the island.
In advancing American leadership in Asia, what are top strategic priorities for the next U.S. president?
Asia represents the major economic opportunity for the United States, and also a major strategic challenge. China is at the heart of both. The big strategic priority is to create a network of strong U.S. relationships with the major countries of the region – India, Japan, South Korea, Australia, Indonesia, and others – that can develop side-by-side with the pragmatic ties the U.S. and all these countries want to have with China. The idea is to avoid drawing lines in the sand (or the sea) that label countries as friendly or hostile. None of the Asian countries will want to be in the “hostile to China” category – in spite of the wariness many of them feel toward their largest neighbor. Juggling the security challenge and the economic opportunity will be critical to a successful U.S. strategy. 
Mercy A. Kuo is an advisory board member of CHINADebate and was previously director of the Southeast Asia Studies and Strategic Asia Programs at the National Bureau of Asian Research. Angie O. Tang is Senior Advisor of Asia Value Advisors, a leading venture philanthropy advisory firm based in Hong Kong.


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