A New ‘Washington Consensus’ : ‘Indo–Pacific’ and India’s Emerging Role

The geopolitical construct of “Indo–Pacific” has gained considerable significance in international relations recently. Scholars, policymakers and think tanks across the world argue that the locale of Asia–Pacific has been substituted more realistically by an appropriate category encompassing two oceanic political and strategic heritages of both the Indian Ocean and the Pacific Ocean. Leaders and policymakers from Japan, Australia, the United States (US), to India and Indonesia have frequently deployed “Indo–Pacific” in their speeches, statements and writings. However, the construct of the Indo–Pacific has a much wider meaning and implication today against the background of the changing US strategy in the region with a view to containing China as a rising power, both economically and militarily.

The US President Donald Trump and Indian Prime Minister Narendra Modi enunciated this construct within the framework of their countries’ strategic and economic interests. While Trump has been more explicit in his position on the potentials and challenges of the region, Modi talked about “strategic autonomy” and “free, open, prosperous and inclusive Indo–Pacific Region” at the Shangri-La Dialogue in Singapore (MEA 2018a). However, just before the commencement of the Shangri-La Dialogue, it may be noted, Washington had rechristened its military command in charge of the Asia–Pacific region from the “Pacific Command” to the “Indo–Pacific Command.”

The renaming was done in a function where America’s South Korean ambassador, Admiral Harris, charged that China was seeking “hegemony in Asia.” He also warned that Russia should be watched, calling it a “spoiler.” The US Secretary of Defense James Mattis was even more categorical, saying that the US would continue its naval activities in the South China Sea aimed at challenging China’s territorial ambitions (Sputnik 2018). Plausibly, the American strategy in the Indo–Pacific is to contain China and co-opt India, both economically and militarily. This strategy obviously stemmed from Washington’s long-term fear about the “rise” of Asia and the decline of American power.

Revisiting Washington Consensus

The “Washington Consensus,” as it has been known for more than a quarter century, unfolded an array of free market economic policies enunciated and reinforced by Washington-based institutions and agencies, as popularised by John Williamson. In a paper “What Washington Means by Policy Reform,” Williamson said that the Washington, as he referred to in his paper,

is both the political Washington of Congress and senior members of the administration and the technocratic Washington of the international financial institutions, the economic agencies of the US government, the Federal Reserve Board, and the think tanks. (Williamson 2004, 1990)

He brought out a set of reforms that dealt with a broad agenda of fiscal discipline, reordering public expenditure priorities, tax reform, liberalising interest rates, a competitive exchange rate, trade liberalisation, liberalisation of inward foreign direct investment, privatisation, deregulation, and property rights. Williamson, in fact, reflected on the emerging Washington Consensus on what the global South countries “should do” (Williamson 2004).

Furthermore, he argued that “lagging countries should catch up with the policy reforms on my list,” pointing to the fact that the East Asian countries “had broadly followed those policies,” and that it would be “more natural to attribute the fast growth of the East Asian newly industrialised countries to what they had in common, such as fiscal prudence, high savings rates, work ethic, competitive exchange rates” (Williamson 2004). The term “Washington Consensus” became popular after 1991 even as the world system moved broadly towards an intensive market-driven order of international exchanges, especially after the formation of the World Trade Organization (WTO) in 1995. Ever since the formation of the WTO, the countries in the global South were compelled to follow the Washington Consensus on reforms and restructuring, and thereby accommodated themselves within a neo-liberal economic framework.

However, over the years, critics have pointed out that this “consensus” only put on ruthless conditions on the global South countries. The East Asian crisis in the late 1990s and the global recession of 2008–09 were further reminders that increased deregulation would only result in financial instability that would spell disaster for both global North and global South economies. Meanwhile, what agitated the minds of the Washington Consensus experts was obviously the “peaceful rise” of China notwithstanding the setbacks in the world economy. Containing China, economically, could hardly be a feasible project for them. Moreover, there were apprehensions in place with regards to the decline of the US power and the rise of China. For instance, Kevin Brown (2008) argued that the US entered the 21st century with its losing of hegemony in international relations. He also pointed out that the “US power on the world stage as a whole has been challenged due to the rise of other powers namely China and India” (Brown 2008; Seethi 2014: 69–70).

The scenario, thus, called for revisiting the Washington Consensus based on certain strategic calculations of the emerging challenges from China. This obviously called for a new strategic engagement with countries across the Asia–Pacific region by making them “aware” of the threat from China. The new Washington Consensus inevitably involves the role of Pentagon (US Department of Defense) alongside the other agencies of the “consensus” that John Williamson (1990) had mentioned in his seminal paper in 1989.

This was what the US President Obama began to emphasise in his speeches and statements on the Asia–Pacific region during his tenure, and what his successor, Trump, tried to reorient (semantically as Indo–Pacific) in the emerging national security strategy. President Obama earlier said that the US would “have new opportunities to train with other allies and partners, from the Pacific to the Indian Ocean.” Underlining “America’s enhanced presence across Southeast Asia,” Obama pointed out that the US would have partnership with a large number of countries in the region, including India, which “looks east” and “plays a larger role as an Asian power.” He declared that in “the Asia Pacific in the 21st century, the United States of America is all in” (White House 2011).

A White House fact sheet on Obama’s policy later on underlined the rising engagements of the administration which reflected “the growing importance of the region to US national interests” and its commitment to advancing a “broader regional strategy, known as the Rebalance.” The region, having “nearly half of the earth’s population, one-third of global GDP, and some of the world’s most capable militaries, [is] increasingly the world’s political and economic center of gravity” (White House 2015).

With the change of administration in the White House, the US strategy in the region has undergone profound changes. The Trump administration now has a different orientation of issues in the region and it has been trying to coalesce economic and strategic issues with a view to containing China in a broader framework of flexible engagements with countries like India. The “new” Washington Consensus, thus, entails a carrot-and-stick policy enunciated by the Trump administration through the involvement of the Pentagon, US Treasury and the Bretton Woods institutions.

‘Peaceful Rise’ of Asia?

Almost a decade ago, when I joined the deliberations of the Mahatma Gandhi–Daisaku Ikeda Peace Research Conference at the National University of Singapore (NUS), Kishore Mahbubani had already shot into fame with his seminal thesis on the “rise” of Asia. A former diplomat of Singapore and Dean of the Lee Kuan Yew School of Public Policy at the NUS, Mahbubani’s (2008) book The New Asian Hemisphere: The Irresistible Shift of Global Power to the East became a sensation then. Many scholars at the Gandhi–Ikeda Conference picked up Mahbubani’s arguments across the table, both formally and informally, to ponder over the “rise of China and India,” although I was sceptical about India’s potential for several reasons (Seethi 2009).

Calling 21st century as the “Asian century,” Mahbubani had put the thesis across that the centre of gravity of power in international relations was shifting from the “West” (consisting of North America, Australia, New Zealand and the European Union) to the “East” (including China, India, Japan, the Islamic World, and the Association of Southeast Asian Nations [ASEAN). Marshalling facts and figures, he said that the West’s domination of the world system was declining and that the East was undergoing a great transformation, with India and China poised to become powerful economies. Mahbubani pointed out that Asia was set to restore its domination in the world which it lost about 200 years ago. He also posed a major question as to whether the West would be willing to accommodate itself to this reality of Asia “emerging” with its fast-growing economies. Mahbubani was apparently sceptical about it precisely because of the West’s reluctance to give up its global hegemony (Mahbubani 2008).

However, about a decade before Mahbubani had talked about this phenomenon, Immanuel Wallerstein (1991) had written about this “shift” of global economy extensively. In his keynote address at a symposium held in Meiji Gakuin University, Tokyo, in January 1997, Wallerstein tried to explain the rise of East Asia within the “fundamental contradictions of the capitalist system” expressed through the “systemic process by a series of cyclical rhythms” (Kondratieff cycles). He argued that the “cyclical rhythms resulted in regular slow-moving but significant geographical shifts in the loci of accumulation and power.” Within this matrix, Wallerstein sought to analyse the rise of East Asia which occurred during a Kondratieff B-phase, a period that was also the beginning of the decline (or B-phase) of US hegemony.” The “immediate impact of the Kondratieff B-phase was felt most sharply in the most defenseless areas,” but “one zone that substantially escaped from the negative impact was East Asia.”

He pointed out that there were two possible scenarios for the future. The world system might continue more or less as before and enter into another set of cyclical changes. Or the world system would have “reached a point of crisis” and therefore would “see drastic structural change, an explosion or an implosion” (Wallerstein 1997; Hopkins et al 1995). Wallerstein had argued elsewhere that a new cyclical phase would begin, sooner or later, and there would be an acute competition between the US and other leading capitalist countries (Wallerstein 1991).

The forewarning of Wallerstein had come true with the global financial crisis of 2008 and its pervasive effect on different regions across the world, including the European Union. Perhaps, the only region that has not been hit hard with the global meltdown is East Asia (including China and some of the countries in South East Asia). It is this “richness” of East Asia—with China emerging to overtake the global players—that worries Trump and his colleagues. Moreover, China’s Belt and Road Initiative across the South, Central and South East Asian terrain, alongside its South China Sea policy, became a major challenge to the Trump administration. Under these circumstances, it was natural that Trump was not willing to undertake any additional responsibility in the Asia–Pacific by perpetuating the US’s deficit-driven trade and its domestic impact.

American Spin on Trade Policy

It may be noted that President Trump withdrew the US from the Trans-Pacific Partnership (TPP) on his first day in office. This obviously reflected a major spin for the US on trade policy which he said sought “to create fair and economically beneficial trade deals that serve their interests.” Trump further said that “it is the intention of my administration to deal directly with individual countries on a one-on-one (or bilateral) basis in negotiating future trade deals” (White House 2017a). “Great thing for the American worker, what we just did,” he told the media after signing. During his election campaign, Trump said, “The Trans-Pacific Partnership is another disaster done and pushed by special interests who want to rape our country, just a continuing rape of our country” (Popken 2017). He also reminded everyone that he had decided to pull out from the TPP with a view to creating “an incentive for our trading partners to diversify, to look for their own way, to have conversations and negotiations in which we will not be participants” (Solís 2017).

After Trump withdrew from the deal, the other members of TPP moved ahead, without the US, and brought forth a new pact named the Comprehensive and Progressive Agreement for TPP (CPTPP) on 8 March 2018 in Santiago, Chile (DFAT 2018). However, after a year, President Trump said in a social media post that he was open to returning to the TPP, but only if he could get a “substantially better” deal than done by his predecessor. Many observers criticised him for the withdrawal from the TPP which would have become the world’s largest free trade zone by joining the Pacific Rim countries that collectively would generate nearly 40% of global economic output. But Trump moved against the agreement, making it a major challenge for his “America First” doctrine. Although Australia, Japan and New Zealand welcomed Trump’s interest for renegotiated TPP, senior policymakers of these countries warned that they would resist any renegotiation of the deal. The guarded response from allies in Asia indicated that it would be a challenge to narrow down the differences between the members of the TPP and the US (Financial Times 2018).

Even as Trump has been settled to continue his TPP policy, the US state apparatuses seemed to be determined to recast Washington’s strategic interests in the Pacific Rim by reformulating the geopolitical layout inherited from the Obama administration (the construct of “rebalancing”). The “rebalance”—initially described as a “pivot”—was expected to mean that Washington would play an activist role in the “Asia–Pacific” region in the future, strengthening diplomatic ties, promoting a regional free trade agreement, and bolstering military and strategic relations with many Asian clients (White House 2014). However, during the historic trip by President Trump to the region in November 2017, he introduced the strategic concept of the “free and open Indo–Pacific” (White House 2017b), a cleverly enunciated concept to offset the Obama formulation. Its politico-security implications have been further documented by the Trump administration.

Washington’s apprehensions about the key players in the region were clearly enunciated in the document “National Security Strategy of the United States, December 2017” (USNSS, 2017). The USNSS 2017 is more explicit in its reference to Indo–Pacific:

China and Russia want to shape a world antithetical to US values and interests. China seeks to displace the United States in the Indo–Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor. Russia seeks to restore its great power status and establish spheres of influence near its borders … Contrary to our hopes, China expanded its power at the expense of the sovereignty of others … It is building the most capable and well-funded military in the world … Russia aims to weaken US influence in the world and divide us from our allies and partners … (and it) is investing in new military capabilities, including nuclear systems that remain the most significant existential threat to the United States. (White House 2017d: 25)

According to the USNSS, 2017,

China is using economic inducements and penalties, influence operations, and implied military threats to persuade other states to heed its political and security agenda. China’s infrastructure investments and trade strategies reinforce its geopolitical aspirations. Its efforts to build and militarize outposts in the South China Sea endanger the free flow of trade, threaten the sovereignty of other nations, and undermine regional stability. China has mounted a rapid military modernization campaign designed to limit US access to the region and provide China a freer hand there. China presents its ambitions as mutually beneficial, but Chinese dominance risks diminishing the sovereignty of many states in the Indo–Pacific. States throughout the region are calling for sustained US leadership in a collective response that upholds a regional order respectful of sovereignty and independence. (White House 2017d)

The USNSS, 2017 stated that the American allies “are critical to responding to mutual threats … preserving our mutual interests in the Indo–Pacific region.” Its alliance and friendship with South Korea remains “stronger than ever.” It supports “the strong leadership role of our critical ally, Japan.” Australia “continues to reinforce economic and security arrangements” that support the US’s shared interests across the region. New Zealand will remain “a key US partner.” The US also acknowledged “India’s emergence as a leading global power and stronger strategic and defense partner.” It says,

We will expand our defense and security cooperation with India, a Major Defense Partner of the United States, and support India’s growing relationships throughout the region. The US also sought “to increase quadrilateral cooperation with Japan, Australia, and India.

The USNSS, 2017 also underlined that “the Association of Southeast Asian Nations (ASEAN) and Asia–Pacific Economic Cooperation (APEC) remain centerpieces of the Indo–Pacific’s regional architecture and platforms for promoting an order based on freedom” (White House 2017d: 45–46). It further warned that the US “will maintain a forward military presence capable of deterring and, if necessary, defeating any adversary.” Moreover, it would strengthen its “long-standing military relationships and encourage the development of a strong defense network with our allies and partners” (White House 2017d).

Important Implications

Thus, Washington’s aim to promote “Indo–Pacific” as a new geopolitical construct has obvious strategic implications. India is undeniably a key factor in this emerging schematic reordering of the region. Months before Trump’s visit to the region, Prime Minister Modi had indicated this prospective strategic alliance. For example, during his visit to the US in June 2017, he said that both India and the US “are committed to such a bilateral architecture that will take our strategic partnership to new heights.” According to Modi, “maintaining peace, stability and happiness in the Indo–Pacific region is the primary objective of our strategic cooperation.” Modi said that India “will continue to work with the US in this region. Our growing cooperation in the area of defence and security is extremely important in the context of security challenges” (MEA 2017a).

Three months after the USNSS, 2017 came out, the Trump administration further underlined the role of India in the emerging US strategy in the Indo–Pacific. In a special briefing on 2 April 2018, Alex N Wong, the Deputy Assistant Secretary, Bureau of East Asian and Pacific Affairs said that the term

Indo–Pacific acknowledges the historical reality and the current-day reality that South Asia, and in particular India, plays a key role in the Pacific and in East Asia and in Southeast Asia. That’s been true for thousands of years and it’s true today.

It is “in our interest, the US interest, as well as the interests of the region, that India play an increasingly weighty role in the region. India is a nation that is invested in a free and open order. It is a democracy. It is a nation that can bookend and anchor the free and open order in the Indo–Pacific region, and it’s our policy to ensure that India does play that role, does become over time a more influential player in the region.”

“India for sure has the capability and potential to play a more weighty role. But the role is on all fronts, whether it’s security, economic and diplomatic” (DoS 2018).

Wong further noted that

It’s not just India that is pursuing greater engagement with East Asia and Southeast Asia. There are a number of crisscrossing strategies throughout the region. So if you look at India’s Act East Policy, if you look at South Korea’s New Southern Policy, if you look at Japan’s own Free and Open Indo–Pacific Strategy, if you look at Australia’s Foreign Policy White Paper, if you look at Taiwan’s new Southbound Policy, these partners in the region are all seeking to increase political, security, and economic ties, particularly with the ASEAN states. And that’s in our interest. If we can have these crosscutting relationships that form a very strong fabric devoted to a rules-based free and open order, that can only strengthen the prosperity of the region, strengthen the fabric of stability in the region, and that’s something that we support. (DoS 2018)

The strategic dimension of the “free and open Indo–Pacific Strategy” has also been highlighted by Wong. He said that at the international level, it implies that “the nations of the Indo–Pacific to be free from coercion, that they can pursue in a sovereign manner the paths they choose in the region.” At the national level, the US “wants the societies of the various Indo–Pacific countries to become progressively more free—free in terms of good governance, in terms of fundamental rights, in terms of transparency and anti-corruption.” By “open, we [meaning the US administration] first and foremost mean open sea lines of communication and open airways.” These open sea lines of communication are “the lifeblood of the region.”

And if you look at world trade, with 50 percent of trade going through the Indo–Pacific along the sea routes, particularly through the South China Sea, open sea lanes and open airways in the Indo–Pacific are increasingly vital and important to the world. (DoS 2018)

Wong also brought to light the economic objectives of the US’s Indo–Pacific strategy:

The United States for decades has supported free, fair, and reciprocal trade. … And if you look specifically at the Indo–Pacific, the two-way trade every year with the region is $1.4 trillion. US foreign direct investment in the region is $860 billion a year. And both those numbers are going up. But when you talk about free, fair, and reciprocal trade, there are two parts to that. Number one, there is setting the rules of the road of free trade for trade agreements—if you’re working on a bilateral basis to lower trade barriers and working through organisations like APEC to reform economies in the region so that they are more open to trade and investment. So you have to set the rules of the road. But number two, you have to enforce the rules of free trade. You have to ensure that nations cannot abuse the rules, cannot force technology transfer, cannot prize their national champions, can’t steal intellectual property. If you don’t do this, if you don’t enforce the rules of free trade, what ends up happening is that over time, the free, fair, and reciprocal trading regime is weakened, and that’s to the detriment not just of the United States’s prosperity but to the prosperity of the region and the world as a whole. (DoS 2018)

At the Shangri-La Dialogue, what Modi said was nothing but a reiteration of a new Washington Consensus on the Indo–Pacific region. Modi’s support for a “free, open, prosperous and inclusive Indo–Pacific Region” and “common commitment, based on shared values and principles, to promote a rules-based order in the Indo–Pacific” (MEA 2018a) are all replications of the White House–Pentagon-State Department “briefs” on the matter. Washington’s renaming of its “Pacific Command” into “Indo–Pacific Command” suggests Pentagon’s strategic hankering for hegemony in the Indian Ocean. According to Tetsuo Kotani (2018), a major aim of Japan’s strategy is “a quad among Japan, India, Australia and the US, or the democratic security diamond.” Kotani noted that Shinzo Abe and Modi had agreed “to seek interaction between Japan’s Indo–Pacific strategy and India’s Act East policy. This assumes considerable strategic importance given New Delhi’s apprehensions about the Belt and Road Initiative, the China–Pakistan economic corridor project and China’s port development in countries like Sri Lanka, Bangladesh, and Myanmar. According to Kotani, the Malabar naval exercise among India, the US and Japan in the Bay of Bengal in July 2017 showed “the participants’ resolve to defend the free and open Indo–Pacific” (Kotani 2018). The American Council on Foreign Relations expert Alyssa Ayres says that the Trump administration has recast the term “Indo–Pacific” to represent “its larger strategic area of interest across the pan-Asian region. Fully realising this strategy’s potential will require reconciling differences over the boundaries of the Indo–Pacific and what can and should be done across this enormous geography” (Ayres 2018).

India’s ‘Act East’ Stance

It is in the background of an evolving strategic milieu in the Indo–Pacific region that a kind of intense competition, if not rivalry, is set to begin, between India and China in the areas of both security and trade. India sees this as an opportunity in its global bargains and Prime Minister Narendra Modi, thus, tried to reorient New Delhi’s Look East policy as Act East policy with a view to strengthening India’s engagements in the Indo–Pacific region. The process initiated by him in 2014 brought in major partnership ties with ASEAN, South Korea, Japan, and Australia which signalled a proactive role of India in the region (MEA 2017b). There has been a growing trajectory of trade between India and ASEAN, on the one hand, and India and other East Asian countries, on the other.

India also faces challenges from China in its South China policy, particularly in engaging Vietnam. China sees India’s Vietnam policy as an attempt to offset Beijing’s influence in the region. A Chinese scholar wrote that

Vietnam is a springboard for Indian naval forces to expand influence from the Indian Ocean to the West Pacific. India has also helped Vietnam build military capabilities. New Delhi is hosting the biennial, eight-day exercise codenamed ‘Milan’ on the Andaman and Nicobar Islands in the eastern Indian Ocean … where Vietnam is one of 23 participating nations. Containing China in strategy and security is the driving force of India–Vietnam ties. Economic cooperation between the two states also carries strategic motives. In 2013, India’s ONGC Videsh signed an agreement with Petro Vietnam to explore and develop oil and natural gas fields in the disputed areas in the South China Sea. (Zongyi 2018)

In another context, China indicated that if New Delhi “treats its enhancement of military relations with Vietnam as a strategic arrangement or even revenge against Beijing, it will only create disturbances in the region and Beijing will not ‘sit with its arms crossed,’” reacting to a report that India would sell surface-to-air Akash missiles to Hanoi (Economic Times 2018). The responses of Chinese media and its think tanks thus create a conducive situation for Indian strategic community to beef up its perceptions of threat. In sum, the strategic positions of India and the US are thus not at variance given their conceptualisation and engagements on the Indo–Pacific. Recent trends in India’s relations with China and Russia would have given an impression that New Delhi is rather maintaining “strategic autonomy” in dealing with them. But the “autonomy” that India enjoys and is seeking to sustain is perfectly within the logic of the security scenario set out by Washington. India is all set to further its Act East policy with a view to cashing in on the “prosperous East.”

Obviously, the strategic autonomy is enunciated with a double mission. First, to strengthen economic and military ties with the countries in the ASEAN region and beyond, including South Korea, Japan, and Australia; and, second, to explore the ties with Russia and China for further bargain with the West. This autonomy has no more and no less of an agenda. For the US, however, this new geostrategic space of East Asia has a long-term “investment potential” also. It has, thus, something to do with the long-held view that East Asia is the only
region in the world system that has relatively escaped the ill-effects of the global financial meltdown, and China (alongside India) is likely to overtake the US and other Western powers. Thus, Washington has also a double mission: first, to restructure the geopolitics of the “East” to suit the American strategic interests and second, to help facilitate the “economic containment” of China and other potential powers from being the front-runners of the global economy, as projected by many. Thus, the geopolitics of the Indo–Pacific has much to do with the US’s long-term strategy to contain the potential/emerging powers of Asia and thereby seeking to ensure American hegemony in the world system.


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