Can the Asia Africa Growth Corridor become a reality?

While the Chinese backed Belt and Road Initiative (BRI) gathers steam and the estimates of its total spend spiral into the billions China’s primary geopolitical rivals in Asia; India and Japan (who have purposely opted out of the BRI) have been left floundering in the wake of China’s bold Eurasian ambitions.

But change is afoot India and Japan have been reinvigorating their own economic diplomacy across Asia and Africa and have dreamt up a direct response to the Belt and Road initiative, in the form of the Asia Africa Growth Corridor (AAGC) which also has an particular emphasis on developing infrastructure, especially port infrastructure and shipping across the region.

Japan has pledged US$100 billion over five years for new infrastructure and development projects and while India may not have as much hard cash, it does have a newly active foreign policy and Indian companies are increasingly active in Africa.

The AAGC or Freedom Corridor is a high level plan which builds on existing initiatives such as India’s Look East policy and Japan’s Expanded Plan for Quality Infrastructure and has four pillars namely: infrastructure, development projects, skills and capacity building. In theory the initiative could marry Japan’s wealth and expertise, India’s outward looking companies and government and help transform the the Indo-Pacific region.

But right now the AAGC is just a plan at best and it is not clear how this might actually be executed, in comparison the BRI has hundreds of projects to its name.

Below I look at five projects which are examples of Indo-Japanese cooperation (or potential cooperation) which could be the vanguard of a new development and infrastructure initiative that could one day be spoken of as a rival to BRI.

Chabahar

Chabahar in Iran: this development was originally an Indo-Iranian effort to develop this port so it could efficiently transport both goods and gas from Central Asia and Afghanistan to India while avoiding its nemesis Pakistan, now Japan has pledged to pitch in with the additional investment needed for two new terminals to be built at the port, for it also shares an interest in secure energy supplies.

The subtext of the Chabahar development is that China is constructing a new port in Gwadar, Pakistan just 75 km down the coast which makes it a major Chinese transport hub (and some allege a potential naval base), allowing it one day to bypass the Straits of Malacca by shipping goods through Pakistan.

Kerawalapitiya

China has been a heavy backer of projects in Sri Lanka notably the ill-fated Hambantota development which produced an unwanted international airport and has helped fuel the perception that many BRI projects are poorly conceived. Many believe this has created an opening for other nations, Indian firm Petronet and Japanese firms Mitsubishi and Sojitz Corporation look set to build a LNG terminal in Kerawalapitiya on the west of the Island to help the country with its energy needs.

Of course Indian and Japanese firms are not necessarily direct or indirect agents of the state, but they will be much more willing to take their government’s side in any future disputes or political wrangling.

Dawei

The development of Dawei in Myanmar into a special economic zone (SEZ) has been a potential project for many years now, with various different parties involved or mooted.

Myanmar has been keen to build the zone, but many locals have objected fearing, probably correctly, that it will not benefit them. The Thai government backed the scheme, but in 2015 the whole plan was put on hold due to a lack of funding, but now there are signs the Japanese – via their JICA development agency will take up the reins and there are also unconfirmed rumours India could also get involved.

Roads in North East India

India’s North East region which borders Bhutan, Bangladesh and of course China is relatively poor and remote but strategically important. Japan is funding the improvement of highway 40 in the region which should help stimulate development and mirrors Chinese efforts across Eurasia and beyond which sees improving transport connections as a first step towards economic development.

The Quad

Both India and Japan have been courting countries in the Indo-Pacific region in a bid to improve diplomatic relations and to prevent Chinese influence becoming overwhelming. In security terms the development of a “Quad” comprising of Japan, India, Australia and the USA, which are all to varying degrees either democratic, western or pro-US and have created a loose alliance in order to counter Chinese influence in Asia. It could be argued that the AAGC is also designed to promote a democratic, pro Western or free market view of the world, but that is not yet clear.

For now Indo-Japanese efforts are modest or merely ideas, but this could rapidly change if AAGC gets off the drawing board, the danger is if the AAGC project is viewed as a challenge or threat to the BRI, this could one day spark deadly conflict between the Asian Powers.

 

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