Sourabh Gupta

Opinion | China scores with Asean play as Trump’s America loses its way in South China Sea

US’ paltry down payment on its Indo-Pacific strategy is only matched by its faltering security commitment to Southeast Asia

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US Secretary of State Mike Pompeo and China's Foreign Minister Wang Yi shake hands before their bilateral meeting at the 51st Association of Southeast Asian Nations in Singapore. Photo: Reuters

Sourabh Gupta

Published: 6:30pm, 3 Aug 2018Updated: 6:46pm, 3 Aug 2018

On March 12, 1947, as the spectre of Soviet communism loomed over the horizon of newly liberated Europe, President Harry Truman vowed that it would be the policy of the United States to “support free people who are resisting subjugation by armed minorities or by outside pressure”. Three months after enunciating the Truman Doctrine, his secretary of state, George Marshall, launched a US$13.5 billion Economic Recovery Plan, better known as the Marshall Plan, to rebuild and revitalise war-torn Europe. The plan’s commitment totalled more than 5 per cent of the US’ 1948 GDP – about a trillion dollars in today’s value.

Seven decades on, President Donald Trump singled out China and Russia in his National Security Strategy as strategic threats to the US that are “determined to make economies less free and fair, grow their militaries, and control information and data to repress their societies and expand their influence.” Seven months later, on July 30, Trump’s Secretary of State, Michael Pompeo, unveiled a “new era in US economic commitment to the peace and prosperity in the Indo-Pacific region” and, without a trace of embarrassment, resourced it to the tune of US$113 million.

Forget the chatter, Asean-China relations are actually stable

The administration’s puny down payment towards its “Free and Open Indo-Pacific Strategy” is as short-sighted as it was predictable. The die was cast last December when Trump announced that his administration would promote an alternative development model that “shifts from a reliance on assistance based on aid and grants to approaches that attract private capital and catalyse private sector activity”.

From left, Singapore Foreign Minister Vivian Balakrishnan, Thai Foreign Minister Don Pramudwinai, Vietnamese Foreign Minister Pham Binh Minh, US Secretary of State Mike Pompeo, Malaysia Foreign Minister Saifuddin Abdullah and Laotian Foreign Minister Saleumxay Kommasith pose during the 51st Asean Foreign Ministers’ Meeting in Singapore. Photo: EPA

If private markets worked anywhere as well as Trump imagined, the Indo-Pacific region would not be the many trillion dollars short of infrastructure financing as it is today – a point acknowledged by his secretary of state in his otherwise lamentable address on July 30th. Pompeo would have been better off directing the administration’s funds to the Asia Infrastructure Investment Bank’s (AIIB) “special funds mechanism”, whereby external funds potentially can be managed by the institution, channelled into infrastructure projects, catalyse private money, yet is held separately from the institution’s shareholder equity.

Of course, an American contribution to the AIIB is not about to happen any time soon. The AIIB already boasts a lending portfolio that outstrips that of the US’ Overseas Private Investment Corporation (OPIC) and Millennium Challenge Corporation, individually, in the Indo-Pacific – despite having been in existence for a mere two-and-a-half years. Its multilaterally managed lending capacity will far outstrip anything that this or future US administrations have to offer.

The stunted economic vision of the “Free and Open Indo-Pacific Strategy” is matched by the irresolution of the Trump administration’s security commitment to its allied and non-allied defence partners in Southeast Asia.