The last fortnight witnessed the enunciation of President Donald Trump’s economic and security vision for the Indo-Pacific. Last week, US Secretary of State Mike Pompeo, in a major policy speech outlining the economic pillar of the Trump administration’s Indo-Pacific strategy, allocated a sum of $113 million towards technology, energy and infrastructure initiatives in the region.

Analysts expressed disappointment with the figure, comparing it to China’s trillion-dollar investment in the Belt and Road Initiative. Others argued that this was just the beginning and that the US needed to sustain its commitment to the region in the long term. Furthermore, experts remarked that along with the money, the US ‘needs to articulate a specific strategy for US economic statecraft’. A major part of the economic strategy is a trilateral infrastructure initiative that the US has entered with Australia and Japan. Commentators were quick to point out India’s absence from the venture, given that New Delhi had earlier indicated its willingness to enhance connectivity initiatives through the framework of the Quadrilateral Security Dialogue.

This speech was followed, a few days later, with another announcement, made by Pompeo at the ASEAN Regional Forum, committing $300 million to enhance security cooperation among Indo-Pacific countries. This would be used to advance ‘shared priorities’, in the words of the Secretary of State, in spheres like ‘maritime security, humanitarian assistance and peacekeeping capabilities, and countering transnational threats.’ Projects in countries like Bangladesh, Indonesia, Mongolia, Nepal, the Pacific Islands, the Philippines, Sri Lanka, Vietnam, among others will be funded under this initiative. Analysts highlight that the initiative focuses on those countries where Chinese investment is considered problematic. It’s reported that Pompeo’s Indo-Pacific pitch to ASEAN is receiving a ‘lukewarm response’ because the general perception is that the concept of the ‘free and open Indo-Pacific’ is more beneficial to the US than to any other country.

Australian Prime Minister Malcolm Turnbull is reported to have hit the ‘reset’ button to mend ties with China, after the last few months witnessed unprecedented souring of bilateral relations due to Beijing’s increasing adventurism in the South China Sea and attempts to interfere in Australian domestic politics. Addressing the University of New South Wales in Sydney, Turnbull adopted a conciliatory tone towards the PRC and said that its rapid rise ‘need not be perceived as a threat so long as everybody played by the rules.’ He also added that Australia wouldn’t be averse on cooperating with China on projects, ‘subject to our due diligence’. While some see this speech as a ‘step change in rhetoric’, others argue that rather than symbolising a reset, ‘it consolidates a new message not only about Australia’s view of China, but about our own evolving and independent role in a contested Indo-Pacific region and an uncertain world.’

China and ASEAN have agreed on a single text to negotiate a code of conduct for the South China Sea which although considered a breakthrough, is warranting words of caution from Southeast Asian leaders who stress on the importance of ASEAN remaining ‘neutral, inclusive and open.’ It’s important to stress also that consensus on a final document is a long way away and there are several hurdles to clear. The US fears that China may try to manipulate the wording of the draft to wrest control over the contested South China Sea and may try to limit Washington’s influence in the region.

The US has granted the Strategic Trade Authorisation 1 (STA 1) status to India, making it the third Asian nation, after Japan and South Korea, to be eligible to access high-technology product sales, particularly in space and defence sectors, from the US. Significantly, India’s entry in this category is exceptional because it is yet to become a member of the Nuclear Suppliers’ Group. This announcement reflects the importance that the US attaches to its defence and security ties to India. Shortly before this decision, India was included in the list of countries being granted a waiver under the Countering American Adversaries Through Sanctions Act, due to its purchase of the s-400 air missile defence system from Russia. It’s also reported that India is set to sign COMCASA, the secure military communications pact with the US at the upcoming ‘2+2’ defence and foreign ministers’ meeting to be held in New Delhi on the 6th of September. Keeping an eye on increasing US-India closeness in relations, Moscow has proposed to sign a similar mutual logistics support agreement with New Delhi that the latter has with Washington.

Former cricketer-turned-politician, Imran Khan, became the prime minister of Pakistan as his Tehreek-e-Insaaf party won the general elections in the country last fortnight. Khan has previously been criticised for allegedly being sympathetic to the Pakistani Taliban. On assuming office, Khan expressed his wish to create harmonious relations with India, including reaching an understanding on Kashmir, the intractable conflict that has plagued the subcontinent for seven decades now. India and the world remain circumspect about any real improvements in Pakistan’s notorious support to terrorist outfits and militant factions. Khan’s biggest challenge would be to rescue the Pakistani economy which is facing a current account deficit of around $18 billion. His government is reportedly planning to seek an IMF bailout to the tune of $12 billion to mitigate the currency crisis. It’s feared that this bailout may be used to repay Chinese loans that Islamabad has accumulated to fund the multi-billion dollar China Pakistan Economic Corridor.

Australian Foreign Minister Julie Bishop visited East Timor, the first Australian leader to do so in five years, signalling the easing of diplomatic tensions over a protracted maritime boundary dispute. The discord was amicably resolved earlier this year, with Canberra agreeing to allow most of the gas from the contested Sunrise field to go to Dili. Although a few niggles remain, it’s widely believed that Bishop’s visit has begun ‘a new chapter’ in Australia’s relations with the Southeast Asian nation. Dili was the first stop for Bishop as she visited Malaysia, Singapore and Indonesia next.

Lombok Island in Indonesia suffered two major earthquakes recently with a reported 347 people dead and hundreds injured. The National Disaster Mitigation Agency faces an uphill task and has appealed for volunteers to help as several people are still trapped in the wreckage. Rescuers face problems accessing most areas due to road blockages, power outages and collapsed bridges. Thousands of people have been rendered homeless. Large numbers of tourists from Gili Islands and Bali have begun leaving amid fears that there could be another earthquake soon.

India drew up its second National Register of Citizens and has excluded four million Bangladeshi refugees living in the country since the Bangladesh war of 1971. These people, mostly Muslims, have been rendered stateless and are forced to face an uncertain future in their battle to determine their identity. The right-wing, conservative BJP government at the centre is accused of its bias against Muslims and the decision has caused a national outrage.


Significance for Australia

The announcement of the trilateral infrastructure initiative between Australia, Japan and the US is a welcome prospect for Canberra, as it builds on the consensus reached at the Manila meeting of the Quad nations last year to enhance connectivity initiatives in the region. It’s reported that the discussions on this venture took place during the ‘2+2’ defence and foreign ministers’ meeting in Washington last month.

Although the three nations are keen to distance the project from China’s BRI, veiled references to China’s mega infrastructure venture are easily decipherable in the statements announcing the initiative. Given that the details of the initiative are not yet clear, Canberra would be assessing its options and priorities carefully. India’s decision to opt out of the venture, given its initial involvement, would be disappointing to Australia. New Delhi cites its ‘emphasis on multipolarity and nonbloc security architecture’ which is emblematic of its default foreign policy position of maintaining its strategic autonomy.

US’ announcements of its economic strategy for the Indo-Pacific are positive developments for Australia, as it strengthens the foundations of a rules-based order in the region. On another note, it may be safe to assume that Canberra would be wary of the risk of ASEAN nations binding themselves in a code of conduct detrimental to their interests in the South China Sea, which would include the deterioration of American influence in the region.

The consolidation of US-India relations, on the other hand, would be viewed most favourably as Australia seeks to build closer ties with New Delhi. The two countries represent important pillars of Australia’s conception of the Indo-Pacific and are crucial for Canberra’s vision of a rules-based order in the region.

Australia has a strong track record in delivering aid relief to its neighbours, especially Indonesia, and given the tragedy in Lombok, it would be important for such efforts to come to the fore again.

Aakriti Bachhawat is a Research Intern at the Australian Strategic Policy Institute, and Research Assistant at the Griffith Asia Institute.