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The Latin Americanization Of Asia? – Analysis

Japan's Prime Minister Shinzo Abe and US President Donald Trump. Credit: White House video screenshot.Japan's Prime Minister Shinzo Abe and US President Donald Trump. Credit: White House video screenshot.

By Rajesh Rajagopalan

As US President Donald Trump slowly puts his administration in place, there is perceptible relief that some of his most extreme rhetoric about America’s global commitments are being reassessed and retuned.  At his summit meeting with Japan’s Prime Minister Shinzo Abe, he reiterated Washington’s “unwavering” commitment to defend Japan “through the full range of US military capabilities, both nuclear and conventional.” This will no doubt ease some of the concerns in Tokyo, and in the capitals of other US allies and partners in Asia, about US commitment to staying engaged in the region and balancing China.  Of course, it is not just the US’s Asian partners that are worried: the latest Munich Security Report also worries about the consequence of Washington’s more nationalistic foreign policy on the entire edifice of the liberal international order.

Still, Asian powers will have to seriously consider the consequences of an eventual US withdrawal from the region and their strategic options if such an eventuality were to come to pass.  Though President Trump has been the most direct in questioning the value of US defence commitments to the region, Washington’s weariness about these commitments go back to the Obama administration, and arguably even to the George W. Bush administration.  That the Obama administration felt the need to pivot back (or rebalance) to Asia is a good indicator of this faltering strategic attention.  Even if the Trump administration engages fully, in a manner that satisfies its Asian partners, the fear of abandonment will continue to lurk just beneath the surface.

If such a US withdrawal were to take place, Asian powers face some unpalatable choices.  Asia is already heavily unbalanced as a consequence of China’s dramatic economic growth.  As its growth continues to outpace other Asian powers (save, possibly, India), the imbalance of power in Asia might very well come close to resembling the imbalance of power in the Western Hemisphere, where American dominance places even the most powerful states in the region at a serious disadvantage.  It is important to note that Asia is not as unbalanced as the Western Hemisphere yet, and it is possible that it will never become as unbalanced.  But Asian powers that are worried about China’s power and behaviour should consider the strategic consequences of such imbalance.  Looking at the international political consequence of American hegemony in the Western Hemisphere may hold some clues.

The GDP (Gross Domestic Product) is a crude measure of national wealth (and hence, power) but it provides some indication of the relative capacity of states.  By this measure, according to World Bank, the US, with a GDP of slightly over US $ 18 trillion, accounts for 72% of the total GDP of the Western Hemisphere [This and all data that follows are from the World Bank, accessed on February 11, 2017, for 2015 and are valued in current US $].  The next biggest economy is Brazil, at a measly US $ 1.8 trillion.  Only three countries, other than the US, even have trillion dollar economies (in addition to Brazil, these are Canada and Mexico).

This gross imbalance has political consequences, as Latin America’s relations with the US and rest of the world clearly illustrates.  There is little that these countries can do to counter American power in the region.  Balancing against the US is not even a choice: Latin American powers are grossly outmatched even if they ally.  In addition, American regional dominance makes pursuing a balance with extra-regional powers a risky endeavour.  This is why no major Latin American power since 1945 seriously even considered such a strategy, despite the fact that much of the rest of the third world was busy playing the US off against the Soviet Union.  The US may no longer formally subscribe to the Monroe doctrine, but its hegemony over the region remains undiminished.

China’s dominance over Asia is as yet not comparable to that of the US over the Western Hemisphere, but it is still impressive.  With a GDP of slightly over US $ 11 trillion, China accounts for about 45% of the total GDP of the Indo-Pacific (East Asia & Pacific plus South Asia).  This is more than two-and-a-half times the size of Japan’s GDP (at US $ 4.4 trillion) and more than five times as large as India’s (at US $ 2.1 trillion), the next two biggest economies in Asia.  Moreover, at 2015 growth rates, China’s incremental annual growth will be almost thrice as much (and about US $ 500 billion more) as the next four Asian economies, combined.  In other words, each year China is adding about half a trillion dollars more to its wealth than the next four major Asian powers put together add to theirs.

Of course, China’s growth rates are already slowing down.  But unless there is a dramatic decline in its growth rate to about 2.5%, other Asian powers will not even be able to match China’s incremental annual growth, let alone begin to catch up.  No one expects such a dramatic decline in China’s growth rate.  Alternatively, the next four Asian economies will have to grow at an average annual rate of 8.5% between themselves to match China’s incremental annual growth rate.  That is even more unlikely.  Consequently, China should be expected to continue to put further distance between itself and the other major Asian powers for a considerable number of years.  It is possible that China might not reach the level of dominance that the US has in its region, but in the absence of any countervailing external power, its dominance over Asia is already established and will only deepen.

In addition, the geography of the region gives China greater capacity to put pressure on the rest of Asia.  The US borders only Canada and Mexico; it is physically much farther away from the rest of Latin America than China is from the rest of Asia.  American military and economic dominance meant that this was not a huge problem for the US.  But by the same token, China’s proximity to the other powers in Asia (save, possibly, Australia) gives it greater capacity to bring its weight to bear on its neighbours even if its economic and military dominance in Asia is not as total as that of the US in the Western Hemisphere.  Further, Asian powers that worry about China such as Japan, Australia and India are scattered far from each other, and are unlikely to be able to come to each other’s assistance, making them much more vulnerable to China’s pressure.

Such a heavily skewed Asian balance will have consequences that are similar to that in Latin America. This imbalance will make it difficult for Asian powers to resist China’s pressure.  If China plays its cards smartly, it will be able to make an offer that other Asian powers will have difficulty refusing: on the one hand, a profitable partnership with China (even if mostly on China’s terms) or on the other hand, an expensive and probably hopeless resistance to China.  Without credible regional or external partners, it is difficult to see how other Asian powers will resist the temptations to bandwagon with rather than balance against China.  In essence, the Japan, India and Australia could become the Asian versions of Brazil, Mexico or Argentina: strong states that are nevertheless forced to live under hegemony, to walk under the huge legs of the Colossus.

It is true that brute dominance by itself need not ensure compliance.  South Asia is even more unbalanced than the Western Hemisphere, with India accounting for about 78% of the total GDP of the region. Pakistan’s GDP is less than 13% of India’s.  Nevertheless, Pakistan has been successful in countering India, though at great cost to itself.  But an important part of the explanation for Pakistan’s capacity to balance India is the existence of external powers such as the US and particularly China, which were able to both bolster Pakistan and deter India.  No such external balancer will be available to the Asian powers to balance China if the US withdraws because there is no one else that has the capacity to do so.

A strong regional alliance that brings together the other major powers to contain China may help, but such a regional alignment will be difficult to establish, especially because the regional powers have little experience working together, with the possible limited exception of Australia and Japan.  It is unlikely, for example, that South Korea will join such an alignment.  But India, Japan and Australia have already started preliminary discussions along these lines, which is an indication of the pressure they feel.

The gross and growing imbalance of power will require that Asian powers worried about China do all they can to ensure that the US remains committed to the region.  But this is ultimately a decision that has to be made in the context of American domestic politics and economic capacity, and not something over which Asian powers have much say.  However, Asian powers can begin to develop their own capacities, and help strengthen each other’s capacities through strategic partnerships.  Such preparations will have another possible positive effect: they might even reduce the US incentive to withdraw.  But if the day should come when the US decides it is either unwilling or unable to put its thumb on the Asia balance, regional partnerships may be the only thing that prevents the Latin Americanization of Asia.


About the Author

Observer Research Foundation
Observer Research Foundation
ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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