Originally Published 2015-10-15 10:23:15 Published on Oct 15, 2015
Well aware of China's growing influence in the Bay of Bengal and the changing power dynamics in the Indo-Pacific region, Japan is now presenting itself as an alternative benefactor. With an eye toward Beijing, can the emergence of Japan in this region prove to play a balancing role?
China in Japan's South Asia policy

Japan is poised to build a seaport, alongside four coal fired power plants of 600 MW each, in Matarbari, Bangladesh, cutting across a long-standing Chinese offer to build deep-water port facilities at Sonadia, only 25 kilometres away from Matarbari.

Dhaka's decision to allocate the project to Japan is just one among the many projects that the Japanese have taken up in the Bay of Bengal. Given the growing strategic and economic importance of the Bay, this region is already witnessing a scramble by major powers such as China, India and the US. Japan, well aware of China's growing influence in the Bay and the changing power dynamics in the Indo-Pacific region, is now presenting itself as an alternative benefactor. With an eye toward Beijing, can the emergence of Japan in this region prove to play a balancing role?

South Asia had long been ignored by Japan, whose polices during the latter part of the twentieth century, focussed more towards North East Asian countries such as China and South Korea, and the ASEAN states. Though the Japanese government has been providing Overseas Development Assistance (ODA) in the form of grants, soft loans and technical assistance to nations in South Asia from the early 1950s, they never formed deeper economic or strategic ties.

However, with China's rise, the importance of the Bay of Bengal region for Japan cannot be overemphasised. Despite the likely resumption of its nuclear power plants, the Japanese government still looks outward to feed its growing energy demands. After the US and China, Japan is the third largest importer of oil from the Bay of Bengal, importing 4.4 million barrels per day. Additionally, the Bay of Bengal region provides the right economic climate to further enhance Abe's plan of reinvigorating Japan's economy through his policy of Abenomics. Countries such as Myanmar and Bangladesh have large populations (estimated at 60 million and 160 million), cheap labour, and potential for economic growth, making them attractive for Japan as a manufacturing investment destination and as a consumer market in the future.

Further and most importantly, the Bay of Bengal connects the Indian and the Pacific Oceans, and subsequently is home to important Sea Lanes of Communication (SLOC). Trade in goods and energy not only from South Asia, but the Middle East pass through this region in order to reach Japan. Thus it is in the national interest of Japan to protect these routes. In relation to this, the Abe administration has been taking the necessary steps in improving diplomatic relations with the surrounding littoral states as well as assisting in improving maritime security in the Malacca Straits. While none of these states will leave China in the cold for Japan, Abe has pitched Japan as a relevant counterweight to an increasingly assertive Beijing.

Given this importance, Tokyo has leaped forward in establishing deeper ties with many Bay states. Since Abe coming into power in 2012, there has been much interaction between Japan and the Bay states. In 2013, the Sri Lankan President Mahinda Rajapaksa visited Japan. In 2014, Abe visited India, and was also the first Japanese Prime Minister to visit Sri Lanka in 24 years, and Bangladesh in 14 years. Further, both the Bangladeshi Prime Minister Sheikh Hasina and Indian Prime Minister Narendra Modi also visited Japan in May and September 2014.

Japan's economic engagement in the Bay is notable. Apart from waiving a US $ 3.7 billion debt loan, Japan is also actively developing port and other infrastructure in Myanmar. A job that originally China was scheduled to do, Mitsubishi and Hitachi have secured a US $ 20million contract from Myanmar Railways to upgrade a track, built more than a century ago, from Yangon, Myanmar's commercial capital, to Mandalay.

In May 2014, the Japanese government also pledged $6 billion to Bangladesh. Prime Minister Abe announced the 'BIG-B' initiative (Bay of Bengal Industrial Growth Belt) for Bangladesh, which has emerged as a cornerstone of Japan's strategy for South Asia. The initiative would boost industrial agglomeration along the Dhaka-Chittagong-Cox's Bazar area by developing infrastructure, improving investment environment and fostering connectivity between the two countries.

The Chief Minister of Andhra Pradesh, Chandrababu Naidu, is also keen to initiate efforts to get the BIG-B project extended to his state. Visiting Tokyo in July 2015, Naidu signed a number of MoUs with companies and government agencies from Japan. The state government also promised to create a separate industrial township for Japanese companies on the Vizag - Chennai Industrial Corridor which is a part of the East Coast Economic Corridor (ECEC). The ECEC is another economic corridor, aligned with the Golden Quadrilateral Project. The Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) have committed major investments too this nearly 1,000km long east coastline, which is poised to play a critical role in India's "Act East Policy" as they will help connect India with Southeast and East Asia.

Further, Japan, Thailand and Myanmar signed a memorandum of cooperation for mutually developing the Dawei Special Economic Zone in Myanmar, which is regarded as an economic gateway linking the Indian and the Pacific Oceans. Japan is also developing a maritime connectivity between Dawei and Chennai port in South India, which is set to boost India's connectivity with ASEAN and also reduce its dependence on the Malacca strait.

In increasing its engagement with the region, Japan is an Observer member in the South Asian Association for Regional Cooperation (SAARC) group, and the Japanese government is also interested in engaging with the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) as a region.

However, a number of initiatives between China and some Bay states, and the strategic significance of Chinese control over port infrastructure in the region have the potential to greatly alter the Bay's delicate balance. Though China claims that its presence and interests in the Indian Ocean region are purely economic, this has been subject to large amounts of scrutiny and that too for good reason. The docking of a Chinese boat and a Shang-class nuclear submarine at a Sri Lankan port, the ambiguity of the extent of their presence on the Coco Islands of Myanmar, and the presence of a Chinese modern Yuan-class 335 conventional submarine at a Karachi port for one week have caused great discomfort for Tokyo, New Delhi and Washington. Therefore such cooperation between Japan and India can only further stimulate a healthy balance in the Bay.

On their part, the Chinese have wasted no time understanding the importance in binding countries in the Bay of Bengal and the Indian Ocean closer to the Chinese economy. China initiated the One Belt, One Road (OBOR) initiative with the aim of developing its landlocked western provinces and enabling them to access the markets of Southeast Asia and the Middle East. The Maritime Silk Road (MSR), which is part of the OBOR initiative has also been designed specifically by China to promote economic cooperation and connectivity. China has also added fresh momentum to the Bangladesh, China, India and Myanmar (BCIM) economic corridor, which has the potential to generate enormous economic benefits in the arena of trade, investment, energy, transport and communication.

Further, China also believes that developing its Southern Yunnan province into a bridgehead linking China's southwest with the Southeast Asian peninsula, and the South Asian Subcontinent will increase international trade flows and deliver long-term regional security. To achieve this, Beijing has built oil and gas pipelines linking its Yunnan province to Myanmar's Arakan coast in barely four years, and has more plans to build high-speed train links from Yunnan into Thailand, Myanmar and Bangladesh.

However, despite its economic endeavours into the region, China's non transparent nature, alongside its muscle flexing in the South China Sea continue to make major powers, as well as other littoral states nervous. In fact, China's defence relationships in the region are probably thinner than claimed, and it is particularly worried it might have to confront a collaborated, joint force comprising of India and its major power partners (Japan and the US) in the Indian Ocean.

On the contrary, there is growing trust and comfort in the Bay states with Japanese engagement in the region. This can be seen with the large amount of cooperation and support that Japan has succeeded in achieving, both economically as well as strategically. Initially at odds over the non permanent seat in the United Nations Security Council, Bangladesh announced that it would withdraw its application to support Japan's bid. In another step forward, Japan, which has not taken part in the Malabar Naval exercise since 2007, is has joined the US and India in the exercise this month in the Bay of Bengal.

Along these lines, Japan should continue to work at deepening ties with Bay states, such as India, Bangladesh and Myanmar. It is well known that the Bay is host to a large number of issues such as piracy and smuggling, maritime boundary disputes and is also a highly disaster prone area. Japan can further contribute effectively in other areas such as Humanitarian Assistance and Disaster Relief (HA/DR), and maritime security. Thus by not looking to contain China, Japan can still enable a balance to the Bay of Bengal.

(The writer is a Research Assistant at Observer Research Foundation, Delhi)

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