Will the Quad's focus on vaccines, rare earths help it win friends in Asean?

The first-ever summit meeting between the leaders of India, Japan, Australia and the US - a grouping known as the Quadrilateral Security Initiative or "Quad" - resulted in two major policy decisions.

First, the four countries agreed to pool their resources to manufacture and distribute more than 1 billion doses of Covid-19 vaccine to countries in the Indo-Pacific region - with a particular focus on members of the Association of Southeast Asian Nations.

Second, they agreed to create a procurement chain to reduce China's monopoly on rare earth elements, which are critical for hi-tech industries ranging from mobile phones to radars. China currently controls more than 60 per cent of the rare earths market.

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These initiatives signal an important realisation and course correction in the Quad's China strategy: that geopolitical encirclement will remain incomplete without economic containment.

Since 2007, when the Quad countries first came together for joint naval exercises in the Bay of Bengal, the grouping's agenda has often been driven and judged by the intensity and tempo of its military cooperation.

But such overemphasis on security relationships is both insufficient and counterproductive.

Irrespective of any territorial disputes or apprehensions they may have about China's military rise, all four Quad countries remain deeply enmeshed with the Chinese economy, as China is their biggest trading partner. Such economic interdependence has not only fuelled China's rise, but also provided Beijing with instruments of economic coercion. Without addressing this economic dependence, a military balance of power in the region would be unattainable.

An excessive focus on security is also counterproductive as it engenders significant resistance among other important actors in the region, particularly Asean member states. Post-Cold War, Asean's emergence as a fulcrum of economic, political, and diplomatic interaction in the Indo-Pacific was premised upon three factors: China's economic rise, America's security commitments, and a belief that the US and China could work together for the shared prosperity of the region.

However, as economic growth has fuelled military assertiveness, the US is now keen on pre-empting China's emergence as the region's hegemon. The growing US-China rift endangers Asean's preferred policy of deepening economic engagement with China while benefiting from US security commitments. A security-driven Quad not only exacerbates Asean's anxieties, it provides no alternative to the bloc's economic dependence on China.

The Quad's major weakness, therefore - as Kishore Mahbubani presciently argued earlier this year - has come from it not grasping that the "big strategic game in Asia isn't military, but economic".

Without a strategy to fill the economic role China plays in the region, the probability of engendering an effective balance of power in the Indo-Pacific would be hopeless. That is why the Trans-Pacific Partnership under former US President Barack Obama aimed to provide an alternative to China's economic stranglehold over the region. His successor's populism and inward-looking economic policies only widened the gap between the Quad's security and economic agenda.

But the Covid-19 pandemic heralded a change to the Quad's China approach, which augurs well for the emerging coalition of the willing among the Indo-Pacific's democracies. Disruptions caused by the pandemic highlighted the region's - and the world's - extreme dependence on Chinese supply chains.

Beijing's use of economic coercion, most evident in its heavy-handedness towards India and Australia, only strengthened the Quad's resolve to progressively decouple their economies from China while creating new patterns of economic integration. The Supply Chain Resilience Initiative launched by India, Japan, and Australia in September 2020 was a precursor to the Quad's impending economic focus.

The Quad's intentions and policy initiatives notwithstanding, reducing China's economic footprint in the Indo-Pacific is easier said than done. The pandemic has only underscored the critical role the country will play in any global economic recovery. Among the world's major economies, only China managed to post a positive growth rate in 2020, with its exports now at an all-time high. Beijing's early ratification of the Regional Comprehensive Economic Agreement further signalled its resolve to become the central economic node of the region.

But the Quad's new-found focus on geoeconomics will help the coalition in the long run, as it ensures attention is paid not just to the balance of military power in the region, but economic power as well.

Its resolve to challenge China's monopolies and create new patterns of economic integration also sends a credible signal to Beijing that the Quad's members are willing to suffer short-term setbacks to reduce their vulnerabilities in the long run.

This geoeconomic turn will also help the Quad address the scepticism expressed by Asean and other countries in the region, who viewed its security-driven agenda as particularly destabilising to their precarious balance of interests vis-a-vis China.

The Quad should enter into a dialogue with Asean members to understand their anxieties and find ways to address their overdependence on China. Contrary to the current global trend favouring economic mercantilism, the Quad countries will have to openly embrace the logic of economic interdependence. Though given the current state of their populist domestic politics, this is going to be an uphill task.

Yogesh Joshi is a Research Fellow at the Institute of South Asian Studies, National University of Singapore

This article originally appeared on the South China Morning Post (SCMP).

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