Forget the Fiscal Cliff: Why Obama Is in Asia

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Jason Reed / Reuters

President Barack Obama tours the Reclining Buddha at the Wat Pho Royal Monastery in Bangkok on Nov. 18 2012

It might seem strange that newly re-elected President Barack Obama has chosen this moment to jet off to Asia. After all, he’s left a mess of problems back home. The White House is in the midst of tense negotiations with Republican Congressmen over a budget compromise to avoid the looming “fiscal cliff.” The nation is still smarting from a long and divisive election. And even in the realm of foreign policy, Asia doesn’t seem to be the priority right now, with a conflict escalating between Israel and Hamas in Gaza. Obama isn’t even visiting Japan or South Korea, historically America’s most important allies in Asia, or landing in China to deal with Washington’s many economic issues with the world’s second largest economy. Instead, he’s attending a summit in Cambodia of the leaders of the Association of Southeast Asian Nations (ASEAN) and others from the region, and making the first visit by a U.S. President to Burma (also known as Myanmar). Over the weekend, he toured a Buddhist temple in Bangkok and chatted with Thailand’s King. Has Obama gotten his priorities all screwed up?

(PHOTOS: Obama Abroad: Scenes of a U.S. President in Burma)

The answer is no. What might seem like a tropical vacation is in fact a major foreign policy initiative. Not only is Southeast Asia one of the most important regions for world economic growth, but it is also a key front in America’s geopolitical struggle with China for influence in Asia. The 10-member ASEAN  includes important U.S. allies, such as Singapore and Indonesia, the world’s most populous majority-Muslim country. If Obama is serious about his “pivot” to Asia in Washington’s foreign policy, then this is a crucial overseas jaunt for America’s global political, economic and security interests. Here’s how U.S. National Security Adviser Tom Donilon explained Obama’s motivation in a speech ahead of his Asia trip:

His decision to travel to Asia so soon after his re-election speaks to the importance that he places on the region and its centrality to so many of our national-security interests and priorities … We’re not only rebalancing toward Asia, we’re also rebalancing our efforts within Asia. We had been heavily invested — as everyone in this world knows — in Northeast Asia for lots of historical and other reasons, but we have really focused here in a renewed way on Southeast Asia and ASEAN… ASEAN plays an essential role in crafting regional responses to shared challenges and building an effective rules-based order. The United States strongly supports these efforts because we believe an integrated, effective ASEAN is inherently in our interest and in the region’s interest … You are either all in or you’re not, with respect to this strategy. And the President … is all in.

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O.K., that’s a big statement — but it is not an overstatement. In all of the attention lavished on the rapidly expanding economies of China and India, Southeast Asia, with its collection of smaller economies, often gets overlooked. But it shouldn’t. The region is a potentially vital source of new customers for American companies, with some 600 million increasingly wealthy people. A recent report by Rajiv Biswas, chief Asia economist at IHS Global Insight, pointed out that the combined GDP of ASEAN, at $2.3 trillion, is bigger than India’s. The research outfit expects the size of the ASEAN economy to surge to $10 trillion by 2030, making it bigger than Japan. Here’s more from Biswas:

ASEAN has become the third growth engine within emerging Asia, playing an increasingly important role in regional trade and investment growth. This is particularly important at a time when the medium-term growth outlook for two of the G-3 economies, the E.U. and Japan, is for protracted weakness due to high government debt levels and fiscal consolidation.

Indonesia is already one of the fastest-growing economies in the world and a significant consumer market, while some economists believe Asia’s next roaring tiger could be a liberalizing Burma. Obama’s tour is already bearing economic fruit. Thailand’s Prime Minister Yingluck Shinawatra agreed to join talks to form a giant, U.S.-backed free-trade agreement called the Trans-Pacific Partnership. Southeast Asia, therefore, could be a significant economic counterweight to China.

And a political one as well. By touring the region, Obama is making it clear to China that the U.S. is still firmly a Pacific power, and that many countries in the region want it to stay that way. Even though China is becoming more and more important to Southeast Asia’s economic growth — ASEAN and China have forged a significant free-trade agreement — its member countries are also becoming increasingly wary of encroaching Chinese political influence. Fear of Chinese dominance was likely one important reason why Burma launched the political reform necessary to repair its relations with the U.S. and Europe. China’s aggressive pursuit of its controversial claims in the South China Sea is also pushing countries closer to Washington. Even onetime foe Vietnam has engaged in joint naval exercises with the U.S. — a clear signal of Hanoi’s concerns about its expansive northern neighbor. Simply, ASEAN could prove a vital ally in American attempts to contain China.

(PHOTOS: Obama’s 2010 Asia Trip)

With so much on the line, Obama had little choice but to set aside politics back in Washington for a few days to focus on such critical foreign policy issues. The question to ask isn’t why Obama traveled to Asia, but how he could possibly have avoided it.

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