Q. If Asia-Pacific Economic Cooperation (APEC) wants to remain as relevant and look toward a new phase of Asia-Pacific economic integration, it must include India as its member. Comment.
- APEC was established in 1989 as an intergovernmental platform for 21 Pacific Rim member economies to promote free-trade in the region.
- The grouping is facing the heat of unilateralism and protectionism. Competition and divergence in the form of US-China tensions was on full display at the 2018 APEC summit
- As a result, a debate pertaining to the question of the forum’s enlargement, with pointed reference to India, has started.
APEC Needs India
- Economic strength of India – As the region’s third largest and one of the fastest growing major economy, India presents the most promising market in the wider Asia-Pacific. India’s burgeoning middle class is estimated to become 450 million in 2030. Also India aspires to become a $5 trillion economy.
- Boost to the economic activities – APEC economies are experiencing sluggish growth. Hence, adding India to APEC would augment regional trade and investment.
- Labour Supply – India’s labor force, which will be the largest in the world by 2030, will help offset the impact of aging populations and shrinking work forces in APEC economies.
- Legitimate stakeholder in regional and global governance – India is second largest democracy in the world and an important player in Indo-pacific arena.
- Complementarity – Outside the west Europe, most of the capital surplus nations are in Asia Pacific. On the other hand, India badly needs investment.
- Emergence of Indo-Pacific Concept – India has emerged as a key player which is central to the Indo-Pacific concept.
- Strength of the APEC grouping can be gauged from the fact that it represents more than a third of the world population, 47% of global trade and 60% of world GDP.
- However, declining multilateralism, increasing protectionism and incidents like trade war are creating a pressure on this institution to reform.
- Hence, it can be said that without India APEC would not only remain incomplete but also unable to reinvent itself. India, on the other hand, will have to ensure economic reforms and openness to qualify for APEC membership.
Click to View More