Now that globalization has entered its military or security-led period, what will be the implications for the world’s fastest-growing regions: India and Southeast Asia? These economies have been seeking to refurbish the non-alignment of the Cold War in the hope of benefitting from US-China rivalry. In their different ways, India, Australia, Indonesia, New Zealand, Vietnam, and others have succeeded at turning that rivalry from a zero-sum game into a win-win for them, if not for the US or China. Investment capital has rushed into their economies as a result, with India on track to become the world’s third largest economy. It is early days, however. Neither major players such as India and Australia nor minor ones such as Fiji or Brunei really know what to expect. And none of the state actors involved, even China, truly have the capacity to coordinate defense, commerce, and innovation policies in a harmonious whole. The same is all the more true for a body such as the 14-member Indo-Pacific Economic Framework in the news this week. The potential for policy and economic chaos is very high.
The military connection of the region into an undeclared bloc is not a new development. The Pentagon’s embrace of a strategy built around the China threat has blossomed, under President Biden and Defense Secretary Lloyd Austin, into an extraordinary network of linkages and cooperation agreements throughout Asia. Given bipartisan support for US-China policy in Congress, and the relative policy autonomy of the defense-industrial sector, the marriage of Asian defense strategy and alliance politics seems likely to survive even into a second Trump administration. As America’s domino-theory aggressions in Vietnam and elsewhere in Southeast Asia have not yet been forgotten, it is striking how eager regional powers have been to accept US military leadership in an unwritten SEATO agreement that stretches from Seoul to New Delhi. The world has the Chinese Communist Party to thank for this still rather incongruous development.
As successful militaries have become so dependent on electronics and electronic-network-based technologies, military cooperation and technological capacities have become inseparable. This is one of the two main roots of the global turn toward industrial policy and the repudiation both of globalization—even by national economies that have benefitted most from it—and of the neo-liberal orthodoxies that seemed so immutable not long ago. Political structures such as AUKUS and the Quad are as much tech alliances as security ones. The US is long accustomed to using American technological sophistication and power as a way to cement security alliances. It is equally adept at using security alliances to advance the US defense-tech sector.
At some point, as all the players must realize, there is defense-tech lock-in. And this is where the other main root of the turn toward industrial policy can be found. The strictly economic prosperity of modern nations is dependent both on access to technology and on indigenous capacity to innovate technologically, at least for domestic markets. As so much of new and future technology is dual-use, the overlap of military tech and every other kind of tech has become enormous and seems constantly to grow. Indeed, the term “dual-use” itself, so important a few years ago, already seems anachronistic. When everything seems actually or potentially dual-use, the term doesn’t have any useful work left to do . Semiconductors are simply the most obvious instance. Japan’s decision to revive its own semiconductor industry, at great expense, makes no sense from the old neoliberal globalizing perspective. In the new dispensation, however, it seems a clever policy, at least to the investors who have bid Japanese equities to the highest point in 35 years on the strength of tech companies. The amazing rise in recent years of electronics manufacturing in India — India’s tech weak point since the 1960s — is a similar example of inherently dual-use industrial capacity-building.
Spending state money to build this kind of capacity, which in the old globalization would have seemed absurdly counter-productive in its inefficiency, has begun to seem sensible because it amounts to states investing in their own relative political and economic autonomy. The alternative is to become passengers on networks designed and controlled by others. The question is: Where does this process end? Where are the network boundaries of sovereignty and where are the network boundaries of alliances? The Biden administration’s turn last week toward the potential threats posed by Chinese electronic vehicles is a case in point. Logically, the threat posed by a Chinese telecommunications network (Huawei, ZTE, China Mobile) is not very different from the threat posed by what the administration identifies as “connected” EVs — or as Commerce Secretary Gina Raimondo has called them, “smartphones on wheels.” The principle extends, perhaps indefinitely, to ships, planes, trains, and any other data-delivery or supply network. The semi-success of an agreement on supply-chain security by the nascent Indo-Pacific Economic Framework should be understood in this context. Even when the supplies as such are not high technology, their transport and distribution networks are. States will continue pushing to secure as much room for maneuver as they can. The brightness of their economic and security futures depends on it. In such a networked environment, however, the scope for non-alignment is shrinking. A later post will consider the factors that could make the emerging geo-economic structure unstable.