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International relations

Indo-Pacific initiatives gain currency despite gaps over China

Key players Japan and Australia grapple with response to Belt and Road

China's Belt and Road infrastructure initiative to create a new Silk Road has triggered concern among other key countries in the Asia-Pacific region.   © Reuters

TOKYO -- Fostering economic cooperation in the Indo-Pacific region is gaining traction as a diplomatic strategy among major countries, with the U.S. proposing an infrastructure fund and Australia announcing a separate three-way initiative.

Yet not all countries view the policy as a counterweight to China's Belt and Road initiative. Even Japan, whose prime minister first proposed the "Free and Open Indo-Pacific" plan in 2016 as a response to China's regional advances, is taking a more nuanced approach.

U.S. Secretary of State Mike Pompeo said in a Monday speech that Washington will commit $113 million to help develop the digital economy, infrastructure and energy in the Indo-Pacific. "These funds represent just a down payment on a new era in U.S. economic commitment" there, he said.

The U.S. has yet to announce whether ad hoc investment frameworks will be created for each project or a permanent institution like the China-led Asian Infrastructure Investment Bank will be set up. 

Japan sees the U.S. initiative as a sign that Abe's strategy is gaining traction and plans to cooperate. One option is a joint investment with the Japan Bank for International Cooperation.

Separately, Australian Foreign Minister Julie Bishop announced on Tuesday a framework with Japan and the U.S. on infrastructure development. The countries will mobilize "investment in projects that drive economic growth, create opportunities, and foster a free, open, inclusive and prosperous Indo-Pacific," according to a joint statement by the Department of Foreign Affairs and Trade, the U.S. Overseas Private Investment Corp., and JBIC.

"Strengthening our cooperation in response to the region's significant demand for infrastructure is a plus for regional stability and prosperity," Japanese Chief Cabinet Secretary Yoshihide Suga said Tuesday.

In proposing the strategy, Abe initially envisioned working with countries like the U.S., Australia and India to promote shared values, such as the rule of law and market economies, and cooperate on maritime security.

Abe this June pledged about $50 billion in infrastructure aid to the Indo-Pacific region over three years. But with Tokyo's ties with Beijing warming, the Japanese leader has tamped down his rhetoric on ideas like the rule of law -- a dig at Chinese maritime disputes in the East and South China seas. He is even considering collaborating with Belt and Road.

The U.S. has implicitly positioned its initiative as a way to rein in China. It continues to oppose China's maritime ambitions and renamed its Pacific Command the Indo-Pacific Command. Americans "have never and will never seek domination in the Indo-Pacific, and we will oppose any country that does," Pompeo said Monday.

Australia has seen a rise in anti-China sentiment at home, but is also facing pressure from the business community to mend ties with the country's largest trading partner. India has avoided taking sides, with Prime Minister Narendra Modi stressing that it does not see the Indo-Pacific as a strategy or a "club of limited members."

Developing countries in the Asia-Pacific region will require $26 trillion in infrastructure investment between 2016 and 2030 to maintain its growth momentum, according to the Asian Development Bank. The Indo-Pacific framework also covers eastern African countries as well.

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