Does the Indo-Pacific Matter for Washington?

There is an old saying in Washington: “show me your budget and I’ll show you your strategy.” It means that resources–not rhetoric–are the key determinant of a country’s national security strategy, especially when they don’t match up. I recently participated in a private discussion of American thought leaders about how the United States could strengthen its approach to the South China Sea–an area of tremendous geopolitical significance in the broader U.S. competition with China. After a lot of discussion about various political, military, and economic options, I asked the question “what would our strategy look like if this region was really a priority for the United States?” Several of the other participants in the conversation seemed a bit taken aback. No one questions the significance of the region to American interests, yet I wanted to make the point that–so far–our rhetoric is not matching our resources.

With the administration identifying China as a strategic competitor as a primary concern in U.S. national security, one would expect a significant shift in investments and new initiatives to enhance the ability of the United States to compete across multiple measures of national power and in several geographical areas. Yet in one of the most critical areas of competition with China–Southeast Asia–the United States continues to under-perform. Absent a significant effort to invigorate U.S. engagement with Southeast Asia, China will continue to exploit a strategic vacuum and expand its geopolitical power.

The primary area in which the United States has begun to fall behind China is regional economic policy. Since leaving negotiations to establish the Trans-Pacific Partnership (TPP), Washington has floundered in coming up with a comprehensive alternative strategy. Secretary of State Pompeo’s recent description of his “Indo-Pacific Economic Vision” was long on rhetoric but short on specific proposals. The most significant initiative announced by Secretary Pompeo–$113 million to support foundational areas of the future: digital economy, energy, and infrastructure–pales in comparison to the at least $34 billion China has spent on the Belt and Road Initiative (BRI) since 2013, which focuses primarily on connectivity projects such as railways, ports, energy pipelines and grids. Of course, BRI has significant challenges and is certainly not living up to the hype of official announcements from Beijing. Nevertheless, the poor comparison between United States and Chinese economic policy in Southeast Asia–which is as unfair as it is inevitable–sends a strong message to countries that will be essential to any geopolitical competition strategy.

Similarly, in the security realm, the United States continues to act as if Southeast Asia were not a significant priority. On the sidelines of a foreign ministers meeting from the Association of Southeast Asian Nations (ASEAN) and other officials from around the world, Secretary Pompeo announced nearly $300 million in new foreign security assistance funding designed to strengthen maritime security, develop humanitarian assistance, peacekeeping capabilities and counter transnational crime. Though certainly significant, such an amount pales in comparison to U.S. foreign security support given to other geographical areas. Indeed, East Asia and the Pacific receives the least amount of direct foreign security assistance from the United States than any other region in the world–in 2017, it received 1.95 percent of the global total, compared to 53 percent to the Middle East and North Africa (primarily Israel and Egypt) and 30 percent for South and Central Asia (primarily Afghanistan and Pakistan). If competition with China is a real priority for the United States, why are these numbers so low?

U.S. Regional Security Aid by Region, 2017.
Security Assistance Monitor, http://securityassistance.org/content/security-aid-dashboard.

While details like these may escape the attention of policymakers and thought leaders in Washington, they are front and center in the minds of leaders across the Indo-Pacific who look to the United States as the only power that can credibly balance a rising and increasingly assertive China. While many of them do not trust Beijing’s intentions and would prefer to work with the Washington, the geographic realities of distance and the limited resources the United States has to date

China has also noticed the disparity between American rhetoric and resources. When asked about U.S. announcements of $113 million in infrastructure assistance and $300 million in security assistance to the Indo-Pacific, Chinese Foreign Minister Wang Yi expressed support for U.S. initiatives and involvement in the region, but also expressed surprise at the modest scale of the initiatives: “the US is the sole superpower in today’s world, with a GDP totaling $16 trillion. So when I first heard this figure of $113 million I thought I heard wrong. At least it should be 10 times higher, for a superpower with $16 trillion of GDP.”

This is not to paint an entirely bleak picture for the United States in the Indo-Pacific, as the United States maintains significant fundamental advantages. Trade between the United States and ASEAN totals about $275 billion annually, and U.S. businesses are the largest cumulative source of foreign direct investment for ASEAN. Moreover, the United States retains very significant alliances and partnerships across the region, and U.S. Indo-Pacific command is home to 360,000 military and civilian personnel. Yet these advantages did not appear by magic–they are the product of decades of diplomatic engagement, military investment, and high-level attention. To sustain American power in the region, Washington cannot rest on its laurels–significant, innovative policies and investments will be needed.

The Obama administration began a process of rebalancing U.S. attention and investment to the region, with mixed success. For example, the United States set the target of home-porting 60 percent of American naval power in the Western Pacific by 2019, and made progress toward those ends. Further, with programs like the Enhanced Defense Cooperation Agreement (EDCA) with the Philippines and more robust defense engagements with India, the United States began the process of expanding its regional defense posture and building the capabilities of like-minded partners. Still, the failure to ratify TPP was a significant setback, civilian agencies under the Obama administration were slow to reprioritize, and the relatively minor adjustments to foreign security assistance allocations suggests that the United States still had a long way to go by the end of President Obama’s term.

The administration does have time to make progress. The $113 million in development assistance was announced by Secretary Pompeo between appropriation cycles, and therefore may represent the beginning of a broader plan. Additionally, the United States should not try to compete with China dollar-for-dollar in foreign assistance, but rather should develop initiatives that leverage the private sector and empower Indo-Pacific partners–areas where the United States already has significant structural advantages, and where the administration rightly appears to be focusing. I expect that the administration will continue to roll out initiatives that seek to implement its “Free and Open Indo-Pacific Strategy,” which may help better match investments with rhetoric.

There is little doubt that the Indo-Pacific will be a driving economic and political force in the 21st century, and of increasingly critical geopolitical interest to the United States. And while each U.S. administration has sought to enhance U.S. engagements in the region, these efforts have been relatively modest. If geopolitical competition with China is truly a top strategic priority for the United States, Washington will need to start matching that rhetoric with a significant shift in investments and initiatives.  American policymakers often like to say that the United States is a Pacific nation–it’s time we started acting like it.

Follow Abraham Denmark, director of the Asia Program, on Twitter @AbeDenmark.

The views expressed are the author's alone, and do not represent the views of the U.S. Government or the Wilson Center.  Copyright 2018, Asia Program.  All rights reserved.