America’s goal in the Indo-Pacific should be to advance economic freedom

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The Indo-Pacific has become an increasingly dynamic and critical part of the world foreign policy chessboard.

It is home to at least five of the world’s trillion-dollar economies and is home to more than half of the world’s population in just two of its countries, India and China.

Before the pandemic, the Indo-Pacific had an average economic growth rate among its countries of about 5%, the highest in the world. In the uncertainty of the past year, several Indo-Pacific countries were among the few in the world to post positive growth rates.

All of this makes the region an extremely important economic area for the United States.

However, in terms of economic governance and freedom, the region is particularly divided. The Indo-Pacific region is home to three of the world’s five fully free economies (Singapore, New Zealand and Australia), according to the latest Heritage Foundation report Index of economic freedom. (The Daily Signal is the Heritage Foundation media.)

At the same time, however, half of the region falls into the “somewhat non-free” and “repressed” categories.

Although some progress has been made in improving trade and cooperation in recent years, the region still has a long way to go.

As Biden administration coordinator for the Indo-Pacific, Kurt Campbell, begins “Explore quietly” business opportunities in Asia, the United States should take this opportunity to promote more economic freedom in the region.

First and foremost, it is in America’s interest to advance its partnerships with willing and like-minded allies and with nations enjoying a high degree of economic freedom in the region.

In the Indo-Pacific, as in the rest of the world, there is a strong correlation between economic freedom and prosperity. The countries identified as the “freest” have an average gross domestic product 11 times greater than those in the “most repressed” category.

Overall, the Indo-Pacific region ranks well below the global average in terms of market openness, especially when it comes to investment and financial freedom. This creates a lot of uncertainty in the business climate of these countries and poses a significant challenge for foreign and domestic investors in the region.

Free market reforms that reduce restrictions on investment and financial services would introduce opportunities for even greater growth in developing countries in the Indo-Pacific.

In particular, the countries of the Mekong Valley (Cambodia, Laos, Myanmar, Thailand and Vietnam) deserve increased and more focused attention from Washington.

As a strategic outpost, this region was an important source of Chinese trade investment and development assistance through Beijing’s Belt and Road Initiative. In 2019, China paved the way for expanding its China-Indochina Economic Corridor with a new $ 6 billion high-speed railway connecting the southern province of Yunnan, China, to the Laotian capital, Vientiane, and further afield to Singapore.

Yet for countries concerned about China’s growing regional dominance and “corrosive capital,” the United States may offer a more secure, market-based alternative development model.

In July 2020, the Singaporean Prime Minister Lee hsien loong published an article in Foreign Affairs detailing the concerns of middle powers in Southeast Asia trapped in a perceived conflict between the United States and China.

As the United States continues to shape its foreign policy in the Indo-Pacific, it must develop a grand strategy centered on the principles of economic freedom.

By pursuing reforms based on the universal principles of economic freedom, the United States can engage the Indo-Pacific not by the coercive nature of its economic power, but by the proven success of its values ​​and continue to build a l international order based.

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