How the next administration should handle South Asia

South Asia contains one of America’s most important long-term partners in sustaining a global order safe for the interests and values of free societies — India — as well as a fragile, nuclear-armed state in Pakistan whose weakening and radicalization could be more consequential for American security interests than nearly any other single contingency. The region also contains a country, Afghanistan, that may not be the center of Asia but is a center of strategic competition among key Asian powers and has cost the West a decade of war to defeat extremism and build lasting stability. Over the coming four years, U.S. leadership to shape this region will be essential, for both positive and negative reasons.

Positively, the consolidation of a wide-ranging strategic partnership with India could change the history of the 21^st century by allying the United States with the world’s largest democracy and budding economic powerhouse. Negatively, U.S. leadership is essential to prevent Pakistan’s many pathologies — state complicity in terrorism, weak institutions, a foreign policy that exports insecurity — from spilling over in ways that undermine fundamental U.S. interests in the future of Afghanistan, non-proliferation, defeating terrorism, and dampening extremism.

India is still casting off its legacy of non-alignment and statist economic management. But its leaders have identified the United States as a vital partner for India for the long-term, just as American leaders pursued a revolutionary strategic partnership with India with an eye on shaping the longer-term balance of power and values in the international system. The United States and India share a convergence of interests across the spectrum. Both seek to balance Chinese power in Asia to encourage China’s peaceful rise. Both want to defeat terrorism, moderate extremism, and promote democratic state-building in South Asia, especially in Pakistan and Afghanistan, to ensure that responsible governments rule there with a focus on internal development rather than fomenting external insecurity. Both want to ensure freedom of the maritime commons in the Indian Ocean, across which most world trade in energy flows. Both want to strengthen an open and liberal international economy in ways that will fuel their knowledge, technology, and manufacturing sectors.

The next U.S. administration can reverse the drift in Indo-U.S. relations that has occurred since 2009, including by deepening the underdeveloped economic relationship between the two countries through a robust free trade agreement and supporting India’s entry into APEC. Washington and New Delhi can also cooperate more intimately on Afghanistan, the Arab Spring, missile defense, maritime security in the Indian Ocean, East Asian security with partners like Japan, and in multilateral institutions like the U.N. The overall objective would be the construction of a preponderance of democratic power in Asia and the international system, with U.S.-India partnership at its core.

As the United States draws down forces from Afghanistan, Pakistan will lose the leverage it has held on U.S. policy by virtue of its control of the primary supply routes into Afghanistan. This creates the prospect for a more mature and balanced U.S.-Pakistan relationship in which U.S. policy concentrates not on buying off the Pakistani military but on strengthening the development of Pakistani civilian institutions. U.S. policy will need to focus more on strengthening Pakistan’s economy and, in particular, its energy sector, as a way to offset the rise of radicalism associated with the country’s chronic economic crises and to build goodwill among a population that is fervently anti-American. Liberalization of trade, including duty-free treatment of Pakistani textiles into the United States, will be as important (if not more important) than official assistance in this regard.

U.S. policy must not re-hyphenate India and Pakistan, but rather pursue independent policies towards both countries that do not allow one country to hold U.S. policy towards the other hostage. Prospects for Pakistan to benefit from India’s economic growth and measured Indian steps to lift trade and visa restrictions on Pakistan could, in tandem with U.S. policy, help reconstruct Pakistan’s moderate majority who opposes the militarization and radicalization of the state and its foreign policies.

In Afghanistan, the next administration will need to fill out the existing strategic partnership agreement with a commitment to keep substantial U.S. forces in-country – to train Afghan forces, contain Taliban attacks against state institutions, and ensure that neighboring powers with predatory designs do not fill a vacuum that would otherwise be left by U.S. retreat. Afghanistan’s 2014 elections will be pivotal to the post-Western dispensation of the country, and U.S. engagement with allies will be key to ensuring that the gains the country has made over the past decade are sustainable. American support for Afghanistan will also be instrumental to helping it build a self-sustaining economy not dependent on foreign aid. Washington will want to coordinate much more closely with New Delhi than it has over the past decade given India’s similar interests in sustaining a representative Afghan government that does not tolerate the export of violent extremism, and can serve as a gateway for South Asian trade and investment with Central Asia.

American policy, often working in parallel with India’s, can play a critical role in the process of democratic state building and free-market economic growth in the other key South Asian states of Bangladesh, Nepal, and Sri Lanka. All are underdeveloped, post-conflict societies in which the military plays a strong role. Bangladesh is especially promising as a partner for greater U.S. engagement — it has one of the world’s largest Muslim populations who are predominantly unradicalized, its economy has been growing very rapidly, it has worked with India and the United States to defeat home-grown terrorism, and its governance indicators have improved meaningfully over the past few years. Goldman Sachs has identified Bangladesh as one of its "N-11" economies or next-generation BRICS.* U.S. partnership will be critical to helping Bangladesh consolidate these gains and join India as part of a "South Asian miracle" of the kind East Asian economies have experienced.

American leadership will be essential to realize the promise of the troubled South Asian region. Wariness and even hostility among neighboring states remains high. This region (not the Arab Middle East) is the source of the world’s most violent extremism. Western forces have fought for over a decade in Afghanistan to render it a regional source of stability rather than instability. Pakistan faces extraordinary development and governance challenges, and its support for terrorism could have explosive consequences, not just in Delhi and Kabul but in Washington and London. Rising India could recast the global balance of power and values by virtue of its success in realizing its extraordinary potential. U.S. partnership can help more of South Asia achieve its enormous economic potential, placing it alongside East Asia as a driver of global economic growth and American prosperity.

Editor’s note: This piece originally stated HSBC was the group to identify Bangladesh, and it has been corrected to Goldman Sachs.