Neil Kromash, U.S. Department of State Keynote Address at the “Building Pan-Asian Connectivity” Conference

(As Prepared for Delivery)

Thank you for that kind introduction. It’s great to be back in wonderful India, even if only for a brief visit.

I’d also like to thank the organizers of this really timely and important conference on Pan-Asian connectivity – the Observer Research Foundation, Indiana University Bloomington, and my colleagues at the U.S. Consulate in Kolkata and Embassy New Delhi. And thanks to the Oberoi Grand Hotel for hosting this meeting today in such a beautiful venue. There’s so much that goes on behind the scenes to pull these kinds of events together. I really appreciate all the time and effort involved by everyone.

I want to start out by saying what an honor it is for me to be invited to speak in front of so many distinguished and influential participants. On the long plane ride from Washington I had a lot of time to prepare and read through the conference materials, which included the bios of the panelists in attendance. The amount of knowledge and years of experience gathered in this room – representatives from government, the business community, think tank organizations, academia, and the media world – is incredible. And so I am really looking forward to the discussions that will take place over the next two days – exchanging views, expanding networks, sharing ideas, and most of all, learning from the collective wisdom and experience possessed by everyone here.

My first visit to Kolkata was about three years ago. One of my colleagues – from the State Department’s East Asia and Pacific Bureau, and I from the South and Central Bureau – went on a long and winding trip through India, Bangladesh, Myanmar, and Thailand. Our goal was to take an in-depth look at physical connections (borders, roads, power, ports, bridges, etc.), economic growth and trade possibilities, and multilateral initiatives that had the potential to enhance regional integration between South and Southeast Asia. Over the course of nearly three weeks and twelve cities, we had the chance to meet with many key figures across the region: government policymakers and opposition figures, academics, the business community, NGO workers, think tanks, journalists, etc. During our stopover in Kolkata, I am certain that we spoke with and learned from many who are sitting in this room right now. We visited sea ports and land borders and custom facilities, visited crowded capitals, rural areas, and even remote outposts. We drove on good, paved roads and bad, rutted dirt tracks. All in all, the journey was a whirlwind, but it offered us a unique opportunity to take a snapshot on the state of connectivity across the region.

One of my main takeaways from that trip in 2012 was despite the many challenges facing the region there was near uniform consensus, no matter who we spoke to, that greater trade and physical connectivity were essential to realizing the region’s vast but largely untapped potential. That better transit and energy linkages would ease the flow of goods between the rapidly expanding economies of South and Southeast Asia. That an improved regulatory environment throughout the region would serve as a catalyst for increased private investment. That enhanced technological networks would spur innovation and act as a natural segue into the region’s indelible entrepreneurial spirit. That improved linkages would create jobs and other opportunities that could help lift millions out of poverty.

When I returned to Washington, this vision – which we refer to as the Indo-Pacific Economic Corridor, or IPEC – gained a sharper focus in our policy efforts, and we have not stopped working since. Many of you are familiar with my bosses – Assistant Secretary of State Nisha Biswal and Deputy Assistant Secretary of State Fatema Sumar – who have crisscrossed the region to promote strengthened regional cooperation in the form of a more interconnected Indo-Pacific. Our message has been consistent and clear – the U.S. will remain a strong and steady partner in bringing the countries of the region together, as well as other stakeholders such as the multilateral development banks and the private sector, to identify where and when our diplomatic engagement and policy advocacy makes the most sense.

I don’t want to leave anyone here with the impression that U.S. support for improved pan-Asian connectivity is an abstract quest by a disinterested party. Everyone here knows this is not the case. Beyond our very tangible desire for better regional stability, we also have our own economic interests at stake. Greater linkages in this part of the globe will benefit the American economy and the American people, in the form of growth and jobs. However, we are not coming to this effort empty-handed. On our side, we have much to offer – cutting-edge technology, innovative partnerships, and a system centered on fairness and transparency. And so we see ourselves as true partners with all the countries of the region in this ambitious integration effort, from which everyone stands to gain.

I want to underscore one key point: that while the U.S. strongly supports these efforts – and as I just noted even stands to gain from them – expanding connectivity between South and Southeast Asia must be, first and foremost, a regionally-led endeavor. There is no substitute for regional ownership, and there is obviously a lot of work ahead. Myanmar – South Asia’s eastern overland gateway to the markets of Southeast Asia – is still in the process of standing on its feet after decades of isolation. And within South Asia itself, most of the experts in this room are familiar with the oft-repeated statistics: that by some measures, this region is one of the least economically connected areas in the world, with less than five percent of intra-regional trade flows and less than one percent of intra-regional investment flows. These kind of dismal numbers are not normally cause for optimism, but where some see failure we really do see tremendous opportunity. Across the horizon, there has been real leadership from regional governments to forge a new era of cooperation and prosperity.

India, as the anchor of South Asia and an indispensable partner of the United States, obviously plays a leading role in this regional equation. On this front, Prime Minister Modi and his Government are off to an excellent start. India’s rebranded “Act East” policy has moved beyond rhetoric and is taking shape across the Indo-Pacific through summit-level engagements with the countries of ASEAN, trade agreements and other strategic investments meant to open new markets to the region. It also did not escape our attention in Washington that the Prime Minister’s first two foreign trips were to Nepal and Bhutan, two important neighbors full of untapped economic potential, including significant hydroelectric resources that could form the foundation for a regional energy market. In the aftermath of new, separate power agreements between India, Nepal, and continued investment in Bhutan’s hydropower sector, there is real hope that the Indian Government is poised to help make these energy connections become a reality. We are also watching, with much enthusiasm, the steps between India and Bangladesh to pursue the development of electricity grid connections, as well as other projects to the east such as the India-Myanmar-Thailand Trilateral Highway, which when completed will create additional opportunities for investment, trade, and people-to-people contacts. We also welcome India’s interest in joining the Asia Pacific Economic Cooperation forum, as the Indian economy is a dynamic part of the Asian economy.

Nepal too, poses great opportunities. Nepal was recently selected for the Millennium Challenge Corporation (MCC) compact assistance, a potential game-changer which recognizes Nepal’s advances in governance, economic freedom, and investing in people. Over the next several years we will be working closely with the Nepalese government to design and implement the MCC compact with a likely key focus on helping Nepal develop its vast hydropower resources by addressing badly needed infrastructure and regulatory reforms. We know this transformation will not be easy, nor will we see results overnight, but this initiative has the potential to transform Nepal’s economy, increase regional trade and provide a catalyst of clean energy for the entire region.

Even closer to Kolkata, Bangladesh – the world’s seventh most populous country – is sometimes overlooked in the discussion about regional connectivity but it shouldn’t be. Rich in natural resources and strategically situated at the intersection of China, South Asia, Southeast Asia, and the Indian Ocean, Bangladesh enjoys advantageous geography that makes it an ideal hub for connectivity. Despite ongoing political turmoil there, we continue to seek areas where we can strengthen our bilateral relationship with Bangladesh, and regional economic cooperation remains high on the list.

Myanmar, which I’ve already mentioned, is another area of significant opportunity. Since its political transition got underway in 2011, foreign investment inside the country has more than quadrupled. So many challenges remain, but as the undeniable conduit between South and Southeast Asia, Myanmar and its improving economic climate has a big role to play in the region’s future capacity to ensure goods and services flow freely across borders.

And finally, I don’t want to forget the positive developments taking place in Sri Lanka, where the January election brought a new government and overturned a longstanding autocratic regime. The U.S. will do all it can to support the new government’s efforts to restore democracy, heal fragile ethnic tensions, and achieve more diversified economic growth.

Before I finish, I want to touch briefly on the importance we also see in emerging regional organizations. We believe certain institutions such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, or BIMSTEC, is well situated to advance important regional objectives such as transit and trade. We know BIMSTEC is in its nascent phase, but the decision by member states to create a secretariat in Dhaka last year is a positive step, and we are closely watching the development of this organization as it gains its legs. In the maritime sphere, we see the Indian Ocean Rim Association, or IORA, as a promising forum to address shared interests such as: freedom of navigation, anti-piracy, climate change, fisheries management, and maritime scientific collaboration.

So in conclusion, promoting pan-Asian connectivity is an issue that has, and will continue to have a strong and enduring U.S. commitment, and where we see great opportunities for cooperation with the countries of the region. I want to thank you again for your warm hospitality. I look forward to our discussions over the next two days.