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  • Conference Report- India and the Indian Ocean Region: Dynamics of Geopolitics, Security, and Global Commons

    Conference Report- India and the Indian Ocean Region: Dynamics of Geopolitics, Security, and Global Commons

    TPF Team                                                                                                    August 19, 2019/Conference

    The Peninsula Foundation held its first international conference titled “India and the Indian Ocean Region: Dynamics of Geopolitics, Security and Global Commons” on the 12thand 13thof July at the Women’s Christian College, Chennai. Fifteen papers authored by research scholars from various institutions and backgrounds were presented during the course of the two-day conference comprising five sessions.The inaugural address was delivered by the Chief Guest, Vice Admiral N Ashok Kumar AVSM VSM, Vice Chief of Naval Staff (VCNS). In an eloquent speech, the VCNS highlighted the growing importance of the Indian Ocean Region and the need to debate and discuss issues relating to chokepoints and the trade routes. He spoke about historical evidence of the criticality of the trade routes in the Indian Ocean Region (IOR), and related it to the present context of ship movements in vital sea lanes of communications (SLOCs) that are vital for economic growth of countries in the Asia-Pacific Region. India’s geographic location gives it a dominant strategic position, as seventy-five percent of international shipping links go through the IOR. He pointed out that China is deeply focussed on safeguarding its interests in the IOR since more than seventy percent of its energy requirements are dependent on Indian Ocean sea lanes. Stressing on the importance of the IOR, the VCNS highlighted the vulnerability of chokepoints and the need to ensure freedom of the seas.

                The keynote address was delivered by Professor Kanti Prasad Bajpai, Vice Dean and Wilmar Professor of Asian Studies at the Lee Kuan Yew School of Public Policy, National University of Singapore. He focused on the contemporary understanding of the term ‘region’ and its context with regards to geopolitics and international relations, stating that when we refer to a region in the geopolitical context, we essentially refer to a zone of conflict, a war-zone or an area of potential conflict. Thus, South Asia often implies the India-Pakistan conflict, Middle East or West Asia the Arab-Israeli conflict, or the conflict between North and South Korea when talking about Korea as a region. Similarly, the Indian Ocean region is one of geopolitical contest amongst the great powers. It is a strategically important region where interdependence is inevitable amongst the nations that have vested interests in the IOR.

                Professor Bajpai further elucidated the fundamentals of trade development in the region and substantiated a case for the IOR as a strategic zone, citing the consistency with which external powers compete to control the region. He highlighted the three forms of culture that govern or define power positions in the IOR: classical culture, popular culture and strategic culture. India, aspiring to position itself as an important player in the region, has to evaluate the choices that are available to it: accept one dominant power to manage the region in a rule-based order or actively participate in the dialogue for a negotiated order that can be achieved through multilateral trade agreements. In conclusion, Professor Bajpai raised questions to be addressed in the upcoming sessions. The inaugural session ended with a special lecture on the cultural legacies of the Asia-Pacific Region, delivered by Indian classical dancer and Padma Bhushan awardee, Dr Padma Subrahmanyam.

    Session One: ‘Indian Ocean: Culture, Civilizations and Connectivity’

                The topic of the first session chaired by Cmde. C. Uday Bhaskar, Director of the Society for Policy Studies (SPS), was ‘Indian Ocean: Culture, Civilizations and Connectivity’. The speakers discussed the history, culture and impact of trade on the IOR. G Padmaja, an independent researcher, emphasised India’s maritime heritage and argued that policies do not move beyond mere talk with respect to the IOR. Dr Vijay Sakhuja, Trustee of The Peninsula Foundation, stated that the IOR is the busiest trade route in terms of development and commodity exchange. He elucidated the importance of digital shipping and the scope of 5G technology and reliance on Artificial Intelligence in driving the trading ecosystem. The third speaker Dr D Dhanuraj, Chairman, Centre for Public Policy Research (CPPR), explored the idea of the modern political economy influencing the flow of men and commodities, and talked about the possibility of India reclaiming its rights over the IOR.

    Session Two: ‘Power Politics in the IOR: Geostrategies and Geo-economics’

                Through his paper “Competing Pivots in the Indian Ocean Region”, Dr Lawrence Prabhakar, Associate Professor, Madras Christian College, highlighted that the region can be constructed and contested through a maritime mandala that goes beyond security and economic factors to include cultural, governance, transnational and other aspects. Dr Arvind Kumar, HOD, Department of Geopolitics, Manipal University, in his paper “Stability of Trade and Commerce: Energy Corridor” discussed the potential of energy resources in the IOR and the need to include energy security as a significant feature in global trade and growth drive. In his paper titled “China’s BRI: Responses in the IOR and Implications for Regional Order”, Dr Jabin Jacob, Associate Professor, Shiv Nadar University, focussed on smaller nations affected by the Belt and Road Initiative and the responses by the Chinese government. Chairperson Dr TCA Raghavan, DG, ICWA, summarised the session by observing that the actions of regional states cannot be categorised as malicious but are rather reactions to Indian and Chinese policies over time.

    Session Three: India’s Strategic Interests in the IOR

                In the final session of the day, speakers discussed maritime security, power projections and evolving ties with littoral states in the region.  The session was chaired by Vice Admiral Shekhar Sinha (retd), Trustee, India Foundation. Cmde Somen Bannerjee, of Vivekananda International Foundation, pointed out in his paper titled “Maritime Security and Power Projections” that China is set to become the biggest power in the IOR in the next fifteen years. He also discussed the need for India to strategize power projection as a necessary course of action in order to secure importance on the global stage.  Through his paper, “Strategic Partnerships: India & ASEAN”, Ambassador Antonio Chiang brought to attention the strategic partnership between Taiwan and China, and the implications of China’s rise to power on Taiwan. Group Captain PB Nair spoke about the role of the Indian Air Force (IAF) in the context of the IOR, providing assistance in navigating sea routes, and the significance of Artificial Intelligence (AI) technology in carrying out sea operations.

    Day Two: Panel Discussion on India’s Approaches in the IOR

                Day Two commenced with a panel discussion on India’s strategic approaches in the IOR, its aspirations and the contradictions. The panel consisted of Dr TCA Raghavan, Ambassador Antonio Chiang, Lt Gen S.L. Narasimhan, Cmde Uday Bhaskar and Professor Kanti Bajpai. The session, moderated by Air Marshal M Matheswaran, addressed three main points: the power struggle in Asia, India’s inadequate investment with regard to being a rising power, and India’s engagement with multilateral institutions.

                The discussion focussed on the ramifications of Chinese economic power and military strength in the region, its effect on India’s policies, as well as the need for utilization of soft power and soft balancing techniques by smaller countries to level the international playing field.

                With regard to India’s investment activities, Dr TCA Raghavan mentioned that ineptness in domestic spheres would spill over and reflect in international projects.

                On the topic of India’s engagement in multilateral institutions, Professor Kanti Bajpai noted that while it cannot be said that India doesn’t deliver, there is a certain level of ambiguity about what the expectations are. The delay in finalising the Regional Comprehensive Economic Partnership (RCEP) was discussed; Lt Gen S L Narasimhan explored the reason behind India’s hesitancy to the agreement, stating that RCEP only covered the free movement of goods and not of services. Thus, India being a service-strong nation would be at a disadvantage.

                With regard to China’s technological advancements and its potential economic superpower status, Ambassador Chiang stated that intellectual power would be a game-changer for India. He noted that China resorts to hard and fast action for solving problems as opposed to the kind of strategic decision-making employed by India.

    Session Four: International Cooperation and Global Commons

                Session Four of the conference was chaired by Dr Joshua Thomas, Deputy Director at the North Eastern Regional Centre of the Indian Council of Social Science Research (ICSSR). The first speaker, Dr Suba Chandran, spoke on the topic of “Cultural Legacies & Competing Zones of Influence: India, China and External Powers.” His talk addressed two questions: who the actors are and their nature of influence, and how India can respond.  Embracing our shared religious and cultural history and strengthening the education system in India were among the measures suggested by Dr Chandran to build bridges and enable India to assume a more central position of power in the region. Rear Admiral S Shrikande presented a paper on the subject of “International Institutions: SLOCs, Chokepoints, Freedom of Navigation”, and shared insights on the United Nations Convention on the Law of the Sea (UNCLOS). The final speaker of the session, Rear Admiral K Swaminathan, spoke on India’s role as a net security provider in the region, and mentioned several instances of the Indian Navy providing assistance to neighbours in times of need and contributing to preserving international security. While Dr Chandran spoke about cultural connectivity across countries in the IOR through a ‘Bring East Policy’, the naval officers emphasised on the need for connectivity, capacity and credibility in the international sphere.

    Session Five: Transnational Issues, Threats and Challenges in the IOR

                In his paper titled “International and Regional Cooperation in Disaster Management”, Air Vice Marshal Ashutosh Dixit underlined the vital role played by the UN and Armed forces in mitigating the risks of disasters. While the UN plays a multifaceted role of being the interface between local and international responders, it is most often the armed forces that promptly and efficiently mobilize resources to the disaster-struck nation, as their reach has no limitations. Dr Arabinda Acharya, Associate Professor, National Defense University, Washington DC, in his paper “Non Traditional Security Threats: Piracy, Maritime Terrorism, Climate Change, Illegal Unreported and Unregulated (IUU) Fishing, Illegal Immigration, and Smuggling of Arms and Drugs” explored challenges to good order at sea and proposed investment in resources to thwart non-state actors on land so as to reduce their power at sea. Through his paper, “India and the Blue Economy: Evolving Partnerships,” Dr R P Pradhan, Associate Professor at BITS Pilani, Goa Campus, emphasised the critical role of the Big Push Theory in developing the blue economy. Investing in strategic assets such as seaports similar to China, Indonesia, South Korea, etc. is vital for realising India’s aspirations for a larger role in the region. In his closing remarks, Lt General SL Narasimhan, Director General, Centre for Contemporary Chinese Studies, Ministry of External Affairs, emphasised the need for states and regional organizations to collaborate rather than compete in order to address challenges that transcend national borders.

                Lastly, in his valedictory address, Dr TCA Raghavan identified crucial points with respect to the theme of the conference, including the difference between military and diplomatic thinking, and strategic and tactical strength. Dr Raghavan stressed the need for developing dialogue forums and intergovernmental organisations in the Arabian Sea littoral with countries such as Saudi Arabia, Yemen and Iran, among others, to focus on pressing issues in the region.

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  • TPF Discussion # 02: Plutonium for Energy? Explaining the Global Decline of MOX

    TPF Discussion # 02: Plutonium for Energy? Explaining the Global Decline of MOX

    Special Guest : Dr Alan J Kuperman LBJ School of Public Affairs, University of Texas, Austin

    Dr.Alan J. Kuperman, chair of the Graduate Studies Committee of the LBJ School’s Global Policy Studies program, University of Texas visited The Peninsula Foundation on 5th of August. He was accompanied by Dr D Subachandran, Professor & Dean, NIAS Bangalore who also facilitated the visit. The discussion centred around global nuclear issues with respect to non-proliferation and nuclear safety in the context of plutonium-based nuclear energy development practices. Dr Alan Kuperman’s presentation was based on the results of    a significant research program conducted by him under the NPPP (Nuclear Proliferation Prevention Project). The outcome of the project is his edited volume ‘Plutonium for Energy? Explaining the Global Decline of MOX’. His views drew extensively from his book. The interactive session commenced with Dr Kuperman presenting the stages of plutonium, recycling effects and further elaboration on  “Plutonium for Energy”  as it is the first-ever comparative research project on “mixed oxide” (MOX) fuel – containing both plutonium and uranium – used in light-water nuclear power reactors.  The project explores the manufacture and use of such MOX fuel in the seven main countries that have done so: Belgium, France, Germany, Japan, the Netherlands, Switzerland, and the United Kingdom.

    Plutonium as the fuel for nuclear energy evolved from the perceived advantages of its closed fuel cycle that would have done away with or reduced the complexities and hazards of having to address long period storage of increasing amounts SNF (Spent Nuclear Fuel) from Uranium-based nuclear (thermal) reactors. According to the study this is a misconception, and he projected that Plutonium is a controversial fuel for three major reasons: Plutonium from reprocessing can be used to make nuclear weapons; it is carcinogenic and so a huge health hazard; and is a very costly process that makes it uneconomical. The main focus of this line of argument was non-proliferation, and the need to make countries move away from plutonium cycle so as to eliminate nuclear weapons possibility, including the possibility of terrorist angle. Participants raised questions about countries like India, which can exploit its vast reserves of Thorium through closed fuel cycle for energy while also addressing their security concerns. The countries selected in the study do not represent a viable model for countries like India and China. Pakistan is already focused extensively on plutonium cycle. Hence, it was pointed out, decision on this issue would be complex for India. One of the primary objectives of the study is also to inform ongoing decision-making in East Asia – including China, Japan, and South Korea – about whether to recycle plutonium for energy.

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  • Greenhouse Gases and Dietary Changes

    Greenhouse Gases and Dietary Changes

    Vijay Sakhuja                                                                                       July 22, 2019/Commentary

    The 21st century has been rightly labelled the ‘Climate Century’ and there is visible urgency to contain global temperature rise to 2˚C or below. Among the many initiatives currently underway to achieve that, deep cuts in global emissions in greenhouse gases (GHG) have been suggested.

    One of the major contributors of GHG is the livestock sector; in particular, beef and cattle milk production result in anthropogenic GHG and represent 65 percent of the sector’s emissions i.e. 41 and 20 per cent respectively totalling about 4.6 giga tonnes carbon dioxide (CO2) equivalent. Meanwhile, pork, poultry and eggs contribute less than ten percent each. Besides, there are other closely associated producers of GHG in this sector such as cattle feed production and processing, enteric fermentation from ruminants, manure storage and processing, and the balance is attributable to the processing and sector supply chains.

    According to the Food and Agriculture Organization (FAO) of the United Nations, nearly half of the global agriculture production is consumed by live stock and just 37 per cent is for humans. Another study by the American Oil Chemists’ Society (AOCS) provides some very alarming outcomes and notes that it takes about 7 kilogram of grain in dry weight to produce 1 kilogram of live weight for bovine, around 4 kilograms for 1 kilogram of live weight for pigs, and for poultry it is just over 2 kilograms. Furthermore, the United States Department of Agriculture notes that agriculture takes up 80 to 90 per cent U.S. water consumption, and the Environmental Working Group observes that one pound of eggs require 477 gallons of water and almost 900 gallons for one pound of cheese. If that be so, it is fair to argue that there is otherwise surplus plant-based food available for humans.

    Livestock as a source of food is expected to grow in the coming years. This is driven by the projected increase in global population from 7.6 billion is expected to reach 8.6 billion in 2030, 9.8 billion in 2050 and 11.2 billion in 2100. Consequently, any strong growth in the livestock sector to support the protein requirements of the growing population would result in higher GHG emissions. This necessitates urgent interventions to reduce emissions and can be achieved through sizeable reductions in the production and consumption of beef and cattle milk and balancing it with higher production of pork and poultry. However, that may not be sufficient.

    In recent times interesting and promising initiatives by both the public and private sectors to promote agro-vegetable based diet among the people has been noticed. For instance, in the US, the sale of dairy and related products witnessed eight per cent drop from $14.7 billion in 2017 to $13.6 billion in 2018. One of the reasons for this drop has been the consumer shift toward plant-based alternatives for milk from oats, cashew, almond and soy. The US market trends suggest that the plant based dairy alternatives are currently valued at $17.3 billion and could double by 2023. The current meat value chain is about $1,900 billion and the livestock economy is a promising domain. Nearly 1 billion people are involved in the rearing, processing, distribution and sale of livestock, with half of those reliant on livestock for their livelihood. Significantly, livestock sector constitutes only 40 per cent of the agriculture as a whole that makes up approximately 3 per cent of global GDP.

    While vegetarianism has been in vogue for a long time, it is veganism which is fast gaining popularity particularly among the Western countries such as the U.S., Canada, the UK and some countries in Europe. The vegan diet is being prompted on at least three counts; first is the issue of human health and a number of scientific studies have confirmed the benefits of plant-based diet that reduces the risk of chronic illnesses and diseases; second is the issue of sustainability and the international community has come to realize the critical need to reduce GHG emissions; and third is the growing understanding among the humans of the sustainability of veganism. In fact the vegan food industry is investing in vegan fashion, vegan leather to replace animal hide footwear and numerous other such products are making debut in the international market and gaining popularity among people at large.

    This has led to a war between meat industry and vegan lobbyists who are promising options such as vegan meats, cheeses, milks, and other products. For instance, global plant milk market is expected to grow from over $8 billion in 2016 to $21 billion by 2024 and would be led by soy and coconut milk.

    Finally, consumers are increasingly concerned about the impacts that animal-based foods have on land and water use, human health and above all on the environment, particularly in the context of GHG.

    Dr Vijay Sakhuja is Trustee, The Peninsula Foundation, Chennai. 

    Photo by Helena Lopes from Pexels

  • China’s Climate Diplomacy and Energy Security

    China’s Climate Diplomacy and Energy Security

    Sakshi Venkateswaran                                                                                July 14, 2019/Analysis

    In the last two years, China has become the leading destination for energy investment. A significant portion of this investment lies in the renewable energy sector of China that has undergone rapid development, accounting for about 45% of global investment(126.6 billion) in 2017. The country overtook Germany in the production of solar panels and solar energy generation in 2014 and in 2015 China’s production of wind energy accounted for one third of global wind energy capacity and needless to say, China has always dominated the market in the production of hydro energy. This has led to widespread speculation of the country being a “renewable energy superpower” following a report by the Global Commission on the Geopolitics of Energy. It has also taken active steps to combat climate change in the form of revamping its energy policies. However, these positive shifts are not without issues. China still remains a net importer of coal and highest emitter of greenhouse gases. This article attempts to understand China’s climate change diplomacy against the backdrop of its energy security concerns and if there is any truth to China becoming a renewable energy superpower.

    The 2018 UN Intergovernmental Panel on Climate Change (IPCC) report highlighted that there was only 12 years to control global warming temperatures to 1.5 °Cfollowing which even a half degree rise would prove catastrophic in the form of unprecedented floods, droughts and millions being pushed towards poverty.  Even maintaining the 1.5 °C would require a complete overhaul in the energy, transportation, infrastructure and industrial sectors and global carbon emissions would need to reach net zero by 2050. The Paris Climate Accord was instrumentalized with the intention of capping carbon emissions and containing global warming temperatures below 2 °C. Since the Paris Agreement in 2015, perceptions toward climate change has seen massive shifts following extreme weather patterns in several countries. For one, the US has been strong in their intention to withdraw from the Paris Agreement while several others have taken steps to address climate change by decisive shifts in environmental and energy policies. Chief among them has been China’s actions to counter the climate crisis by investing in renewable energy.

    With a population of more than 1.4 billion and a boom in growth since the 2000s, China has been experiencing rising living standards and industrialization. As a consequence, China’s energy consumption has seen a surge as well. Historically, China’s major sources of energy have been its vast domestic coal reserves and imports of crude oil and natural gas from Russia and Middle East. This has resulted in China competing with the US for the position of being the largest emitter of carbon dioxide. In acknowledgment of this, the Chinese have been the first to invest billions in renewable energy.

    China’s Energy Landscape

    China’s investment in renewable energy began as early as 1949 with the construction of the world’s largest hydroelectric plant, the Three Gorges Dam over the Yangtze River. The reason the Chinese shifted towards hydroelectric energy was the rising dependency on imports and harmful effects to the environment due to the usage of coal. Prior to the Sino-Soviet split in 1960, China had been importing close to 50% of its oil from the Soviet Union. However, a combination of losing the Soviet’s support, economic collapse and a shift from being a net exporter of oil to being a net importer in 1993 accelerated China’s desire for energy self-sufficiency. Since the 2000s the country’s oil and natural gas imports from Russia and Middle East have exhibited a dramatic increase. In 2016 China’s imports of crude oil reached a record high of 68%while natural gas imports hit 33% in 2017.

    Concern regarding the emission of greenhouse gases and inefficient use of coal for power generation prompted a shift in the subsequent energy policies that China released. The Chinese established several economic and technological policies to promote energy conservation. An energy saving branch consisting of a three-tier system was set up within the central and local governments and enterprises in the 1980s. Under the 1988 Energy Conservation Law numerous policies were implemented beginning with the ‘Energy Conservation Propaganda Week’ in an attempt to increase energy efficiency and energy conservation. The government also began providing loans and tax incentives to entrepreneurs who developed small hydropower and wind power plants.

    Even the 13th Five Year Plan by the Energy Bureau of China revealed its plans to restrict coal to 58%of its energy mix by 2020 as opposed to previous levels of more than 60%. The country’s shift to renewable energy has garnered itself the title of being the world’s renewable energy superpower”; a title that has increasingly found its way into academic and policy circles.

    China’s Climate Diplomacy

    Climate change or rather, the climate crisis has metaphorically lit a fire under the member states signed on to the Paris Agreement to combat the greatest threat posed to mankind. Germany has rallied several EU member states to achieve “climate neutrality” by 2050 with net zero carbon emissions. Amidst mounting public pressure and weekly climate protests by students (Fridays for Future), several governments have convened in Bonnin Germany from June 17th to 27th of this year for a climate summit to address the carbon emissions. China has been proactive in that regard; having already shifted to electric vehicles and invested in technologies of carbon capture and storage among other initiatives. China’s share of electricity generation from renewable energy accounted for 26.4%in 2017. The country has also made large investments in the power sector in Africa, specifically for electricity generation in the last 20 years. They contributed up to 30% of capacities of which 56%of the total capacity comprised of renewable sources in 2016.

    Given these numbers regarding renewable energy and its position on climate change, it might be reasonable to speculate that China’s behavior in the international system — its dispute over the South China Sea (SCS) with the Southeast Asian countries, challenging the established status quo of the US as a superpower, the Belt and Road Initiative (BRI) and increasing energy diversification in Russia, Central Asia, Latin America and Africa — is an attempt at addressing its current energy insecurity.

    China claims the entirety of the SCS on the basis of historicity, what they refer to as the nine dash line; a claim that is contested by several countries in Southeast Asia. According to reports by the World Bank the SCS has proven reserves of natural gas and oil. China’s rising energy security concerns over the Malacca Strait, Strait of Lombok, Sunda and Ombai Weitar and the Persian Gulf compound its behavior regarding the SCS as more than 50% of China’s trade travels these waters. Another issue that arises is US’s presence and influence it wields in the region.

    In the last 10 years China’s imports of crude oil from the Middle East has been on the decline. Russia, Angola, Brazil and Venezuela have increasingly taken up a major portion in China’s energy mix (14%, 12%, 5.1% and 4% respectively). The influence that the US wields in the Middle East and the general instability pose a very credible threat to China’s imports. Recently, with the US unilaterally leaving the Iran nuclear deal and the return of sanctions on the country, any state continuing to trade with Iran has been under economic fire from the US (China, India, Turkey etc.). In such a scenario China’s focus on renewable energy would prove an alternative as well as a challenge to the US’s power in the international system. 

    Addressing the climate crisis has been on the agenda of energy policies of several countries. That China has taken a massive step towards that end impacts US’s credibility on that front. The Trump administration has made their position on climate change explicitly clear with their decision to withdraw from the Paris Climate Accord. China’s renewable energy generation will damage US’s optics. Barring this, investment in renewable energy could have an effect on the economies of oil rich countries in the Middle East. China’s ambitions to challenge the existing global order by strengthening their military and economy depend upon its strategies to combat their energy insecurity. Hence, the strategic value in investing in renewable energy.

    However, China’s energy shifts do not come without its own set of logistical issues. In spite of leading most of the world in the production of wind, solar and hydro energy, the percent of these in domestic electricity generation remains low. Only 19.2%, 3.8% and 1.2% of hydro, wind and solar power was utilized for domestic electricity generation in spite of a net installed capacity of 344 GW, 148.6 GW and 77.5 GW respectively in 2016. Though there has been incremental rises in these numbers, China still has a long way to go before attaining energy self-sufficiency. China still relies on heavy imports of coal from its neighbours such as Australia, Mongolia, Indonesia and Russia. The country’s usage of coal rose by 1% in 2018 though its share in the energy mix decreased to 59%, a 1.4% decrease from 2017.

    Conclusion

    The blame and burden for finding a solution to the climate crisis cannot solely rest on the shoulders of developing economies contrary to frequent statements made by the US President who blames Russia, China and India for climate change while ignoring the US’s emission of greenhouse gases. The bottom line is that the US and most of the West had almost 200 years to industrialize and develop their economies. Countries such as India and China have only experienced industrialization and a developing economy in the last 50 or so years. In such a situation, the scale to measure with whom the blame for climate change lays is skewed. Specifically in the case of China, a burgeoning population drove the need for rapid growth. Therefore, it is still a commendable fact that China has been environmentally conscious in the development of its economy. It remains one of the few countries on track to meet the Paris Climate Agreement targets for carbon emissions. 

    All this aside, it is rather premature to refer to China as a “renewable energy superpower” at this point in time. The numbers regarding the use of renewables in domestic electricity generation do not paint a picture of a country poised to change its energy dependency from fossil fuels to renewable energy. China’s goal of becoming a global superpower by 2049 does not just include powering up economically and militarily. Even a developed economy implies growth across the entire country and not just in certain provinces, as is the present situation in China. But it is increasingly becoming evident that any country that reaches their target to combat climate change along with being an economic and military powerhouse stand to become a global influencer and dictate the terms of the international system. If recent developments are any indication, China needs to continue its sustained efforts at decarbonization to attain the influence and recognition it seeks from the international community.

    Sakshi Venkateswaran is a Research Intern at The Peninsula Foundation.

    Image by Skeeze from Pixabay.

  • Venezuela’s Collapsing Economy: Victim of Geopolitical Games

    Venezuela’s Collapsing Economy: Victim of Geopolitical Games

    Manjari Balu and M Matheswaran                                                                     June 23, 2019/Analysis

    The collapse of Latin America’s oil-rich country, Venezuela, epitomises the probable debacle of a socialist regime while the geopolitical strategies espouse the power struggle at the cost of the economy. After the death of Hugo Chavez in 2013, Nicolas Maduro, the hand-picked successor of Chavez took overthe office to preserve the “petrostate” status of Venezuela.  USA, backed by Brazil, Canada and many other countries, have recognized the opposition led by Juan Guaido as the interim president and have questioned the legitimacy of the Maduro government. Venezuela’seconomy depends to the extent of 95 per cent on oil exports and the dwindling oil prices in 2014 deepened the latent crisis, an inevitable consequence for a socialist government with illiberal economic agendas. Chavizmo rose to fame with a brand of Bolivarian revolution that promised to reduce poverty and deter the US in interfering in the country’s functioning.

    Economic Collapse: Paradox of Largest Oil Reserves and Economic Mismanagement

    Venezuela is a prime example of what economic mismanagement, impractical socialist measures, and corruption can do to a country that is wealthy with natural resources. At 300, 878 million barrels of proven oil reserves, Venezuela has the largest amount of proven oil reserves in the world. The country’s economy is largely tied to its oil wealth and was one of the richest in Latin America until a few years ago. Economic collapse has led to a huge humanitarian crisisunseen in the country’s modern history. IMF has predicted that Venezuela’s inflation rate will reach 10 million per cent in 2019, becoming one of the worst cases of hyperinflation in modern history.

    TheTransformation Index that evaluates the political and economic transformation of a country, has ranked Venezuela 110 out of 129 nations with a score of 3.27 out of 10. In addition to criticizing the poor state of the economy, it also reported that the state-sanctioned crime rates have spiralled. The current catastrophic economic crisis and political chaos is the result of a pervasive economic mismanagement and an economy rooted in a single commodity, petroleum.

    Inflation was 1,30,000 per cent in 2018 and the economy has contractedby 22.5 per cent, indicating the dire status of the economy. The economic future of the country continues to be bleak and the debate has converged to the geopolitical relevance of the issue. Data on money supply is a key element to understand the inflation rates in an economy and Venezuela has refused to publish money supply data in the past years. A recent data suggests that  12 trillion BsF (Bolivares Fuertes) were printed exposing the economic ruination.

    Initial denial by the Venezuelan government about the crisis never let aid flow in, recent acceptance of humanitarian aidhas tripled the aid budget. With poor socio-economic indicators as a major challenge, Venezuela is further saddled with huge external debt as a problem to be solved by the new dispensation, be it Maduro led government or any other successor. Currently, Venezuela’s external debt stands at  150 per cent of the total GDP.

    American Sanctions, Food Imports, and Falling Aid

    Few consider the problem to be homegrown in Venezuelaand many blame the US for artificially creating the hyperinflation.  The US justified the economic sanctions to bring down Maduro regime and accused him to have caused upheavals since 2014 and the controversies besieging election manipulation by Maduro’s party substantiate the allegation. Political funding for a coup against the regime change in Venezuela was extensively promoted by the Bush administration. The protraction of political interest led to imposition of anti-democratic sanctions,  and reiterates the hegemonic strategy that the US continues to pursue.

    The recent economic sanctions imposed on the state-owned oil company, Petroleos de Venezuela SA (PdVSA)  by the US has exacerbated Venezuela’s problems in its oil production- the output is expected to fall by 33 per cent in 2019. Investigation of Venezuela’s oil production before and after the economic sanctions suggests the production has been on downtrend even before the sanctions.  

    Private investments and productivity in agriculture dropped alarmingly as the socialist government led by Chavez nationalized agribusiness and industries and encouraged food imports.  Seventy per cent of the food requirements were met by imports. According to the United States Department of Agriculture, Venezuela is one of the potential markets for the US to export agricultural produce, and accounted for 21 per cent of total agricultural imports of Venezuela. However, as the economy collapsed, over-dependence on imports for food began to tell. In 2016, food imports fell by 72 per cent and reports state that people have lost an average of 8.6 kgs of weight due to food scarcity.

     

    China’s Extractive Relationship with Venezuela

    Majority of the loans are from China and Russia and their servicing or repayments are tied with its oil revenue. It is estimated that Venezuela owes around 13.5 billion USD to China as of 2019. Under Chavez leadership, China and Venezuela laid a financial foundation by crafting  “China-Venezuela Joint fund” known as the FCCV. The central bank of China alone loaned 42.5 billion US dollars from 2007-2012 to Venezuela. The compounded bilateral interest incentivized China to support even when the Venezuelan economy faltered in 2014. China further escalated its commercial interest byloaning a sum of $4 billion as cash for oil deal paying little attention to the projected contraction in the Venezuelan economy. In the year 2017, Maduro announced ambitious planning to spend 70 percent of the total budget on social schemes to address food scarcity. While the quixotic socialist paradigm was impressive during Chavez’s tenure the public soon realized the huge dent made in the economy by imprudent  social spending.

    The defensive lending strategy adopted by China post Maduro’s electoral victory shifted the focus of investments to oil and oil-related infrastructure. Although China’s recent intervention in Venezuela’s domestic affairs is evident from the endorsement for Maduro,  oil supply has always been its priority over political rivalry in Venezuela. As China became more sceptical about Venezuela’s ability to repay the loans because of low oil production and the adverse impact of US sanctions, its capital flow to Venezuela shrunk.  Maduro had viewed relations with China to be based on ideological common ground, but China was focused on leveraging its abundant resources, which, in turn, contributed to the crippling of the economy of Venezuela. This asymmetric relationship between Venezuela and China thwarted expectations of Maduro to acquire more credit from China.

    For China, endorsing Maduro is not an option as far as its economic interest is concerned; increasing rebellion of Venezuelan people portends a threat to the Maduro government that could bring in democracy in Venezuela, which could make it a potential defaulter of past debts. The Chinese government is considered culpable for Venezuela’s crisis by many American policymakers, and are accused to have followedthe “debt trap diplomacy”. The investment strategy in Venezuela resembles the Angola model- Chinese government extends credit tied with oil. However, in the case of Venezuela, China is bearing the cost of overestimating the performance of Venezuelan economy.

    Russia’s All-Weather Ties

    As we see a pragmatic China becaming more cautious about the failing economy of Venezuela, Russia’s interest and the relationship go beyond just the commercial narrative. Russia ties with Venezuela are deep-rooted since the time of Chavez, and it has continued to bolster the failing Venezuelan apparatus for clear geopolitical reasons. Vladimir Putin has invested strongly on  Russia’s international image and prestige, especially while rebuilding Russia post the Yeltsin years. The first credit line of arms relations between Russia and Venezuelawas signed in 2006. Although the export of military equipment to Venezuela have reduced drastically by nearly 96 per cent in the past few years, Venezuela has been the largest buyer of Russian arms in the Western Hemisphere with a total estimate of $4 billion during Chavez years. Russia has made consistent efforts to support Maduro by deploying military presence in Caracas even as Venezuela’s economy took a downturn.

    Chavez and Putin deepened their political ties on common grounds of  supporting a multipolar world order, and Chavez expected tangible benefits for Venezuela out of this agreement. Oil deals between both the countries advanced asRussia’s largest crude oil producer, Rosneft, partnered with PdVSA for several projects. Rosneft holds 40 percent shares and plays an instrumental role in pivoting Russia’s foreign policy through sound investments in the West. Venezuela agreed to commit 49.9 percent of its share in Citgo, American subsidiary company in exchange for credit from Rosneft. Russian emphasis on the “strategic” importance of the alliance with Venezuela reveals Russia’s intention to strengthen its geopolitical presence in USA’s backyard. Putin’s domestic political image has become sharper with his strategic take on Venezuela.

    However, sanctions on Venezuela has severely restricted the ability of Rosneft to borrow or invest, thus escalating tensions between Russia and the US.  Much like in Syria, Putin has sent a strong signal to the US by deploying a small contingent of Russian military personnel in Venezuela.

    Pawn on the Chessboard of Great Power Politics

    Venezuela has become the strategic battlegroundfor geopolitical struggle between the USA, Russia, and China. Collapse of the Venezuelan economy does not augur well for China in the long-term. However, China will look to strengthen its ties with Venezuela through economic support as its energy needs have a critical link with Venezuela. USA’s ‘Manroe Doctrine’ and its ‘Roosevelt Corollary’  has fiercely opposed any external powers’ strategic presence in the Western Hemisphere. This policy has led the USA to be an interventionist in Latin American countriessince the 1960s. Not much has changed since then. Chavez’s Venezuela has been a major opponent of US hegemony  Putin’s Russia is looking to strengthen its presence in South America, and support to Venezuela forms the lynchpin of this strategy. While international community looks for peaceful resolution of the rapidly deteriorating situation in Venezuela, geopolitical competition of external players has ensured  power tussle continues in Venezuela. Political Victory of either Maduro or opposition would represent the triumph of their Global supporters, Russia or the USA.  The socialist seed sown by Hugo Chavez is haunting Venezuela with a dented economy and a crisis in leadership. The “Petrostate” desperately needs economic reforms and international support to rebuild its economy. Structural reforms to remove the bottlenecks of growth in the post-crisis period and opportune investments in potential areas would rescue Venezuela in the following years.

    Manjari Balu is a Research Analyst at ‘The Peninsula Foundation’.

    Air Marshal M Matheswaran (retd) is the President of TPF.

    Image Credit: BBC News

  • American Sanctions on Iran and the Underlying Oil War

    American Sanctions on Iran and the Underlying Oil War

    Adithya Subramoni                                                                                      June 24, 2019/Analysis

    In a shocking turn of events, America in 2018 announced its withdrawal from the Joint Comprehensive Plan of Action 2015. This came as a surprise to the international community for good reason, because subjecting Iran under harsh sanctions when they kept up their end of the bargain seemed like a punishment from the US for keeping up this good behaviour. President Donald Trump, calling towards the international community and specifically ‘like-minded countries’ for a team effort, said it was time to curb Iran’s state-sponsored terrorism. But his idea to get Iran to re-engage on this field was through the ‘maximum pressure campaign’. This strategy is unlikely to find takers owing to the fact that the nuclear issue and state sponsored terrorism are two completely different issues, and hence need to be dealt with separately. To charge Iran with state sponsored terrorism is completely misplaced. Iran has not caused any damage to US or its citizens in the last twenty five years. On the other hand terrorist acts affecting the US and its allies have almost always had a link to Sunni Islamic fundamentalism with its links to Saudi Arabian Wahabi organisations. The real motive is USA’s geopolitical targeting of Iran. Trump’s recent designation of the Iranian Islamic Revolutionary guard corps (IIRGC), a unit of the Iranian army, as a terrorist outfit defies all logic and may become counterproductive to the US interests, the very issue that Trump wants to safeguard.

    Iran’s support to Hamas is fundamentally a regional and geopolitical struggle with Israel, while the Sunni vs Shia conflict is a manifestation of the regional power struggle between Saudi Arabia and Iran. If the USA wanted to pressurise Iran on its support to militant outfits like Hamas, it should have ensured it has support of its allies and multilateral institutions. USA’s unilateral action on Iran does not have the support of other members of the P5 +1(Germany) as well as other oil-dependent countries. With the latest round of sanctions, countries with economies having exposure to Iranian trade industry are gearing up to take a major hit. This brings us back to the subject of concern, why take such hasty decisions impacting the global economy without consultations from other members of the P5 + 1?

    The exit strategy

    In 2018 shale oil catapulted America to the leading position amongst the oil producers. As companies in Texas adopted fracking technology to good use in optimising their oil production, America climbed up to the first position in the oil producers list, surpassing major oil producers such as Saudi Arabia,Russia, Iran and the UAE. Climbing up the oil ladder came at a cheaper price for America considering the OPEC countries, excluding Iran, and Russia had agreed to reduce their oil production to protect the free-falling price of oil. This gave America a free hand at capturing the oil market especially where the demand from emerging economies was increasing rapidly. The only barrier to becoming the largest oil exporter was qualms from the emerging economies and other countries who found the American alternative to be an extremely expensive replacement for their oil needs. With emerging economies deeply dependent on Middle Eastern oil sources, one of the options for America to increase the demand for its oil was by blocking Iran’s oil exports through sanctions. This could give multiple advantages to the US: one is to create economic pressure on Iran; second is to boost American oil exports by eliminating Iran’s oil supply from the market; and third is to strengthen its ally Saudi Arabia’s pursuit of regional domination by squeezing Iranian oil-based economy.

    America’s play on executing its exit and sanctions in such a speedy manner may be rooted in the fact that the major countries dependent on the Iranian oil are in the Asian continent. European countries such as France, Greece, Italy and Spain all combined import close to 500,000 barrels a day as opposed to China and India who import close to 600,000 barrels per day and 500,000 barrels per day respectively. With America limiting its oil imports primarily from Canada and Saudi Arabia, and the European Union sourcing two-thirds of its oil requirements from Russia and Saudi Arabia, American sanctions on Iran do not impact the energy requirements of the western power bloc significantly. Hence, it may have been an American expectation that other members in the JCPOA (P5+1) would support Trump administration’s move to scrap the JCPOA and resume the earlier hard line approach of sanctions on Iran. This, however, has not happened.

    Unfortunately for America, other members of the JCPOA did not see any justification in the logic and accusation given by the Trump administration and hence, there was no support forthcoming from them. Trump’s disdain for allies and his unilateral approach, virtually demanding complete acceptance from European allies bordered on disrespect and insult to the member countries’ sovereignty and pride. Reaction to Trumps position was one of disbelief and contempt, as his actions displayed, in their opinion, disregard and contempt for international norms and credibility. Quite clearly USA has sought to bulldoze its way through with utter disregard for international institutions and multilateralism, exploiting its domination of the global financial institutions, banking system, and the fact that the US dollar is still the world’s reserve currency.

    UK, France and Germany together set up Instex – Instrument in Support for Trade Exchanges, to facilitate the trade of medicines, medical devices and food supplies, which trades in Euro through a financial channel having zero exposure to the American financial intermediaries. This marked a milestone in the chapter of American supremacy, where its European allies took a stance against its imposing regime. Though the volume of trade is negligible, the all important European message is that it will not support the American unilateralism. In the absence of any European support, Trump administration should have recognised its folly of trying to impose its decision on its allies, but on the other hand it made it even worse by virtually threatening diplomatic ties with those countries. Others in the P5, such as China and Russia have agreed with the European counterparts to re-examine and review if necessary the terms of the 2015 JCPOA deal and look for ways to deflect and overcome the US sanctions. Iran too, has welcomed the idea and agreed to keep its end of the 2015 deal. Time however, is running out as Iran has demonstrated its loss of patience over the lack of progress on the issue, and has stated on more than one occasion, in the last six months, that it will recommence its nuclear fuel reprocessing and enrichment activities.

    Asian approach to the Iranian issue

    Asia is the largest customer of crude oil, importing 53% of the global total oil imports, translating to an approximate amount worth $628.2 billion. One major reason for this huge oil influx is the fact that Asia is home to the fastest developing economies such as China and India. Though China and India have maintained that they will continue to import oil from Iran, one issue that concerns all the countries importing Iranian oil is the availability of insurers willing to take up the risk for oil supply from Iran. Most insurers will be cautious to take up projects for fear of losing business and financial access in the West.

    With the ongoing trade war with America, China is fighting a dual war. For America, the opponent has been weighed down with two hurdles co-incidentally and conveniently. With the trade war impacting the export industry and sanctions on its oil supplier indirectly hitting the Chinese economy, China may chose well to hit back on America by disregarding the sanctions on Iran. Iran might just have earned itself a powerful ally because of American hegemony. Chinese imports of crude oil from Iran have surged to record levels in April and May. Iran is set to become China’s 2ndlargest supplier of crude oil.

    Steering the wheel of attention towards India, Iran is its third largest oil source. Particularly being an oil dependent emerging economy, the sanctions on Iran will force India to look at more expensive oil options. The six month credit line and insurance included price for Iranian oil made it the most lucrative oil supplier in the business. Another issue that has come to India’s doorstep is the longevity of the rupee account based trading system with Iran using the UCO Bank. UCO Bank being the only bank with no exposure to American financial channels is the only means for continued Iran-India trade relations. In light of the US sanctions, India reduced its oil imports to turn eligible for a sanction waiver. This sanction waiver came to an end on 02May 2019, and oil imports stopped owing to the election period as well. Now the primary concern for the new Indian government is to prioritise the Iran issue. Iran is accountable for thirty percent of India’s exports, and given that the rupee account is fuelled by the INR deposited in favour of oil imports from Iran, the systematic reduction of oil import also creates a proportional fall in demand for Indian exports, owing to the curb of Iran’s purchasing power. Since the end of the sanctions waiver, India has stopped import of Iranian oil, hopefully only as a temporary measure.

    At the same time, a diplomatic concern that arises for India is its interest over the Chabahar port. Chabahar Port is a major investment arena for India to create a transportation corridor connecting Asia as well as the land-locked Afghanistan with the rest of the world. Though India plans on disregarding the US Sanctions and continuing business through the UCO Bank and Iran’s Pasargad Bank, attention needs to be paid to resolve the reducing Iranian imports, not only to secure India’s exports but also to show Iran the commitment India has towards its diplomatic ties with them and its vested interest in operating the Chabahar Port. Going ahead with the possibility that China would disregard the sanctions on Iran, a reduction in Iranian imports could weaken Iran’s ties to India and pave the path to strengthen Iran-China ties. This would particularly be drastic for India, if Iran were to give China operational rights to the Chabahar port. Needless to say, this would bring in interference from Russia, who wouldn’t be thrilled with the loss of regional trade autonomy to China.

    Approaching the dénouement

    From a bird’s eye view, the rising conflicts in the West Asian region, with Saudi Arabia and the UAE being the main champions who support the efforts for a change in Iran’s regime, Iran finds itself in a cornered situation amongst its neighbours. If cornered, both strategically and economically, Iran could resort to using its strategic location to choke the Strait of Hormuz by planting sea mines or through any other obstruction mechanism. Though unlikely, as it would put Iran in a very hostile situation with rest of the world, it cannot be ruled out as an extreme last resort measure. This could create major international crisis. It would, as a start contribute to the run up in oil prices and owing to supply security – it is possible that USA stands to benefit immensely in such a crisis.

    On the other hand, by imposing sanctions on Iran, America has pushed India to an uneasy corner. Owing to regional ties, it plays to India’s strength to take care of her interests by dealing with Iran and securing operation of Chabahar port. On the other hand it is essential to keep India’s ties with America on an even keel. If it refuses to acknowledge India’s ground interests and resorts to the muscle power of sanctions, China may end up as the beneficiary with a fortuitous win with Chabahar port, leading to an ultimate strategic loss to India and the US.

    The situation calls for global introspection into imposing sanctions by a country due to its phenomenal control over the world’s financial channels and the domination of the USD international trade. But this round of sanctions just might be the one where countries figure out alternate solutions together; considering the European initiative of Instex, Asian methods such as the trade using rupee account, Russian and Chinese support towards Iran; to finding a more cooperative and equitable solution that enables the world to trade outside the control of America. The sanctions may have just provided the edge to catalyze the changing world order, but the question is who’ll sit on the throne of the high table when the rubble settles? Or will it be, as it seems more likely, a more cooperative and less competitive, multi-polar world order?

    Adithya Subramoni is interning at ‘The Peninsula Foundation’. She has a Bachelors degree in Commmerce  from Christ College, Bangalore.

    Photo Credit under a Creative Commons Attribution 4.0 International License.: english.khamenei.ir

  • TPF Conference India and the Indian Ocean Region

    TPF Conference India and the Indian Ocean Region

    TPF Conference

    “India and the Indian Ocean Region: Dynamics of Geopolitics, Security, and Global Commons”

    Venue: WCC, Chennai

    Registration

    08:15 to 09:00

    Speakers

    Inaugural Session (9:00 to 10:45)

    dr-lilian-i-jasper
    Dr Lilian Jasper

    Principal, WCC, Chennai

    Dr Lilian Jasper
    Welcome Address
    air-marshal-m-matheswaran-avsm-vm-phd-retd
    Air Marshal M Matheswaran

    President, The Peninsula Foundation, Chennai

    Air Marshal M Matheswaran AVSM VM PhD (Retd)
    Presidential Address and Overview
    ashok-kumar
    Vice Admiral Ashok Kumar

    AVSM VSM Vice Chief Of Naval Staff HQ

    Vice Admiral Ashok Kumar AVSM VSM Vice Chief of Naval Staff
    Inaugural Address

    Prof Kanti Bajpai

    LKYS of Public Policy, NUS, Singapore

    Prof Kanti Bajpai
    Key Note Address

    COFFEE BREAK

    10:45 to 11:10

    Special Lecture 11:15 to 12:00

    Dr. Padma Subrahmanyam, Padma Bhushan awardee/Classical Dancer
    India’s Art & Culture in IOR

    Session I (12:00 to 13:30)

    Cmde Uday Bhaskar (Retd) – Director, Society for Policy Studies, New Delhi

    Indian Ocean: Culture, Civilizations and Connectivity

    Mrs G Padmaja – Former Regional Director, National Maritime Foundation, Vizag

    Topic: Historical and Cultural Dynamism of the Indian Ocean

    Dr. Vijay Sakhuja – Trustee, The Peninsula Foundation, Chennai

    Topic: Cargos and Commodities: Then and Now

    Dr. D Dhanuraj – Chairman, Centre for Public Policy Resrarch. Cochin

    Topic: Impact of Trade and Migration Flows: Past and Present

    LUNCH BREAK

    13:00 to 14:15

    Session II (14:15 to 15:45)

    Dr. TCA Raghavan – Director General, Indian Council for World Affairs, New Delhi

    Power Politics in IOR: Geostrategies and Geo-economics

    Dr Lawrence Prabhakar – Associate Professor, Madras Christian College, Chennai

    Topic: Competing Pivots: China, US, Japan, Russia, India and the EU

    Dr Arvind Kumar – HOD, Department of Geopolitics, Manipal University

    Topic: Geopoltics of Energy in the IOR

    Dr Jabin Jacob – Associate Professor, Shiv Nadar University, Noida

    Topic: China’s BRI: Contrasting Responses

    COFFEE BREAK

    15:45 to 16:00

    Session III (16:00 to 17:30)

    Vice Admiral Shekhar Sinha (Retd)- Trustee, India Foundation, New Delhi

    India’s Strategic Interests in the IOR- Maritime Security, Power Projections and Evolving Partnerships

    Cmde Somen Bannerjee – Senior Fellow, Vivekananda International Foundation, New Delhi

    Topic: India’s Maritime Security and Power Projection

    Amb Antonio Chiang – Policy Advisor to the President; Board Director, Institute for National Defence and Security Research

    Topic: Strategic Partnerships: India and ASEAN

    Group Captain PB Nair – Directing Staff, Defence Services Staff College, Wellington

    Topic: Air and Space: Dimension of India’s IOR Strategy

    End of Day 1 – 17:30

    Network Dinner (By Invitation)

    19:30 to 22:00

    Gold Sponsors

    Event Sponsors

    Speakers

    Panel Discussion (9:00 to 11:00)

    Topic – India’s Strategic Approaches in IOR: Between Aspirations and Contradictions

    Moderator

    Air Marshal M Matheswaran AVSM VM PhD (Retd)

    Prof Kanti Bajpai – Panelist

    Dr TCA Raghavan – Panelist

    Amb Antonio Chiang – Panelist

    Lt Gen SL Narasimhan – Panelist

    Cmde Uday Bhaskar – Panelist

    COFFEE BREAK

    11:00 to 11:15

    Session IV (11:15 to 12:45)

    Dr. Joshua Thomas – Deputy Director, ICSSR, NERC, Shillong

    International Cooperation and Global Commons

    Dr Suba Chandran – Professor and Dean, School of Conflict and Security Studies, NIAS, Bangalore

    Topic: Cultural Legacies and Competing for Zones of Influence: India, China and External Powers

    Rear Adm S Shrikande AVSM (Retd) – Goa

    Topic: International Institutions: SLOCs, Chokepoints, Freedom of Navigation

    Rear Adm K Swaminathan – FOST, Southern Naval Command, Cochin

    Topic: India’s Ability to Provide Net Security and Balance Global Public Goods

    LUNCH BREAK

    12:45 to 13:45

    Session V (13:45 to 15:15)

    Lt Gen SL Narasimhan – Director General, Centre for Contemporary Chinese Studies, MEA

    Transnational Issues, Threats and Challenges in the IOR

    Dr R P Pradhan – Associate Professor, BITS, Goa

    Topic: India and the Blue Economy: Evolving Partnerships

    Dr Arabinda Acharya – Associate Professor, International relarions, NDU, Washington

    Topic: Non Traditional Security Threats: Piracy, Maritime Terrorism, Climate Change, Illegal, Unreported and Unregulated (IUU) Fishing, Illegal Immigration, and Smuggling of Arms and Drugs

    AVM Ashutosh Dixit – AD Commander HQ, Southern Air Command, IAF, Trivandrum

    Topic: International and Regional Cooperation in Disaster Management

    COFFEE BREAK

    15:15 to 15:30

    Valedictory Session (15:30 to 17:00)

    Air Marshal M Matheswaran AVSM VM PhD (Retd) – Chairman and President, The Peninsula Foundation, Chennai

    Topic: President’s Introduction

    Dr TCA Raghavan, IFS (Retd) – Director General, Indian Council of World Affairs, New Delhi

    Topic: Valedictory Address

    Brigadier Albert Pakianathan VSM and Bar – Director- Research and Admin, The Peninsula Foundation, Chennai

    Topic: Vote of Thanks

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  • Strategic Autonomy and the Looming Oil Crisis

    Strategic Autonomy and the Looming Oil Crisis

    Kamal Davar                                                                                             May 31, 2019/Commentary

    The new Modi government will have to speedily contend with a serious foreign policy challenge on its hands.

    That this ordeal comes in the wake of some underplayed serious economy problems currently facing the nation will compound the problems for India which imports over 80 per cent of its burgeoning oil needs.

    Thus, if the looming crisis in the Persian Gulf between an arrogant US and an equally defiant Iran does not get resolved peacefully, ominous ramifications await the region, the world and all those nations which import crude oil from Iran.

    The genesis of the current crisis between the US and Iran has its roots in the Joint Comprehensive Plan Of Action (JCPOA) which was agreed upon by Iran and six western nations in 2015, led by the US, to curb Iran’s nuclear programme, which boils down to deterring Iran from developing nuclear weapons. But in May 2018, the US, under its mercurial President Donald Trump, chose to renege on this treaty as Trump felt that this was the “worst deal ever negotiated.”

    It is also a fact that Iran did not violate any norms of the law as regards this agreement.

    Meanwhile, the US allowed some nations, including India, which import oil from Iran a six-month waiver, which ended on May 2, 2019. As a consequence of the US action, oil prices the world over have jacked and soon its adverse effects will be felt in India as inflation will hit the already strained Indian economy. Over a 10 per cent hike in global oil prices has already taken place in the last one month and a crippling escalation in oil prices ahead is well on the cards.

    Notwithstanding any US pressure on India, the unalterable fact of Iran’s strategic significance to India in the region remains beyond question. India imported 24 million metric tonnes of crude from Iran in the 2018-19. India was Iran’s second largest buyer of crude last year, while Tehran was the third largest supplier to India after Iraq and Saudi Arabia (11 per cent of a total of India’s oil imports).

    Additionally, Iranian crude comes with a longer credit period and cheaper freight owing to Iran’s geographical proximity to India and, thus, Iranian oil remains the best option for India in more ways than one.

    Higher oil prices also make the Indian rupee weaker, making imports to India costlier. Importantly, that Iran-India collaboration in the development in the vital Chabahar Port in Iran will give India vital ingress to Afghanistan and the Central Asian Republics cannot be understated.

    Meanwhile, the US has rushed the formidable USS Abraham Lincoln carrier-borne Task Force to the Persian Gulf region and undertaken certain prophylactic steps in case war breaks out.

    The Iranians, too, have mounted some small-range anti-ship missiles on their warships. Iranian President Hassan Rouhani recently said that his nation is facing acute pressure from international sanctions, dubbing it a “war unprecedented in the history of the Islamic revolution.”

    The US has also branded Iran’s elite Revolutionary Guards as a foreign terrorist organisation. A war of words has broken out, with President Trump declaring that if “Iran wants to fight, that will be the official end of Iran. Never threaten the United States again.”

    Replying back sternly, Iranian Foreign Minister Javad Zarif retorted that Iranians have stood tall for millennia against aggression and that “economic terrorism and genocidal taunts won’t end Iran.” He added that “never threaten an Iranian. Try respect it works.”

    Importantly, even US allies have steered away from of taking any partisan positions with either the US or Iran. Meanwhile, oil-producing nations like Saudi Arabia, Kuwait, Mexico and the US itself have been requested to step up their oil production to cater for Iranian oil shortfalls.

    How this oil crisis will shape up to meet global demands is anyone’s guess.

    It is a strategist’s nightmare in conjuring up a scenario concerning the ramifications of a war between Iran and the US. The Persian Gulf is easily one of the world’s critically significant strategic waterways through which one-third of the world’s oil is transported.

    In the event of a war, Iran will definitely close the vital Straits of Hormuz for commercial shipping purposes, throwing the region’s economy out of shape — an eventuality which, hopefully, should not ever take place.

    Preoccupied with its General Election, India, as a major regional player, has so far not reached out to its strategic partner, the US, to impress upon it to defuse the crisis.

    Recently, the Iranian Foreign Minister made a trip to India to explain their position to India on the current standoff.

    India, however, need not succumb to any US pressures or take sides. India has an adequate financial standing and moral stature to play a peacemaker’s role. India must conscientiously follow the time-honoured policy of zealously guarding its strategic autonomy. Respect for India from nations even adversarial to each other — as in earlier decades — will follow automatically and some of India’s economic tribulations will also get simultaneously addressed.

    Let the new government in New Delhi bear in mind Iran’s more than significant strategic value for India in the region.

    The author, Lt Gen Kamal davar is a former DGDIA and is visiting Distinguished fellow at TPF. 

    This article was earlier published in The Tribune.