ASEAN-India-Australia: Towards Closer Engagement in a New Asia 9789812309648

Table of contents :
Contents
Preface
Contributors
List of A bbreviations
Introduction
Part I: Emerging Regional Security
1. Emerging Regional Security Architecture: An Australian Perspective
2. Emerging East Asian Regional Architecture: ASEAN Perspectives
3. India in the Emerging Asian Architecture: Prospects for Security Cooperation with ASEAN and Australia
4. ASEAN, Australia, and India in Asia’s Regional Order
Part II: Energy Security
5. Regional Energy Security: A Challenging Objective?
6. Energy Security: An ASEAN Perspective
7. India’s Perspectives on Energy Security
Part III: Climate Change
8. The Strategic Implications of Climate Change
9. Climate Change: An ASEAN Perspective
10. Indian Perspectives on Climate Change
Part IV: Maritime Security
11. Australia and Maritime Security in the Northeast Indian Ocean
12. ASEAN Maritime Security Perspectives: Enduring Partnerships
13. Maritime Security Triangulation of ASEAN-Australia-India: An Indian Perspective
14. Governance in Australian Discourse
15. ASEAN Charter and Perspectives of Governance and Democracy in Asia
16. The Problem of Governance in India
Part V: Law Enforcement/Combating International Crime
17. Implications of the Growing Prevalence of Interregional Crime for Cooperation in the Asia-Pacific Region
18. Australian Perspectives on Regional Law Enforcement: Issues and Challenges
19. Countering International Crime in an ASEAN Context: Singapore’s Perspective
20. Indian Perspectives on Law Enforcement against International Crime
Conclusion
Bibliography
INDEX

Citation preview

ASEAN INDIA AUSTRALIA

The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). ISEAS Publishing, an established academic press, has issued almost 2,000 books and journals. It is the largest scholarly publisher of research about Southeast Asia from within the region. ISEAS Publishing works with many other academic and trade publishers and distributors to disseminate important research and analyses from and about Southeast Asia to the rest of the world.

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ASEAN INDIA AUSTRALIA

Towards Closer Engagement in a New Asia

Edited by

WILLIAM T. TOW and CHIN KIN WAH

INSTITUTE OF SOUTHEAST ASIAN STUDIES Singapore

First published in Singapore in 2009 by Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614 E-mail: [email protected] Website: All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2009 Institute of Southeast Asian Studies, Singapore The responsibility for facts and opinions in this publication rests exclusively with the authors and their interpretations do not necessarily reflect the views or the policy of the publisher or its supporters.

ISEAS Library Cataloguing-in-Publication Data ASEAN-India-Australia : towards closer engagement in a new Asia / editors William T. Tow and Chin Kin Wah. 1. Southeast Asia—Relations—Australia. 2. Australia—Relations—Southeast Asia. 3. Southeast Asia—Relations—India. 4. India—Relations—Southeast Asia. 5. Australia—Relations—India. 6. India—Relations—Australia. I. ASEAN. II. Tow, William T. III. Chin, Kin Wah. DS33.3 A81 2009 ISBN 978-981-230-963-1 (hard cover) ISBN 978-981-230-964-8 (PDF) Typeset by Superskill Graphics Pte Ltd Printed in Singapore by Utopia Press Pte Ltd

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Contents

Preface

ix

Contributors

xiii

List of Abbreviations

xvii

Introduction Robin Jeffrey

xxi

Part I: Emerging Regional Security 1

Emerging Regional Security Architecture: An Australian Perspective William T. Tow and Brendan Taylor

2

Emerging East Asian Regional Architecture: ASEAN Perspectives 22 Chin Kin Wah

3

India in the Emerging Asian Architecture: Prospects for Security Cooperation with ASEAN and Australia C. Raja Mohan

4

ASEAN, Australia, and India in Asia’s Regional Order Deepak Nair

3

40 58

Part II: Energy Security 5

Regional Energy Security: A Challenging Objective? Stuart Harris

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79

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vi

Contents

6

Energy Security: An ASEAN Perspective Elspeth Thomson

7

India’s Perspectives on Energy Security Ligia Noronha

95 111

Part III: Climate Change 8

The Strategic Implications of Climate Change Alan Dupont

131

9

Climate Change: An ASEAN Perspective Michael Richardson

153

10 Indian Perspectives on Climate Change T.P. Singh and Sharai Lewis-Gruss

172

Part IV: Maritime Security 11 Australia and Maritime Security in the Northeast Indian Ocean 185 Chris Rahman 12 ASEAN Maritime Security Perspectives: Enduring Partnerships 203 Ramli H. Nik 13 Maritime Security Triangulation of ASEAN-Australia-India: An Indian Perspective W. Lawrence S. Prabhakar 14 Governance in Australian Discourse William Maley 15 ASEAN Charter and Perspectives of Governance and Democracy in Asia Ho Khai Leong 16 The Problem of Governance in India Sarbeswar Sahoo

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219 243

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Contents

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Part V: Law Enforcement/Combating International Crime 17 Implications of the Growing Prevalence of Interregional Crime for Cooperation in the Asia-Pacific Region Sandy Gordon

293

18 Australian Perspectives on Regional Law Enforcement: Issues and Challenges Grant Wardlaw

319

19 Countering International Crime in an ASEAN Context: Singapore’s Perspective Lock Wai Han

334

20 Indian Perspectives on Law Enforcement against International Crime Hormis Tharakan

347

Conclusion Pritam Singh and Michael Wesley

361

Bibliography

369

Index

399

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Preface

Nearly two decades after the Cold War, what type of security order is emerging in the Asia-Pacific remains unclear. Hegemony, power balancing, the politics of concert, and community building have all been designated as possible models for a future regional order, but all of these approaches contain risks for misperception and conflict escalation. Uncertainties are further intensified by the nature of emerging, broader security tests now confronting the region. These “non-traditional” or “transnational” challenges originate largely from “non-state-centric” sources and permeate national boundaries in unprecedented fashion. Climate change, international crime, maritime threats, energy shortages, and various issues of civil society and human security emanating from problems of governance all vie for attention of Asia-Pacific policymakers in an increasingly complex world. What remains constant, however, is the human tendency to seek ways of organizing collectively to overcome the major security challenges of the day. The bipolarity that was shaped by superpower competition between the United States and the Soviet Union and dominated “strategic Asia” for the second half of the previous century is clearly transforming into new geometries that are not yet clearly understood. In the absence of a more certain and transparent world, actors who have either previously formed habits of interacting with each other in a regional context, or who share a common heritage of language, political culture, and geopolitical affinity, often find it easier to communicate and cooperate with each other than to negotiate hard bargains with potential adversaries. ASEAN-Australian relations exemplify the first pattern; Australian-Indian relations potentially reflect the second. The ASEAN-Indian relationship appears to have largely remained outside

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Preface

such orbits to date. Yet both Southeast Asian and Indian analysts have noted that a greater “security convergence” is now materializing within that dyad as well. Visible strategic consensus now clearly exists, for example, in the areas of counter-terrorism, maritime security, and democratization.1 An obvious question flowing from such developments is to what extent these three actors might constructively pursue an implicit form of trilateralism in their security interactions. “Trilateralism” is applied to mean that the three actors under review in this particular volume would forge a series of arrangements or even policy-specific regimes, underwritten by a commonality of interests, derived from increasingly shared democratic values, economic concerns, and geopolitical relativities. India has joined ASEAN and Australia to adopt a robust anti-terrorism posture, and this will only be reinforced in the aftermath of the December 2008 Mumbai attacks. As predominantly maritime entities, all three are largely dependent on unencumbered sea lanes and are apprehensive about Asian land powers developing maritime projection capabilities that could challenge their natural domain reserves. All of them will grapple with developing or accessing effective sources of water, energy, and food needed to sustain growing populations. Australia has a keen interest in encouraging the continued development of democratic forces in both India and in various ASEAN member states. In early 2008, the time appeared opportune to convene a workshop finally of experts representing these three polities for discussions and analysis of these issues. India had reached a crossroads in its “Look East” policy with ASEAN, with initial high expectations for a free trade agreement between the two parties not realized, and with the Indian government becoming more strategically enmeshed with the United States via the Indo-United States nuclear deal. ASEAN was moving closer towards implementing formal, regional community-building processes for Southeast Asia via the ASEAN Charter. Australia had just elected its first new Prime Minister in eleven years and one who was determined to resuscitate his country’s “Asian credentials” after his predecessor had arguably linked it closer to U.S. strategy than had any other post-war Australian leader. By 2007, India had emerged as Australia’s fourth largest export market and was being viewed more seriously as a potential geopolitical counterweight to the expansion of Chinese power in Asia. Indeed, one respected Australian observer noted near the end of the year that, “…(s)ome would even argue that the stability of India’s political system, with the shock-absorber that democracy provides, might make its long-run success more assured than China’s and therefore an increasingly appealing economic and strategic collaborator with Australia”.2

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xi

Exploratory discussions between representatives of the Australian National University’s (ANU’s) Department of International Relations and Singapore’s Institute of Southeast Asian Studies (ISEAS) had resulted in a planning meeting at ISEAS on 16 October 2006, which paved the way to a substantive workshop at the ANU on 18–19 February 2008 to consider this emerging trilateral relationship. Vigorous discussions were conducted at this latter event in the six broad issue-areas that constitute this volume’s subsections. These were subsequently synthesized into formal chapters and supplemented by other contributions from selected analysts unable to attend the original proceedings. Acknowledgements for projects such as this invariably omit individuals who played some role in their manifestation. There is no doubt, however, that those who are mentioned below all contributed substantially to those processes leading to the planning meeting, the subsequent wonderfully productive workshop, the publication of this book, and the realization of overall project success. These include, in particular, Ambassador K. Kesavapany, ISEAS Director, who extended his institute’s resources and encouragement to see the project through to completion, and Professor Robin Jeffrey, Dean of ANU’s Research School of Pacific and Asian Studies at the time the workshop convened. To both of them, we owe an immense debt and are highly grateful for their interest and support. Chin Kin Wah, who oversaw the project on the ISEAS side, was assisted by Pritam Singh and Deepak Nair (both of whose work appear within these pages) at critical junctures of project development. The publications process was ably managed by ISEAS Managing Editor, Triena Ong. Preparation of the reference list was painstakingly handled by Linda Yip and D. Ghandimarthy of the ISEAS Library, and assisted by Sheila Flores of ANU’s Department of International Relations. Kasmawati binte Abdullah of the Rajaratnam School of International Studies (RSIS), Singapore, steadfastly formatted most of the revised chapter drafts for the ISEAS editorial team and she was assisted by Lynn Aw of ISEAS, who also helped to prepare the final pre-publication manuscript. The editors are particularly grateful to Mary-Louise Hickey for assuming responsibility of the book’s copy editing at a crucial juncture in its production phase. We are deeply indebted to her timely and hugely effective involvement in this project. Professor Lorraine Mazerolle, Director of the Australian Research Council’s Centre of Excellence for Policing and Security (CEPS), is to be particularly thanked for the infusion of critical financial support for the project at a critical time. Professor Peter Grabosky, CEP’s Deputy Director, was instrumental in ensuring that the Centre provided valuable and timely

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logistical support for the workshop’s duration. Workshop organization was administered at the ANU by Amy Chen, Tomohiko Satake, and Peta Hill. Dr Brendan Taylor proved to be an invaluable contributor to the proceedings, not only for his academic input, but for logistical contributions to workshop functions as well. Finally, the co-editors wish to thank the contributors to this volume for their patience and understanding towards what became a somewhat extended editorial process. We hope what follows will be worth the wait, stimulating greater thought and more extensive debate on what promises to be an increasingly significant trilateral security relationship in years to come. William T. Tow Chin Kin Wah

Notes

1



2

See Sudhir Devare, India and Southeast Asia: Towards Security Convergence (Singapore: Institute of Southeast Asian Studies, 2006) and ASEAN Secretariat, “ASEAN-India Dialogue Relations”. (accessed 22 December 2008). Rory Medcalf, “Australia’s Relations with India”, Incoming Government Brief (Sydney: Lowy Institute for International Policy, 21 December 2007).

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Contributors

Chin Kin Wah is Deputy Director, Institute of Southeast Asian Studies, Singapore. Alan Dupont is Professor, Michael Hintz Chair of International Security, and Director, Centre for International Security Studies, University of Sydney, New South Wales. Sandy Gordon is Professor, Centre for Excellence in Policing and Security (CEPS), RegNet, College of Asia and the Pacific, The Australian National University, Canberra. Stuart Harris is Emeritus Professor, Department of International Relations, RSPAS, College of Asia and the Pacific, The Australian National University, Canberra. Ho Khai Leong is Associate Professor, School of Humanities and Social Sciences, Nanyang Technological University, Singapore. Robin Jeffrey is Emeritus Professor, The Australian National University, Canberra. Sharai Lewis-Gruss is Assistant Programme Officer Princeton in Asia, International Union for Conservation of Nature (IUCN). Lock Wai Han is Deputy Secretary (Industry & the Arts), Ministry of Information, Communication & the Arts, Singapore. He was formerly Director, Criminal Investigation Department, Singapore Police Force.

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Contributors

William Maley is Professor and Director, Asia-Pacific College of Diplomacy, The Australian National University, Canberra. C. Raja Mohan is Professor of South Asian Studies, S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. Deepak Nair is Research Associate, Institute of Southeast Asian Studies, Singapore. Ramli H. Nik is Research Fellow, Maritime Security & Environment, Maritime Institute of Malaysia (MIMA). Ligia Noronha is Director, Resources and Global Security, The Energy and Resources Institute, New Delhi. W. Lawrence S. Prabhakar is Associate Professor, Department of Political Science, Madras Christian College, Chennai, India; Founding Member, Centre for Security Analysis, Chennai, India; and Adjunct Professor, Department of Geopolitics, Manipal University, Manipal, India. Chris Rahman is Research Fellow, Australian National Centre for Ocean Resources and Security (ANCORS), University of Wollongong. Michael Richardson is Visiting Senior Research Fellow, Institute of Southeast Asian Studies, Singapore. Sarbeswar Sahoo is a Ph.D. Student in Sociology, Faculty of Arts and Social Sciences, National University of Singapore. Pritam Singh is Founder, Opinion Asia, Singapore. T.P. Singh is Regional Group Head, Ecosystems and Livelihoods Asia, International Union for Conservation of Nature (IUCN). Brendan Taylor is Lecturer, Graduate Studies in Strategy and Defence, Strategic and Defence Studies Centre, Research School of Pacific and Asian Studies, The Australian National University, Canberra. Hormis Tharakan is currently a member of the National Security Advisory Board, Government of India; Chief Advisor to Brahmos Aerospace, New

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xv

Delhi; and Visiting Professor at Indian Institute of Science, Bangalore, and Department of Geopolitics, Manipal University, Karnataka. Elspeth Thomson is Senior Fellow, Energy Studies Institute at the National University of Singapore. William T. Tow is Professor, Department of International Relations, Research School of Pacific and Asian Studies, The Australian National University, Canberra. Grant Wardlaw is National Manager Intelligence, Australian Federal Police, Canberra. Michael Wesley is Director, Griffith Asia Institute, Griffith University, Brisbane.

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List of Abbreviations

ACS ADF ADMM AFP AHTCC AMMTC AOC APEC ASEAN ASEANAPOL ASEAN+3 ASEAN+6 ASEM ASL ASOD ARF APT ATS b/d BEID BIMSTEC BNP BPO CCS

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Australian Customs Service Australian Defence Force ASEAN Defence Ministers Meeting Australian Federal Police Australian High Tech Crime Centre ASEAN Ministerial Meeting on Transnational Crime Asian Organized Crime Asia-Pacific Economic Cooperation Association of Southeast Asian Nations ASEAN Chiefs of National Police ASEAN plus China, Japan, and the Republic of Korea ASEAN+3 plus Australia, India, and New Zealand Asia Europe Meetings archipelagic sea lane ASEAN Senior Officials on Drugs ASEAN Regional Forum ASEAN+3 amphetamine type stimulants barrels a day Bomb and Explosives Investigation Division Bay of Bengal Initiative for Multi-Sectoral Technical Economic Cooperation Bangladesh National Party Business and Process Outsourcing carbon capture and sequestration

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xviii

CDIAC CDM CEPEA CETS CFL CID CO2 CPI CSCAP CSI e-ADS EPA EAEC EAEG EAS EAVG ECBC EEZ ERIA EU FARC FIU-IND FPDA FTA GCC GHG GIS GNOP HDI IDRF IEA IMB IMO INP INTERFET Interpol IOC IONS IP

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List of Abbreviations

Carbon Dioxide Information Analysis Center clean development mechanism Comprehensive Economic Partnership Agreement of East Asia Child Exploitation Tracking System compact fluorescent lamp Criminal Investigation Department carbon dioxide Corruption Perceptions Index Council for Security Cooperation in the Asia Pacific Container Security Initiative electronic ASEANAPOL Database System Environment Protection Act East Asian Economic Caucus East Asian Economic Grouping East Asia Summit East Asia Vision Group Energy Conservation Building Code Exclusive Economic Zone Economic Research Institute for ASEAN and East Asia European Union Fuerzas Armadas Revolucionarios de Colombia Financial Intelligence Unit — India Five Power Defence Arrangements free trade agreement Gulf Cooperation Council greenhouse gas Geographic Information System Greater Nile Oil Project Human Development Index Indian Development and Relief Fund International Energy Agency International Maritime Bureau International Maritime Organization Indonesian National Police International Force for East Timor International Criminal Police Organization Indian Oil Corporation Indian Ocean Naval Symposium intellectual property

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xix

List of Abbreviations

IPC IPCC IRRI ISP JCLEC JDA JI JMSDF LNG LULUCF mbd MDMA MSW MW NAPCC NATO NEAT NPA NPT OECD OIL ONGC OPEC OVL PECC PMLA PNG PRIA PSI PVC RAN SCO SEATO SLL SLOC SLR SOMTC SOLAS SPF

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Indian Penal Code Intergovernmental Panel on Climate Change International Rice Research Institute Internet Service Provider Jakarta Centre for Law Enforcement Cooperation Joint Development Area (Malaysia-Thailand) Jemaah Islamiyah Japanese Maritime Self-Defence Force liquefied natural gas land use, land-use change, and forestry million barrels a day Methylenedioxymethamphetamine Municipal Solid Waste megawatt National Action Plan on Climate Change North Atlantic Treaty Organization Network of East Asian Think-tanks New People’s Army Nuclear Non-Proliferation Treaty Organization for Economic Cooperation and Development Oil India Ltd Oil and Natural Gas Corporation Organization of Petroleum Exporting Countries Oil and Natural Gas Corporation Videsh Ltd Pacific Economic Cooperation Council Prevention of Money Laundering Act Papua New Guinea Society for Participatory Research in Asia Proliferation Security Initiative photovoltaic cell Royal Australian Navy Shanghai Cooperation Organisation Southeast Asia Treaty Organization Special and Local Laws sea lines of communication sea level rise Senior Officials Meeting on Transnational Crime Safety of Life at Sea Singapore Police Force

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xx

SRATS SUA TAC TERI TTEG ULFA UNMISET UNCLOS UNEP UNFCCC UNODC VGTF VoIP WHO WMD WOT WTO ZOPFAN

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List of Abbreviations

Specialist Response Amphetamine Type Stimulant Suppression of Unlawful Acts Treaty of Amity and Cooperation The Energy and Resources Institute Tripartite Technical Experts Group United Liberation Front of Asom U.N. Mission in Support of East Timor U.N. Convention on the Law of the Sea U.N. Environment Programme U.N. Framework Convention on Climate Change U.N. Office on Drugs and Crime Virtual Global Task Force Voice over Internet Protocol World Health Organization weapons of mass destruction war on terror World Trade Organization Zone of Peace, Freedom and Neutrality

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Introduction Robin Jeffrey

Two incidents help to explain the reason for this book, a book about a new, constantly interacting world, yet a world in which local skills, history, and emotions reach out more widely and potently than ever before. In 2008, a news item highlighted aspects of old and new times: the Indian Navy pursued pirates in the Gulf of Aden and sank a Thai vessel that pirates had hijacked. “An Indian Navy, sinking a Thai boat in the Arabian Sea?”, many consumers of English language media would have asked. “When did India become a great seafaring power?” Surely it should be the Royal Navy or the U.S. Navy that squared off with maritime malefactors? And “pirates”? The word returned to common use in 2008, not in reference to musical comedy or Hollywood swashbuckling, but to sea-borne criminals threatening shipping from the Suez Canal to the Strait of Malacca. In 2008, too, the city of Mumbai was attacked by a handful of terrorists from dusty Punjab in Pakistan who slipped into the city from the sea. The police who interrogated the sole surviving attacker took hours to make sense of him because “the Mumbai Police officers … were Marathi speakers, unable to communicate with the south Punjab resident.”1 The task that this book sets itself — the task the Mumbai police wrestled with — is to understand local subtleties and nuances within the larger context of globalization. The “actors” in this book — India, Australia, and the ASEAN countries — might once have seemed an unusual combination. For the first two generations after the Second World War, these were distant neighbours and an unlikely triangle. Australia, to be sure, had interests in Southeast Asia, but these varied enormously — from confrontation with Indonesia and war in Vietnam, to military bases in Malaysia. In spite of assertions about things in common, India and Australia struggled to find genuine partnerships either

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Robin Jeffrey

in diplomacy or commerce.2 And India, champion of a global non-aligned movement, did not begin to “look east” until the 1990s.3 So much has changed, as the present book illustrates. Emerging from ascetic stand-offishness, India, since the 1990s, has sought recognition as a conventional “great power”. Its interests in the countries of ASEAN range from fascination with the economic successes of Singapore, to a sense of family involvement that extends back to the Hindu kingdoms of Bali and mainland Southeast Asia. India’s closer engagement with Australia, which is only slowly being appreciated, dates in part from the beginning of the twenty-first century and the arrival of large numbers of Indian students — 65,000 in mid-2008.4 Many will stay in Australia, and most will retain long-term connections. Previously, three reasons explained why Australia-India relations always seemed to be filled with unfulfilled potential. First, the human dimension was narrow. People of Indian extraction in Australia were fewer and of more recent standing than similar populations in Canada, the United Kingdom or the United States,5 and thus the constant two-way traffic, which creates relationships and diversifies commerce, was small. Second and relatedly, though the volume of India-Australia trade grew from the 1980s, the bulk of it lay in Australia’s export of a narrow range of raw materials.6 Third, until the 1990s, Australia and India were wedded to antagonistic partners — Australia to the United States and India to the Soviet Union. As India and the United States warm to each other in the twenty-first century, defence and intelligence cooperation between Australia and India becomes less inhibited. By 2005, the dynamics of the relationship were changing. This is seen most clearly in the people traffic: In 2005, a surprising number of Indian tourists (79,000) visited Australia and 94,000 Australian tourists went to India. India had become Australia’s fastest growing merchandise export market.7 Expanding global trade, and Australia’s role as a trading nation, have focused Australian attention on trading routes as never before. Similar considerations apply to many of the countries of ASEAN and certainly to ASEAN’s corporate aspirations as a facilitator of, and hub for, trade. As Prabhakar tells us in this book, 50,000 ships today pass through Indian territorial waters each year and another 50,000 call at Indian ports. India’s Andaman Islands, the southernmost of which is closer to Indonesia, Thailand, and Malaysia than to mainland India, can be seen as the guardians of the Strait of Malacca, through which pass much of the world’s oil trade on its way to China and Japan. This maritime world, which has been interrelated in slow-moving ways for hundreds of years, has in the past generation been augmented by the digital and electronic revolution and the speed and reach

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that the digital age make possible. India, Australia, and the countries of ASEAN now find themselves confronting their geography on a daily, interactive basis as never before. The struggle to comprehend and adapt to this new world is the substance of the chapters in this book. It is a book about “security”, but security understood in broad terms. Indeed, the fundamental question is posed by Deepak Nair: How can India, Australia, and ASEAN contribute to stability in the new Asia? Without stability, the biggest questions — those of climate change and the improved well-being of large numbers of people — cannot be effectively tackled. And if they are not tackled, the future, not just of the region, but of the planet, is gloomy. The supplementary question, sometimes alluded to, but not dealt with explicitly in this book, is how India, Australia, and ASEAN manage their relationships with China. It is a question worth a conference and a book in itself. India, some would argue, lacks knowledge and expertise about China, and Australia should develop a role to work with India to enhance its cadre of China specialists. (It is worth pointing out that Australia’s prime minister speaks Mandarin, learned at an Australian university.) On the ASEAN side, each of its members has a complex and unique history of engagement with China — from Singapore, where Mandarin is an official language, to Indonesia and Vietnam and their troubled China links. Australia, for its part, seeks to mitigate potential conflict between its U.S. ally and its immense new trading partner, China. A common approach to growing Chinese power is unlikely to emerge among India, ASEAN, and Australia; but the “China factor” will be ever-present in future meetings of India, ASEAN, and Australian leaders. This book’s six sections analyse both broad and specific concerns: • Emerging Regional Security Architectures provides readers with details of the treaties and agreements into which India, Australia, and ASEAN have entered, and interpretation of what these attempts to construct diplomatic “architecture” mean; • Energy Security examines the needs of the three actors and the policies that attempt to satisfy those needs; • Climate Change examines each actor’s understanding of, and policy efforts towards, the great issue of the twenty-first century; • Maritime Security emphasizes the aspect, noted at the start of this introduction, that “everything old is new again”. Growing world trade, overwhelmingly dependent on the sea, has brought seafaring before public minds in ways unheard of since planes became a popular mode of travel in the 1960s. As the three chapters in this section point out, ships are

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vulnerable, their cargoes both valuable and potentially dangerous, and their capacity to degrade environments is great; • Governance returns to broader questions: How do countries and transstate groupings such as ASEAN organize themselves to serve their people? In ASEAN’s case, the question is tantalizing: Variations of “governance” range from Singapore’s efficacious paternalism to the brutal incompetence of Burma. And the picture of India drawn in this book is depressing indeed; • Law Enforcement leads analysts — not to mention law-enforcers — into problems of governance and interstate relations. One country’s crime may be another’s successful business (for example, online gambling), and the variations in law among ASEAN states, not to mention between Australia and India, are vast. Yet cooperation is essential if the larger goal of regional stability to enable human well-being is to be achieved. The tasks identified in the six sections of this book are daunting. Yet change is possible, as the history of relations among India, ASEAN, and Australia indicates. In the early 1980s, in a Cold-War world in which the Soviet Union had occupied Afghanistan, and Vietnamese troops had overthrown the Khmer Rouge in Cambodia, India sought to divide ASEAN, which opposed the Vietnamese invasion.8 In the late 1980s, ASEAN members regarded Indian naval expansion as an intrusion and potential threat.9 In Australian diplomatic eyes, India rated in the second division: The former High Commissioner to Fiji was sent as Australia’s High Commissioner to India in 1979, and soon afterwards created a diplomatic incident with a leaked report pessimistic about India and critical of Mrs Gandhi.10 India, ASEAN, and Australia in many ways inhabited their own solitudes. Much had changed by the twenty-first century. India had become a dialogue partner of the ASEAN Regional Forum in 1996, and the Indian navy had become for ASEAN a benign presence and bulwark against piracy (even if a Thai trawler might occasionally fall victim to mistaken identity).11 For Australia, the post of its High Commissioner in New Delhi now went to its most senior diplomats coming from ambassadorships in Washington, Tokyo, and Jakarta. In trade, both India and Australia registered strong increases in their dealings with the ASEAN countries, Australia emerging as ASEAN’s fifth largest trading partner, and India its sixth by 2006.12 The growing interconnectedness of the actors in this book is another mark of an increasingly interdependent world. Flows of trade, people, and information will increase, along with the potential for both conflict and harmonious prosperity. The chapters in this book document both what has

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been achieved and what needs to be done if goals of well-being and stability are to be realized.

Notes

Hindu, 6 December 2008, . 2 ����������� Meg Gurry, India: Australia’s Neglected Neighbour? (Brisbane: Griffith University, 1996). 3 Sandy Gordon, “India’s Strategic Posture: ‘Look East’ or ‘Look West’ ”, Working Paper No. 225 (Canberra: Strategic and Defence Studies Centre, Australian National University, 1991). 4 Australian, 3 September 2008, . 5 An estimate based on the 1981census put the population of Indian extraction in Australia at about 14,000 people. Purusottama Bilimoria and Ruchira GangulyScrase, Indians in Victoria (Melbourne: Deakin University, 1988), p. 9, citing the work of the demographer Charles Price. In comparison, Canada in the early 1990s had more than 200,000 people of Sikh background alone. Sarjeet Singh Jagpal, Becoming Canadians (Vancouver: Harbour Publishing, 1994), p. 15. 6 Australian Bureau of Statistics, Year Book Australia, 2006 (Canberra: Australian Bureau of Statistics, 2006). Sandy Gordon, “India and South Asia”, Current Affairs 67, no. 12 (May 1991): 11–12. 7 Department of Industry, Trade and Resources, Submission to the Joint Standing Committee on Foreign Affairs, Defence and Trade, Inquiry into Australia’s Relationship with India, 2006, pp. 5, 11. . 8 Age, 12 July 1980; Sydney Morning Herald, 29 July 1980, 13 August 1980. 9 Malla V.S.V. Prasad, “Political and Security Cooperation between India and ASEAN: Implications for Economic Cooperation”, in India-ASEAN Economic Relations: Meeting the Challenges of Globalization, edited by Nagesh Kumar, Rahul Sen, and Mukul Asher (Singapore: Institute of Southeast Asian Studies; New Delhi: Research and Information System for Developing Countries, 2006), p. 276. 10 Sydney Morning Herald, 6 December 1979, 17 November 1980; Age, 6 November 1980. 11 Prasad, “Political and Security Cooperation”, p. 276. 12 ASEAN Secretariat, “Top Ten ASEAN Trade Partner Countries/Regions, 2006 as of 14 September 2007”, Table 20, . 1

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PART I Emerging Regional Security

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1 Emerging Regional Security Architecture An Australian Perspective William T. Tow and Brendan Taylor

“Architecture” has become the latest buzzword in Asian security politics. The staggering growth in regional multilateralism which began during the 1990s has given rise to a burgeoning scholarship employing this terminology. Policymakers too have embraced the architectural metaphor. Yet despite this ubiquitous usage, little effort seems to have been expended to define explicitly what “security architecture” actually means. As a consequence, various scholars and practitioners of Asian security have ended up employing one and the same descriptor, but often with reference to quite different forms, dimensions, and configurations of cooperative activity. This chapter seeks to redress that shortcoming. It begins by reviewing the ways in which various scholars have employed “security architecture” and by highlighting the contradictions that their often imprecise applications have created. It also examines the differing manner in which the region’s incumbent “security architects” — the United States and the Association of Southeast Asian Nations (ASEAN) — have constructed and utilized the term. The chapter then proposes a definition of “security architecture” that is sufficiently ecumenical to appeal to scholars and practitioners alike, while at the same time rigorous and nuanced enough to exhibit genuine conceptual substance and regional specificity. A concluding section discusses the benefits of employing this new definition. It is proposed that this new definition 

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will contribute to the advancement of knowledge by allowing scholars to communicate more effectively with one another; that it will help to bridge the gap between the so-called academic and policy worlds by facilitating meaningful dialogue between them; and, most importantly, that it will assist in establishing clear criteria for ascertaining what “security architecture” actually exists in the Asian region.

Scholarly Applications The term “security architecture” grew in popularity during the early 1990s, largely as a result of the Cold War’s termination. The demise of the Soviet Union transformed global strategic politics, giving rise to the establishment of indigenous order-building initiatives in those two theatres which had been so central in the superpower stalemate — Europe and the Asia-Pacific. Perhaps due to the historical legacy of America’s role as what Hanns Maull terms the “master builder” of Western European security following the Second World War, the logic and applicability of the term “architecture” to post-Cold War Europe was apparent.1 The concept was applied explicitly to early post-Cold War efforts to broaden existing European institutions (such as the North Atlantic Treaty Organization [NATO] and the European Union [EU]) by co-opting new member countries from Eastern Europe and the former Soviet Union, and from Western Europe itself.2 The earliest attempts to apply the idea of “security architecture” to Asia were consistent with these European developments. In 1991, at the advent of the post-Cold War era, the-then U.S. Secretary of State James Baker wrote — on the pages of the prominent American journal Foreign Affairs — about an “emerging architecture for a Pacific Community”.3 Indeed, Baker’s article echoed the language he used in two earlier, oft-cited speeches outlining the George Bush Snr. administration’s vision for a new post-Cold War architecture of the Euro-Atlantic community.4 Leading scholars of Asian security have since readily embraced the term. Analysing security developments in East Asia since the ending of the Cold War, Barry Buzan and Ole Waever, for instance, have contemplated how best to understand “security architecture” in this part of the world, while also considering what may be gleaned from the study of East Asia’s security architecture itself.5 Rosemary Foot has examined the contribution of the United Nations to Asia-Pacific “security architecture”.6 More recently, Amitav Acharya has written of “the emerging regional architecture of world politics”.7 The popularity of its usage notwithstanding, little effort seems to have been expended to defining explicitly what the term “security architecture” actually

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means. Instead, there appears to exist at least several clusters of assumptions as to what the term connotes. None of these assumed understandings, however, hold up to closer scrutiny due to a series of common anomalies. First, different pride of place is afforded to the economic and security dimensions of regional architecture. Some, for instance, refer to an overarching regional or institutional “architecture”, but do not clearly distinguish between its economic and security components.8 Others specify an overarching regional architecture, but see it as comprising two distinct economic and security “pillars” or “legs”.9 Yet another perspective views trade and security arrangements as distinct components of a broader Asian institutional architecture, but also considers the “strategic interaction” between them.10 Last, but not least, a number of analysts refer to the Asian security architecture as a separate and largely distinct construct.11 Second, “security architecture” is often employed as one and the same term, but with reference to quite different “layers” or “levels” of collaborative security arrangements. As the preceding paragraph suggests, the term can be used in a broad sense, to describe the overarching architecture across an entire region. The question of where such boundaries can and should be drawn geographically, however, remains unclear. Some refer, for instance, to an “Asia-Pacific security architecture”, some to an “Asian security architecture”, whilst others refer to an “East Asian security architecture”. In many regards, this trend could be seen as reflecting the contested nature of the concept of Asia itself.12 Compounding this problem, however, some scholars assume the existence of “architectures” within the overarching regional security architecture. David Shambaugh, for instance, suggests that “the U.S.-led [bilateral alliance] security system remains the predominant regional architecture across Asia”. Yet Shambaugh also goes on to refer to an emerging “multilateral architecture that is based on a series of increasingly shared norms (about interstate relations and security)” and suggests that regional security architecture can be likened to a “mosaic” comprising of “different layers that address different aspects of regional security”.13 Adding to the confusion, scholars seem unable to agree as to whether the architectural terminology should be employed in the plural or the singular sense. Highlighting this tension, Nick Bisley’s recent contribution to the National Bureau of Asian Research’s annual Strategic Asia series is entitled “Asian Security Architectures”, whilst Bisley refers to a “Asian Security Architecture” in the singular throughout the piece.14 Finally, “security architecture” is also often used interchangeably with other terms. Some scholars, for instance, have used the term “architecture” interchangeably with that of “framework”.15 Maull employs the term

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interchangeably with what he considers the more “appropriate” descriptor “security arrangements”.16 Along similar lines, while referring to the U.S.-led alliance “system” as “the predominant regional security architecture across Asia”, Shambaugh also depicts an Asia-Pacific security architecture that is embedded within an imprecisely defined Asian regional “system”.17 In so doing, he would appear to have blurred the distinction between the terms “architecture” and “system” to the point where they become almost indistinguishable.

The Practice of Regional Security Architecture As with scholars of Asian security, ambiguity and imprecision is equally apparent when practitioners refer to regional security architecture. To demonstrate, this section of the chapter examines how the region’s two most established “security architects” — the United States and ASEAN — have presented and utilized the terminology. As will become apparent, the discrepancies which often emerge when these “security architects” invoke the metaphor is not simply a product of their competing architectural visions. Rather, the fact that they each continue to present such inconsistent depictions of regional “security architecture” also suggests that these discrepancies are but another manifestation of the lack of clarity surrounding the concept. The first area of ambiguity relates to the question of what actually constitutes regional “security architecture?” In line with the structure that America erected during the 1950s — the so-called San Francisco System of bilateral alliances, named in honour of the city where it originated as part of the Japanese peace treaty — U.S. policymakers have been relatively steadfast in depicting this set of alliance relationships as forming the core of any regional “security architecture”. Alluding directly to the architectural metaphor, U.S. Secretary of Defense Robert Gates, for instance, recently described the U.S. alliance system as the “cornerstone” of peace and security in Asia.18 Consistent with this, Secretary of State Baker’s much earlier characterization of an “emerging architecture for a Pacific Community” depicts: [a] fan spread wide, with its base in North America and radiating west across the Pacific. The central support is the U.S.-Japan alliance, the key connection for the security structure and the new Pacific partnership we are seeking. To the north, one spoke represents our alliance with the Republic of Korea. To the south, others extend to our treaty allies — the Association of Southeast Asian (ASEAN) countries of the Philippines and Thailand. Further south a spoke extends to Australia — an important, staunch economic, political and security partner. Connecting these

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spokes is the fabric of shared economic interests now given form by the Asia-Pacific Economic Cooperation (APEC) process.19

Beyond the centrality assigned to this system, however, U.S. policymakers have offered very little else in terms of explicating the key components of regional “security architecture”. While Baker’s characterization demonstrates that Washington is clearly open to the possibility that multilateral institutions can also form part of such a structure, their role is overwhelmingly depicted as supplementary to America’s Asian alliances. As U.S. Deputy Secretary of State John Negroponte more recently put it, “We recognize that the structures for peace and security are not as developed in Asia as they could become. We also realize that a multilateral structure that adds value to the diplomacy and security cooperation among the powers of the Asia-Pacific, including the United States, would be of great benefit to the region.”20 American enthusiasm for ad hoc multilateral processes — such as the Proliferation Security Initiative and the Six-Party Talks — as components of regional “security architecture” appears to have been greater. As Negroponte goes on to observe, “one idea to which we are giving serious thought is the potential to use the six-party talks, in particular the working group on Northeast Asian peace and security, as the beginning of a more lasting structure for peace and security in Northeast Asia…[T]hat might be the right time to elaborate this idea of a broader multilateral structure for security in Asia”.21 U.S. Secretary of State Condoleezza Rice and Assistant Secretary of State Christopher Hill (who is also the chief U.S. negotiator at the Six-Party Talks) have also put forward this idea. Indeed, the so-called “Five-plus-five” group (another informal process comprising each of the six party members minus North Korea, but also including Australia, Canada, Indonesia, New Zealand, and the Philippines) which Secretary Rice attempted to convene in late September 2006 during an impasse in the Six-Party Talks may offer some initial insight as to what such a structure might ultimately look like.22 This American tendency to privilege alliances and more informal multilateral processes as key components of regional “security architecture” stands in stark contrast to the composite elements of such a structure as described by senior ASEAN officials. Their depictions typically afford pride of place to formal multilateral institutions — namely ASEAN-led processes such as the ASEAN Regional Forum (ARF) and the East Asia Summit (EAS). As Singaporean Prime Minister Lee Hsien Loong put it during his keynote address at the 2006 Shangri-La Dialogue “the changing economic patterns in East Asia will create a new regional architecture of cooperation…a new framework of regional cooperation that reflects the growing intra-regional

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trade, investment and people linkages is emerging. One manifestation is the East Asia Summit”.23 This emphasis on formal institutions was also recently reflected in the Chairman’s statement from the 13th ASEAN Summit which applauded “relentless efforts to enhance peace and security in the region through active cooperation and consultations in forums such as the ASEAN Ministerial Meetings, ASEAN Ministerial Meetings on Transnational Crime and ASEAN Regional Forum” and which noted “the ASEAN Defence Minister’s Meeting’s aspiration to establish a robust, effective, open and inclusive regional security architecture, which would enhance regional peace and security”.24 Like scholars, however, policymakers have been unable to settle on precisely which geographic demarcation to employ when referring to regional “security architecture”. Unlike scholars, however, the central issue for practitioners in this second area of ambiguity is essentially a political one, and relates to the degree of inclusiveness and/or exclusivity which any such structure should permit. For geographical reasons which are largely self-evident, U.S. policymakers for example, have traditionally advocated an “open” and “inclusive” regional “security architecture” and have, therefore, preferred the broader “Asia-Pacific” designation. As a recent Congressional Research Service report addressing the subject of regional architecture puts it “the United States would like for Asian institutions to straddle the Pacific Ocean rather than stopping at the international date line in the Pacific”.25 Somewhat paradoxically, however, U.S. officials have increasingly taken towards referring to “Asian security architecture” — as reflected most prominently in the title of Defense Secretary Donald Rumsfeld’s address to the June 2006 Shangri-La Dialogue.26 Despite emphasizing the importance of “inclusive, multinational institutions and activities” during the course of his speech, Rumsfeld’s reference to a distinctly “Asian” security architecture ran counter to America’s traditional trans-Pacific focus and thereby implicitly excluded the United States for reasons of geography. Similar confusion is evident in the statements of senior ASEAN officials. As the aforementioned statement from the 13th ASEAN Summit makes clear, ASEAN officially supports a regional “security architecture” that is open and inclusive. In practice, however, intramural tensions persist in ASEAN over the question of whether this formula or a more narrowly conceived “East Asian security architecture” is preferable. This cleavage was most evident in the lead up to the inaugural East Asia Summit of December 2005, when Malaysia (along with China) advocated a more distinctive and exclusive “East Asian” arrangement, while its ASEAN partners, Indonesia and Singapore (along with Japan) reportedly pushed for a more open and inclusive grouping which

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incorporated Australia, India, and New Zealand.27 Such tensions become apparent when ASEAN policymakers employ the architectural metaphor, such as when Singaporean Senior Minister Goh Chok Tong made the following remarks during a speech to the 2005 Asia Society conference: How do we fold the US into the emerging East Asian architecture, just as we have melded India, Australia and New Zealand into the East Asia Summit? An East Asian architecture that does not have the US as one of its pillars would be an unstable structure.28

A third area of uncertainty surrounding the use by practitioners of the term “security architecture” relates to the “purpose” or “function” of such a structure. U.S. policymakers, for instance, conceive of regional “security architecture” in highly material terms. Their judgements as to its utility and future viability are overwhelmingly centred upon the “outcomes” it is able to produce, particularly in the area of crisis management. The aforementioned Congressional Research Service report is indicative of this tendency. In its terms, “regional security meetings tend to be attended by foreign affairs ministers or their representatives rather than by defense chiefs, and they often result in ‘talk and photo-ops’ rather than in actual problem solving or confidence building”. The report then goes on to call for a political/security structure for Asia “that is less process-oriented (meetings) and more directed towards functions and achieving concrete results”. This is namely because Asia “still is rife with nationalism and power rivalries operating in a 20th century fashion with interstate conflicts and territorial disputes flaring up on occasion”.29 ASEAN officials, by contrast, tend to present regional “security architecture” more as a means to an end, rather than as an end in itself. From their perspective, the process of building a “security architecture” is much more important than the tangible outcomes which any such structure might initially be expected to produce. This is because the sense of trust generated and the communal norms and understandings established by virtue of this process might eventually even negate the need for a formal “security architecture”. For this reason, ASEAN countries have tended to base their architectural-building efforts around so-called non-traditional security issues such as infectious disease, terrorism, transnational crime, and disaster relief/mitigation. This is not only because these kinds of trans-border challenges are increasingly pressing and potentially affect the region as a whole, but also because they tend not to raise the same level of sensitivity that more traditional security issues are apt to generate. In the words of a recent report produced under the

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auspices of the Network of East Asian Think-tanks (NEAT) — “addressing non-traditional security issues, pandemic threats and environmental issues is not only important in itself, but also crucial to nurturing trust and promoting community building in East Asia”.30 It would be easy to dismiss these disparities in the presentation and use of the term “security architecture” as a product of the competing “architectural visions” advanced by the region’s two most established “security architects”. Yet the fact that these disparities are evident within as well as between American and ASEAN policy circles makes this argument difficult to sustain. Such intra-mural differences are exposed most vividly in the statements of U.S. officials referring to the (supposed) regional security architecture’s current state of development. Secretary of Defense Robert Gates, for instance, suggests that the American alliance system has been the “cornerstone” of Asia’s security architecture “for more than a generation”.31 Employing almost identical terminology, his counterpart Deputy Secretary of State John Negroponte explicitly states that these alliances “have been for generations, and remain today, the cornerstone of peace and security in Asia”.32 By contrast, Gates’ predecessor, Secretary Rumsfeld, only one year earlier spoke of “Asia’s Emerging Security Architecture”, implying that such a structure had yet to materialize.33 The disparities identified in the construction and utilization of the term “security architecture” — by both scholars and practitioners alike — are, therefore, more than mere reflections of competing architectural visions or blueprints. They are almost certainly also a product of the fact that so little effort seems to have been expended to define explicitly what the term “security architecture” actually means, thereby leading to its imprecise usage. Some might argue, of course, that it is precisely the flexibility offered by the concept of “security architecture” which has appealed to practitioners who, for political reasons, might regard it as advantageous to retain at least some definitional ambiguity surrounding the term. The persistence of ambiguity around such a central analytical concept is highly problematic from an intellectual perspective, however, given the importance of conceptual clarity to scholarly communication and the advancement of knowledge.

Defining Regional Security Architecture In attempting to resolve this dilemma, the first component of our proposed definition relates to how the term is used. We contend that “security architecture” should only ever be employed in an overarching, macroanalytical sense. It should not, in other words, be used interchangeably with

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other descriptors such as “institutions”, arrangements, “networks”, or even “systems”. Nor should these ever be referred to as “architectures” by themselves. Certainly such terms can be used to describe the various components which come together to comprise an overarching “security architecture”. However, our contention is that “architecture” should always be seen as presiding over these specific components conceptually. This, of course, should not prevent one from contemplating alternative security “architectures” — meaning competing architectural pathways or visions. However, once the “tipping point” is reached when one of those contending paths or visions prevails and is thereby implemented, we maintain that the term should thereafter only ever be used in the singular and never in the plural sense. Second, our definition of “security architecture” requires that the term be used with reference to a clearly delineated and largely self-contained geographical area. This, of course, does not preclude the possibility of extraregional powers contributing directly to the regional “security architecture” in question. In the European context, for instance, the United States plays an integral role in that region’s “security architecture” through its membership of the North Atlantic Treaty Organization (NATO). In this respect, the inclusive/exclusive dichotomy which scholars and practitioners so frequently utilize when invoking the architectural metaphor essentially misses the point. That said, we would argue that to speak of regional “security architecture” without referring to a particular geographical referent point also constitutes a misnomer. As Buzan and Waever put it “any coherent regionalist approach to security must start by drawing clear distinctions between what constitutes the regional level and what constitutes the levels on either side of it”.34 To do otherwise is akin to conceiving of a building without walls or other similar supporting structures to draw on the architectural metaphor. Third, we propose that the term “security architecture” should only be used with reference to a coherent, unifying structure. Like the realworld practice of architecture itself — the art or science of designing and constructing buildings — we posit that “security architecture” should embody a sense of order and coherence. This aspect of our definition is partially concerned with how the various components of “security architecture” are arranged. For instance, an orderly collaborative structure which minimizes duplication and overlap — qualities which we would argue are central to any genuine “security architecture” — will not only exhibit greater elegance in design, but is also likely to be more efficient in practice. Absolutely central to this issue of performance, of course, is how the various components of the “security architecture” relate to one another. This latter dimension is particularly important because one of the defining features of any “security

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architecture”, we would argue, lies in its capacity to produce synergistic effects. By this we refer to the interrelationships between the architecture’s various components and their ability to produce desirable overall properties that would not naturally occur in the absence of that interaction. In other words, we see “security architecture” as being something much more than simply the sum of its parts. Fourth, we propose that “security architecture” should be, or at the very least, should appear to be, the product of “intelligent design”. This requirement that “security architecture” be as (or as if ) the result of a conscious act could be interpreted as rigidly implying a structure that is meticulously planned and the work of a single “master builder”. While our definition certainly accommodates such a potentiality, we also recognize that the process of architecture building is not always inherently neat and tidy. Our definition, therefore, leaves open the possibility that “security architecture” can emerge from the work of two or more competing architects. We also acknowledge that “security architecture” can evolve from disparate parts to become a coherent whole and that it can conceivably emerge as much by default as by “intelligent design”. That said, the aforementioned characteristics of order and coherence which our proposed definition also imposes requires that any emergent structure needs, at the very least, to appear as though it were the product of a conscious act in order to constitute “security architecture” in any genuine sense of the term. Fifth, we also posit that the term “security architecture” should only be used with reference to a structure that embodies purpose in terms of addressing functional needs. The range of functions that “security architecture” might conceivably perform — including collective defence, collective security, crisis management, and the protection of members against non-military security challenges — is virtually limitless. Under the terms of our definition, it is possible that the composite elements of “security architecture” might interact in such a way that collectively and coherently contributes to only one of these overarching objectives. It is also foreseeable that a range of different functions may be assigned to various components of the architecture — a division of labour known as “functional differentiation”.35 Moreover, our definition does not overlook the possibility that the purpose and function of “security architecture” can evolve over time, both as a consequence of changing internal architectural preferences, or in response to significant shifts in the regional and/or global strategic environment. Nevertheless, we maintain that “security architecture” cannot exist simply for “security architecture’s” sake, and that the embodiment of purpose ought to be regarded as an indispensable feature of any structure to which the terminology is legitimately applied.

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Sixth, although the purpose or function of “security architecture” ought to be security related, this does not mean that its various components need necessarily be limited to security mechanisms. This observation is especially pertinent to the Asian region, where understandings of security have tended to be comprehensive and where economic institutions are so often used for security ends. The APEC process, for example, is ostensibly a vehicle for trade facilitation, but began with an oblique security function — that of “enmeshing” and “tying down” the region’s great powers — and has taken on additional security functions as it has matured. Likewise, the second track Pacific Economic Cooperation Council (PECC), which was the progenitor of APEC, was designed to perform similar “socializing” functions that went well beyond the economic realm. Indeed, during the early 1990s PECC’s institutional model was directly transplanted onto the newly-established Council for Security Cooperation in the Asia Pacific (CSCAP), which arguably now stands as the region’s pre-eminent second track forum for security dialogue. Hence, while we maintain the value of referring to “security architecture” as a separate and largely distinct construct, the nature of the economics-security nexus in Asia is such that it makes little sense to conceive of any such structure as composing of discrete economic and security “pillars” or “legs”, nor does it seem viable to exclude economic processes from consideration in cases (such as APEC) where their core functions are evidently also security related. Finally, it ought to be clear from the foregoing analysis that the term “security architecture” should not be used merely as a shorthand description for the totality of multilateral institutions and activities in any given region. To be sure, institutions are a necessary ingredient in any genuine “security architecture”. These are certainly in no short supply in this part of the world given the startling growth in Asian multilateral activity which has occurred since the beginning of the 1990s. Notwithstanding speculation that this burgeoning multilateralism forms the basis of a nascent or “emerging” security architecture, however, the definition which we propose suggests that “security architecture” is at once both something more and something less than the sum of this region’s security institutions. It is something less because of the requirements of order, coherence, structural unity, and “intelligent design” that our proposed definition imposes — it is, of course, virtually impossible for each of these features to be genuinely present in a structure comprising several hundred individual components. At the same time, however, the synergistic qualities and the embodiment of purpose and function that our definition also necessitates means that, both in material and in normative terms, a genuine “security architecture” must necessarily constitute much more than simply the sum of its parts.

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Towards Asian Security Architecture? Against those criteria, it cannot be said that authentic Asian “security architecture” currently exists. For a variety of reasons, nor can it be considered inevitable that it will necessarily materialize in the foreseeable future. First, definitions of what does or should constitute “region” in this part of the world remain fluid and highly contested. Efforts to circumvent this problem by referring to subregional “security architecture” — as has been suggested in the case of Northeast Asia — are unhelpful, in our view, given the high level of economic and strategic interdependence which is such a defining feature of security politics right across Asia. Likewise, although geographic location does not necessarily determine the capacity of a state to contribute to a region’s security architecture, we also regard the notion of an exclusive East Asian security architecture as highly problematic by virtue of the very deep engagement of a number of extra-regional players — namely the United States, Russia and, increasingly, India. Relaxing the definitional parameters still further to encompass the entire Asia-Pacific region provides one obvious solution to this latter problem. However, this proposition in turn is likely to be highly unpalatable to China, particularly as its economic and strategic weight in Asia continues to increase. Quite where the boundaries are drawn around any future regional “security architecture”, therefore, remains to be seen. Unless and until this critical issue is resolved, however, we would argue that regional “security architecture”, in the true sense of the terminology, simply cannot exist. Second, this problem of geographical delineation is likely to be compounded by the growing number of aspiring regional “security architects”. As the volume of regional security institutions and activities has grown, so too has the number of actors seeking to participate in shaping their design and future development. Since the late 1990s — flowing from its apparent embrace of multilateralism — China has played a leading role in the establishment of a number of high profile regional institutions, including the Shanghai Cooperation Organisation (SCO), the Boao Forum for Asia, and NEAT. India too has become an increasingly involved and accepted player in such leading mechanisms as the EAS and the SCO, and as a preferred political partner of ASEAN.36 As its economic and strategic weight continues to grow, India’s willingness and potential ability to further influence and shape the design of any emergent regional “security architecture” will also increase. ASEAN remains an established “security architect” and is now moving to embody its earlier (1976) Treaty of Amity and Cooperation (TAC) into a more comprehensive ASEAN Charter that not only envisions how its

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member states will shape their own intrastate relations, but also how they will condition outside powers to relate to them collectively.37 All of this stands in marked contrast to the Cold War period, during which time the United States was very much regarded as the “master builder” of whatever regional security architecture could be said to exist. Indeed, concerns are now rising in Washington that its once firm “architectural” monopoly in the region may be dissipating.38 In this increasingly crowded field, however, there can be no single successor to that mantle, rendering the establishment of any meaningful consensus amongst the region’s “security architects” — over such issues as architectural function and purpose — increasingly complex and potentially elusive. Third, this proliferation of “security architects” has, in turn, exacerbated the problem of institutional “overcrowding” in the region. According to one recent estimate, more than 100 channels for security dialogue now exist at the official (Track 1) level, including such leading regional security institutions as the ARF, the SCO, and the EAS which, despite its predominantly economic focus, still has the potential to emerge over time as an influential regional security mechanism. More ad hoc, but still substantial, multilateral initiatives have also been undertaken regarding specific issues such as the Six-Party Talks concerning security on the Korean peninsula. The growth in institutions and dialogues at the unofficial (or Track 2) level has been even more profound, with more than 200 such channels now estimated to exist.39 Predictably enough, as institutions elbow for attention and relevance in this increasingly crowded field — often by seizing upon the most visible and contentious issues of the moment — their agendas are exhibiting an increasing degree of overlap. This duplication is most apparent in the case of APEC and the EAS. Purists might argue that there is little reason for concern here and that there can be no such thing as “too much talk” on any issue of pressing concern. Pragmatists would assert that this trend towards duplication will remain deeply entrenched due to the “phenomenon called ‘institutional stickiness’ — in layman’s terms, the tendency of organisations to resist doing themselves out of a job”.40 From an architectural standpoint, however, this “hyper-institutionalism” remains problematic in that it essentially does nothing more than generate an over-abundance of groupings without reconciling the countervailing national interests their members bring to the table. If so, the requirements such as “coherence”, “structural unity”, “purpose and function”, and “intelligent design” which our proposed definition of “security architecture” calls for simply cannot be met. Instead, all that will exist is merely an amalgam of loosely constructed networks that come and go as issues change.

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Finally, the extent to which as yet unresolved countervailing national interests have perpetuated this problem of “institutional stickiness” should not be underestimated. Thus far, the multiplicity of multilateral institutions and activities in Asia has actually afforded the region’s great powers, in particular, the option of using these mechanisms as instruments of competitive influence. Occasionally these regional heavyweights will square off against one another within institutional settings, as occurred between China and Japan at the inaugural EAS. Yet, more often than not, the broad menu of choice allows the region’s great powers to make their presence felt within those institutions with which they feel most comfortable, and with which they have the most influence — Beijing in ASEAN+3 and the SCO; Moscow in the SCO; Washington in APEC and through its own ad hoc mechanisms such as the Trilateral Strategic Dialogue and the Proliferation Security Initiative; and Tokyo through the ARF and, increasingly, the EAS as it strives to check China’s growing influence in the ASEAN+3 process. In short, this remains one of the great ironies of the remarkable growth in regional multilateral institutions and activities which has occurred since the beginning of the 1990s: that their emergence has raised as many problems as it has potentially addressed in terms of forging architectural consensus and establishing viable regional “security architecture”.

Conclusions and Contributions Critics of the definition we propose in this article might argue that our conception of “security architecture” is unduly rigid and thereby not well suited to the dynamics of the highly variegated Asian region. The Australian strategic observer Allan Gyngell, for instance, posits that “the multiplicity of visions of the region and the variety of functional needs that must be accommodated” are such that “the Asia Pacific has never been headed towards the goal of a comprehensive European-like arrangement: its history and geography are of a very different order”.41 There is certainly merit to this observation. However, Gyngell’s contiguous assertion that “the Asia-Pacific region has too many regional organisations, yet they still cannot do all the things we require of them” illustrates all too well the need for a more disciplined architectural ideal embodying the characteristics assigned within our definition: regional specificity, coherence, structural unity, synergy, “intelligent design”, purpose, and relevance. If what we regard as Asian “security architecture” in any genuine sense of that terminology proves unattainable, does the definition provided in this chapter amount to nothing other than a largely self-indulgent semantic

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exercise? For the following three reasons, we propose that its contribution is more than that. First, our definition promises to facilitate more effective scholarly communication. As this chapter has demonstrated, scholars of Asian security continue to employ the architectural metaphor with reference to quite different forms, dimensions, and configurations of cooperative activity. Because “architecture” in ordinary language is a concept laden with multiple (and often contested) meanings, this situation is understandable, if somewhat impractical. The definitional ambiguity it has created, however, has spawned a growing debate over the relevance and utility of the terminology. As David Baldwin observes “the advancement of knowledge depends on the ability of scholars to communicate with one another; and clear concepts seem to help”.42 The adoption of our proposed definition by scholars of Asian security will, we hope, contribute towards such knowledge advancement. Second, our definition should also facilitate more effective interaction between scholars and practitioners of Asian security. The fact that the concept of “security architecture” has become so deeply embedded in academic and policy discourse should be reason alone for retaining it and for privileging it over competing terminologies. The “gap” between the so-called “worlds” of academia and policymaking has traditionally been such a difficult one to bridge, with issues of language and terminology often tending to reinforce differences between the two.43 To be sure, the flexibility surrounding the usage of “security architecture” will almost certainly still appeal to some practitioners of Asian security who, for political reasons, regard it as advantageous to retain at least some of the term’s definitional ambiguity. Yet policy elites may still find cause to employ the definition of “security architecture” which we advocate for at least two reasons. On the one hand, the conception of “security architecture” as we have developed it here appropriately highlights that policy approaches and mechanisms can be fashioned to modify existing security structures effectively to meet evolving security challenges. At the same time, we have also sought to retain the bland and at least superficially non-threatening connotations associated with the “security architecture” concept — relative, at least, to terms with a more definitive ring such as “arrangements” or “systems” — which can and often do generate an image of structural legitimization that can facilitate regional security cooperation. From the perspective of the policymakers, the policies derived and the acts committed under “architectural” auspices can at least be rationalized as undertaken for the “greater good” of Asian populaces. Third, and most importantly, the definition we propose establishes clear criteria for ascertaining what (if any) “security architecture” actually exists in the Asian region. As this chapter has demonstrated, some scholars

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and practitioners of Asian security speak of an emerging or nascent regional “security architecture”, whereas others refer to a structure that is already firmly in place. In so doing, these two groups are essentially talking past one another. Moreover, given the judgment of this chapter that there is actually no Asian “security architecture” yet to speak of, coupled with the proposition that one may not even emerge in the foreseeable future, these two groups of analysts risk becoming like the loyal Ministers in Hans Christian Andersen’s famous fairy tale — The Emperor’s New Clothes — who praised the illusory garments of the naked emperor standing before them. The definition we propose not only safeguards against this embarrassing potentiality. It also provides a clear yardstick for deciphering if, and when, authentic regional “security architecture” actually comes into being. Our intention in establishing such criteria is not to set the bar so high as to make the realization of regional “security architecture” unattainable. Indeed, we would argue that the need for viable “security architecture” in Asia is currently more pressing than ever. The future of American power and how it will be applied in this region is becoming more ambiguous. Yet widely-trumpeted Asian collective institutional norms have thus far failed to take precedence over the sovereign prerogative motivations of Asian states. Meanwhile, the strategic environment in this part of the world is becoming more demanding and complex as the persistence of traditional security concerns — such as weapons of mass destruction (WMD) proliferation, regional flashpoints, and the prospects of a destabilizing arms race — has been complicated by the increasing range of non-traditional security challenges, including international terrorism, environmental issues, and disease-based threats. Moreover, as the continuing North Korean nuclear crisis and the plight of a perpetually starving North Korean population demonstrate, there is also a growing awareness of the interdependence between these traditional and non-traditional security agendas. In the final analysis, this environment promises to generate a myriad of crises requiring transboundary policy management in both the traditional and non-traditional sectors. Yet unless and until scholars and practitioners of Asian security are first able to agree on what they actually mean by the term “security architecture”, the urgent task of devising and implementing an effective region-wide structure to cope with this highly fluid and treacherous strategic environment is likely to be fraught with difficulty. It is therefore hoped that the definition of “security architecture” put forward here might offer a basis for such a consensus and, in the process, serve as a useful “building block” for regional security.

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Notes An earlier version of this chapter was presented at the Annual Convention of the International Studies Association (ISA) in San Francisco, March 2008 and excerpts of it also appeared in a chapter the two authors contributed to Bates Gill and Michael Green (eds.), Asia’s New Multilateralism: Cooperation, Competition and the Search for Community (New York: Columbia University Press, 2008). We are grateful for the comments from participants at the ISA event. 1 Hanns W. Maull, “The European Security Architecture: Conceptual Lessons for Asia-Pacific Security Cooperation”, in Reassessing Security Cooperation in the Asia-Pacific: Competition, Congruence and Transformation, edited by Amitav Acharya and Evelyn Goh (Cambridge, MA: The MIT Press, 2007), p. 254. 2 See, for example, “Declaration on Peace and Cooperation” issued by the Heads of State and Government participating in the meeting of the North Atlantic Council (including decisions leading to the creation of the North Atlantic Cooperation Council [NACC]) (“The Rome Declaration”), Rome, 8 November 1991. 3 James A. Baker III, “America in Asia: Emerging Architecture for a Pacific Community”, Foreign Affairs 70, no. 5 (Winter 1991/1992): 1–18. 4 See James A. Baker III, “A New Europe, a New Atlanticism: Architecture for a New Era”, Speech to the Berlin Press Club, 12 December 1989; and “The Euro-Atlantic Architecture: From West to East”, Speech to the Aspen Institute, Berlin, 18 June 1991. 5 Barry Buzan, “Security Architecture in Asia: The Interplay of Regional and Global Levels”, The Pacific Review 16, no. 2 (2003): 144. See also Barry Buzan and Ole Wæver, Regions and Powers: The Structure of International Security (Cambridge: Cambridge University Press, 2003). 6 Rosemary Foot, “The UN’s Contribution to Asia-Pacific Security Architecture”, The Pacific Review 16, no. 2 (2003): 207–30. 7 Amitav Acharya, “The Emerging Regional Architecture of World Politics”, World Politics 59, no. 4 (July 2007): 629–52. 8 See, for example, Joseph A. Camilleri, Regionalism in the New Asia-Pacific Order: The Political Economy of the Asia-Pacific Region, Volume II (Cheltenham: Edward Elgar, 2003), pp. 306–42. 9 See, for example, Dick K. Nanto, East Asian Regional Architecture: New Economic and Security Arrangements and U.S. Policy, CRS Report for Congress (Washington, DC: Congressional Research Service, Library of Congress, 18 September 2006). See also Baker, “America in Asia: Emerging Architecture for a Pacific Community”, p. 3. 10 Vinod K. Aggarwal and Min Gyo Koo, eds., Asia’s New Institutional Architecture: Evolving Structures for Managing Trade, Financial, and Security Relations (Berlin: Springer, 2008). 11 See, for example, Desmond Ball, “Security Cooperation in Asia Pacific: Official

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and Unofficial Responses”, in Searching for Peace in Asia Pacific: An Overview of Conflict Prevention and Peacebuilding Activities, edited by Annelies Heijmans et al. (Boulder, CO; London: Lynne Rienner Publishers, 2004), p. 48. See also Buzan, “Security Architecture in Asia: The Interplay of Regional and Global Levels”. Peter J. Katzenstein, A World of Regions: Asia and Europe in the American Imperium (Ithaca, NY; London: Cornell University Press, 2005), p. 10. David Shambaugh, “The Evolving Asian System: Implications for the Regional Security Architecture”, Paper prepared for 8th Waldbroel Meeting on the European and Euro-Atlantic Coordination of Security Policies vis-à-vis the Asia Pacific, Berlin, 14–15 December 2005, pp. 3, 11, 14. Nick Bisley, “Asian Security Architectures”, in Strategic Asia 2007–2008: Domestic Political Change and Grand Strategy, edited by Ashley Tellis and Michael Wills (Seatte, WA; Washington, DC: National Bureau of Asian Research, 2007), pp. 341–69. See, for example, Stuart Harris, “Architecture for a New Era in Asia-Pacific”, Pacific Research 3, no. 2 (1990): 8–9; and Camilleri, Regionalism in the New Asia-Pacific Order, pp. 318–19. Hanns W. Maull, “Security Cooperation in Europe and Pacific Asia: A Comparative Analysis”, The Journal of East Asian Affairs XIX, no. 2 (Fall/Winter 2005): 69. Shambaugh, “The Evolving Asian System”, pp. 2–3. Reproduced in US Fed News, “Defense Secretary Gates Delivers Speech at Sophia University”, 9 November 2007. Baker, “America in Asia: Emerging Architecture for a Pacific Community”, pp.  4–5. John D. Negroponte, Deputy Secretary of State, “Remarks at the American Enterprise Institute Symposium”, 24 October 2007. Ibid. Glenn Kessler, “With N. Korea Talks Stalled, US Tries New Approach”, Washington Post, 22 September 2006. Keynote Address by Prime Minister Lee Hsien Loong at the 5th International Institute for Strategic Studies “Asia Security Summit”, Shangri-La Hotel, Singapore, 2 June 2006. Reproduced by BBC Monitoring Asia Pacific, “ASEAN Chairman Summarizes Singapore Summit’s Achievements”, 21 November 2007. Nanto, East Asian Regional Architecture: New Economic and Security Arrangements and U.S. Policy, p. 31. Donald Rumsfeld, Secretary of Defense, “The United States and Asia’s Emerging Security Architecture”, Paper presented at the 5th International Institute for Strategic Studies “Asia Security Summit”, Shangri-La Hotel, Singapore, 3 June 2006. See Patrick Walters, “Beijing Plays Spoiler on Asia Summit”, The Australian, 6 April 2005.

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Goh Chok Tong, Senior Minister, “Constructing East Asia”, Speech at the Asia Society Conference, Bangkok, 9 June 2005. 29 Nanto, East Asian Regional Architecture: New Economic and Security Arrangements and U.S. Policy, p. 2. 30 The Network of East Asian Think-tanks (NEAT) Working Group, “Overall Architecture of Community Building in East Asia: Regional Architectures for Non-Traditional Security and Environmental Cooperation in East Asia: Final Report, 2006”, p. 5. 31 US Fed News, “Defense Secretary Gates Delivers Speech at Sophia University”. 32 Negroponte, “Remarks at the American Enterprise Institute Symposium” [emphasis added]. 33 Rumsfeld, “The United States and Asia’s Emerging Security Architecture”. 34 Buzan and Waever, Regions and Powers, p. 27. 35 See Carsten Tams, “The Functions of a European Security and Defence Identity and Its Institutional Form”, in Imperfect Unions: Security Institutions over Time and Space, edited by Helga Haftendorn, Robert O. Keohane, and Celeste A. Wallander (Oxford: Oxford University Press, 1999), pp. 80–103. 36 See C. Raja Mohan, “India and the Balance of Power”, Foreign Affairs 85, no. 4 (July/August 2006): 22–23. 37 For further reading, see Evelyn Goh, “Great Powers and Hierarchical Order in Southeast Asia: Analyzing Regional Security Strategies”, International Security 32, no. 3 (Winter 2007/08): 113–57. 38 See, for example, Ralph A. Cossa, “East Asia Community-Building: Time for the United States to Get on Board”, Pacific Forum CSIS Issues & Insights 7, no. 17 (October 2007). 39 See Japan Center for International Exchange, “Towards Community Building in East Asia”, Dialogue and Research Monitor Overview Report, 2005. 40 Allan Gyngell, “Design Faults: The Asia Pacific’s Regional Architecture”, Policy Brief (Sydney: Lowy Institute for International Policy, July 2007), p. 10. 41 Ibid, p. 8. 42 David Baldwin, “Interdependence and Power: A Conceptual Analysis”, International Organization, 34 (Autumn 1980): 474. 43 Andrew D. Marble, “Bridging the Gap with Market-driven Knowledge: The Launching of Asia Policy”, Asia Policy, no. 1 (January 2006): 3. 28

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2 Emerging East Asian Regional Architecture ASEAN Perspectives Chin Kin Wah

Defining “regional architecture” The term “regional architecture” is often used loosely or with scant prior clarification — presuming we all know what it refers too. A useful working definition is provided by Brendan Taylor and Bill Tow in their paper “Asia Pacific Security Architecture” prepared for an International Alliance of Research Universities Conference on Security held in November 2006.1 They used “architecture” in a collective sense to refer to the institutions, including other structures, which together comprise it. Attention is drawn to the “number, style and arrangement of those individual institutions and activities” that “combine and form an overall architecture”. Although the main focus of their paper is on security in the Asia-Pacific, the definition is relevant to our discussion here which looks essentially at the “East Asian” region in a broad political rather than narrow geographic sense. Of particular relevance to the East Asian endeavour is their observation that the “architecture” referred to is essentially a work in progress — “not static and meticulously planned, but as something that is organic, constantly growing and developing”. Citing Hanns Maull, they see it very much as “the work of several competing architects, rather than one master builder”.2 Such a composite definition which they worked out essentially in a “security” context (hence the use of 22

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“security” to qualify “architecture”) remains pertinent to our discussion here that relates to a loosely defined East Asian region. Although we focus here on regional rather than security architecture, an underlying assumption is the interconnectedness between security and other concerns in the realms of trade, economic cooperation, and energy security, as well as the environment, among others which may have their own functional frameworks and structures to facilitate cooperation, but which nevertheless can be related back to or subsumed within the broad regional architecture. This section of the book seeks to address the question of how ASEAN, India, and Australia see their respective roles and interests within the East Asia Summit (EAS) process that is shaping a certain regional architecture, and how they would like to see it develop with reference to other big players outside it — particularly the United States, the European Union, and Russia. The specific task of this chapter is to focus on the ASEAN leg of the ASEANIndia-Australia triad.

Some ASEAN Perspectives While it may be possible to identify a “corporate” viewpoint as articulated by say, the ASEAN Secretariat (the public, corporate face of ASEAN), on any major issue, there remains obviously a range of strategic perspectives and national interests among the ASEAN states themselves on the patterning of a desired regional architecture. There may indeed be many “architects” within ASEAN and compromising and accommodating different “architectural plans” in a creatively ambiguous ASEAN way may not result in a neat regional architecture eventually. Nowhere is this truer than in the existence side-by-side of the “ASEAN+3” (APT) and the EAS subsumed within an “in-progress” overarching macro regional architecture. Both processes reflect different, inherently competitive, though not necessarily conflict-inducing perspectives, approaches, and interests among non-ASEAN and ASEAN players. On the surface, governments have been at pains to suggest that the two cooperative processes (the APT involving the ten ASEAN countries and the three external partners namely China, Japan, and Korea); and the EAS (involving the APT members plus Australia, India, and New Zealand) are complementary although among the “plus three” countries, China has invested far more efforts in giving substance to APT3 while Japan tends to favour a wider EAS framework underpinned by a proposed EAS-wide Comprehensive Economic Partnership Agreement for engagement in East Asia.4 Both these Track 1 (official) processes also have their Track 2 counterparts — the non-official embellishment of a potential regional architecture, so to

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speak, since they are meant to augment and feed into their respective Track 1 agendas. For example, the Network of East Asia Think-tanks (NEAT) in which China plays a very active role, is to the APT what the Council for Security Cooperation in the Asia Pacific (CSCAP) is to the ASEAN Regional Forum (ARF). Indeed the NEAT charter and institutional framework seem to have been modelled on CSCAP which antedated NEAT by ten years.5 NEAT, like CSCAP, is currently going through a similar phase of soul-searching with regards to its future role, agenda, and relevance vis-à-vis Track 1. The Japanese for their part (primarily through the Ministry of Economy, Trade and Industry are promoting the ERIA (Economic Research Institute for ASEAN and East Asia) — a regionally linked research network to support the EAS agenda, such as in-putting ideas for a Comprehensive Economic Partnership Arrangement of East Asia (CEPEA).6 The dynamics which led to the evolution of the APT (an ASEAN initiated process that coincided with the unfolding of the 1997–98 Asian economic and financial crisis)7 stemmed from an earlier proposal by former Malaysian Prime Minister Mahathir Mohamad in 1990 to establish a more exclusive East Asian Economic Grouping (EAEG).8 The idea which was pushed without prior regional consultation, especially with the largest ASEAN member, Indonesia, was later reworked into a “Caucus” (EAEC) and embedded within APEC.9 The then Indonesian President Soeharto was known to have strong reservations about the EAEG, having construed “Grouping” as suggestive of an exclusive trade bloc. Nevertheless as some had noted, the EAEC remained “a caucus without Caucasians”.10 This did not endear it to the United States nor did it, especially in its previous EAEG incarnation, find support in Japan. With the emergence of the APT, the EAEC which never really got off the ground, died a natural death. Meanwhile other hands, Korean and Japanese, also helped to shape the idea of an East Asian community.11 With the APT in place, one nagging concern remains the rise of China — that is, China by the sheer size of its population of 1.3 billion and growing economic weight would dominate an East Asian Community if sustained within an exclusively APT-defined regional architecture. It is hoped that nesting China within a broader regional architecture that also includes the APT would serve to manage the region’s responses to this rising power better while enabling China itself to engage positively in an expanded region and demonstrate how it could exercise a benign influence and be a stakeholder in regional peace and prosperity. That said, some other ASEAN countries such as Singapore (which strongly supported India’s membership in the EAS12) and Indonesia (which, together with Japan, supported Australia’s membership13) also saw the need for a more “balanced” regional architecture eventually. For

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those given to an architectonic view of international relations, India’s inclusion would provide a “balance” not in the traditional balance-of-power sense, but rather in that the lesser states of the region would not be left to the exclusive embrace of any one major power therein. The growing economic and security footprints of not only a rising India, but also of Australia and New Zealand in East Asia, were equally compelling considerations for counting them in. India’s addition can be perceived from an ASEAN vantage point as the incorporation of a crucial “western” wing to the regional architecture, serving to underline the geographic meaning of Southeast Asia as a region South of China and East of India: two external Asian powers increasingly looked upon as the new growth engines for ASEAN — given their impressive economic growth rates. The subsequent escalating global financial turbulence triggered by the “sub-prime crisis” in the United States in 2008 may have dented their growth rates, but not seriously devalued the significance of these drivers of growth within East Asia. If anything they may have risen in importance relative to the United States. An important aspect of the ASEAN attempts to contribute to a wider regional architecture building process is that it is guided by a flexibility of approach and “inclusivity” — which suggest a complement, rather than an alternative, to the strengthening of bilateral relationships or relations with other mega-regional groupings such as the Asia-Pacific Economic Cooperation (APEC) forum and the European Union.14 It is also not a substitute for the existing U.S.-centric security systems supported by bilateral alliance structures (such as the U.S.-Japan and the U.S.-Korea alliances) and less formal and unobtrusive security arrangements between the United States and some ASEAN countries such as Singapore. Hence the United States has so far been able to turn a benign eye at least to this state of play in East Asia. But much depends on how open and inclusive ASEAN is able to make of East Asian regionalism, or whether it ends up as a de facto backyard of a dominant China.

A Question of Identity While the addition of Australia and New Zealand in the EAS certainly gives it a different tinge, imparting further meaning to “inclusiveness” and making the EAS more palatable to the United States, this “inclusive” element has also stretched the geographic imagining of “East Asia” and adds a complicating factor to identity building in the wider community that is being nurtured within a putative, overarching regional architecture. Whatever might have been Mahathir’s personal biases against Australia and his history of prickly

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relations with previous Australian Prime Ministers (from Bob Hawke to Paul Keating and John Howard), his idiosyncratic role in foreign policy, coupled with the ASEAN consensus style of political decision taking, did result in the exclusion of Australia (and New Zealand too) from any formal ASEANcentred East Asian regionalism and architectonic design. Such exclusion was couched in his peculiar rhetoric of national pride and Asian identity. It was left to his successor Abdullah Badawi (who assumed office in November 2003 and subsequently resurrected the East Asian community idea at the 2004 APT summit) to make it possible for Australia and New Zealand to be part of the EAS, the inaugural meeting of which was hosted by Malaysia.15 Nevertheless the question remains — where does East Asia end in a world that, thanks to globalization, is seeing a growing disconnect between physical geography and political geography? As one Malaysian economist opined, “The criteria may no longer be geographical proximity or having a long stint under colonial rule, and may include some conditions, such as subscribing to key principles and some degree of integration in trade and investment, no matter where you are on the map.” He followed this with a somewhat acerbic quip, “If this becomes endemic. Then we could expect Greenland and Monaco to be members.”16 This kind of concern should be read against the ASEAN criteria for EAS membership (discussed later in this chapter) which are political and functional, not geographic. Russia had in July 2005 formally requested to join the EAS although ASEAN countries were known to be divided on the issue, with Malaysia and the newer members Cambodia, Laos, Myanmar, and Vietnam supportive of Russia’s bid, while Singapore, Indonesia, and the Philippines were opposed.17 In the event President Vladimir Putin attended the inaugural EAS meeting in Kuala Lumpur as a guest of Malaysia. The European Union was also keen to join as an observer although there was no provision in the EAS for formal observer status to be accorded. With growing external interest in the EAS, ASEAN decided on a moratorium on EAS membership for the subsequent two summits.18 The issue of EAS membership notwithstanding, in ASEAN terms, the attempts to mould a regional architecture reflects the underlying saga of ASEAN seeking regional order of a kind through positive engagement of external powers to augment a continuing stable external environment that is conducive to peace, economic growth, and common prosperity. Quite simply, ASEAN states generally wish to see all major powers play a positive role in building a peaceful and prosperous region, together with their other ASEAN partners, even as they must invariably adjust to a rising China. But more than that, ASEAN has sought to be the main reference point in any

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emerging regional architecture. As Singapore’s Foreign Minister George Yeo put it, “…a large part of our (ASEAN) diplomatic energy is concentrated on fostering good relations with the major powers and building architecture of peace and cooperation around ASEAN in Asia”.19 Indeed the ASEAN Charter, signed at the ASEAN Summit in Singapore in November 2007 and subsequently rectified by all ASEAN members, does declare as one of its objectives, the maintenance of “the centrality and proactive role of ASEAN as the primary driving force in its relations and cooperation with its external partners in a regional architecture that is open, transparent and inclusive”.20

ASEAN’s “centrality” in the regional architecture In an objective sense, ASEAN does lie at the heart of many multilateral groupings such as the ARF and the various “ASEAN+1” dialogues besides the APT and the EAS. The region itself constitutes an important crossroads of external interests, where “new players and resurgent powers are jostling for influence, access to markets and strategic resources”.21 But ASEAN, it should be noted too, has been accorded a diplomatic centrality in the EAS and before that, the ARF, practically by default. The structural tensions and sensitivities in Sino-Japanese relations and Chinese sensitivities towards any American initiative with a strategic/security bearing pointed to the unacceptability of having any of the major East Asian powers or the United States drive that mega-regional architecture-building process. It is noteworthy that Beijing, showing dismay over Japanese Prime Minister Junichiro Koizumi’s visits to the controversial Yazukuni shrine (which had similarly angered Seoul), decided to put off a trilateral meeting with Tokyo and Seoul, as well as a Sino-Japanese bilateral meeting. These were expected on the sidelines of the December 2005 APT Summit and EAS in Kuala Lumpur. The trilateral meetings had been a customary feature of the annual APT summits since November 1999.22 To Singapore’s Senior Minister, Goh Chok Thong, “The geopolitical sensitivities in East Asia are real; as real as the necessity for East Asian integration.” ASEAN’s centrality in a wider regional architecture would help to “reconcile and to assuage the tensions between the major players and their competing interests. This is the real meaning of the phrase ‘ASEAN in the driver’s seat’ and the underpinning for the multitude of dialogues and fora that ASEAN has spawned…”23 Nevertheless ASEAN has intrinsic appeal as a non-threatening, but still influential grouping with a certain track record in its non-confrontational

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approach towards patterning international relations and regional order. Indeed what might be shaping up as the guiding principles and modalities for cooperation and good neighbourly relations within the East Asian region are derived from the ASEAN experience and are enshrined in ASEAN’s Treaty of Amity and Cooperation (TAC) which all ASEAN’s EAS partners have acceded to, as one of the three conditions set by ASEAN itself, for EAS membership. It can be summed up that aside from the prevailing generally benign external environment in which none of the major external players are asserting a dominant role hence giving a certain diplomatic space to ASEAN, the regional grouping itself is well positioned to discharge a unique role in the evolving regional architecture on account of its pivotal geographic location, its history of forging cooperation out of conflict, and its ability to be a facilitator, an honest broker, and the neutral ground where powers with intersecting interests meet.24 ASEAN occupying that centrality also ensures that the open regionalism that characterizes ASEAN’s own approach will be extended into the wider East Asian context. This, as observed earlier, will have a reassuring effect on the United States. As former ASEAN Secretary Ong Keng Yong disclosed, the outward-looking, inclusive aspects of the emerging East Asian community have been explained to U.S. policymakers and “we have received a positive reaction”.25 With explicit reference to the conduct of ASEAN’s external relations, the ASEAN heads of government have declared upfront in the ASEAN Charter that “ASEAN shall be the primary driving force in regional arrangements that it initiates and [shall] maintain its centrality in regional cooperation and community building” (Article 41 para. 3). But whether ASEAN can indeed be the “primary driving force” in the long term depends on its utility as a driver in the eyes of the major external players, as well as its own cohesiveness and coherence as a regional actor. This in turn is dependent on its becoming at least a better coordinated, if not increasingly integrated, community within the greater East Asian region. Certainly the ASEAN Charter reflects an underlying desire to attain the legal standing, identity, and regional oneness, but it is also a means to hasten ASEAN’s integration process, which will enable a more coherent rule-based rather than process-driven ASEAN to be more competitive in an economic sense and be counted as a credible “soft power centre” in a wider regional community. More substantively ASEAN can be seen as an important building block in an evolving regional architecture underpinned on the economic side by ASEAN’s as well as individual ASEAN states’ forging of free trade agreements

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and economic partnership arrangements with China, Japan, South Korea, India, and Australia and New Zealand, on a multilateral as well as bilateral basis. This could arguably propel East Asia on a long-term trajectory signposted by free trade agreements (FTAs), Customs Union, Common Market, and eventually economic, though not political, union. On the more overtly security side, ASEAN has a “centrality” in the ARF in that the chairman of this mega arrangement is the annually rotating chairman of the ASEAN Standing Committee. Since June 2004 there has also been a coordinating ARF unit located in the ASEAN Secretariat. However with the admission in August 2007 of Sri Lanka, seventeen of the twenty-seven ARF members are non-ASEAN. There is a nagging concern within some ASEAN circles that the ARF might be “hijacked” by other bigger players such as China. More importantly, ASEAN lacks a common approach or policy towards this security forum which might diminish its driver’s role.

ASEAN+3 and the EAS Since the Kuala Lumpur summit, a clearer distinction is being drawn between the EAS and the APT. While the EAS is shaping up to be an annual talk shop to address the big strategic and political issues of common concern where “the value of open and spontaneous Leaders-led discussions”26 is being underscored, the APT remains largely the mechanism to implement the agenda for East Asia community building. The APT is embellished with forty-eight mechanisms and sixteen areas of cooperation (including tourism, agriculture, the environment, energy, and information and telecommunications technology, besides cooperation in the economic, monetary, finance, political, and security areas),27 but has no formal binding agreements. The EAS, for its part, is enjoined at the 2007 Cebu summit “to continue coordination within the framework of existing mechanisms”28 to facilitate the implementation of the identified five priority projects in energy security cooperation, human capital development, financial cooperation, avian flu prevention, and natural disaster mitigation. ASEAN’s centrality in the EAS is reaffirmed by the collective decision to rotate the summit venue among ASEAN members, instead of alternating it between ASEAN and non-ASEAN members as originally proposed, given China’s initial interest to host the second summit. The EAS is not officially referred to as “ASEAN+6” and certainly not as “ASEAN+3+3”, which would suggest a tiered structure and a different status being accorded to an outer layer comprising India, Australia, and New Zealand. Such a tiered structure will, in the view of an ASEAN Secretariat official, be a “disinvestment” for

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India, Australia, and New Zealand as “the key factor of shared ownership needed to crank up the EAS will be missing”.29 The EAS is billed as a meeting of seven parties (that is, ASEAN meeting together with its six dialogue partners) and not as a meeting of sixteen countries, which would imply that individual ASEAN states, rather than ASEAN as a group, meet with the six external partners. For ASEAN to translate its numbers into strength in its external engagements would require a more integrated and cohesive regional hub. Indeed there is some incipient worry that the EAS could dilute ASEAN itself. As the Director of the APT and External Relations Unit at the ASEAN Secretariat expressed it, “any co-operation undertaken under the EAS should not dilute ASEAN integration and community building but must complement and reinforce it”.30 It is in this context and the ASEAN assertion of its role in the driver’s seat, that we should view regional reactions to Australian Prime Minister Kevin Rudd’s resurrection in a speech in Sydney in June 2008, of the Asia Pacific Community idea, buttressed by a strong, effective new institution “spanning the entire Asia-Pacific region — including the US, Japan, China, India, Indonesia and other states of the region” by 2020.31 Reacting to press reports that the new ASEAN Secretary General, Surin Pitsuwan who took office in January 2008, had welcomed the proposal, Singapore, which held the ASEAN chair at the time, issued a press statement through its Foreign Ministry saying, “This is not ASEAN’s position. The ASEAN foreign ministers have not discussed the matter.” The statement also noted that Surin had since clarified his position and asked for more details about the proposal and also reminded Rudd that ASEAN had been playing a central role in East Asia’s community building efforts.32

But where are the boundaries of this regional house? ASEAN Foreign Ministers spelt out three criteria for membership in the EAS when they met in Cebu in April 2005. These are: 1) being a full dialogue partner of ASEAN, 2) having signed the ASEAN Treaty of Amity and Cooperation and 3) having substantial relations with ASEAN. All three conditions serve to underline the ASEAN-centric character of the so-called regional architecture that is being constructed. The TAC, originally signed in 1976 among the original five ASEAN members and subsequently

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by all new members, sets out in its Article 2, the ground rules of seemly political engagement.33 With the amendment in July 1998, opening the treaty to accession by countries outside Southeast Asia,34 the wider regional architecture which it seeks to underpin in a normative way, is in turn suffused with the quality of inclusiveness. Ten years later, North Korea became the fifteenth country from outside Southeast Asia to accede to the TAC. The first non-ASEAN members of the EAS to accede to the TAC were China and India (in October 2003), followed by Japan (July 2004), South Korea and Russia (November 2004), and New Zealand (July 2005). Australia, known for its previous resistance to accession,35 belatedly acceded to the TAC in December 2005 as a quid pro quo for EAS membership. The United States, which has not acceded to the TAC, currently meets two of these criteria. However it has kept its distance from the treaty out of apprehension that it might compromise its strategic nuclear policy although in the run-up to the 2008 U.S. presidential election, both Democrat and Republican camps indicated that a new administration would not be averse to the TAC.36 Russia, which has sought EAS membership from the beginning, also meets two criteria, but is being blocked for want of real substance in its relationship with ASEAN.37 In the U.S. case, accession to the TAC is something ASEAN would like to see, but the general expectation is that the United States, even if it did so, would not seek to play on all the regional chessboards in the East Asia region. Nevertheless like the European Union (which clearly belongs to quite a different region) it might at least want a ringside seat as an EAS observer. But the question of the European Union’s participation in particular will reawaken the issue of identity for the evolving regional architecture as long as we remain fixated on “region” in a spatial sense.

Some Practical Underpinnings of the Architecture There is much to be said for a more comprehensive and strategic thrust in underpinning the regional architecture that will take the main processes within it beyond economic concerns and interests. The broad security/ stability concerns of our times — terrorism, weapons proliferation, weapons of mass destruction (WMD), maritime piracy, safety of transit through sea lanes of communication, energy security, climate change, and environmental concerns as well as infectious diseases such as SARS, avian flu, HIV-AIDS — highlight the interconnectedness between states and regions, and require more comprehensive and creative approaches in international cooperation.

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Invariably too, institutional capacity will need to be strengthened to coordinate and monitor such cooperation. This need was recognized by an ASEAN Secretariat official who recommended such mechanism be established under the EAS38 although the Cebu summit subsequently called for the continuing use of existing ASEAN mechanisms, which would mean the ASEAN+1 mechanisms. It has been noted that the strengthening of ASEAN institutions as promised by the Charter is not matched by a commensurate increase in the annual budget for the ASEAN Secretariat, or any substantive adjustments in financial contributions from ASEAN members to the organization. With specific reference to the EAS-centred regional architecture, the bottom line to any further institutional underpinning to what is essentially a forum, will depend on what the partners want out of the relationship — to savour the flavour of summit diplomacy or really deepen the relationship with an agenda that is enduring and strategically meaningful to support a wider regional architecture.

Regional architecture — limitations and opportunities It can be said that regional architecture is a means to further regional order. However the management of regional order depends, among other things, on successful management of domestic political order as well. In countries of the region and elsewhere, the pressures of globalization have resulted in the playing of the nationalist card — whether in the reaffirmation of discriminatory policies in the protection of ethnically defined economic rights, or protective claims over natural resources and strategic economic sectors in the name of sovereignty. These tendencies can affect bilateral and multilateral relations and impact negatively on an investment climate at a time when ASEAN is looking to ways to promote the region as a single investment area. Secondly, from Thailand, the Philippines, and Malaysia in the ASEAN core, to Myanmar in the periphery, ruling regimes are encountering domestic political tensions and challenges that undermine their sense of security. It is a distraction to political leadership and the pursuit of good governance in the interest of the greater good of the nation and the regional commons. At times such domestic political dissonance, indeed turbulence, undermines the political will and vision to work towards a wider regional order. This is compounded by the fact that the region contains disparate levels of economic development and different political systems that bedevil efforts at reconciling competing and at times incompatible, interests.

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Thirdly, the ability of ASEAN to stay “centred” in the evolving regional architecture, and hence, it is hoped, have a handle on the management of a wider regional order, would also depend on the dynamics between the bigger external players — in particular between the United States and China, United States and India, China and Japan, and China and India. Significant improvements in these relationships will no doubt make for a better climate in which to pursue the wider regional cooperation which ASEAN ought to welcome. But it will also render ASEAN, in the eyes of some observers, as being less indispensable as an avenue through which external power engagement, confidence building, and substantive multilateral cooperation can be pursued. In this respect, it is noteworthy that China, Japan, and South Korea culminated their improving relations with a trilateral summit for the first time at Dazaifu, Fukuoka Prefecture, Japan on 13 December 2008, to address problems of common concern arising out of the global financial crisis, as well as other functional cooperation issues. The three Northeast Asian leaders, while affirming their support for APT cooperation, also agreed to regularize their own summit meeting. Significantly, their first trilateral meeting (originally to have been held in September) occurred at a time when the APT Summit (that takes place annually back-to-back with the ASEAN summit and which traditionally provided the occasion for the external “+3 countries” to meet informally as a group) had to be postponed because of domestic political turmoil in Thailand, which, as holder of the rotating chair of ASEAN, was designated to host the ASEAN summit. Fourthly, new cross-cutting alignments in East Asia are adding to the complexity of any broad regional architecture being contemplated. Already the Six-Party Talks on the Korean peninsula underline the limited efficacy of the EAS, the APT, or the ARF in addressing the bolts and nuts of security challenges in Northeast Asia. Other engagement processes (such as the China-India-Russia meetings) and the new security partnerships such as that formalized between Japan and Australia, as well as the evolving strategic dialogue and partnership between Japan and India, with the possibility (much speculated on at one time) of the United States and Australia being included — adds to the prospects, as well as danger, of a new competitive dynamic with rising China as a point of reference. The eventual regional architecture will need to accommodate cooperative as well as competitive tendencies. Nevertheless there are two underlying forces that could sustain East Asian regionalism which provides an important foundation to the architecture. One is the continuing resilience among the Asian economies (despite the unfolding global financial crisis) and the political interest of all parties in not undermining it. The other is the continuing

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security role of the United States in underpinning regional stability whether the United States chooses to work within or stay out of any formal regional architecture that might eventuate. When we talk about the need to keep the United States engaged in ASEAN and the wider East Asian region, we tend to forget that the United States is already deeply engaged, not only in terms of its huge investments in and trade with East Asia, but also its association with the complex ASEANcentric security forums and arrangements by virtue of its membership in the ARF and the Track 2 CSCAP, as well as the annual Shangri-La Dialogue organized in Singapore by the London-based International Institute for Strategic Studies, involving prominent defence officials among others. It is also a member of APEC, which bridges trans-Pacific economic interests. A re-energized APEC, through the suggested creation of an Asia Pacific Free Trade Area,39 will also help the United States live more comfortably with an East Asian Community in the future.40 Another trans-Pacific link being canvassed is reflected in U.S. Trade Representative Susan Schwab’s announcement in September 2008 of U.S. interest to join the Trans-Pacific Strategic Economic Partnership Initiative Agreement (that, among other things, facilitates trade and investments) signed by Chile, Singapore, New Zealand, and Brunei in 2005, and which came into force the following year. Expressions of American interest also led to indications of similar interest from Australia, Peru, and Vietnam.41 Builders of regional architecture who advocate inclusiveness are mindful that it is the deep U.S. engagement that has provided the underpinning to stability in the regional environment that makes it possible for regional states themselves to positively engage each other politically and economically. As the putative core, ASEAN is also being shaped by the evolving regional agenda as much as it seeks to shape it. A case in point is the acceleration of the target date for the realization of an ASEAN Economic Community and single market from 2020 to 2015, in response to the prospect that most of ASEAN’s FTAs with its East Asian partners are expected to come on stream by then, making it imperative that ASEAN gears up effectively in response to a new wave of competitive forces, and to take fuller advantage of the opportunities for trade and investments. The imperatives for ASEAN cohesion and coherence are clear enough. But clashing national interests and national pride converging on competing territorial claims had resulted in a glaring use of force between Thai and Cambodian troops (resulting in some casualties on both sides) in October 2008. The incident, which occurred in the vicinity of the Preah Vihear temple located in a disputed part of the Thai-Cambodia border, set a bad

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example of un-neighbourly relations contrary to the spirit and injunctions of the TAC, which ASEAN has been seeking to use as the ground rules for intra mural as well as wider regional engagement.42 Looking inwards even as they look outwards, the ASEAN states will have to redouble efforts to marshal the political will and capacity needed to make the ASEAN Charter work to further the course of regional integration that in turn would enhance ASEAN as a credible core within any wider regional architecture. This is in addition to an already complicated situation of competitive regionalism and where many hands are seeking to mould a regional architecture after their own designs. Arguably, Tow and Taylor in their chapter (which expands on their earlier conference paper) might have refined their concept of “regional security architecture” — more in the form of a “disciplined architectural ideal” requiring “regional specificity, coherence, structural unity, synergy, ‘intelligent design’, purpose and relevance” — to the point of placing it beyond reach as a practical policy objective. But the utility of rigorous conceptualization should not be lost on the policy discourse relating to the building of a “coherent unifying structure” for the region. If anything, it serves to highlight the inherent difficulties of such an endeavour. This chapter focusing largely on the underlying dynamics which centre on ASEAN further illustrates the complexity and challenges facing those who seek to place ASEAN at the core of a wider regional architecture.

Notes

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See Brendan Taylor and Bill Tow, “Asia Pacific Security Architecture”, Paper prepared for the International Alliance of Research Universities Conference on Security, Cambridge, 2–4 November, 2006, p. 6. Hanns W. Maull, “Security Cooperation in Europe and Pacific Asia: A Comparative Analysis” , The Journal of East Asian Affairs XIX, no. 2 (Fall/Winter 2005): 69, cited by Taylor and Tow, “Asia Pacific Security Architecture”, p. 6. As one Chinese academic noted, “The Chinese government has taken ASEAN Plus Three as ‘the major channel’ of its efforts toward Asian regionalism and community building. China is more active in APT than it is in the other multilateral organizations in Asia, and it is more active than the other members of the group.” Shulong Chu, “The East Asia Summit: Looking for an Identity”, Brookings Institution, 5 October 2008. In August 2008, Jusuf Wanandi, cofounder and vice-chairman of the CSIS Foundation in Jakarta, told a Singapore audience that China’s leaders were enthusiastic about the APT “but when the EAS came, it was a little bit of a diversion.” Nazry Bahrawi, “ASEAN+3 and the EAS: The Risk of Double Vision?”, Today, 5 August 2008, p. 16.

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See Masahiro Kawai and Ganeshan Wignaraja, “EAFTA or CEPEA: Which Way Forward?”, ASEAN Economic Bulletin 25, no. 2 (August 2008): 113–39. The founding conference of NEAT took place in Beijing in September 2003. ERIA has been described as the brainchild of Akari Amari, the Minister at METI, which is the main funder of the Institute of Developing Economies (a think tank of the Japan External Trade Organization or JETRO) which represents Japan in ERIA. Pending a permanent location, ERIA currently operates out of the ASEAN Secretariat in Jakarta. Anthony Rowley, “New Japan ‘think tank’ an OECD for Asia”, Business Times, 18 March 2008, p. 25. It was the regional financial and economic crisis of 1997–98 that brought home to ASEAN and its East Asian partners the need to work more closely together to ensure the macro-economic and financial stability of the region to avert a recurrence of another crisis. Significantly the “ASEAN+3” was initiated by ASEAN in 1997. Interestingly it was also a response to the felt need to consult more closely for the purpose of engaging Europe through the ASEM. See Richard Stubbs, “ASEAN Plus Three: Emerging East Asian Regionalism?”, Asian Survey 42, no. 3 (2002): 440–55. For Mahathir’s rationalization of his original EAEG proposal, see Hashim Makaruddin, ed., Reflections on ASEAN: Selected Speeches of Dr Mahathir Mohammad, Prime Minister of Malaysia (Subang Jaya: Pelanduk Publications, 2004), pp. 120–24. This was decided upon by the ASEAN Ministerial Meeting in Singapore in July 1993. Quoted in K. Kesavapany. “ASEAN’s Role in Asian Economic Integration”, in Asia’s New Regionalism and Global Role: Agenda for the East Asia Summit, edited by Nagesh Kumar, K. Kesavapany and Yao Chaocheng (Singapore: Institute of Southeast Asian Studies, 2008), p. 78. For example, at the 1998 APT summit in Hanoi, South Korean President Kim Dae Jung proposed an East Asian Vision Group to think through mid- to long-term plans for cooperation. A subsequent East Asian Study Group which submitted a report to the 2002 APT summit proposed, among other things, an East Asia Summit and the establishment of an East Asian free trade agreement. In early 2002, Japan proposed the Initiative for Development of East Asia (IDEA) and also called for the establishment of an East Asian Community. As Singapore’s Minister Mentor Lee Kuan Yew expressed it in late 2004, “India should join in …as…it will expand the market, force more specialization, division of labour, and India has something to contribute in economic, political, diplomatic as well as the security fields. So I believe it is to the advantage of the ASEAN countries that any such East Asian Community should include India.” See “Regionalism with an ‘Asian Face’: An Agenda for the East Asia Summit”, RIS Policy Briefs, no. 28 (October 2006), p. 3. During Prime Minister John Howard’s visit to Indonesia in April 2005, President Yudhoyono gave support to Australia’s membership in the EAS, declaring that

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Jakarta would be a bridge between Australia and Asia. . “Inclusivity” which refers to the involvement of the like-minded and the non-likeminded in a process of engagement and dialogue is seen as one defining element of the “ASEAN way”. Inclusiveness is also considered an important underpinning to open, non-discriminatory regionalism evidenced in APEC. See David Capie and Paul Evans, The Asia-Pacific Security Lexicon, 2nd ed. (Singapore: Institute of Southeast Asian Studies, 2007), p. 13. That said, both ASEAN and the APT are “exclusive” in the sense of their assumed geographic delineation and identity. By comparison the EAS is more “promiscuous” in terms of its membership. While Abdullah was careful to cast the EAS as a realization of an idea first proposed by Mahathir, the latter was adamant in opposing Australia and New Zealand membership. As the first EAS approached, Mahathir again publicly opposed their membership — arguing that they were neither Asian nor from the East. While he recognized India’s right to participate as an Asian country, he expressed disappointment that his vision of an East Asian grouping was being expanded to include countries that are not geographically or culturally Asian. Carolyn Hong, “Mahathir criticizes East Asia Summit”, Straits Times, 8 December 2005, p. 17. Mahathir had also blocked an ASEAN free trade pact with Australia and New Zealand in 2002. Their prime ministers were not invited to meet with their ASEAN counterparts on the occasions of the annual ASEAN summit from 1977 to 2004, by which time Mahathir had ceased to be prime minister of Malaysia. See Michael Richardson, “Shared Perceptions”, in Australia-New Zealand & Southeast Asia Relations (Singapore: Institute of Southeast Asian Studies, 2004), pp. 27, 30. Australia’s Prime Minister John Howard retorted that “this frantic search for a precise unanimously accepted definition of who we are is a load of nonsense”. Straits Times, 15 December 2005, p. 9. Zainal Aznam Yusof, “ASEAN Can Lead Asian Community Process”, New Straits Times, 31 December 2005. “Focus: ASEAN Split on Russia’s Bid to Join EAS, May Decide in NY”, Kyodo, Asian Political News, 12 September 2005, . “East Asia Summit Freezes Membership for 2 Years”, The Times of India, 20 May 2006, . George Yeo, Minister for Foreign Affairs, “Europe’s Role in 21st Century Asia”, Speech at the OAV Liebesmahl dinner, Hamburg, 13 March 2007. ASEAN Secretariat, “The ASEAN Charter”, Chapter 1, Article 1, para. 15. Straits Times, 12 February 2008, p. 16. The first China-Japan-Korea trilateral meeting took place in Manila in November 1999 when Prime Minister Zhu Ronji, Prime Minister Keizo Obuchi, and President Kim Dae Jung held an informal breakfast meeting on the sidelines

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of the third APT summit. Following the interruption in 2005, such meetings were resumed on the occasion of the Cebu summit in 2007. Goh Chok Tong, “Towards an East Asian Renaissance”, Speech by Senior Minister of Singapore, at Opening Session of the 4th Asia-Pacific Round Table, Singapore, 6 February 2006. Straits Times, 12 February 2008, p. 16. Straits Times, 17 June 2006, p. 7. ASEAN Secretariat, “Chairman’s Statement of the Second East Asia Summit, Cebu, Philippines, 15 January 2007”. ASEAN Secretariat, “ASEAN Plus Three Cooperation”. ASEAN Secretariat, “Chairman’s Statement of the Second East Asia Summit”. S. Pushpanathan, “East Asia Summit: Keeping the Momentum Going”, Straits Times, 29 December 2005, p. 26. S. Pushpanathan. “Opinion: Carving a Niche for East Asia Summit”, New Straits Times, 29 December 2005. Roger Maynard, “Rudd Moots EU-style Body for Asia-Pacific”, Straits Times, 6 June 2008, p. 38. A Singapore Foreign Ministry spokesman also pointed to the support of ASEAN members and all ASEAN dialogue partners of the principle that ASEAN should be at the centre of any regional architecture. Hence Rudd’s proposal “appears to be a departure from Australia’s previous position”. Straits Times, 16 June 2008, p. 13. These are mutual respect for independence, sovereignty, equality, territorial integrity, and national identity of all nations; right to freedom from external interference, subversion, and coercion; non-interference in domestic affairs; peaceful settlement of disputes; renunciation of threat of the use of force; and effective cooperation. One academic saw this as “a dramatic concession to the principle of ‘inclusiveness’  ”, Amitav Acharya, Regionalism and Multilateralism: Essays on Cooperative Security in the Asia-Pacific (Singapore: Times Academic Press, 2002), p. 186. Australia had advanced different reasons for its aversion to the TAC — that it might impact negatively on its alliance obligations to the United States, that it was a legacy of the Cold War, that it had a provenance in the outdated nonalignment movement, that the non-intervention principle would compromise its ability to comment on the internal affairs of other TAC signatories and that the TAC restricted membership in its High Council to Southeast Asian countries with a non-Southeast Asian signatory entitled to participate only if it was a party to the dispute under consideration. The TAC’s non-intervention principle could also be seen as running against John Howard’s advocacy of pre-emptive action against a terrorist threat from another country. See Rodolfo Severino, “Australia and the Southeast Asian Treaty” (Sydney: Centre for Policy Development, 9 August 2005). Straits Times, 6 October 2008, p. A18.

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President Vladimir Putin, who was invited to address the first EAS as a guest of Malaysia, chose to absent himself from the next two summits. His absence from the Cebu summit led to speculation that it reflected a frustration over the lack of substance in Russia’s dealings with ASEAN, considering that ASEAN’s trade with Russia in 2006 amounted to just 1 per cent of ASEAN’s total trade. Jonathan Eyal, “Weak Trade Links, so Putin is Skipping Summit”, Straits Times, 1 January 2007, p. 13. 38 S. Pushpanathan, “East Asia Summit: Keeping the Momentum Going”. 39 See, for example, C. Fred Bergsten, “Toward a Free Trade Area of the Asia Pacific”, Policy Briefs in International Economics no. PB07-2 (Washington, DC: Peter G. Peterson Institute for International Economics, February 2007). 40 The flip side of this is that a parlous APEC or a “spent” APEC could well be another reason why East Asian countries are casting around for an EAS-centred Comprehensive Economic Partnership Agreement. 41 Straits Times and Business Times, 24 September 2008. 42 Cambodian Prime Minister Hun Sen even warned Thailand that it was risking “large-scale armed conflict” if its soldiers were not pulled back from the disputed area. Straits Times, 15 October 2008, p. A15. 37

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3 India in the Emerging Asian Architecture Prospects for Security Cooperation with ASEAN and Australia C. Raja Mohan

INTRODUCTION The debate on the construction of a new security architecture in Asia takes place in the context of two broad trends. One is the potential impact of a rising Asia on the international system. There is a widespread sense today that the rise of China and the emergence of India might mark a fundamental power transition in the global order, but there is less agreement on whether the transition will be peaceful or violent. The focus of this chapter is on the other question — whether Asia can effectively manage the current change in power distribution within Asia. Linked to this is the main thrust of this chapter on New Delhi’s likely role in the building of a new order in Asia and the prospects for greater political and security cooperation among India, ASEAN, and Australia. The intellectual debate on the future of Asian security is dominated by two basic schools of thought. One school suggests that great power rivalry in Asia is inevitable. It insists that the strategic future of Asia might resemble Europe’s past. The other school hopes for a “liberal peace” of sorts, rooted in the growing economic interdependence in the region. The sense of a unipolar 40

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moment in world affairs and America’s positive relations with all the other powers seemed to reinforce the proposition that traditional power politics might be less salient in Asia’s strategic future. The overarching presence of nuclear weapons, too, appears to rule out the prospect of major conventional wars that a rising Europe had to endure. The principal security challenge, according to this school, is to compensate for the under-institutionalization of the Asia Pacific region. Most Asian states would like to avoid the outcome of an unstable balance of power system in Asia. There is indeed a widespread consensus in Asia that creating a new framework of multilateralism in the region would help constrain the competition among the major powers. ASEAN has led the new efforts towards economic integration and initiated the construction of the mechanisms for cooperative security in Asia. The ASEAN Regional Forum (ARF) and the East Asia Summit (EAS) process were among the principal results. A series of recent developments, however, have begun to challenge the hope that Asia was moving forward, if slowly, towards effective multilateral arrangements for peace and prosperity in the region. These include the North Korean nuclear weapons tests in October 2006, the Chinese test of an anti-satellite weapon in January 2007, the U.S. drift towards a hedging strategy against the military rise of China, the Indo-U.S. civil nuclear initiative, the deepening strategic nexus between Beijing and Moscow, the expansion of Japanese strategic partnerships with Australia and India, and the profound differences within Asia on the ways to address the political crisis in Myanmar. More fundamentally, the very process of building an Asian community now seems vulnerable to potential great power rivalry within Asia. The exclusion of the United States from the East Asia Summit has generated suspicions in Washington that Asian multilateralism led by China will undermine the U.S. influence and role in the region. Despite the fact that multilateralism as an idea enjoys widespread support, it is now being recognized that its consequences need not necessarily be equally benign to all the major powers in Asia. The concerns about the direction of Asian multilateralism are not limited to Washington. Tokyo and New Delhi, as well as a few ASEAN states, are apprehensive about the prospect of a Sino-centric Asian order. While some nations might argue that China’s preponderance in any future Asian architecture is “natural”, both Japan and India may find it difficult to reconcile to a future secondary status in the region. For them, as well as for the United States, strengthening old alliances and building new partnerships have become central to the presumed need to balance the rising Chinese power. The deepening economic interdependence with China

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has constrained, but not prevented the new politics of balance of power in Asia. Meanwhile, the very attempt to reinvigorate old alliances and create new ones has created apprehensions in Beijing about an American-led Asian containment ring against China, and a determination to pre-empt the formation of an “Asian NATO”. Reinforcing this new tension between the ideas of multilateralism and alliances is the security dilemma that has begun to engulf the bilateral relations between the United States and China, Beijing and Tokyo, and China and India. In each of these, a seemingly reasonable attempt by one at insuring its interests looks threatening to the others. Their countermoves, in turn, alarm others in the region. A second factor is the resurgence of nationalism in all the major Asian powers. In China, nationalism has become the principal source of political legitimacy for the party-state. In Japan, nationalism is at the root of the current attempts to build a “normal” nation free from the post-war restrictions on Tokyo’s security role in the region. In the Korean peninsula, the new nationalism has begun to transform the relations between the North and South and disrupt the traditional balance of power system in the region. Nationalism has always been a powerful force driving India’s security policies. A third factor is the quest for strategic autonomy among major powers. While the notion of autonomy was always central to the world views of China and India, the mantra is beginning to gain currency among other Asian powers. The quest for autonomy feeds into the efforts to premise national security on self-reliance, which in turn privileges investments in military capability and such prestigious programmes as nuclear power and space. Against the backdrop of this dynamic situation in East Asia, the chapter focuses on five issues. It begins with a discussion on whether India really belongs to East Asia. We then move on to assess India’s rapidly evolving relations with great powers and the significance of its newly purposeful security diplomacy in East Asia. The fourth section offers an assessment of India’s approach to the construction of a new order in Asia. The chapter concludes with a review of a potential agenda for security cooperation among India, ASEAN, and Australia.

Does India belong to East Asia? To speak of India and East Asia in the same breath would have been nearly impossible a few years ago. For many decades, India and East Asia were considered two very different entities without much of a relationship between them. It was quite common sometime ago to suggest that India did not merit a place even in Southeast Asia, let alone East Asia. Much, however, has

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changed in the way the world thinks about India and Asia in recent years. Amidst the new awareness of the emergence of India as a major power, the worldwide interest in the rise of Asia and its implications for the international system, the current dynamics in favour of Asian economic integration, and the unfolding debate on the construction of a new security architecture for the region, have made it very reasonable to discuss the evolving Indian role in East Asia. India is now very much a part of the East Asia Summit process. And the decision to admit India into the EAS, as we all know, was a political one. Yet, the question on India’s relevance for East Asian community building has not gone away.1 That India is not part of the ASEAN+3 (APT) process and that some major powers continue to have reservations on New Delhi’s role in East Asia are indeed well known.2 For the foreseeable future, India will prudently defer to the leadership of ASEAN in East Asia. The nature and extent of the formal Indian role in future institution building in Asia will largely depend on the geopolitical calculus of the ASEAN leadership, which drives institution building in East Asia. ASEAN’s view on an Indian role would, in turn, depend on a number of factors. For one, regions, much like nations, are imagined communities. Attempts to define regions always tend to be political constructs rather than precise geographic expressions. In the final analysis, it is a nation’s power to influence outcomes in a particular region that is more relevant than an academic discourse on where one region ends and another begins. If India maintains its present unprecedented economic growth rates, it is bound to emerge as the world’s third largest economy in the coming decades and will figure prominently in ASEAN’s own strategy for building regional prosperity. India’s increased economic weight would mean New Delhi would have a lot more resources to expand its conventional military and strategic capabilities, which will be consequential for the regional balance of power.3 Second, historic circumstance has much to do with the particular expression of the scope of the region at any given moment. Looking back, we see that Singapore was administered from Calcutta until 1867. Burma (now Myanmar) was part of British India from 1885 to 1937. The first time the term “Southeast Asia” was used was when the British set up a military command under that name during the Second World War. Nor can we forget that it was Lord Mountbatten’s British Indian Army that supervised the surrender of Japanese troops throughout Southeast Asia in the summer of 1945. India was also at the forefront of the post-war struggles for the decolonization of Asia. As the Cold War dawned on South Asia, it was India, along with Indonesia, Burma, and Ceylon that championed Asia’s first

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regional diplomacy under the so-called Colombo powers. The real question is not whether India “belongs” to East Asia. The important question is whether India “matters” to the region. That brings us to the importance of internal and external orientations of large nations that tend to shape and reshape regions. When China and India turned inward in the late 1950s and early 1960s, they became relatively marginal to the region on which they have had a natural bearing in terms of size of population, physical connectivity, and historic relationships. As China, starting in the late 1970s, and India from the early 1990s, embarked on an outward orientation, their economic weight in East and Southeast Asia has begun to grow. So has their political interest and influence. As China and India seek to recapture their past economic centrality in Asia and regain their strategic influence, many traditional notions of what constitutes the region are bound to alter. The Indian national movement, which evolved during a long period stretching from the mid-nineteenth to the mid-twentieth century, was intensely animated by the notion of shared Asian destiny. These themes were at the heart of the articulation of Asia’s destiny in the 1920s by India’s poet Rabindranath Tagore. And his interaction with the other great Asianist, the Japanese scholar Okakura Tenzin, provided the first construction of the notion of a new Asia. A number of factors in play then continue to resurface with vigour today. One was the idea that Asian cultures were inherently superior to those of the occident. It implied that Asia must find its own way rather than merely ape the West. Another stemmed from the rediscovery of India’s own past cultural influence in Asia and the sense of a shared past. A third emphasized the notion of India’s natural obligation to assist the struggles of fellow Asian peoples against the European colonizers. Months before its own independence, India took the lead in organizing an Asian Relations Conference in 1947 to focus on regional political cooperation. Jawaharlal Nehru, India’s first prime minister, often talked about an “Eastern Federation” encompassing India, China, and a number of Asian nations to the east and west of India. The idea of an Eastern Federation is not very different from the notion of an Asian community that has captured the imagination of analysts today. Nor is the current debate on “Asian values” very different from Tagore’s and Tenzin’s ideas of Asia’s uniqueness nearly a century ago. By the end of the 1950s, India’s idealist notion on Asian unity had suffered many blows. The impact of the Cold War on the subcontinent and Asia, and India’s differences with China over Tibet and the boundary delimitation undermined what little prospect there was for Asian unity. On the economic front, India’s search for a “third way” of development that was focused on

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autarky resulted in a severance of India’s traditional economic linkages with East Asia and the relative decline of India’s weight in the international system. It was only after the collapse of its state socialism at the turn of the 1990s that India was compelled to launch sweeping economic reforms and join the new wave of economic globalization. Recognizing the importance of accessing external markets, finance and technology, and finding itself completely isolated from the Asian economic dynamism, India launched its “Look East” policy in the early 1990s of befriending the Southeast Asian nations. Through the decade, India steadily became a part of the ASEAN institutions, including the ARF. By the turn of the new millennium, India was expanding the ambit of its “Look East” policy. In geographic terms, India was now including China, Japan, the Korean peninsula, and Australia and South Pacific in its single most important post-Cold War diplomatic initiative. Since the late 1990s, India has also been emphasizing the restoration of physical connectivities with the neighbouring regions in Asia. And finally looking beyond the economic, India has begun to focus on security cooperation with the East Asian countries. Despite the change in the context and format of its engagement, Asia continues to remain at the core of Indian foreign policy thinking.4

India’s Relations with Great Powers Since the end of the Cold War, India has been enjoying an unprecedented and simultaneous deepening of its relations with all the great powers. India’s bilateral relations with China, the United States, and Japan are today in their best ever period since the middle of the last century. India has proclaimed “strategic partnerships” of varying intensity with all the three powers.5 Yet the fact remains that none of India’s three great power relationships has arrived at a plateau. All three remain susceptible to significant swings — up or down. Changes in one relationship are bound to affect the other two. Against the backdrop of this dynamism, the following is an assessment of India’s relationship with China, the United States, and Japan. The ties between India and China are extraordinarily complex and are misunderstood both within the two nations and in much of the world. But one thing appears certain; the future direction of Sino-Indian relations would be a key element of the incipient balance of power system in Asia. For much of the world, the rise of China is a more recent phenomenon. For India the resurgence of China in the middle of the last century and its emergence as a neighbour was a geopolitical development of great importance. As the two nations re-emerged on the world stage after a long period of relative decline, India and China did not find it easy to build good neighbourly relations.

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Even as they proclaimed high principles of friendship, the two giants drifted towards inevitable conflict. Distrust over Tibet resulted in India concluding bilateral security treaties with Nepal, Bhutan, and Sikkim from 1949–50. As India drew closer to the Soviet Union amidst the Sino-Soviet conflict, China was wary of Indian policies that appeared to focus on balancing China. New Delhi in turn was concerned by what it considered hostile policies of China, especially its support to Pakistan in its quarrels with India, and the strengthening of Islamabad’s strategic capabilities, including its nuclear and missile programmes.6 This behaviour of mutual balancing has been partly mitigated in recent years as India and China have worked hard to construct a more cooperative relationship. After a tentative rapprochement that began at the end of the Cold War, India and China have successfully deepened and broadened their relationship.7 Bilateral trade between the two countries is booming and is expected to exceed US$50 billion by 2010. China is all set to become India’s largest trading partner in a few years’ time. The two countries are embarked on a dialogue to resolve their long-standing political differences. In 2003, the two countries resolved their differences over Sikkim’s integration into India. They are also engaged in an intensive political exercise to find a fair and reasonable solution to their difficult boundary dispute. Meanwhile, the interaction between the two societies is rapidly expanding. These positive trends, however, do not necessarily imply that the sources of competition between the two countries have dried up. As both nations acquire greater economic and political clout, there is also a sense of competition between them across a broad front — from the maritime domain to outer space. From Latin America to Siberia, and from Southern Africa to Central Asia, China and India are locked in a global competition to ensure resource security. Citing the protection of their sea lines of communication, China and India are determined to expand naval power and ensure maritime presence far away from their shores. In some areas, such as Southeast Asia, especially in Myanmar, their competition for influence is open and vigorous.8 This does not mean India’s relations with China will turn inevitably adversarial. The Sino-Indian relationship is likely to see enduring elements of both rivalry and cooperation. The challenge before Beijing and New Delhi is to continuously expand their cooperation and develop a better mutual understanding and prevent any potential misreading of each other’s intentions. While Sino-Indian relations are being managed in the space between security dilemma and cooperative security, Indo-U.S. relations are moving from a prolonged estrangement during the Cold War to a conscious effort to build

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a strategic partnership. Over the last seven years, the Bush Administration had made a sustained effort to change the very fundamentals of the relationship with India. On the deeply divisive issue of Pakistan, the United States has ended its traditional political tilt towards Islamabad and positioned itself for the first time as a neutral actor. In the process, the Bush Administration achieved the near impossible simultaneous improvement in relations with both India and Pakistan. On the other traditional bone of contention, nuclear non-proliferation, the Bush Administration made a big move to accommodate India into the global nuclear order. It changed its own domestic non-proliferation laws to facilitate renewed civilian nuclear cooperation with India and worked with the international community to change the global rules on nuclear commerce with India. Underlying this unique American readiness to spend political capital on India is the recognition that New Delhi is bound to emerge as the crucial swing state in the future global balance of power.9 The Bush Administration publicly declared its commitment to assist India’s rise as a great power, and offered it a full range of military cooperation from advanced conventional weapons to missile defence. This contrasts with the United States’ reluctance to sell arms to China and its campaign to prevent European arms sales to Beijing. The deal on resuming civilian nuclear cooperation and the growing military relationship between New Delhi and Washington have raised some important questions. How far is India willing to go in partnering the United States? Is India, in fact, ready for an alliance-like relationship with Washington? The record of India’s foreign policy and its reluctance to accept the dictates of other great powers suggests that India will never sacrifice its freedom of foreign policy action in favour of a tight alliance with the United States that might constrain its options. That there was such vigorous domestic opposition in New Delhi to the Indo-U.S. nuclear deal points to the depth of Indian sensibility for an independent foreign policy. As the world speculates on the prospect of India joining the United States against China, the reality is that Sino-U.S. relations remain broader and deeper than those between New Delhi and Washington. Nor has Washington made up its mind to go beyond a hedging strategy towards China. In that sense, there is no American invitation to a containment party to which India is obliged to respond. To be sure, there is bound to be a triangular dynamic between the United States, China, and India. It is also true that there is greater military and strategic content to the Indo-U.S. relationship than the Sino-Indian ties. My assessment is each of the three giants would prefer to build open-ended relationships rather than commit themselves to long term binding arrangements with others. India’s interlocutors will have to keep two

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broad propositions in mind in assessing New Delhi’s future relationship with the United States and China. First, India’s main objective is to emerge as an indispensable element in the Asian balance of power. Second, India’s emphasis will be on simultaneous expansion of political and economic relations with all the great powers and avoidance of choosing sides between them. An intensified relationship with Japan fits naturally into this broad framework that India has set for itself.10 Japan has been the last among the great powers of the world to sense India’s rising power potential. But during the final years of the premiership of Junichiro Koizumi and the brief tenure of Shinzo Abe, Japan has moved rapidly to define a new approach to India. Although India’s improved relationship with the United States and the fluidity in Sino-Japanese relationships has cleared the ground for an improved Indo-Japanese relationship, there are other factors driving the bilateral strategic partnership. The two nations on the fringes of East Asia now have every incentive to expand their cooperation. Unlike much of East Asia, India carries no baggage about Japan’s history or a grudge against its nationalism. More significantly, India is perhaps the only country in the world that is willing to celebrate the much maligned “Asianist phase” of Japanese foreign policy. The implementation of the Indo-U.S. nuclear agreement and the likely change in Japan’s policy on sensitive exports to India could open the doors for a very rewarding, high-technology partnership between Tokyo and New Delhi. India and Japan have also agreed to expand their current defence cooperation which is focused on securing the sea-lanes in the Indian Ocean, so vital for Japanese access to energy and raw materials. Traditionally, India was not part of Japan’s conception of Asia. In expanding its geographic definition of Asia to beyond Myanmar in the west, and drawing India into a strategic partnership, Japan believes it has a better chance of coping with the unfolding redistribution of power in Asia and establishing a stable balance of power in the region. India, in turn, sees huge strategic complementarities with Japan.

India’s Regional Security Diplomacy India’s policy towards East Asia is not a simple function of its great power relations. India has every reason to deepen its independent relationships with all the major nations of East Asia and engage all the regional institutions. If security initiatives were conspicuous by their absence in the first phase of India’s “Look East” policy, they have begun to acquire a new importance in the second phase that began in the middle of this decade.11 Although India initiated tentative defence engagement with Southeast Asian nations from

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the early 1990s, it was the conclusion of a bilateral defence cooperation agreement with Singapore in 2003 that launched vigorous security diplomacy in the region.12 At the end of 2004, the Indian Navy was quick to respond, on its own, to the tsunami disaster and later joined the navies of the United States, Japan, and Australia to provide relief in Southeast Asia. In 2005, the Indian Aircraft carrier, INS Viraat, arrived for the first time in the ports of Southeast Asia — Singapore, Jakarta in Indonesia, and Klang in Malaysia. In the spring/summer of 2007, the Indian Navy sailed all the way up to Vladivostok and conducted a series of bilateral and multilateral exercises with a number of nations that included major powers such as the United States, Japan, Russia, and China, as well as regional actors such as Singapore, Vietnam, and the Philippines. India’s military diplomacy in 2007 culminated in large scale naval exercises with the United States, Japan, Australia, and Singapore in the Bay of Bengal. While these exercises raised alarm about a potential Asian NATO, India is focused more on expanding its own regional profile rather than the creation of a new alliance. This was reflected in the Indian Navy’s initiative to convene for the first time an Indian Ocean Naval conclave in February 2008. Only littoral navies from South Africa to Australia were invited. That the navies of the United States, China, and Japan were not invited is explained by Indian officials in terms of geography, but there is no mistaking the enduring intent of India to affirm its own independent engagement of the Indian Ocean littoral.13 Beyond the expanded reach and scope of its recent external military engagement, India has stepped up its bilateral security cooperation across the region. During the last few years, India has signed defence cooperation agreements with a number of Southeast Asian countries, including Singapore, Indonesia, Malaysia, Vietnam, and Cambodia. These involve Indian assistance in military training and arms transfers. Although India’s arms exports are well below the level of the Chinese volumes, these are set to grow. As it privatizes its defence industry and begins to co-produce advanced weapons systems with European producers, India is positioning itself to meet some of the security needs of the Southeast Asian countries. India is already committed to servicing some of the Southeast Asian fighter aircraft purchases from Russia and training the military personnel from the region to operate them. Underlying India’s military diplomacy is a basic political change. For nearly four decades, India had withdrawn into a shell of military isolationism that became the flip side of its foreign policy of non-alignment. From being a lone ranger, India has begun to emphasize the virtues of security multilateralism — of working with other great powers as well as regional actors to promote security public goods in the region. One example of this is the active Indian

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cooperation with the region for the promotion of safety and security of the Malacca Strait.

India and the Asian Security Order As we look to the future role of India in the construction of an East Asian security order, a number of broad approaches stand out. One, unlike in the past from the late 1940s to the mid 1950s, India does not seek a leadership role in Asia. Such claims came to nothing, and India has no desire to repeat them now. New Delhi is quite happy to abide by Deng Xiaoping’s advice to Chinese leaders on “keeping a low profile and never taking the lead”. India will consciously defer to the ASEAN sentiments, rather than make an attempt to get ahead of them. Second, India is unlikely to articulate a grand theory about its own changing strategic position in the region. Put another way, India sees no reason to posit a theory about its own “peaceful rise”. As Singapore’s Minister Mentor, Lee Kuan Yew, pointed out recently, Asia and the world, for a variety of reasons are not unduly concerned about India’s rising international and regional profile.14 India’s democratic pluralism, the region instinctively senses, provides a natural counter to any future nationalist excesses and external military adventures. Having flirted disastrously with grand concepts in the past, India has as its current emphasis, cautious realpolitik. Third, this pragmatism also makes India sceptical of the notions of collective security that involves the construction of supra-national structures. It is worth recalling that New Delhi, even at the height of its dependence on Moscow, was reluctant to endorse the proposals for collective security, from either Leonid Brezhnev in the late 1960s, or Mikhail Gorbachev in the late 1980s. India is unlikely to want the EAS or any other system to undermine sovereign decision making on national security. This focus on sovereignty, however, does not come in the way of India’s new interest in security multilateralism and expansive regional cooperation in addressing regional threats. For the operative phrase might be cooperative security, rather than collective security. Fourth, at the pan Asian level, India’s preference will be for an inclusive arrangement, rather than an exclusive one. India believes that without the participation of all the great powers, no security system in the region can succeed. It would not want to support either an exclusion of the United States from Asia or a U.S.-led containment of China. New Delhi’s preference, then, is for a “multipolar Asia” that fully respects the extraordinary political diversity of Asia. Finally, India would rather have Asia setting itself modest and achievable political goals and avoiding too ambitious an agenda for a

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security community in the region. An incremental, and step-by-step approach to greater political cooperation and the careful management of regional balance of power, New Delhi believes, might be the key to a more secure and prosperous East Asia.15

The India-ASEAN-Australia Triangle While a credible security order might evolve only over an extended period of time, a host of other bilateral and multilateral security arrangements, old and new, will continue to be important. No one is suggesting at this moment that the hub-and-spokes model of U.S. bilateral alliances might fade away. For decades now, it is these arrangements that have been the bedrock of Asian security. The Bush years have seen a strengthening of some of the U.S. bilateral alliances with Australia and Japan. There have also been significant new bilateral security arrangements that have begun to come into view. The ten-year defence framework unveiled by India and the United States in June 2005 is certainly not an alliance. But it lays out an unprecedented framework for security cooperation, including intensified military engagement, coalition operations, arms transfers, and defence industrial cooperation.16 The U.S. decision to strengthen Indian defence potential has already seen the transfer of USS Trenton, a landing platform docking ship that allows India to project force far beyond its shores, and the C130 J military transport aircraft that allows New Delhi to move its special forces far beyond its borders. The dynamic Indian private sector has also begun to tie up with the American defence industry for the production of components for various weapons systems. Whichever way one looks at it, there can be no doubt that the expanding Indo-U.S. defence cooperation and the continuing American pressure against the European companies from selling arms to China are bound to have significant effect on the overall military balance in East Asia. Beyond the Indo-U.S. defence cooperation, there have been other growing bilateral arrangements. The India-Japan strategic partnership announced in April 2005 has a significant defence component, which, however, will remain constrained by Japanese domestic laws. The Japan-Australia agreement on security cooperation announced in March 2007 also envisages cooperation between the two militaries in a number of areas, including peace-keeping operations and humanitarian relief.17 Although Japan and Australia have been long-standing military allies of the United States, both countries now see the need to enhance their own bilateral military cooperation. The U.S. hub-and-spokes model is also being complemented by new forms of security multilateralism. The U.S.-Japan-Australia security dialogue

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has already emerged as an established institution in East Asia. However, the idea of quadrilateral cooperation between the four Asian democracies — the United States, India, Japan, and Australia — has become trapped in political controversy all around.18 The proposal appears to have taken root after the on-the-run decision in Washington when the tsunami hit the Indian Ocean at the end of 2004. This saw a brief coordination among the naval forces of the United States, India, Japan, and Australia. The idea was later developed into a formal proposal by the Japanese Prime Minister Shinzo Abe in 2006. This was formally endorsed by Prime Minister Manmohan Singh during his visit to Tokyo in December 2006. One formal meeting of the senior officials from the four offices took place on the margins of the ARF meeting in May 2007. India’s decision to host a massive multilateral naval exercise involving the United States, India, Japan, Australia and Singapore in the Bay of Bengal in September 2007 was widely seen as a continuation of the idea of a “Democratic Quad”. However, it was a one-off Indian initiative. In all the four nations, however, there were significant reservations about the danger of the “Democratic Quad” being seen as an open attempt to contain China. The fall of the Abe government in Tokyo and that of John Howard in Australia in 2007 seemed to take the steam out of the initiative. While Abe’s successor Fukuda was lukewarm, the Kevin Rudd government in Australia explicitly suggested that it is not interested in the quadrangular initiative. Both Abe and Rudd had no stomach for offending China in any way. Compared with the other three governments where internal differences cast a shadow over the “Democratic Quad”, India surprisingly remained steadfast in its support. India, which was quite comfortable engaging China and Russia in a trilateral framework, found no problems in the simultaneous pursuit of a quadrilateral initiative with the United States, Japan, and Australia. Despite the fact that the original idea emanated from the Bush White House, the idea of Asian democracies working together has an enduring resonance in the United States. The proposal was explicitly endorsed by Hillary Clinton, a candidate for the Democratic presidential nomination, and more broadly by John McCain, the Republican candidate who called for a new global league of democracies.19 Given this fluid context of security multilateralism in Asia, what are the prospects for a triangular security cooperation among India, ASEAN, and Australia? That there is a need for such cooperation has been underscored by ASEAN’s collective decision to support the entry of India and Australia into the EAS, despite some individual reservations in the organization and the reluctance of China. This decision was clearly a political and strategic one rather than a geographic one. As Chin Kin Wah points out, “ASEAN

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countries such as Singapore (which lent strong support for India’s membership in the EAS) and Indonesia also saw the need for a more ‘balanced’ regional architecture. For those given to an architectonic view of the world India’s inclusion would provide a ‘balance’ in that the lesser states of the region would not be left to the exclusive embrace of any one major power between them”.20 Chin also suggests that “the addition of Australia and New Zealand in the EAS certainly gives a different tinge to the EAS imparting further meaning to ‘inclusiveness’ and makes the EAS more palatable to the United States”.21 Singapore’s Senior Minister Goh Chok Tong summed it all up in a pragmatic manner that is typical of the city state when he said, “ASEAN Foreign Ministers agreed on a set of criteria that would allow the participation of India, Australia and New Zealand in the first East Asia Summit. This was a wise decision. It kept East Asian regionalism inclusive, forward looking and open. It underscored the importance of adapting to new developments and not being trapped by narrow and outmoded geographic notions. But that decision was only the end of one chapter, not the end of the book.”22 Looking at the next chapters of the construction of East Asia, Goh suggests that the United States cannot be excluded from the East Asia Summit. He also suggests that the EAS cannot be “the only pillar” supporting East Asian regionalism. One might add here that expanded cooperation among India, ASEAN, and Australia too might be an important force in building a new order in East Asia. What form might such a cooperation take place? The idea of a triangular cooperation among the three is not entirely new. It was articulated by the Indian historian K.M. Panikkar in 1943. Looking ahead to the post-war situation in Southeast Asia, Panikkar called for a form of regional security that would involve cooperation among India, Indonesia, Australia, and Great Britain.23 But the evolution of the regional context of Southeast Asia, as well as the foreign policy direction of independent India, precluded such cooperation. Today, however, it is entirely appropriate that we look at the prospects of a triangular cooperation among India, ASEAN, and Australia. There is already a significant institutional basis, both bilateral and multilateral, for Australia’s security cooperation with Southeast Asia. India’s security engagement with Southeast Asia has begun to expand as we have noted earlier in this chapter. While there is a new breadth to India’s defence cooperation with the ASEAN states, it will be a while before it acquires significant depth. As Tim Huxley argues, “India’s approach to developing defence and strategic links in Southeast Asia has some times appeared hesitant. At the same time, there is some caution on the part of Southeast Asian governments because of concern over what China might perceive in India’s growing role in Southeast Asia. Overall,

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India is widely perceived in Southeast Asia as a benign power, and there is great potential for existing links to develop further as ASEAN governments seek to balance China’s role in the context of continuing doubts over the durability of the United States’ strategic commitment to the region.”24 The current tentativeness in India’s defence ties with Southeast Asia could also yield to greater purposefulness as New Delhi’s strategic capabilities begin to mature in the coming years. The weak link in a possible triangular strategic cooperation among India, ASEAN, and Australia, however, is the current underdeveloped partnership between New Delhi and Canberra. Despite occasional efforts, India and Australia have found it difficult to lend either depth or durability to their bilateral political and security relationship. Despite many shared political values, the strategic interests of New Delhi and Canberra were too divergent during the Cold War. An India that increasingly became alienated from the West found Australia a mere camp follower of the United States. Canberra, on the other hand, saw India’s de facto alliance with the Soviet Union as a threat to its own interests in the Indian Ocean. Attempts to find a new basis after the Cold War saw new difficulties such as the diverging perceptions on non-proliferation and Canberra’s hostile response to India’s nuclear tests in May 1998. As the Clinton Administration initiated an attempt at a nuclear reconciliation with New Delhi, and the Bush Administration boldly sought to promote a nuclear and strategic entente with it, the international context became far more conducive for a better India-Australia relationship. Reinforcing this was India’s Look East policy that began to raise New Delhi’s profile in East Asia. India’s own rapid economic growth expanded the possibilities for building on the commercial synergies with Australia. Finally, rising Indian migration, including a large student population, provided an entirely new basis for long-term cooperation between the two, including on strategic and defence cooperation.25 The Liberal Government of John Howard made a determined bid to build on these opportunities by emphasizing trade cooperation and signing a new defence Memorandum of Understanding. Howard’s support to the Indo-U.S. civil nuclear initiative and his hints of flexibility on lifting the ban on future uranium sales to India helped to generate a new optimism about the future of bilateral relations. That there was no consensus, however, on a fundamental change of approach towards India, however, became evident when the Labour government replaced that of Howard. The Labour opposition to the quadrangular cooperation with the United States, India, and Japan, as well as the reversal of the Howard approach on uranium, could be seen as temporary setbacks rather than a fundamental reversal. Nevertheless they produced some indignation in India at the unreliability of Australia as a partner.26

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While the Rudd government will have an opportunity to rethink Australia’s ties with India, there remains enduring doubts within Australia on the merits of a genuine security cooperation with India. A leading Australian analyst suggests that rather than deepen defence ties with India, Canberra should focus on multilateral engagement with India within the existing forums on a range of transnational threats, and initiate a strategic dialogue.27 The Australian reservations could be traced to a fundamental difference with India. New Delhi is relishing its new self-awareness as a rising power and its potential to shape the future balance of power in Asia. While India simultaneously pursues good relations with both the United States and China, Australia is apprehensive that lending new weight to India’s role might offend Beijing which has become an important partner. As India’s relative weight in East Asia grows, Australia will find it increasingly difficult to ignore the relationship with New Delhi and treat it as secondary to its ties with China. Canberra’s adaptation to India’s rise, however, might remain slow and tentative. That, however, should not preclude the beginning of triangular strategic cooperation with selected ASEAN countries. There is no reason for the three to launch yet another institution for such cooperation. The existing forums such as the ARF, in which both New Delhi and Canberra participate, already provide a multilateral framework for cooperation on a range of transnational threats. Cooperation on hard security issues will remain on the region’s agenda. Many current lines of bilateral security cooperation say, between India and Singapore, or between New Delhi and Jakarta, could be expanded to include Australia. Similarly many of Australia’s bilateral security activities with individual Southeast Asian countries could see future involvement of India. The emphasis must be on flexible arrangements rather than the creation of new rigidities in East Asia. Triangular security cooperation among India, ASEAN, and Australia can be developed on an ad hoc capability based approach. The list of shared interests among the three is long, and the complementarity too is quite evident. The challenge lies in the successful demonstration of at least one specific area of such cooperation among the three.

Notes

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For a discussion, see S.D. Muni, “East Asia Summit and India”, ISAS Working Papers No. 13 (Singapore: Institute of South Asian Studies, 2006). See Mohan Malik, “China in the East Asian Summit: More Discord than Accord”, Brief Analytical Report 02/06 (Honolulu: Asia Pacific Center for Security Studies, February 2006). David Scott, “Strategic Imperatives of India as an Emerging Player in Pacific Asia”, International Studies 44, no. 2 (2007).

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For an appreciation, see Christophe Jaffrelot, “India’s Look East Policy: An Asianist Strategy in Perspective”, India Review 2, no. 2 (April 2003): 35–68. C. Raja Mohan, “India and the Balance of Power”, Foreign Affairs 85, no. 4 (July/August 2006): 17–32. For a good overview, see John Garver, Protracted Contest: Sino-Indian Rivalry in the 20th Century (New Delhi: Oxford University Press, 2002). For an assessment of recent positive evolution of Sino-Indian relations, see C.V. Ranganathan, ed., Pachsheel and the Future: Perspectives on India-China Relations (New Delhi: Samskriti, 2005). Greg Sheridan, “East Meets the West: The Sino-Indian Rivalry”, The National Interest, no. 86 (November/December 2006): 92–96. C. Raja Mohan, Impossible Allies: Nuclear India, United States and the Global Order (New Delhi: India Research Press, 2006). For a recent review, see N.S. Sisodia and G.V.C. Naidu, eds., India-Japan Relations: Partnership for Peace and Security in Asia (New Delhi: Institute for Defence Studies and Analyses, 2006). For a former Indian official’s perspective on the security dimensions of India’s “Look East” policy, see Sudhir Devare, India and Southeast Asia: Towards Security Convergence (Singapore: Institute of Southeast Asian Studies, 2006). See Udai Bhanu Singh, “India and Southeast Asia: Enhanced Defence and Strategic Ties”, in Changing Security Dynamics in Southeast Asia, edited by N.S. Sisodia and Sreeradha Datta (New Delhi: Magnum, 2008), pp. 329–45. See Gurpreet Khurana, “Indian Ocean Naval Symposium: Where From…Whither Bound?”, IDSA Strategic Comments (22 February 2008). Lee Kuan Yew, “India’s Peaceful Rise”, Forbes, 24 December 2007. For an Indian view, see Varun Sahni, “India and the Asian Security Architecture”, Current History 105, no. 690 (2006): 163–68. “New Framework for the U.S.-India Defence Relationship”, 28 June 2005, . Japan, Ministry of Foreign Affairs, “Japan-Australia Joint Declaration on Security Cooperation”, 13 March 2007. C. Raja Mohan, “Asia’s New Democratic Quad”, ISN Security Watch, 19 March 2007. See Rory Medcalf, “Chinese Ghost Story”, The Diplomat, February/March 2008, . See Chin Kin Wah’s Chapter in this volume. Ibid. Goh Chok Tong, “Constructing East Asia”, Speech at the Asia Society Conference, Bangkok, 9 June 2005. K.M. Panikkar, The Future of South-East Asia: An Indian View (London: Macmillan, 1943). Tim Huxley, “India’s Defence and Strategic Relations with Southeast Asia”, in Changing Security Dynamics in Southeast Asia, edited by Sisodia and Datta, p. 353.

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Jenelle Bonnor and Varun Sahni, “Australia-India Reengagement: Common Security Concerns, Converging Strategic Horizons, Complementary Force Structures”, Strategic Insights, no. 11 (Canberra: Australian Strategic Policy Institute, 29 September 2004). 26 Brahma Chellaney, “Rudd’s Rudderless Reversal”, Asian Age, 1 March 2008, . 27 See Sandy Gordon, Widening Horizons: Australia’s New Relationship with India (Canberra: Australian Strategic Policy Institute, 2007). 25

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4 ASEAN, Australia, and India in Asia’s Regional Order Deepak Nair

Can ASEAN, Australia, and India emerge as effective and influential drivers of Asia’s pursuit for a stable regional order? This question is at the heart of this enquiry. Writing in 2003, G. John Ikenberry and Michael Mastanduno observed that essentially three actors would shape the current and future politics of the Asia-Pacific. Unsurprisingly, these actors were identified as the Untied States, Japan, and China.1 By most empirical and conceptual definitions of “power”, these three actors are genuine claimants to their position as the three most powerful actors in the international politics of Asia.2 But is this power singularly decisive and absolute? The fact that the most powerful states of Asia are unable to translate their material capacities neatly into shaping the politics of the region on their own terms provides an important opening into understanding the limits of instrumental power in Asia, and of the purpose and function of regional projects and state-led regionalism in charting alternative paths to order. Indeed, the very fact that it could be argued that an emerging yet underdeveloped power such as India, an institutional conglomerate of states such as ASEAN, and a geographically removed “middle power” such as Australia, can be influential shapers of an evolving Asian order, is a reflection of the variable nature of “power” in international politics, as well as of the numerous means by which it can be leveraged. That such an argument can be ventured is equally a reflection of the achievements and possibilities that have been 58

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opened up by pursuing regionalism to counter the strategic uncertainties of the post-Cold War period. Admittedly, these achievements have been limited, with instrumental state concerns often obstructing the normative goals and aspirations of regionalism. But regional institutions and practices have, at the minimum, socialized regional diplomatic and defence elites,3 have offered a basis for organizing interstate cooperation, and have provided foundations for regional stability that reflect elements of both necessity and innovation in providing viable answers to the Asian region’s search for stability. If a regional “security architecture” is a reference to the empirical arrangements and ideational elements from which a state of order can be obtained, and if it were to be conceptualized in an “overarching and macro analytical sense” (Tow and Taylor, Chapter 1), then it is possible to identify the twin processes of realist and liberal-institutionalist order-building as the key dynamics within this broader attempt at constructing/sustaining order in Asian international relations. There is a realist and instrumental path to order-building manifest in the structure of U.S. guaranteed security alliances and the persistent politics of security dilemmas and Great Powers on the one hand, and, on the other, the operation of a neo-functional method whereby states invest in regional institutions to enhance predictability and transparency among state elites, an endeavour often glazed with the normative pursuit of community building. The operation of multiple pathways to order-building contains within it, and expresses, the multiplicity of material and ideational interests, agendas, and strategies that inform the agents and structures of order-building in Asia. In terms of the ongoing construction of order in the region, scholars have identified the uneasy existence of different permutations and possibilities, and it is a matter of debate as to which type dominates or best describes the international politics of the region.4 These include the continued dominance of a liberal U.S. hegemonic structure, the contestation of this hegemony by China which advances multipolarity to further its ambition of being a “co-manager” of Asian security, and the more normative influence exerted by regional institutions that pursue monetary and security regionalism to create a normative-contractual order.5 In short, these coexisting structures — realist and liberal-institutional, actualized by alliances and regional institutions, respectively — enable the realization of a state of order in the region. Order, as much theoretical literature demonstrates, is a complicated category, and there are different ways of identifying what it constitutes. Hedley Bull’s seminal study of order defined it as “a pattern of activity that sustains the elementary or primary goals of the society of states, or international society”, with these primary goals identified

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as the preservation of the state system, of sovereignty, international peace, the limitation of violence, the honouring of promises, and the operation of rules of property that enable legitimate possession.6 However, order has also been conceptualized in broader ways. Muthiah Alagappa, for instance, builds on the insights of English School theorists — Bull, Barry Buzan, and Andrew Hurrell — to define order as “rule governed interaction”, and this conception enables the identification and operation of order in all forms of international social life — Hobbesian, Kantian, and Grotian.7 Order can thus be constituted by, and expressed in, the existence of transparent and stable methods for managing interstate relations, and, to extend it further, in managing change as well. While stability would be a natural cognate to the quest for building order, it is not necessary that they go together. Indeed, order established by the diktat of empire and conquest — Japanese invasions in the Asia-Pacific during the Second World War being a case in point — produce fragile and unstable orders that struggle with sustaining an iniquitous and exploitative status quo.8 The question of whether ASEAN, Australia, and India can play a viable role in shaping a stable regional order would have to be located within the framework of these twin order-building processes. Alagappa’s typology of orders in the form of an “Instrumental” and “Normative-Contractual” provide a useful conceptual framework to study their roles in order-building processes. An “Instrumental” order is characterized and realized by a form of rule-governed interaction where the fulfilment of private ends — with national interest, identity, and power being major motors — enable coexistence among states. A “Normative-Contractual” order does not eschew the pursuit of private ends, but is marked by an attempt to fulfil collective goals as well, and the rules of interaction enable collaboration and cooperation among states. Reformulated to encompass a broader terrain of international social life, Alagappa’s typologies of order mirror extant traditions of International Relations (IR) theory. Indeed, and as he notes, an instrumental order reflects the realist and Hobbesian strands of IR thinking while the NormativeContractual endeavour is underpinned by a rational-liberal conception of cooperative international relations.

Instrumental Order-building In terms of instrumental order-building, Australia, ASEAN, and India have been involved in a variety of strategic bilateral and/or multilateral alliances and partnerships in Asia. These alliances and partnerships have been developed to

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deal with the uncertainties and security dilemmas that have characterized the security politics of the region since the end of the Cold War. Two concerns have been particularly persistent and are derived from both the legacy of the Cold War and from the evolving strategic landscape of the post-Cold War period: First, the role of the United States and its commitment to the region, and second, the dramatic rise of China and the attempts by the other states to develop effective means of hedging against its power. These twin concerns have offered sufficient stimulus and rationale for states to pursue their instrumental goals of state security by strengthening their alliance relationships, especially with the United States. Often, these alliances, arrangements, and partnerships have taken the form of, and have been expressed in terms of, symmetries and geometries. Thus, there is the “hub and spokes” structure that has been the centrepiece of U.S. security structure in the region from the Cold War and which has linked U.S. power with states in Northeast and Southeast Asia. Geometries are invoked to describe other important alliance relationships in the region as well: Japan, Australia, and the United States constitute a triangle of Pacific Asian powers. Also notable is the conception of the “Quadrilateral” of democracies or “Quad”, which adds India to this pre-existing triangle of Asia-Pacific powers. With only a meeting of officials from the four countries at the sidelines of the ASEAN Regional Forum (ARF) meeting in Manila in 2007 and a naval exercise (which included Singapore), the “Quad” concept did not materialize into an institutional arrangement or sustained dialogue. However, even though it subsisted and circulated as an undeveloped concept in state discourse, it nevertheless produced perceptible effects and responses. It bolstered the perception of a new ideologically defined basis for “containing” and “encircling” China, and Chinese anxieties with this process was evident by its demand for an explanation for the one-off meeting held in Manila. Besides Dick Cheney’s support for such a dialogue of democracies, the perception that the “Quad” was a framework directed against China was not helped by the fact that the framework sprang from the Japanese Premier Shinzo Abe’s call for “value oriented diplomacy” and for the creation of an “arc of freedom and prosperity”.9 While the security alliances of the United States, and the bilateral security relationships between many other states in Asia seem to express a Hobbesian necessity to secure and protect, the pursuit of instrumental means nevertheless has limitations, and, in many ways, the abandonment of the “Quad” concept is a telling reminder of these limitations. Ultimately, the quad was unable to effloresce into any meaningful security or strategic

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framework because it was an imperfect and simplistic means of addressing the strategic challenge of enmeshing and socializing Chinese power in the evolving politics of the region. The apprehension towards taking this ideologically defined form of exclusion was reflected by the governments of Kevin Rudd in Australia and the former Japanese Prime Minister Yasuo Fukuda, both of whom sought to adopt a more nuanced policy in approaching China and its role in the region. The preceding chapters have elaborated on the different ways by which instrumental order-building has been pursued so far. William Tow and Brendan Taylor have elaborated on Australia’s attempts to seek a balance between its “history and geography”, that is, its alliance relationship with the United States on the one hand, and its immediate neighbourhood on the other. The rise of India as an influential actor in the recent international politics of the region has been discussed by C. Raja Mohan in this book. India’s growing presence in East Asia is not only a product of its assiduously cultivated “Look East” policy, but also of the interest with which it has been received by East Asian states who have sought to draw in Great Powers and make them collective stakeholders in order-building processes. In terms of instrumental politics, India’s rising presence in the region, and indeed its strategic value, has been expressed in the form of its growing bilateral economic and security relationships with Southeast Asian states, as well as the role of its navy in conducting joint exercises with Australian, American, and Southeast Asian counterparts. Unlike India and Australia, ASEAN has had a more apparent role in Asian order-building processes. The construction of ASEAN itself represents one of the most notable instances of regionalism in Asia, and despite its problems, it has played a key role in order-building at a subregional Southeast Asian level.10 However, as Chin Kin Wah notes (Chapter 2, this volume), despite its appearance as a corporate entity, ASEAN contains within it a vast body of interests and agendas that reflect the preferences of the individual states of Southeast Asia. As Evelyn Goh points out, these states have pursued a complex strategy whereby they may use ASEAN (and the other regional forums it drives) to pursue the “omni-enmeshment of major powers”, while at the same time playing a key role in shaping a “complex balance of influence”.11 Thus, even though Southeast Asian states have taken considerable advantage of ASEAN, and the regional project in general, to become shapers of order-building processes, they have nevertheless followed a concomitant pathway of balancing to fulfil national instrumental goals.

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Normative-Contractual Order: Building Order with Regionalism The pursuit of self-interested national goals describes only one interpretation of Asia’s international relations. Processes that go beyond instrumental goals, or which supplement national ends with collective goods, express a more complex texture of international politics in the region. Besides working towards collective objects, a normative contractual order is crucially defined by the operation of international norms, international law, as well as institutions, all of which shape rule making and impact state behaviour. In Asia, the push for such an order has been most directly expressed by regionalism or state-led “institution creation”,12 which has been one of the most salient dynamics in the international politics of Asia since the end of the Cold War. Regional institutions and frameworks have been numerous, and have sought to address different aspects of interstate interaction — financial cooperation, monetary arrangements, and security concerns as well. There are several factors that have made regionalism a sustained dynamic. First, and quite fundamentally, are the connections and linkages unleashed by globalization and the market, which have forged complex interdependencies across Asian states in trade, technology, and manufacturing.13 This “grass roots” web of linkages, also referred to as regionalization (as opposed to “top down” regionalism) has been robust in Asia and they have been furthered by — and equally have offered rationale for — the institutional frameworks of state-led regionalism. The rise of regionalism is also deeply linked to the profound impacts of global finance and capitalism. Regional institutions and arrangements have been bolstered by their role in providing a crucial intermediary level of governance between the global and the local, as evidenced by the steady rise of the ASEAN+3 (APT) in the wake of the Asian financial crisis of 1997. Rather than marking a departure from the project of neoliberal capitalism, the APT reflected the desire of state elites to mediate and regulate domestic exposure to such global flows.14 In ideational terms, the move towards regionalism has been underpinned by the neo-functional belief in the benefits of economic and financial cooperation and interdependence, as indeed in the “virtuous cycle” — that interstate economic cooperation makes war costly, enhances domestic stability, and thus raises the possibility of international stability.15 These are just some of the factors that have contributed to the rise of regions and regionalism in international politics, a trend manifest in the consolidation of the European Union and other major region wide arrangements such as the North American Free Trade Area, the Southern American Market, and their

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counterparts in Asia such as the APT. The rise of regions, not only as a basis for organizing economic and security cooperation, but also as a conceptual category, is reflected in the foregrounding of the region in new approaches of International Relations theory, which have moved away from unipolarity and bipolarity to employing a regional level of analysis in conceptualizing international politics.16 While Australia, India, and ASEAN states have been consistent in their pursuit of hard power capabilities and bilateral arrangements in the form of partnerships and alliances to address their instrumental concerns, their record in regionalism varies considerably. Australia, for instance, took the lead at the turn of the 1980s in advancing an open and inclusive Asia-Pacific regionalism by playing a key role in establishing the Asia-Pacific Economic Cooperation (APEC) in 1989. This process for economic regionalism was premised on the explicit acknowledgement of the interdependence of Asian states on a broad slate of stakeholders in other continents including North and South America. Moreover, it drew its relevance from the heightened role of globalization and liberalization in economic relations, and was to serve as a mechanism to institutionalize these rapidly developing economic relations. However, APEC had limited success in pushing its agenda for trade liberalization, not only because of the mercantilist economic preferences of East Asian states, but also owing to different stylistic approaches among members: the supposed difference between the “process oriented” approach of East Asian actors, and the more “outcome oriented” approach of Anglo-American actors.17 Australia’s role and initial leadership in regionalism was, however, inconsistent over the years, and by the mid-1990s the Howard government was actively seeking to restore Australian strategic and political attention to its alliance relationship with the United States.18 The change to a new Labour government has resulted in Australia’s renewed interest in pursuing a regional order-building process in Asia, expressed most explicitly by Kevin Rudd’s proposal for an “Asia-Pacific Community”, a formally constituted regional body that would seek to provide a holistic regionalism that combines both economic and security cooperation on an inclusive basis.19 However, the diplomatic faux pas of declaring this vision without prior consultation with Asian states, apart from the more fundamental challenge of tackling realist state concerns that complicate region building visions, has placed serious encumbrances to realizing this broad and inclusive initiative for regional order-building in Asia. ASEAN has, of course, been one of the principal drivers and beneficiaries of regionalism as a means to order-building in Asia. Despite its material weakness, ASEAN has enabled Southeast Asian states to wield more influence

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and “weight” in the international politics of the region. It was in the context of an uncertain post-Cold War regional environment that ASEAN took the lead in founding the ARF in 1994, as a multilateral dialogue mechanism to keep all major powers engaged in the region, and in securing new forms of regional stability. The ARF provided for multilateral security cooperation and dialogue on an Asia-Pacific scale, in much the way APEC was working towards trade liberalization. Ever since taking the “driver’s seat” of the ARF, ASEAN has sought to consolidate its position as the leading architect of the regional order-building process, and has been instrumental in bridging East Asia with Europe through the Asia Europe Meetings (ASEM) constituted in 1996, and, quite significantly, in bridging Southeast and Northeast Asia via the ASEAN+1, and subsequently, the APT process. The establishment of the latter in 1997 marked a major development in the experience of regionalism in Asia. It developed in opposition to the hitherto open and inclusive character of Asia-Pacific regionalism. The Asian financial crisis provided a decisive impetus for organizing regionalism on an exclusive “East Asian” basis, and a mandate to formulate new financial and monetary arrangements on a bilateral and multilateral basis so that Asian states could redress potential financial crises in the future without bearing the price for overdependence on international financial institutions.20 The success in advancing such monetary and financial regionalism has been evidenced by numerous initiatives such as Bilateral Currency Swaps, the Chiang Mai Initiative, and the Asian Bond Market Initiative, among others.21 The apparent success of pursuing economic regionalism on an East Asian basis through the APT had been central to the impression that the APT would become the “most important regional institution” in Asia.22 However, such expectations of the APT, and indeed the enthusiasm over its success, would have to be qualified in light of the East Asia Summit (EAS) founded in 2005. The East Asia Vision Group (EAVG) report was the first to articulate the proposal for the “evolution of the annual summits of the ASEAN+3 into the East Asia Summit”.23 The EAS was meant to subsume and carry forward the functions of the APT with the broader endeavour to become a more holistic regional body addressing economic and security concerns of an exclusive East Asia.24 However, the blueprints for realizing the EAS changed considerably, and altered the pre-existing APT definition of East Asia to include India, Australia, and New Zealand. The EAS has thus emerged as an alternative conception of East Asia, and while it has not subsumed the APT, it has not developed as a distinct mechanism in its own right, with specific functions and rationales.25 In fact, in certain aspects, the EAS has also emerged as a competitor to the APT, especially

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since both East Asian processes employ the same lexicon of diplomatic and political end goals such as an “East Asian Community” and the creation of a Free Trade Area on an East Asian basis. Thus, it remains a matter of deep ambiguity as to whether a putative East Asian Community or Free Trade Area will be organized on an exclusive APT or an inclusive EAS basis. To have two formally defined (and competing) conceptions of an ASEAN+3 or an “ASEAN+6” East Asia Community or Free Trade Area would be a serious strain on the credibility of the regional project. Even though ASEAN’s central role is reiterated in the official discourse of both the APT and EAS, it has clearly ended up in a more complicated position whereby it has to mediate the stresses of competing regional conceptions. Unlike both Australia and ASEAN, India’s record in regionalism beyond South Asia has been meagre. This has had much to do with the relative newness of India as an actor in the international politics of the Asian region, and not simply as an actor of consequence to South Asia alone. Concomitant with the newness of India as a strategic player has been its ambiguous position in formal conceptions of Asian regions articulated so far — in both East Asia and Asia-Pacific forms. Its engagement with ASEAN-led regionalism began in the aftermath of the Cold War and the advent of its Look East policy. Its steps have been cautious and timid: In 1992, India became a Sectoral Dialogue partner of ASEAN, in 1995 it became a full-dialogue partner, and in 1996 India became a member of the ARF. However, India’s exclusion from the APT process from 1997 onwards highlighted its uncertain position in the evolving future of Asian regionalism. In recent years, the growing economic and strategic significance of India has played a crucial role in solidifying India’s position within Asian regionalism. Thus, in 2002, India-ASEAN relations were institutionalized with the holding of annual summit level meetings, and this process of drawing India more firmly into formal regional processes was achieved by the East Asia Summit where Japan and ASEAN countries such as Singapore and Indonesia rallied behind its membership. India has begun to take a more proactive position in Asian regionalism, not only in terms of multilateral cooperation, but also in espousing the normative goals of these regional projects. Indian Prime Minister Manmohan Singh, for instance, has expressed India’s keenness to be part of an emerging East Asian community.26 Despite membership in the EAS, India’s identity problem is not definitively settled. Indeed, the Prime Minister’s remarks have to be located in the context of the confusion over whether a future East Asian community would be arranged around concentric circles, with the APT countries comprising a “core”, and the other three members being situated (and implicitly distanced) at the periphery.

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The Challenges to Order-building via Regionalism While Australia, ASEAN, and India have had varying records at pursuing regional order-building processes, their membership in the EAS can be seen as a step towards a more coordinated and regularized involvement in this pathway to order-building. However, it would be simplistic to suggest that this formal involvement would necessarily lead to a more enhanced and fruitful regionalism. Ultimately, the process of regionalism and its normative belief — in “virtuous cycles”, in the benefits of interdependence, and in the belief that linkages will construct meaningful regional communities — are not unproblematic and, indeed, have been seriously challenged in light of recent regional institutional developments, the founding of the EAS referred to earlier being a case in point. The challenges to regional projects and how they impact the potential role that Australia, ASEAN, and India can play in shaping regional order warrant closer attention.

The Question of Region and Asian Identity The first — and perhaps more obvious — problem arises from a conceptual question quite fundamental to the process of regionalism. What is a region? Are regions natural and fixed spaces? Are they constituted by geography or political and empirical practices? This conceptual issue is vital to address since the conception of a region is central to both the organization and practice of regionalism: from the delineation of members to determining the inclusiveexclusive structure of regional projects to the scope and character of goals that regional projects may espouse. In contrast to the attempt by official discourses to reify and invest meaning and substance to them, regions are not a priori spatial and social entities; rather, they are products of political and social imagining. From the outset, a “region” does not yield to easy definition. As a composition of small units, or parts bound by definable characteristics, it is conceptualized in the framework of levels, as something bigger than units, yet smaller than a whole. Its conceptualization is fundamentally tied to the agency that conceives it, and thus an appreciation of this agency is instructive in understanding how regions are realized. Whether it is a materialist theory of region emphasizing territorial markers and geopolitics, or an ideational theory with its accent on political-cultural construction, or a behavioral theory focusing on human practices that shape them, regions exist as constructed and fluid spatial conceptions.27 An appreciation of the inherent fluidity of regions explains

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to some extent why and how multiple conceptions of an Asian region in the form of Asia-Pacific and East Asia (among others) exist. If the conception of a region, of regional identity, and belonging, are contingent on material and ideational interests that operate and define the agenda in a given context and time, then, by implication, they are also susceptible to shifts, to closures, and openings. What this implies for India and Australia is their continued vulnerability even if they take proactive roles in pursuing regionalism to further their strategic interests, as well as shape order-building in Asia. There will continue to be latent discourses of “Othering” that may cast India and Australia as geographical outsiders, with different political systems and cultural sensibilities that may not fit neatly with essentialized conceptions of “East Asia”. While ASEAN struggles with questions of its own identity, it occupies a relatively more secure place within evolving conceptions of East Asia, especially since it is among the chief drivers of regional identity building. Nevertheless it faces serious challenges of different types. In brief, however, it is possible to identify the challenge to ASEAN’s preference for managing regionalism with consultation and consensus, its upholding of sovereignty and non-interference, all of which can also subject its leadership to strain, as demonstrated most recently in the aftermath of protests in Myanmar in 2007. Moreover, there are also challenges to its leadership position: the success of the Six-Party Talks in providing for preventive diplomacy and its planned institutionalization into a more enduring framework will be a direct challenge to ASEAN’s position in Asian regionalism. Also, ASEAN contains within it the diverging interests of ten states: these are either resolved into a consensual position that reflects the common minimum level of agreement, or these differences spill out in the open. Again, the EAS is a telling example: Singapore and Indonesia were supportive of its expansion while Malaysia under then Prime Minister Mahathir was openly sceptical about the implications of such an expansion.

The Economic-Security Nexus Another conceptual issue that has a direct bearing on the practice and organization of regional projects is the character and form of regional cooperation pursued. Specifically, it refers to whether multilateral cooperation on a region-wide basis should be confined to economic forms, or whether it should embrace broader questions of security and defence and thus express a more holistic approach to conducting regionalism. Asia’s recent regional projects — from APEC and the ARF to the APT and EAS — have sought to carve their own forms of regional cooperation. Importantly, most regional

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institutions and frameworks employ regional economic cooperation as their starting point, and this trend has been motivated by both the incentives produced by globalized networks of trade and investment and also by the neo-functional belief that interdependence and transnational linkages build transparency, predictability, and stability in international relations. Even though economic and financial subjects have provided a starting point for regional cooperation, the depth and extent to which it has provided a basis for meaningful regionalism has varied: while the APT registered much success by spawning a range of financial mechanisms, APEC has been less successful in driving its agenda for trade liberalization, especially after the collapse of the Early Voluntary Sectoral Liberalization initiative in the 1990s. Other regional institutions such as the ARF and the Shanghai Cooperation Organisation (SCO) are focused primarily on security cooperation, while the EAS espouses a more holistic vision by seeking to provide for a “forum for strategic dialogue” as well as work towards the realization of an East Asian Free Trade Area.28 However, the pursuit of security regionalism has been one of the most intractable problems of regional cooperation in Asia. This is particularly the case since the remit of security issues that have been embraced by these regional initiatives have focused on transnational security concerns and areas where state and elite securitization agendas converge most easily. Thus, maritime piracy, terrorism, drug and human trafficking, and even climate change — as with the EAS’s growing concern — receive a large share of regional attention.29 While such cooperation is useful in terms of providing for a forum for the socialization of defence and diplomatic elites, they have, however, been unable to proceed to realize the goal of a deeper and more direct tackling of security concerns. This is especially evident with the ARF, which has been unable to move substantively towards its stated goals of preventive diplomacy and conflict resolution.30 Asia’s experience in regionalism also fleshes out a crucial point, that the formal separation of economic and security regional cooperation is a complicated and potentially unviable strategy for regionalism in the long term. While the security benefits of economic interlinkages are obvious, they are not necessarily a panacea for the problem of regional security. On the other hand, the limited success in addressing hard security concerns has often constrained economic regionalism: the mistrust between China and Japan, for instance, negatively impacted on discussions for an Asian Currency Unit under the APT framework of financial regionalism.31 This would make it tempting to argue that a more balanced method of pursuing a holistic regionalism — one where functional economic cooperation would have to be coupled with attempts at addressing outstanding security concerns and dilemmas — would offer a

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better basis for regionalism. However, there is a more fundamental problem that encumbers the potential for such substantive regionalism in Asia: the enduring and complex realism that informs the international politics of Asian states, manifest in the influential role of the state, sovereignty, nationalism, and Great Power politics. The last in particular has affected the possibilities for regionalism as a credible means for order-building in the region, and this warrants further examination.

Great Powers and the Problem of Rival Architects and Visions One of the most serious problems that has come to affect the credibility of regionalism in Asia has been the vulnerability of regional projects and mechanisms to being hijacked by Great Power politics and agendas. While the implicit role and intervention of such agendas is not surprising, what is worrying is the heightened nature of this problem in Asia’s recent experience of regionalism. This “competitive institutionalism”32 or “institution racing”33 is evident by the way major powers in the region have rallied selectively behind institutions which fit neatly with their preferences and further their interests. Thus, the United States continues to remain a traditionally strong backer of APEC and has been active in rejuvenating APEC’s contemporary relevance by broadening its scope to counter-terrorism and security issues. China, despite its traditional apprehension towards regional multilateralism, has come to take a lead role in the APT process. Indeed, it supported the planned evolution of the APT into the EAS as long as it remained an exclusive “East Asian” grouping. However, the inclusion of India, Australia, and New Zealand, and the role of other APT members in revising the original conception of the EAS, betrayed the growing apprehension of the prospect of Chinese dominance in East Asian regionalism. The expansion of the EAS has affected China’s enthusiasm for this regional grouping, and it has gone back to consolidating its position in the APT process. Japan played a critical role in revising the blueprints for the APT to transform into the EAS by lobbying hard for the inclusion of new members. With its success in countering Chinese dominance in the APT process, Japan has become a strong backer of the EAS and has invested much material and intellectual capital in this process: Apart from resources, it plays an active role in the Economic Research Institute for ASEAN and East Asia (ERIA). Track 2 bodies such as the ERIA and other forums have been explicating goals such as a Comprehensive Economic Partnership Arrangement of East Asia (CEPEA) and an East Asian Community. These new goals have led to confusion in East Asian regionalism: CEPEA offers a regional free trade

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agreement on an East Asian basis and it is not clear what relationship this would have with the East Asian Free Trade Area that has been declared by the APT process and which centres on APT members.

Conclusion The above sections have pointed to the complicated operation of the dual processes of order-building in Asia — a realist pathway that coexists with the liberal-institutionalist pathway of regionalism. Far from being autonomous, these processes interact, complicate, and even frustrate each other: the desuetude of the “Quad” as an ideological basis to address Chinese power in Asia reflected the limitations of pursuing realist and instrumental security politics, and equally, the expansion of the EAS from its initial formulation as an exclusive regional project, and indeed the effects of Great Power politics on regional institutions, reflect the extent to which the normative aspirations of regional projects have been persistently checked by pragmatism and realist practices in international politics. These twin order-building processes raise several questions: Is this current state of multiple paths to order-building deleterious to order and stability, or does it reflect a more complex response in the form of a realist-liberal balance? Moreover, will these pragmatic and fluid processes be a transient or a long-term strategy? Would they be viable as long-term strategies, especially the regional project that has often laid claim to solidarist goals of community building, which seem implausible in light of the pressing instrumental concerns in the region? This brings us back to the question posed at the outset of this chapter: What role can India, Australia, and ASEAN play in furthering regional order in Asia? This question has been answered in various ways through this chapter: From Australia’s lead in formulating a more nuanced policy towards China and in its subsequent loss of enthusiasm for the “Quad”; India’s active interest and reception as a player and stakeholder in the security of Asia; and in ASEAN’s provision of direction and enthusiasm for non-hegemonic regionalism. From the thread of argument developed in this chapter, it is only natural that the three actors will attempt to shape order and seek stability by employing both order-building processes. However, ASEAN, India, and Australia can enhance their role in securing stability for Asia if they take a more concerted role in regional institutions and work towards rescuing the credibility of regionalism as a means of order-building. With the EAS, the three actors have been brought together closely into Asia’s most recent and current regional process. Their association also constitutes a new symmetry,

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one that is crucially not constituted in oppositional terms to any perception of threat, but is bound by a common normative desire to seek stability in the Asian region. The EAS, despite its flaws, nevertheless provides the three actors with an opportunity to converge and reinvigorate the potential of regionalism as a means of order-building. To do so, however, the three actors would have to work concertedly towards checking and balancing the agendas of Great Powers in the EAS, and enhancing transparency and socialization among state elites. All the same, they would have to eschew grand designs and visions of constituting formal regional Communities. Despite the appealing nature of such visions, this would be premature in the near or medium term. Instead, they ought to focus on strengthening cooperative security. While it may also be tempting to work towards addressing hard security concerns — bilateral animosities and territorial disputes in the region — this may not be easy: India, for instance, would refrain from a conflict resolution agenda on account of a sensitivity arising from its own internal territorial concerns, while ASEAN and Australia alone may not be able to mitigate their particular constraints. Australia, for instance, would have to factor in its important alliance relationship with the United States, which has a bearing on the power equation in Asia, while ASEAN, as a regional body, is subject to the political agendas of its member states, which affect its ability to pursue a more coherent or proactive approach to conducting regionalism. The EAS offers a new opening for the three actors to consolidate their positions, identities, and rationales in the Asian region, even though it remains to be seen how far the three can effectively coordinate with one another to shape the regional project, and, by implication, order and stability in Asia.

Notes

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G. John Ikenberry and Michael Mastanduno, “Introduction: International Relations Theory and the Search for Regional Stability”, in International Relations Theory and the Asia-Pacific, edited by G. John Ikenberry and Michael Mastanduno (New York: Columbia University Press, 2003). The exact nature of “power” is not easy to define. Realist conceptions of power include a “national power” approach that focuses on the material capacities of the state. An alternative realist conception is that of “relational power” where “power” is contingent on the ability of the state to influence. For more on realist conceptions of power, see Brian Schmidt, “Competing Realist Conceptions of Power”, Millennium 33, no. 3 (2005): 523–50. There are, of course, other conceptions as well, notably, Joseph Nye’s “Soft power”. Alastair Ian Johnston, “Socialization in International Institutions: The ASEAN

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Way and International Relations Theory”, in International Relations Theory and the Asia-Pacific, edited by Ikenberry and Mastanduno, pp. 107–62. Muthiah Alagappa, “The Study of International Order: An Analytical Framework”, in Asian Security Order: Instrumental and Normative Features, edited by Muthiah Alagappa (Stanford, CA: Stanford University Press, 2003), pp. 63–64; Patrick M. Morgan, “Regional Security Complexes and Regional Orders”, in Regional Orders: Building Security in a New World, edited by David A. Lake and Patrick M. Morgan (University Park: Pennsylvania State University Press, 1997), p. 39. Muthiah Alagappa, “Constructing Security Order in Asia: Conceptions and Issues”, in Asian Security Order, edited by Alagappa, pp. 70–105; G. John Ikenberry and Michael Mastanduno, “Conclusion: Images of Order in the Asia-Pacific and the Role of the United States”, in International Relations Theory, edited by Ikenberry and Mastanduno, pp. 421–37. Hedley Bull, The Anarchical Society: A Study of Order in World Politics (New York: Columbia University Press, 2002). Alagappa, “The Study of International Order”, pp. 39–41. For English School works on order, see Bull, The Anarchical Society; Barry Buzan, “From International System to International Society: Structural Realism and Regime Theory Meet the English School”, International Organization 47, no. 3 (Summer 1993): 327–52. Thanks to Dr Chin Kin Wah for this insight. See Rory Medcalf, “Mysterious Quad More Phantom than Menace”, 9 April 2008, , and “Remarks by Taro Aso, Minister for Foreign Affairs at the 60th Meeting of the Board of Counselors at Nippon Keidanre”, . Yuen Foong Khong. “Michael Leifer and the Pre-requisites of Regional Order in Southeast Asia”, in Order and Security in Southeast Asia: Essays in Memory of Michael Leifer, edited by Joseph Liow and Ralf Emmers (New York: Routledge, 2006). Evelyn Goh, “Great Powers and Hierarchical Order in Southeast Asia: Analyzing Regional Security Strategies”, International Security 32, no. 3 (Winter 2007/08): 113–57. T.J. Pempel, ed., Remapping East Asia: The Construction of a Region (Ithaca, NY: Cornell University Press, 2005). Ibid; Shaun Breslin, “Theorising East Asian Regionalism(s): New Regionalism and Asia’s Future(s)”, in Advancing East Asian Regionalism, edited by Melissa G. Curley and Nicholas Thomas (New York: Routledge, 2007). Peter J Katzenstein. “Regionalism in Comparative Perspective”, Cooperation and Conflict 31, no. 2 (1996): 123–60; Breslin, “Theorising East Asian Regionalism(s)”, pp. 32–35. John Ravenhill, “Mission Creep or Mission Impossible? APEC and Security”, in Reassessing Security Cooperation in the Asia-Pacific: Competition, Congruence,

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and Transformation, edited by Amitav Acharya and Evelyn Goh (Cambridge, MA: MIT Press, 2006). Barry Buzan and Ole Wæver, Regions and Powers: The Structure of International Security (Cambridge: Cambridge University Press, 2003). Mark Beeson, “American Hegemony and Regionalism: The Rise of East Asia and the End of the Asia-Pacific”, Geopolitics 11, no. 4 (2006): 541–60; John Ravenhill, APEC and the Construction of Pacific Rim Regionalism (New York: Cambridge University Press, 2001). William T. Tow, “Asia’s Competitive ‘Strategic Geometries’: The Australian Perspective”, Contemporary Southeast Asia 30, no. 1 (2008): 29–51. Kevin Rudd, “It’s Time to Build an Asia Pacific Community”, Address to the Asia Society Australasia Centre, Sydney, 4 June 2008. “Inclusive” and “exclusive” are, of course, not an unproblematic basis for classifying regional projects. For, one could ask, isn’t ASEAN inclusive in that its membership consists of states with diverse models of economic and political organizations, even though it is exclusive in its geographic and spatial scope? The same could be said for the APT as well. This, however, does not negate the value of using an inclusive/exclusive classification. The operative point in identifying a regional institution as such is to consider the context of its formation, and whether or not it was founded in opposition to an extant state discourse or conception of a region. Hence, the APT is exclusive as it consolidated in response to the crisis of 1997 and a “politics of resentment” and echoed the decidedly exclusivist proposal of an East Asian Economic Caucus by Mahathir Mohammad in 1991. Similarly, the EAS reflects an inclusive conception of an “East Asia” as it entailed a revision of the narrower East Asian concept embodied by the APT. See Christopher Dent, East Asian Regionalism (New York: Routledge, 2008), pp. 153–68. Richard Stubbs, “ASEAN Plus Three: Emerging East Asian Regionalism?”, Asian Survey 42, no. 3 (2002): 440–55; Chu Shulong, “The ASEAN Plus Three Process and East Asian Security Cooperation”, in Reassessing Security Cooperation, edited by Acharya and Goh. East Asia Vision Group Report, Towards an East Asian Community, p. 4, . Dent, East Asian Regionalism, p. 169; Akihiko Tanaka, “The Development of the ASEAN+3 Framework”, in Advancing East Asian Regionalism, edited by Curley and Thomas, p. 65. Dent, East Asian Regionalism, p. 169. See Manmohan Singh, “Keynote Address at Special Leaders’ Dialogue of ASEAN Business Advisory Council”, Kuala Lumpur, 12 December 2005. Peter J. Katzenstein, A World of Regions: Asia and Europe in the American Imperium (Ithaca, NY: Cornell University Press, 2005), pp. 6–13. ASEAN Secretariat, “Chairman’s Statement of the Third East Asia Summit, Singapore, 21 November 2007”, point 12.

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The EAS has been developing its niche in climate change and environment related issues. The main outcomes of the second and third EAS in 2007 include the Cebu Declaration on East Asian Energy Security and the Singapore Declaration on Climate Change, Energy and the Environment, respectively. See ASEAN Secretariat, “Chairman’s Statement of the Second East Asia Summit, Cebu, Philippines, 15 January 2007”, points 4, 5, 6; ASEAN Secretariat, “Chairman’s Statement of the Third East Asia Summit”, points 5, 6. 30 Sheldon W. Simon, “Whither Security Regionalism? ASEAN and the ARF in the Face of New Security Challenges”, in Reassessing Security Cooperation, edited by Acharya and Goh, pp. 121–25. 31 Dent, East Asian Regionalism, p. 165. 32 Shaun Narine, “Economic Security and Regional Cooperation in the Asia-Pacific: Evaluating the Economics-Security Nexus”, in Reassessing Security Cooperation, edited by Acharya and Goh, p. 216. 33 Amitav Acharya and Evelyn Goh, “Introduction”, in Reassessing Security Cooperation, edited by Acharya and Goh, p. 7. 29

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PART II Energy Security

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5 Regional Energy Security A Challenging Objective? Stuart Harris

The consequences of sustained and rapid economic changes in Asia (particularly China and India) for international trade, labour, and financial markets have been recognized for some years. Recognition of their current and prospective effects on commodity markets has evolved more slowly, but those impacts are now seen as substantial.1 Energy is at the forefront of this attention, in part because cyclical and structural changes have contributed to the considerable uncertainties in energy markets, to which the 2008 financial crisis added substantially. This chapter asks: How do uncertainties in the international energy market affect Asia? It is apparent that the way we perceived energy security in the past has changed. It now needs to be seen as a more serious global issue. As the chief economist of the International Energy Agency (IEA), Fatih Birol, has argued, “Rising global energy demand poses a real and growing threat to the world’s energy security.”2 In the short term, the financial and related economic fallout has affected energy markets. We are concerned here, however, primarily with the medium to long term in which energy market uncertainties revolve around future energy (notably oil) supply and demand, including potential oil supply adequacy, the sensitivity of oil demand to increasing prices, enhanced investment uncertainty, the changed role of the international oil companies, the increased importance of national oil companies, the role of the Organization 79

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of Petroleum Exporting Countries (OPEC), the impact of speculation, and the changing value of the American dollar. To these uncertainties are added environmental issues, notably climate change, and increasing overlaps with food supply and prices. Even before these uncertainties emerged as significant factors, access to energy supplies had become a matter of high policy concern in most countries in Asia. Along with energy security concerns, predominantly about the physical accessibility to future energy supplies, have been more immediate regional concerns about rising prices and their impact on lower income sectors of national populations. Moreover, given the environmental and budgetary benefits of following market prices for oil, but also given the adverse inflationary and economic stability impacts of such policies and the effects on poverty and food production, countries now face difficult choices in managing the various policy options, even if that management has only a marginal influence on supply conditions. These interrelationships are especially important to Asian countries. Nevertheless, while features exist that are particularly significant in the region — such as import dependence, high energy intensity, substantial maritime transport dependence, infrastructural investment needs, and limited refinery capacity — regional energy security must be looked at within a global energy security context. Although energy security can be defined in various ways, it usually relates to three supply factors: adequacy, affordability, and reliability. Rapid developments in the global energy market from 2003 on make it difficult to separate short-term influences from cyclical and structural shifts in the energy, particularly oil, market. Cyclical and structural issues are often critical causes of short-term, sharp, price variability, as well as of long-term developments. Nor is it possible to separate physical supply from price, since supply determines price, even if price does not necessarily determine supply.

Adequacy Adequacy of energy supply relates to the existing global supply/demand balance, and how that balance might evolve over time. We will look, therefore, at how energy markets have changed, and what influences will affect them in the future. Global energy demand has increased because of the sustained economic growth of recent years, and notwithstanding short-term downturns, is expected to continue increasing in the future in China, India and elsewhere in Asia. Global oil consumption increased by 10 per cent from 2000 to 2006; over the same period, consumption in the Asia-Pacific increased by

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16 per cent, and that of China and India by 52 and 14 per cent respectively. Although those two countries accounted for only 12 per cent of global consumption, China alone accounted for over one-third of the growth in global demand. Despite lower short-term growth rates, estimates based on past trends suggested that global energy consumption would grow at an average of some 1.8 per cent a year, and by 2030, to have increased by almost 50 per cent on today’s figures;3 Asian demand, Chinese and Indian demand in particular, would continue to grow rapidly. Coal will be a growing component of the energy sources needed for this energy consumption. China, once a major coal exporter to other parts of Asia and beyond, will become a net importer over that period despite being affected by the U.S. and European economic slowdown. While the reliability of natural gas and electricity supply are energy security concerns, particularly in some parts of Asia, including China, crude oil is the centre of regional policy concern, and the most problematic prospectively. Consequently, this chapter concentrates largely on crude oil. IEA projections pointed to China and India accounting for over 50 per cent of global growth in oil imports by 2030, and other developing Asian countries accounting for 6 per cent. Projections of demand produced in current circumstances might be a little lower, on the expectation that higher prices will reduce demand growth, as is already happening, particularly in industrialized economies. A basic assumption, however, has been that there will be continued growth in Asia. Most analysts expect economic growth in this region to continue despite the global economic difficulties, but how far China and other major regional economies can decouple from the U.S. economy will be a major factor. Energy supply generally has grown slowly. In particular, for liquid fuels, which are the major energy security concerns for most countries, supply has become tight. It will likely remain tight, and it tends to set the market outcomes for other fuels. Reflecting the outcome of an investment cycle, underinvestment in the industry at all levels during the low price phase of the cycle in the 1990s meant that spare capacity in the industry was limited when demand rose, restricting the supply response; hence the price rises that have been experienced.4 Although this cyclical influence was critical in the 1990s and early 2000s, other structural features that emerged, such as the diminishing importance of the international oil companies, and their need for improved financial performance, also increasingly influenced the energy market. Although exploration and developmental activity has increased in response to the higher prices, a variety of constraints have limited the expected

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response, including rising production costs and increased political risks. In the longer term, the tight supply situation will likely continue. The level of uncertainty in the energy market is considerable, which then poses problems for responding to energy security concerns. The supply difficulties have contributed to speculation that higher oil prices indicate long-term resource limitations. There is substantial debate about whether the oil industry has reached, or will soon reach, the point of “peak oil” production (where global oil production, on a trend basis, will decline or, at least, plateau). Given the non-renewable nature of the major energy resources, the question is less whether there will be a peak than when it might emerge. Various estimates suggest that the peak would be reached within the next few years. This view leads to a belief that the international “scramble” for supply sources will intensify. Nevertheless, while economically recoverable fossil fuel resources are finite and will eventually constrain production, a lack of the underlying resource is unlikely to be the major reason for supply problems in the short to medium-term future. Despite expecting oil demand to be 37 per cent higher in 2030 (the end point of its projection period) than in 2006, the IEA, in its 2007 analysis, did not expect oil production to peak in the next quarter century at least. To date, however, IEA projections have been largely demand-based, with mostly Middle East-based OPEC members expected to meet most of the added demand. The IEA has previously assumed that there are enough resources to meet growing demands at least until 2030. There is some uncertainty in the IEA about the accuracy of resource and reserves estimates following the downward revision of some U.S. estimates of what resources are still to be discovered.5 Proven economically recoverable reserves, however, have either kept pace with, or been a little ahead of, production in recent years, including a slight increase in Asia in 2007.6 These reserve figures do not include the substantial reserves of unconventional oils in Canada and South America. The IEA’s concerns appear to have been less about resource scarcity in the short to medium-term, than its fears that the investment needed to provide the global supply to meet the expected demand will not be adequate. Capital requirements are large: The IEA estimated in 2007 that capital requirements amounted to some US$22 trillion, a figure not beyond the capacity of the world’s capital markets to provide even if, as seems likely, that estimate will need to be increased. Moreover, price increases have already transferred an estimated additional US$3 trillion from importing to exporting countries since 2001.7 The requirement for investment derives not just from the need to explore and develop new fields, but also because of the age of existing fields

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and past underinvestment in field maintenance. Increased expenditure is necessary to refurbish infrastructure, and to keep decline rates down and production up. Several factors lead to pessimism about whether sufficient investments will be made to bring on the additional supply required to avoid further substantial price increases. New discoveries are often made in more geographically awkward or politically sensitive areas of operation as, for example, in offshore deep water, or in Africa or Central Asia, which add to costs and lead to unpredictable and unstable production. Increased competition for scarce labour, technology, and service equipment, such as drilling ships and rigs (the production of which decreased during the low price period of the 1990s), has greatly increased costs. The Goldman Sachs Group estimated the costs to the marginal producers of producing a barrel of oil in 2008 to be around US$70 a barrel.8 A major factor inducing pessimism, however, is that national governments now control most of the petroleum liquids reserves. The five largest, privatelyowned international oil companies control little more than 4 per cent of those reserves; national oil companies now control close to 90 per cent.9 The major private sector international oil companies have reserve to production ratios averaging eleven years, while the nine major national oil companies have an average reserve to production ratio of seventy-eight years.10 National oil companies have different incentives to those of the private sector oil companies; moreover, despite their increasing revenues, many of the national oil companies have not used, or are not permitted to use, these revenues to pursue output growth. Low investment rates have also been accompanied in many cases by relatively inefficient operations. To ensure access to energy resources, several Asian countries, China and India in particular, have pursued policies of “going out” to invest in oil and gas ventures internationally. Despite concerns, especially in the United States, that these investments, often in the form of shares in the output (or “equity oil”), will in some way limit the global access to this oil, such fears are exaggerated. Oil shipped to the home country would reduce by the same amount that country’s demand on the global market. Moreover, in practice, most of the Chinese equity oil has been sold on the international market for quality, logistical, and profitability reasons. Involvement in Sudan and Iran has been a controversial issue, especially for China. The investments in those countries have, however, added to the supply of oil on the international market. China and India are not the only Asian countries with energy investment interests outside the home country. Japan has had a long experience of overseas energy investment and recently reinvigorated its sagging efforts. South Korea

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has become active in recent years. Malaysia, too, through its company Petronas, is a partner with China and India in Sudan’s oil industry; and like a number of Association of Southeast Asian Nations (ASEAN) members, has energy interests in neighbouring Southeast Asia.11

Affordability Given the increase in energy (especially oil) prices, the perspectives on what constitutes affordability has changed. In mid-2008, oil prices reached record levels in real terms. Whilst later in 2008 prices fell from their earlier peaks, they are likely to remain high in historical terms. Such prices pose difficulties for industrialized countries,12 but they remain bad news for developing countries in Asia, as elsewhere, and very bad news for the poorer countries among them. The continued use of subsidies to help those on low incomes is becoming a financially unsustainable burden. Estimates put the budgetary cost of global energy subsidies in 2005 at around $250 billion.13 Around one-third of this was in Asian countries, and a number of regional countries — Indonesia, India, China, and Malaysia — have already cut existing subsidies, thus allowing domestic energy prices to rise. Looking ahead to the future may not promise much relief. The evidence suggests continuing upward pressure on prices from the growth in demand from emerging countries, including China, India, and other Asian countries in particular, in the face of lagging supply. For the long term, the IEA has said that were there a level of per capita income to be realized in China and India comparable to that of the industrialized countries, on today’s (resource intensive economic) model, it would require a level of energy use beyond the world’s energy resource endowment.14 It would also be beyond the capacity of the world’s ecosystem to absorb the associated carbon emissions. The IEA suggested that all countries, including China and India, would have to pursue a different development path to that adopted in the West.15 Policies to achieve an early outcome of that kind may seem improbable; in the meantime, the more likely outcome is a continuing rise in the trend price of oil and other energy resources across the globe. Crude oil prices are set on an international market. While production is not determined on an open competitive basis, once produced and available for sale internationally, crude oil is priced competitively. Energy security is also concerned with rapid and unexpected price hikes. The increased volatility of oil prices has particular problems for the fiscal and monetary authorities in developing countries, problems additional to those already resulting from the high trend levels of prices. Many factors can

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contribute to short-term price variability. The market is supplied by fewer suppliers and there is a greater reliance for supplies on the Middle East, which in the past has been a significant source of instability. Moreover, there is now less price elasticity so that with continuing price changes, demand adjusts only slowly. A major cause of price variability is that spare capacity in the energy industry is limited and any political disturbances such as rebel attacks in Nigeria, climatic events such as Cyclone Katrina, or attacks on an oil-producing country such as Iraq, lead to price spikes. Price spikes were frequent in the past in response to disruptions in the international and domestic supply of crude oil, such as the Arab oil embargo in 1973, the Iranian revolution, the 1980 Iran/Iraq war, the war in Iraq, unrest in the Niger River delta region of Nigeria, and hurricanes in the Gulf of Mexico, but to a degree the situation is now even more volatile. There is much argument that the international market for crude oil has been affected by the fall in the value of the U.S. dollar and by speculation. Since crude oil is usually priced in U.S. dollar terms, falls in dollar values do make some difference to posted prices, but for those consuming countries with currencies not tied to the U.S. dollar, that effect is offset to the extent that their currencies have appreciated against the dollar. There has been more extensive debate about the effects of financial speculation on price levels. Pension and hedge fund operators and other financial speculators in the United States, and, to a lesser extent, in Britain, appear to have contributed to shortterm price instability. Price variability is likely to increase in part because of speculative activity, credit difficulties, and because tight supply leaves little room to compensate for unexpected movements in supply or demand. When, as in mid-2008, investment funds such as Goldman Sachs predicted the possibility of US$200 per barrel of oil by the end of that year, markets would be expected to respond; industry participants sought forward cover for their business needs while financial investors wanting to move from a falling dollar saw oil futures as a promising alternative. In practice, both types of financial actions contributed to record levels of activity in futures markets on the New York Mercantile Exchange. Eventually, adequate counter speculators who wanted cover against, or were betting on, downwards price adjustments emerged. In general, however, speculators follow rather than shape the market. In the past, OPEC had, at times, a significant influence on prices by setting upper production limits on its members who produce about 40 per cent of the world’s crude oil. OPEC members possess about two-thirds of the world’s estimated crude oil reserves, but only Saudi Arabia has spare

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production capacity, much of it in heavy crude for which global and Asian refining capabilities are limited. There is considerable debate about Saudi Arabia’s reserves and its actual and spare production capacity, and this leads many analysts to believe that OPEC will be less able to influence the market in the future than in the past. The Saudis and other OPEC members have financial and strategic interests in ensuring some market stability; in 2008, Saudi Arabia increased production to hold prices down, and then when they fell substantially, led OPEC in cutting production. In neither case, however, was the immediate price effect substantial. While the long-term price trend is likely to be upwards, sizeable movements from the 2008 peaks occurred as demand slowed and the investment stimulated by price increases contributed some added production, but less than expected. There is little basis for judging where the trend price might end up, however, except that it is unlikely to move back to levels of only a few years ago. Various estimates for early short-term prospects range widely, but commonly well below US$100 a barrel. For more substantial reasons, however, including continued growth not only in developing Asia, but also in the Middle East where demand has grown by 35 per cent since 2000, the underlying trend level of prices is likely to continue upward at levels substantially above those of historic trend levels.16 Because international distribution of oil is a competitive process, access to crude oil will normally be available on the international market at the going price. That price will remain sensitive to short-term shocks, not only because of limited spare capacity, but also because at current prices the incentive to hold stocks is also limited.

Reliability Various factors could interfere with the reliability of the supply of oil, including political coercion, natural disasters, military conflicts, and terrorism. Much of the concern in the region, however, relates to the security of sea lines of communications (SLOCs). Nearly 40 per cent of global crude oil shipments go through the Malacca Strait; more than 40 per cent goes through the Strait of Hormuz. Consequently Asian states, China, Japan, and India in particular, worry about their vulnerability. Any blocking of the Hormuz or Malacca Straits would have a global and not just regional impact on oil markets. There is no practical alternative to the Strait of Hormuz for the Gulf countries, which supply a substantial portion of global oil and oil imported into Asia. Consequently, the market

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has responded sharply to any periodic threats of hostilities towards Iran. There have already been naval skirmishes between the United States and Iran in the Straits where the two countries, neither of whom have ratified the Law of the Sea convention, differ over maritime borders. China has a particular concern that if it had a major difference with the United States, the United States could block oil shipments to China. It may be less concerned today than in the past, in part because of improved SinoU.S. relations. In practice, moreover, interdiction would be very difficult; and any move to interdict crude oil shipments would have significant short-term impacts not just on China, but on all involved in the international oil trade, as well as major, long lasting, impacts on the global shipping and insurance industries. Regional sea lane concerns, however, have mainly reflected effects of piracy and the possibilities of terrorism. Intensified activity by the littoral states — Indonesia, Malaysia, and Singapore — including coordinated patrols and “eye in the sky” aerial surveillance, seems to have reduced the incidence of piracy, now increasingly limited to smaller vessels. The International Maritime Bureau noted a drop in the number of attacks in the Malacca Strait from thirty-eight in 2004 to seven in 2007.17 Terrorism remains a possibility, but one not easily undertaken; possible scenarios have included sinking a large tanker to block the Strait or blowing up a liquefied natural gas (LNG) tanker — referred to, somewhat dramatically, as a “floating bomb”. Speculative scenarios often see the possible linking of pirates and terrorists. Each of these possibilities cannot be totally ruled out, but is generally thought unlikely, as is the possibility of blocking the Strait, given the width of the Malacca Strait even at its narrowest part.18 In any event there are alternative routes. Problems would arise, however, from the added shipping capacity needed because of the longer distances. They also underline the significance of sea lane security more widely in maritime Southeast Asia. Around the Indonesian straits, for example, the number of attacks remains high, but is declining.19

The Search for Energy Security For countries in Asia, energy security issues arise from rapidly rising energy demand, increasing dependence on imports in an increasingly uncertain international environment, a volatile and high priced market, and inadequate investment in many producing countries in energy exploration, production, processing, and transport.

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A variety of general measures would have beneficial effects in limiting both short- and long-term energy insecurity, whether physical interruptions to supply or through price volatility. These include energy conservation, increased energy efficiency in industrial and transport facilities, diversification of supply and energy sources, increased stockholding, increased domestic production (where possible) including of renewable substitutes, removal of market impediments, better data and information and their greater transparency, good relations with supplying countries, and increasing international cooperation. Conservation measures to reduce oil, gas, and coal consumption, including increasing the efficiency of energy use, are perhaps the least expensive way to improve energy security for both short- and long-term benefit. Asian developing countries have the advantage of being able to draw on existing conservation technologies that would make possible significant progress. Pricing energy at global levels is a first step, particularly for oil which will increasingly be used primarily for motor transport. Japan and Hong Kong have long had high petrol prices, with substantial taxes on transport fuel. Elsewhere in Asia, consumer petrol prices have generally been low in global terms. China has high motor vehicle fuel efficiency standards, and although until recently its prices for transport fuels have been low, in 2008 it brought prices closer to global market levels. While this chapter does not discuss at length the other major energy policy imperative, global climate change, in this case the implications for climate change problems would be positive. Nevertheless, few would expect conservation alone to reduce oil and other fossil fuel use absolutely in the near future. Motor vehicle car numbers are likely to grow swiftly in rapidly developing Asian countries. Nevertheless, enhanced conservation measures would help. Apart from conservation, a standard response to concerns about energy security is to argue for greater diversification of supply sources and fuels. To the extent that it is possible, this would help provide some added security. In most cases these methods are now more difficult to achieve sufficiently to make a major difference. Indeed, as the exporting countries of Asia increase their own demand, as in Vietnam, or their productive fields decline, as in Malaysia and Indonesia, the region’s supply will increasingly depend on the Middle East for much of its crude oil. Diversification of fuels is being pursued in a number of directions. The constraints, however, on switching to other energy sources, apart from its practicability, are often substantial. For electricity generation, natural gas is increasingly used mainly because of its lower carbon emissions, but it requires substantial capital investment for transport and storage infrastructure and

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for industrial and power generation uses. How far that investment is made depends only in part on its profitability although natural gas prices moved substantially with oil. Natural gas reserves are also substantially held by national companies. Natural gas, however, is a regional resource, regional reserves are extensive, and a number of countries in Asia have domestic resources. China, India, and Korea, however, are expected to import around half of their requirements within two decades or so, with transport processes as vulnerable as those for oil. China and India are looking to rely increasingly on coal. Coal use in China is expected to increase by over 50 per cent by 2030, while India’s coal use will treble from present levels. Coal consumption elsewhere in the region will double over the same period, posing obvious problems for efforts to reduce carbon emissions. The use of biofuels internationally, notably ethanol from grains and biodiesel from oil seeds, has increased liquid fuel availability, accounting for almost one-third of increased liquid fuel production in 2006 and 2007. Often in receipt of subsidies, the production of these first-generation biofuels, however, competes with food and feed production. Estimates indicate biofuel use for transport contributed to increased global food prices of 30 per cent of average grains prices, and a regionally significant 22 per cent in rice prices.20 Together with other factors affecting food production, including increased costs of energy and energy-based fertilisers, the distress to those on lower incomes is already substantial and likely to limit the extent of biofuel substitution for other liquid fuels. For power generation, interest in nuclear power has increased in the region. Six Asian countries have nuclear plants under construction,21 and China and India have major plans for expansion of their nuclear industries. Australia has started to export uranium to China under safeguards agreements signed with China, but it has not agreed to sell uranium to India, a non-Nuclear Non-Proliferation Treaty country. Although a positive factor on the climate change front, public concerns about nuclear safety, costs, and the possibilities of proliferation of nuclear weapons, continue to be a factor in many decisions about nuclear energy. Overall, then, the scope for increasing energy security by diversifying supply sources and fuels, while positive, is subject to substantial constraints. Emergency stocks can be an important weapon against short- or mediumterm supply and price shocks. In September 2005, IEA members collectively agreed to release sixty million barrels of oil and oil products over a month to offset the price effect of Hurricane Katrina. Japan and Korea released stocks from their emergency stockpiles in accordance with their membership

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obligations in the IEA. Although not an IEA member, China, some years ago, also established an emergency stock, filling of which began in 2005. India has also started to build a crude oil stockpile. To gain the full benefit of stock releases, stocks need to be released cooperatively with others. If a single country does so unilaterally, the market effect is widely dispersed. While all market participants gain a little, including the country releasing the stocks, that country nevertheless carries the full cost. A “tie up” with the IEA in this process would be a constructive step.

Where does Australia Fit in? Australia’s dependence on imports for transport fuels will grow. Its net oil self-sufficiency is expected to drop from 58 per cent in 2007 to 33 per cent by 2015, absent further substantial discoveries.22 Australia presently imports oil predominantly from Asia. Its main regional suppliers are Vietnam, Papua New Guinea, Malaysia, and Indonesia. Only a limited amount now comes directly from the Middle East, although its imports of petroleum products from Singapore presumably include Middle East oil. It is likely to source more oil from the Middle East in the future as its import needs grow and as Asian exporters’ once ample reserves run down and their own demand increases. With its extensive resources of natural gas, coal, and uranium, Australia is a major energy exporter to Asia. It is a large exporter of coal; around 90 per cent of its coal exports and a large share of its LNG exports go to Asian countries. Within the region, Australia is presently a significant uranium exporter to Japan, Korea, and Taiwan. Much of its coal and LNG exports currently go through Indonesian (Lombok and Sunda) straits and this energy trade is expected to increase. Sea lane reliability is an important security interest that Australia shares with other regional countries. Australia has an obvious economic interest in contributing to Asian resource security. The impact on Australia’s economy of the market for Australian resources in China, and also, over a longer term, Japanese demand for Australia’s resources, has been marked. Japan has long invested in Australian resource industries and China has shown similar interest. Measures that enhance energy supply security are commonly of a global public good nature. International cooperation is more effective when undertaken collectively with other countries. It will often pay for countries to act together for various energy security purposes — joint stock management, swap arrangements, data provision, technology development in conservation, clean energies, fuel switching, and pipeline and electrical transmission systems.

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Reference has already been made to multilateral cooperation among oilimporting economies in order to reduce oil consumption, especially through policy intervention that promotes the fuel efficiency that addresses the national and global external diseconomies of oil consumption, notably global warming. Bilateral, regional, and international energy cooperation will help to develop more effective policies in order to reduce regional energy insecurity. A constructive bilateral example was a Sino-Japanese agreement for China to import Japanese conservation technology, and Japan to import coal from China.23 Regional countries have been active in pursuing energy security through the Asia-Pacific Economic Cooperation (APEC) Energy Security Initiative. This initiative encompasses short- and long-term measures under five headings: energy supply disruptions, energy investment, energy efficiency in use, diversification, and technology innovation. The resultant perspective would be useful in resource security discussions in line with those in IEA, the G20, the G8, and the ASEAN Regional Forum. Australia and other regional countries are involved in other energy related initiatives, such as carbon sequestration (Carbon Sequestration Leadership Forum), the hydrogen economy (International Partnership for the Hydrogen Economy), and the methane partnership (Methane to Markets Partnership).24 Other examples of cooperation are in clean coal research through, among other mechanisms, the Asia-Pacific Partnership on Clean Development and Climate, which involves six regional countries and the United States.

Conclusion The Asian region cannot avoid looking for energy security within the global energy market and indeed has had to move closer to it. That market is clouded with many uncertainties. The argument that high prices are due to developing Asian economies overlooks the contribution of two major influences: a major investment cycle and structural changes in the energy supply situation. Because of underinvestment in all aspects of the industry since the mid-1980s, energy producers had difficulty coping with the increased demand that came with global economic growth in the early 2000s, to which the Asian developing countries certainly contributed substantially. That cyclical process has now reversed itself, but structural changes, including most reserves now being in the hands of national oil companies and production declining in a number of the major existing fields, have also become important. The investment that would normally have followed the price increase will now be constrained by national policies of producing countries, geopolitical risks, and rapidly

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rising costs. The volatility of prices that fluctuate widely — as between above US$140 and below US$70 a barrel within less than a year — also makes investment planning difficult. This slow supply response has contributed markedly to the rising trend prices of oil and other energy sources, and it seems likely to continue to do so. There are many uncertainties about future energy demand, but perhaps more so about future energy supply, providing problems for decision makers. Among the major uncertainties is how soon basic resource constraints will affect the market. In practice, however, for the next two decades or so, whether the resource constraints become real or the problem is in underinvestment and other induced supply constraints, how the problems show up will not differ greatly. The downturn in economic activity following the financial crisis may delay, but not change this picture. This will have important political consequences. It is not likely that any “scramble” for oil would lead to overt conflict where sovereignties are well established, although conflict over energy resources has by no means been unknown in the past. Nevertheless, provided the distribution of oil remains open and competitive, the international market remains a more efficient means of gaining access. Yet, where sovereignties are uncertain or disputed, possibilities of conflict are greater. The scope for destabilization within all countries is likely to be substantial. In developed countries, increased prices of energy, food, and other energyrelated products, and the associated required reduction in demand, will be very unpopular. Consequently, the substantial process of adjustment that appears inevitable could be disruptive in domestic politics. That close to comparable price levels for energy have been experienced in the past and that the costs of energy have been declining in price for much of the postSecond World War period will hardly be a persuasive counter-argument in developed countries. It certainly will not be in developing countries. The extent of political discontent in the latter could stimulate major tensions, especially in those developing countries with less robust governing systems. In exporting countries, particularly those with differing ethnic or religious communities, the distribution of wealth from energy receipts could split communities and lead to civil, possibly violent, conflict. Ensuring reliable and affordable energy in these circumstances will be a challenging global objective and no less so regionally.

Notes 1

HM Treasury, “Global Commodities: A Long Term Vision for Stable, Secure and Sustainable Global Markets” (London: HM Treasury, June 2008).

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3



4



5



6



7



8 9



10 11



12



13



14



15 16



17



18



19 20



21

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“Transcript: Interview with IEA chief economist”, Financial Times, 7 November 2007. Drawn from the data in International Energy Agency, World Energy Outlook 2007 (Paris: OECD/IEA, 2007), chapter 1. For more detail see Stuart Harris and Barry Naughten, “Economic Dimensions of Energy Security in the Asia-Pacific”, in Energy Security in Asia, edited by Michael Wesley (London: Routledge, 2007). Neil King and Peter Fritsch, “Energy Watchdog Warns of Supply Side Oilproduction Crunch”, Wall Street Journal, 22 May 2008. “BP Statistical Review of World Energy June 2008”, . Goldman Sachs Commodities Research, “The Revenge of the Old ‘Political’ Economy: The Sustainability of Higher Long-term Commodity Prices, Part III”, 14 March 2008, p. 13. Ibid., p. 12. The marginal costs of production set the market price for oil. Robert Pirog, “The Role of National Oil Companies in the International Oil Market”, CRS Report for Congress (Washington, DC: Congressional Research Service, Library of Congress, 21 August 2007). Ibid. More detail is available in Vincent S. Pérez, “Who Wins in the Asian Scramble for Oil?”, in Energy Perspectives on Singapore and the Region, edited by Mark Hong and Teo Kah Beng (Singapore: Institute of Southeast Asian Studies, 2007). However, the industrialized countries are better placed to cope with high prices than they were at the time of the previous high oil price peak in 1980, when comparable prices in real terms were experienced. International Energy Agency, World Energy Outlook 2006 (Paris: OECD/IEA, 2006), Section 11. International Energy Agency, World Energy Outlook 2007 (Paris: OECD/IEA, 2007), p. 215. Ibid. Foreseeing a squeeze between demand and supply by mid-next decade for reasons of investment inadequacy, Paul Stevens postulates that a spike in excess of US$200 a barrel is feasible; Paul Stevens, The Coming Oil Supply Crunch (London: Chatham House, 2008), p. 31. International Chamber of Commerce International Maritime Bureau, Piracy and Armed Robbery against Ships: Annual Report 1 January–31 December 2007 (London: ICC International Maritime Bureau, January 2008), Table 1, p. 5. Sam Bateman, “Assessing the Threat of Maritime Terrorism: Issues for the AsiaPacific Region”, Security Challenges 2, no. 3 (October 2006). Forty-three in 2007, compared with ninety-four in 2004. Mark W. Rosegrant, Biofuels and Grain Prices: Impacts and Policy Responses (Washington, DC: International Food Policy Research Institute, 2008). China, India, Indonesia, Japan, South Korea, and Taiwan.

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Ian McFarlane, Minister for Industry, Tourism and Resources, “Data Room to Boost Search for Oil Reserves”, Media release, Canberra, 18 July 2007. 23 Xinhua News Agency, Beijing, 5 December 2005. 24 National Petroleum Council, Committee on Global Oil and Gas, Facing the Hard Truths about Energy: A Comprehensive View to 2030 of Global Oil and Natural Gas (Washington, DC: National Petroleum Council, 2007), chapter 4, p. 22. 22

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6 Energy Security An ASEAN Perspective Elspeth Thomson

The projected demand for energy in ASEAN over the next two decades is expected to be among the highest in the world. Many of the ten member nations are just beginning their economic take-offs after decades of strife. Essential for sustained development to occur, of course, are adequate and reliable energy supplies. The region is not without energy resources. However, it is facing two major energy security worries: inadequate oil for transport fuels and inadequate electric power. The local oil resources needed to fuel the transport sector are far from sufficient. Not only must the region steadily increase its imports of oil, but it must do so against the background of rapidly changing oil prices. At the time of writing, high oil prices were threatening the survival of the region’s poorest through increased food, power, and transport costs. Governments were scrambling to attempt to eliminate oil subsidies on the one hand, and provide monetary assistance in other ways to cushion the effects of high oil prices, on the other. Most analysts predict that oil prices will rise much higher yet before feasible alternatives appear, be they biofuels, electric vehicles, etc. If this is the case, there will surely be heightened domestic insecurity within ASEAN. Public demonstrations could easily swell into efforts to overthrow governments. As for electric power, there are large numbers of people in ASEAN who have none at all, or only minimal and unreliable supplies. The governments 95

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seem faced with the impossible dilemma of either building more fossil-fuelled plants that contribute to global warming, or building nuclear plants with their attendant relatively high costs, long lead times, and lack of expertise for building and operating, as well as the worries over disposal of wastes, building on land prone to natural disasters, and potential diversion to military or illicit uses. ASEAN’s two energy worries have implications for India and Australia. India shares the same worries as ASEAN. Their rates of modernization, and concomitantly, demand for and ways in which energy is consumed, will likely share some similarities over the coming years. Fortunately, India and ASEAN are beginning to cooperate instead of compete in the area of energy. Australia stands to gain from ASEAN’s need to build more power plants of whatever type. Indonesia, Vietnam, Thailand, and Malaysia have all announced plans to build nuclear power plants and other countries in the region may soon follow suit and need to import uranium from Australia. At the same time, other parts of the region may opt to build more thermal plants and need Australian coal. As Australia has plenty of both resources, there will be no competition between ASEAN and India for coal or uranium, at least in the near future.

Overview of ASEAN’s Energy Resources and Economic Structures The ASEAN ten vary greatly in terms of land size and resource endowment, as well as economic development. They also differ in terms of their population size, economic structure, and concomitantly, their energy consumption. Table 6.1 gives an overview of their economic structures and total energy consumption.1 All of these economies are still very much evolving. Their current structures are the result of their geography, history, political and legal systems, cultures, etc. Total energy consumption is a function of a host of factors. Among these, the rate of economic and population growth are key, as is the structure of the economy. Industry generally consumes more than services, and within industry, heavy industry consumes far more than light industry. In developing economies, the agricultural sector usually consumes the least amount of energy. Of the ten ASEAN countries, industry accounts for at least one-third of total value added in all but four: Cambodia, Laos, Myanmar, and the Philippines. Agriculture still accounts for about half of total value added in Laos and Myanmar. The service sector is smallest, at about 26 per cent of total value added in Laos. Over the coming decades, it is expected that the

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0.177 0.010 4.149 0.023 2.557 0.236 1.271 2.142 3.741 1.404

0.37 14.00 234.69 6.52 24.84 47.37 91.08 4.55 65.07 85.26

Population 2007 estimates (million)

2.20 1.79 1.41 2.51 1.95 5.03 2.00 1.80 0.76 1.14

Population Growth 1997–2007 (%)

482.1 0.7 17.9 3.6 104.8 5.0 14.2 476.8 57.9 16.6

Per Capita Energy Consumption 2006 (million BTU) 11.48 0.43 3.76 2.77 3.49 8.44 3.09 5.62 6.33 10.99

Per Capita Energy Consumption Growth 1997–2006 (%) 1.1 29.6 13.7 46.8 8.8 52.6 14.2 0.1 10.7 21.7

Agricultural Sector, % Total Value Added 2006

67.9 29.2 42.4 27.6 50.0 13.4 32.1 33.0 44.6 40.2

Industrial Sector, % Total Value Added 2006 31.0 41.2 44.0 25.7 41.2 34.0 53.7 66.9 44.7 38.0

Service Sector, % Total Value Added 2006

52,432 1,871 3,595 1,963 14,552 1,924 3,295 49,879 8,015 2,593

Per Capita GDP, Purchasing Power Parity (USD) 2007

Sources: EIA at and (March 2009); Economic and Social Commission for Asia and the Pacific, Statistical Yearbook for Asia and the Pacific 2007 (New York: United Nations, 2007), p. 88; CIA World Factbook quoted on Nationmaster at (March 2009).

Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam

Total Primary Energy Consumption 2006 (quadrillion BTU)

Table 6.1 ASEAN Energy and Economic Structure Overview

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industrial and service sectors in all of these economies (excluding Singapore and Brunei) will grow and expand very rapidly, while the agricultural sector slows and shrinks. The region’s average population growth from 1997–2007, at 2.1 per cent, was considerably higher than the Organization for Economic Cooperation and Development (OECD) and world averages, at 0.6 and 1.2 per cent, respectively. There is still considerable poverty in the region. Three of the ASEAN countries, Cambodia, Laos, and Myanmar, had a GNP at purchasing power parity per capita of less than US$2,000 in 2007. The region accounts for about 8.7 per cent of the world’s population, but only 3.3 per cent of its total primary energy consumption. Energy resources have played major roles in the industrial development and modernization of the Malaysian, Indonesian, and Thai economies and have been the key to Brunei’s wealth. However, having domestic energy resources has not been essential for all the ASEAN members. Indeed, Singapore has become the wealthiest member of ASEAN without any energy resources at all. Table 6.2 outlines the production of the various types of energy in recent years. The largest oil producers are Indonesia, Malaysia, Vietnam, and Thailand, respectively. At the time of writing, the Indonesian Government had just announced its intention not to renew its membership in the Organization of Petroleum Exporting Countries (OPEC). Production peaked in 1977 and had been declining since 1995 (discussed further below), and the country became a net importer of crude oil in 2004. The country currently imports one-third of its oil demand. Production has also been declining in Malaysia and Thailand, and also in Brunei, but is showing promise in Vietnam, the Philippines, and Myanmar. Total production in the region amounted to only about 3.2 per cent of world production in 2007. ASEAN depends very heavily on imports of oil from the Middle East (discussed further below) and total import dependency is expected to rise. As for natural gas, the largest producers in 2006 were Malaysia and Indonesia, though gas can be found in or around most of the ASEAN countries. The region is, and will continue to be, largely self-sufficient in natural gas. Brunei will continue to be a major producer and there are confirmed fields available in and around Indonesia, Malaysia, and Myanmar. The region’s production of natural gas accounted for just over 6 per cent of world production in 2006. Indonesia has long been the world’s second largest exporter of liquefied natural gas (LNG) after Qatar. Since the 1970s, this commodity has earned

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180.56 0 1,043.14 0 703.92 21.93 25.19 345.40 0 350.65 2,670.79 84,440.64 3.2

13.73 0 1,081.68 0 536.48 20.74 246.74 1,038.17 1,051.24 0 3,988.78 82,589.32 4.8

Total Refined Petroleum Products (thousand barrels per day) 2005 0.487 0 2.016 0 2.278 0.445 0.078 0.859 0 0.201 6.364 103.977 6.1

Natural Gas (trillion cubic feet) 2006 estimate

3.10 1.16 125.67 1.64 99.08 5.96 53.93 130.68 37.08 54.28 512.58 18,014.67 2.8

Total Electricity (billion kilowatt hours) 2006 estimate

Hydro Power (billion kilowatt hours) 2006 estimate

3.10 0 1.11 0.05 109.82 9.53 0.05 1.59 93.13 5.95 2.67 3.29 34.15 9.84 119.83 7.87 37.08 0 30.92 23.36 431.86 61.48 11,943.04 2,997.80 3.6 2.1

Thermal Power (billion kilowatt hours) 2006

Notes: Other Electricity* refers to geothermal, solar, wind, wood and waste electric power. Source: EIA at (March 2009).

Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Thailand Singapore Vietnam ASEAN Total World Total ASEAN Total as Per Cent of World Total

Crude Oil (thousand barrels per day) 2007 estimate

Table 6.2 ASEAN Energy Production

0 0 0 0 0 0 0 0 0 0 0.0 2,660.26 0.0

Nuclear Power (billion kilowatt hours) 2006 estimate 0 0.002 6.33 0 0 0 9.94 2.99 0 0 19.26 414.31 4.6

Other Electricity* (billion kilowatt hours) 2006 estimate

0 0 213.17 0.33 0.72 1.53 2.60 21.02 0 45.06 284.43 6,806.99 4.2

Coal, all types (million short tons) 2006 estimate

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the country the largest amount of foreign exchange. However, unable to meet its contractual obligations with Japan, South Korea, and Taiwan, it has had to import LNG in recent years. Brunei is also a large producer of LNG, most of which is exported. Malaysia also exports LNG. Indonesia is also by far the largest coal producer, though Vietnam and Thailand also produce sizeable quantities. The region’s production of coal (all types) accounts for some 4.2 per cent of world production. These three countries are expected to maintain current production levels at least for some time though they will likely opt to consume larger shares domestically instead of exporting it. Indonesia stands to gain from the harnessing of coal-bed methane, but the start-up and operating costs are high. Of all the fossil fuels, the burning of coal is known to result in the heaviest emissions of carbon and greenhouse gases. Thus, many countries in the world are urgently trying to find substitutes for coal. In ASEAN, those member countries wanting to increase their consumption of coal to fuel thermal power plants can find ample resources available from Australia. The region’s production of hydropower presently accounts for about 2 per cent of world production. However, with considerable hydropower potential in the region from the Mekong, Chao Praya, or Nu Jiang (Salween) watershed systems, this proportion is set to rise over the next two decades. Currently, Vietnam and Indonesia generate the most hydroelectricity, but Laos will surely produce more before long and export large quantities to its neighbours. Crucial, is the reaching of agreements for joint development of the river systems. Inevitably, there will be loss of flow downstream and implications for fishing and navigation.2 Another natural energy resource not included in the table is geothermal power. Indonesia is said to have large geothermal power potential, followed by the Philippines. Both countries are presently tapping only a fraction of what is available.

ASEAN’s Energy Security Worries Insufficient Oil Production in the Region and a Questionable Future Role for Biofuels As is apparent from the above brief summary of natural energy resources, the region has enjoyed the proximity of rich deposits of oil, natural gas and coal, and also hydropower resources. Indeed, for decades, much of ASEAN’s energy resources have been exported to northeast Asia.3 However, the oil resources are declining rapidly and new large finds are not expected.

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On 28 May 2008, the Indonesian Government announced it was pulling out (would not renew its membership) of OPEC at the end of the year. Unable to get enough oil to the international market, Indonesia was not enjoying the profits that other producing countries were from the skyrocketing prices. Also the government could not attempt to be seen showing concern to its citizens about high oil prices whilst belonging to a cartel that appeared to be intent on continuously increasing prices. It had been a member of the cartel since 1962. The government expressed the hope that it could resume oil exports and rejoin the cartel in five years’ time with the development of more effective oil well exploitation and domestic fuel saving practices. It hoped to emulate Ecuador, which withdrew from OPEC for fifteen years, but resumed membership later when exports surged again. As for Malaysia, despite its being a net exporter of oil in recent decades, with over one-third of the government’s budget coming from oil revenues, Petronas, the national oil company, predicts that the country’s demand for energy could outstrip its supply within two years.4 Thailand has limited quantities for export. Vietnam is currently exporting all of its output. However, when its first oil refinery is completed in 2009, a large proportion of the oil will be consumed domestically. As noted above, most of the oil imports are currently coming from the Middle East. Unless many of the deposits deemed hitherto too expensive to exploit are put into production soon, ASEAN may be forced to rely increasingly on politically unstable countries for their oil supplies.5 Generally speaking, the ASEAN countries are now generating their electricity from natural gas, coal, or hydropower, not oil. Most of the oil consumed in the region is used in the transport sector (ground, air, and water). As yet, there is no feasible substitute. In recent years, many companies in ASEAN have experimented with the production and use of biofuels to be used to fuel ground transport. It has been hoped that Brazil’s success with ethanol produced from sugarcane could be replicated, but using palm oil instead to produce biodiesel.6 However, recently, environmental and commercial concerns have been raised both in the region and beyond. In January 2008, the European Union Environmental Chief announced that it would have to reconsider its draft rules for boosting the production of biofuels because the environmental and social problems arising from their production (especially in Southeast Asia) were more serious than initially believed. Large tracts of land are being razed to create palm oil plantations. This is resulting in thick haze blanketing the region and soil erosion caused by

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deforestation. Fragile ecosystems are also at risk with the application of huge quantities of fertilisers, and enormous amounts of carbon have been released into the air through the draining and burning of peatland. Moreover, traditional food crops are being abandoned in favour of biofuel crops. Often the biofuel that is produced yields little or no more energy than what is required to produce it. At the time of writing, food prices were rapidly rising, causing hardship for wider segments of Asian society. Demonstrations were occurring weekly. Speaking at the World Economic Forum on East Asia held on 16 June 2008 in Kuala Lumpur, Peter Brabeck-Letmathe, chairman of the Swiss-based multinational company Nestle, blamed one-third of the increases in food prices on governments promoting biofuel production, while about 10 per cent was due to increases in fuel prices, 10 per cent due to increased demand resulting from changes in Chinese and Indian lifestyles, and another onethird due to political decisions to stop exports, for example in Argentina, Kazakhstan, and Ukraine.7 According to a report released by Oxfam in June 2008, “biofuels are responsible for 30 per cent of the increase in global food prices, pushing 30 million people worldwide into poverty”.8  Indeed, a number of studies have lately argued that too much land is being converted to biofuel crop production and that this is leading food price inflation. Global grain reserves are said to be dangerously low.

Continuously Increasing Oil Prices and the Lifting of Subsidies Not only is the outlook for oil production in the region not particularly sanguine, but there is no feasible substitute at this time. The rising price of oil imports is beginning to affect some ASEAN members’ national budgeting seriously. By June 2008, oil was selling at over US$143 per barrel, compared with US$25 in the mid-1980s. The Indonesian and Malaysian governments’ steps to lift price subsidies on oil products have had alarming implications for domestic security. The increase in oil prices has far-reaching implications not only for transport, but also electricity and food. Inflation is inevitable. While some ASEAN countries, such as Singapore, can use its currency to offset the impact of rising oil, electricity, and food costs, others are not in a position to do so. For ASEAN’s wealthier citizens, the rising oil (and food) prices may cause them to travel less, drive less, and purchase fewer non-necessities. This will

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undoubtedly affect national and regional incomes. Tourism in several ASEAN states is a key employer. All road, water, and air transport organizations will be affected, potentially cutting back services, laying off workers, and cancelling orders for new equipment. Thus, these price increases threaten the very survival of hundreds of thousands of people living in the region. Such people will spend less in all categories of goods and services, including food, potentially leading to malnutrition and strife. Energy subsidies in Indonesia soared from 11.7 per cent of the state budget in 2007 to 18.9 per cent in 2008.9 In May 2008, the Indonesian Government increased gasoline, diesel, and kerosene prices by an average of 28.7 per cent. Unfortunately, the price of oil had risen far above what had been expected. The government had originally assumed in its 2008 budget that the price of oil would be US$60/barrel. At this price, the spending on fuel subsidies would have totalled Rp46 trillion (US$5 billion, or about 5 per cent of total spending). Later, it was assumed that oil would be US$95/barrel and the budget was duly revised to reflect this. Then, another revision was made on the assumption of an average price of US$110/barrel.10 Even with the 28.7 per cent increase, the price of fuel in Indonesia will still be far lower than in Singapore, Thailand, and the Philippines. The subsidies were drastically undercutting the government’s ability to fund programmes aimed at supporting the poor, including education, health facilities, National Programme for Community Empowerment, small business credit facilities, and the development of infrastructure.11 The Indonesian Government was also well aware that the subsidies in the past often benefited people who did not require them, and that very low-income people would suffer greatly from the removal of the subsidies. According to Vikram Nehru, the World Bank’s chief economist for East Asia, “Fuel subsidies are quite regressive in the sense that the top 20 per cent of the income distribution get two-thirds of the subsidies and the bottom 10 per cent only get one per cent.”12 Thus, it will provide financial relief to try to cushion the higher prices charged for filling motorcycle, tuk tuk, farming machinery, tanks, and so on. The government is also providing subsidized rice.13 The lifting of the subsidies is causing great alarm among Indonesians and they are frequently holding violent demonstrations.14 Indonesia will hold presidential elections in 2009. How the president manages to calm things (or not) will determine his future. Indeed, it was increases in fuel prices which helped topple President Soeharto in 1998. Then later, the current leader’s predecessor, Megawati Soekarnoputri, was forced to rescind a proposed price increase in 2003.

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In June 2008, Malaysia raised the price of petrol by 41 per cent and diesel by 63 per cent. The stated intention is to align pump rates with international prices over the next few months. In the past, Malaysia was selling gasoline at perhaps the lowest price in all of Asia and drivers from both Thailand and Singapore would enter Malaysia specifically to tank up.15 It was estimated that Malaysia, a net oil exporter, had been earning 250 million ringgit (US$77.6 million) in revenue annually for every US$1 increase in crude prices.16 However, the fuel subsidies were largely cancelling this out. With rising prices, the government foresaw it having to allocate onethird of its spending to the fuel price-support programme. Like Indonesia, the government is trying to buffer the effect on the people in the lowest income brackets. Here, an annual cash rebate is planned for owners of small cars and motorcycles. Nonetheless, Malaysians are beginning to panic and are holding large demonstrations, which, as in Indonesia, threaten domestic security.17

The Hormuz and Malacca Straits Chokepoints About two-thirds of oil exports from the Gulf are sent to Asia. Singapore relies on the Middle East for about 80 per cent of its oil, while Thailand and the Philippines, over 70 per cent. By comparison, the Middle East accounts for only 20 per cent of US oil imports and 27 per cent of Europe’s. Oil coming from the Middle East must transit two “chokepoints”, the Hormuz Strait, then the Malacca Strait. If one or both of these were blocked by terrorists, not only ASEAN, but also Japan, Korea, and China would be seriously affected: at least 75 per cent of Japan and South Korea’s oil imports, and 50 per cent of China’s oil imports pass through the Malacca Strait. In order to demonstrate to the world how easily it could interfere with tanker traffic, the Iranian military has held naval manoeuvres and fired torpedoes and missiles near the Hormuz Strait. The Malacca Strait “chokepoint” is 2.5 kilometres at its narrowest point. About thirty tankers pass through the Strait daily, each carrying ten million barrels of oil. The ASEAN governments, as well as the Japanese, Chinese, and South Korean governments have long feared that traffic through the Strait could be hijacked, blown up, or cut off by the sinking of tankers, the deliberate creation of an oil slick, etc. Lloyd’s shipping underwriters’ Joint War Committee declared the Strait vulnerable to “war, strikes, terrorism and related perils” in 2005. This considerably increased the cost of shipments through the Strait. However, the governments of Singapore, Indonesia, Malaysia and Thailand have taken measures to expand sea and air surveillance and communication networks vastly, and to carry out patrol and anti-piracy

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exercises. In August 2006 Lloyds lifted this verdict because it had faith in the steps taken to deter would-be attackers. The United States has military presence in the Arabian Sea and Persian Gulf and regularly dispatches warships through the Malacca Strait. However, some Asian countries are not keen to be seen supporting the United States in any way. At the same time, Iran is courting Asia in order to reduce its trade with the West. In order to obviate the need for tankers to go through the Strait of Malacca, the Thai Government considered building a canal, land bridge, or pipeline across the Kra Isthmus. Recently, the Malaysian government has also discussed the possibility of some energy transfer line across its peninsula.

Nuclear Power and the Imperative to Increase Electricity Generation Drastically While Reducing Carbon Emissions Another key energy security worry in ASEAN is the need to generate far larger quantities of electricity than is done now to meet expected demand, and in ways that emit relatively low levels of greenhouse gases. In the coming decades, the demand for electricity is expected to grow much higher in Asia than anywhere else in the world. The International Energy Agency estimated that the demand for electricity to 2030 in “Developing Asia” will grow at an average annual rate of 6.7 per cent from 2004–15 and 4.6 per cent from 2004–30. This compares with world averages of 3.3 and 2.6 per cent respectively, and 1.7 and 1.4 per cent for OECD countries.18 Large areas in rural ASEAN do not have adequate electricity, or have none at all. For example, some 44 per cent of the Indonesian population lives without electricity.19 Several cities in ASEAN experience frequent brownouts. The inadequate and/or unreliable power supplies discourage investment and restrict economic growth. They also contribute to political instability. Air pollution in the region’s metropolises has already been amongst the highest in the world for many years. The threat of global warming is adding considerable incentive to try to generate electricity more cleanly. ASEAN members realize that their energy security strategies must accommodate the imperatives of climate change for political reasons. They have very real practical reasons to be extremely anxious about the effects of climate change. Most of the coastlines would be very badly affected by rising sea levels, extreme wind storms, etc., potentially rendering hundreds of thousands of people homeless. There would be loss of huge tracts of prime agricultural land and increased incidence of disease. As noted, there are already large numbers of relatively low-income people living in ASEAN. With continuously increasing fuel prices,

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their lives are becoming even more difficult. Should sea levels rise sharply in the coming decade, there would be mass instability resulting in tendencies towards conflict within and among the ASEAN members. Despite the high capital costs, long construction times, waste disposal, and safety issues, as well as the potential diversion to military or illicit uses, several countries in Southeast Asia are considering the nuclear power option. Large manufacturers of nuclear power plant equipment from the United States, France, Russia, Canada, Japan, South Korea, and China are all fiercely competing with one another for business.20 Not only is the demand for power increasing exponentially as these countries modernize and urbanize, but governments also want to be seen to be reducing greenhouse gas emissions. A possible incentive for building nuclear plants is the potential launch of clean development mechanism (CDM) credits for carbon dioxide reductions resulting from the non-building of new coal/gas power plants.21 Thus, not only would nuclear plants help reduce the emission of greenhouse gases, but also the huge construction costs could be somewhat offset by the new plants’ entitlement to CDM credits. The CDM credits are being advocated by Japanese companies in particular. Vietnam is planning four plants totalling 8,000 megawatts capacity in 2025. Of these, two 1000-MW plants are to be running by 2020. Unlike in Indonesia, there is no public opposition. Indeed, there was no outcry in Vietnam when the government announced in 2007 a doubling of the generation target of 4,000 MW to 8,000 MW by 2025. According to Vietnam’s Atomic Energy Strategy, by 2040 nuclear power will account for 25–30 per cent of national electricity output.22 The Indonesian Government is planning to have its first nuclear plant operating around 2015. However, there is strong opposition domestically, and some neighbouring countries are watching with concern.23 The protesters believe there are cheaper, safer ways to generate electricity, such as harnessing the country’s considerable geothermal power resources. Not only is Indonesia on a geologically unstable zone, the so-called “ring of fire”, where most of the earth’s volcanoes and earthquakes occur, but the government is seen to be suffering from corruption and ineptitude. There are worries that the plant may have faulty construction and that there will not be sufficient expertise to operate and maintain it. A feasibility study is currently underway in Thailand for a nuclear plant to come into operation potentially by 2020. Thailand relies on natural gas to generate about 70 per cent of its electricity. Such heavy reliance on one type of fuel is not ideal in terms of energy security. However, the prospect of building a nuclear power plant here is also coming up against considerable public

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opposition. The Philippines and Malaysian governments are also carrying out feasibility studies for nuclear power plants. Myanmar has indicated its desire to build a research reactor.

ASEAN’s Efforts to Raise its Energy Security Strategic Petroleum Reserves Singapore, a major oil trading, refining, and petrochemical hub, holds large reserves. In 2006, the refineries and independent terminals stored some eighty-eight million barrels of oil, equivalent to nearly 107 days of its net petroleum imports that year and enough to cover 105 days of consumption.24 At least another sixty-five million barrels’ worth of capacity, in the form of tanks on land, underground, and floating in the sea is expected to be added in the coming years. The other members of ASEAN, however, hold very little or no oil or oil product reserves. They are relying on the ASEAN Petroleum Security Agreement signed in Manila on 24 June 1986, which established the ASEAN Emergency Petroleum Sharing Scheme for crude oil and/or petroleum products during times of shortages and oversupply.25 It has yet to be invoked.

Energy Conservation Saved energy is a bonus. Taking steps to conserve energy is always much cheaper than procuring new energy sources. Efforts towards saving energy in ASEAN began in 1986.26 Though a great number of initiatives have been launched, energy consumption efficiencies are still generally very low.27 One of the main obstacles to energy conservation has been subsidized energy prices. As discussed above, in the past, some governments’ merely suggesting the lifting of these subsidies has prompted their fearful citizens to take to the streets in fury.

Regional Gas Pipeline Network and Electricity Grid Plans for a Trans ASEAN Gas Pipeline began in 1998.28 A regional network of pipelines would greatly enhance ASEAN’s energy security. The existing point-to-point lines include: Indonesia to Singapore (2), Indonesia to Malaysia, Malaysia to Singapore, and Myanmar to Thailand (2). Planned lines include: CAA (Commercial Agreement Area between Malaysia and Vietnam) to Malaysia, JDA (Malaysia-Thailand Joint Development Area) to Thailand,

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JDA to Thailand and Malaysia, and Malaysia to the Philippines. Progress has been difficult, however, in finalizing agreements for multicountry hook-ups. The main problems are the liberalizing of energy markets and the regulation of anti-competitive behaviour throughout the region.29 The ASEAN Vision 2020, adopted by the ASEAN leaders in December 1997, called for the establishment of an ASEAN Power Grid. Largely for the same reasons hindering the gas network, progress on this project has been slow. A Memorandum of Understanding for the ASEAN Power Grid was signed in 2007.30

Conclusion ASEAN has two main energy security worries on the horizon: inadequate transport fuels and inadequate electric power. Over the coming decades, demand for both in this region will be among the highest in the world. As the region’s own oil supplies can meet only a small proportion of its needs, it must rely on imports at a time when research into biofuel production and use in the region are confronting major challenges. Another concern is uninterrupted transport of the precious oil to ASEAN ports. ASEAN is blessed with considerable hydropower potential. However, this cannot meet the needs of the entire region. The only other options for greatly increasing generating capacity are massive construction of gas and coal-fired power plants, or nuclear power plants. All of these come with serious constraints. Gas and coal are readily available in the region and from Australia. However, climate change is now recognized as a real threat and governments are hesitant to contribute further to the problem. Coal is a dirty fuel. Due to concerns about global warming, it could become a non-option. The issues surrounding nuclear power plants are multiple: high cost, long lead-times, lack of expertise to build and operate the plants, the potential for corruption, unstable geological foundations, and disposal of the wastes. ASEAN faces real dilemmas with respect to its future energy security. In the meantime, it will necessarily continue to curtail exports of energy and opt to use more of the available energy resources locally. It is also imperative that all forms of energy be used far more efficiently than in the past. As for the ASEAN-Australia-India security nexus, ASEAN and India share similar energy constraints, and are beginning to cooperate in the resolution of these. Australia is in a position to help alleviate both ASEAN’s and India’s energy problems. However, the use of nuclear energy and access to uranium has been problematic between Australia and India.

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Notes The author would like to thank Valerie Choy, Benjamin Tang, and Dickson Yeo, for their assistance in gathering data. 1 The ten ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. 2 Milton Osborne, River at Risk: The Mekong and the Water Politics of China and Southeast Asia, Lowy Institute Paper 2 (Sydney: Lowy Institute for International Policy, 2004). 3 See Elspeth Thomson, “ASEAN and Northeast Asian Energy Security: Cooperation or Competition?”, East Asia: An International Quarterly 23, no. 3 (Fall 2006): 67–90. 4 Thomas Fuller and Heather Timmons, “India and Malaysia Risk Voters’ Wrath by Raising Fuel Prices”, New York Times, 5 June 2008. 5 Besides crude oil deposits situated in difficult structures and remote locations, there are other forms of fossil fuels, such as methane hydrates which are being considered more seriously as oil prices rise. 6 Not just biodiesel, but also used cooking oil, jatropha, etc. 7 Hazlin Hassan, “World Economic Forum Says: Long-term Solutions to Food Crisis Needed Now”, Straits Times, 17 June 2008. 8 “30% of Food Price Rises ‘Due to Biofuel Demand’”, Straits Times, 26 June 2008. 9 John Aglionby, “Indonesia to Lift Fuel Prices by 30% and Ration Supplies”, Financial Times (UK), 1 May 2008. 10 “No Light at the End of the PLN Tunnel”, Tempo Magazine 8, no. 41 (June 2008). 11 “Government Explanation on Government of Indonesia Decree Regarding the Reduction of Fuel Subsidy and Other Related Policies”, Jakarta, 23 May 2008. 12 Leisha Chi and Catherine Yang, “Indonesian Fuel Subsidy Cut in Right Direction, World Bank Says”, Bloomberg Television Interview, 3 June 2008. The Indonesian Government calculated that some 40 per cent of high income families benefited from 70 per cent of the subsidy, while 40 per cent of the lowest income families benefited only 15 per cent. See “Government Explanation on Government of Indonesia Decree”. 13 “No Light at the End of the PLN Tunnel”. 14 “Indonesian MPs to Review Fuel Price Hike after Violent Demo”, AFP, 25 June 2008. 15 Regular gasoline had been selling at less than half the price in Singapore. 16 Niluksi Koswanage, “Malaysia to Scrap Fuel Price Curbs, Use Market Rate”, Reuters, 3 June 2008. 17 Thomas Bell, “Oil Prices Threaten to End Malaysian Party’s 50-year Rule”, Telegraph, 14 June 2008.

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International Energy Agency, World Energy Outlook 2006 (Paris: OECD/IEA, 2006). These figures are from the “Reference Case”. The key assumptions for the “Reference Case” are provided in the first chapter of this volume. The definition of “Developing Asia” excludes China, Japan, and India. 19 David Adam Scott, “Japan’s Fragile Relations with Indonesia and the Spectre of China”, The Asia-Pacific Journal: Japan Focus, 5 May 2008. 20 Andrew Symon, “Vietnam Sets Nuclear Pace in Southeast Asia”, Asia Times Online, 5 June 2008. 21 Ibid. 22 “Vietnam: Vietnam to Build Two Nuclear Power Plants”, Thai News Service, 12 May 2008. 23 Erwida Maulia, “Mismanagement Not Energy Crisis, Says Nuke Society”, Jakarta Post, 24 February 2008. 24 Michael Richardson, “Can Asia Keep Enough Oil in Reserve?”, Straits Times, 15 December 2007. 25 ASEAN Secretariat, “ASEAN Petroleum Security Agreement, Manila, 24 June 1986”. 26 ASEAN Secretariat, “Agreement on ASEAN Energy Cooperation, Manila, 24 June 1986”. 27 See Chang Youngho and Elspeth Thomson, “The Potential for Energy Conservation in East Asia”, in Energy Conservation in East Asia: Towards Greater Energy Security, edited by Elspeth Thomson (Singapore: Energy Studies Institute, National University of Singapore, 2008). 28 For full details of the plans for the Trans ASEAN Gas Pipeline project, see ASEAN Centre for Energy, “ASEAN Plan of Action for Energy Cooperation (APAEC) 2004–2009”. 29 Andrew Symon, “Privatisation and Liberalisation of Gas Markets in Southeast Asia”, Paper presented at the Thai Gas Markets ’05 Asia Business Forum, Bangkok, 26–27 May 2005. 30 See ASEAN Secretariat, “Memorandum of Understanding on the ASEAN Power Grid”. 18

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7 India’s Perspectives on Energy Security Ligia Noronha

It is evident that the years since the new millennium have seen a profound transformation of the global and Asian security environment. Resource needs, and in particular, energy, have been key drivers of this change. This reactivation of resource interests in international affairs is due to their being so central to achieving economic dynamism and successful global engagement, which have become the defining parameters of power and influence in a post-Cold War era. Energy has, as a result, risen to the top of national policy agendas and security debates. Nations are adopting positions and making choices both based on their assessments of the room to manoeuvre they have, as well as their perception of political and economic vulnerability in the international context. Perceptions of threats of embargoes, supply disruptions, and sanctions lead to more statist responses, resulting in bilateral and regional alliances; while those less prone to such perceptions adopt more market-oriented strategies to secure energy/minerals for the economy.1 Most of this concern has been around oil as this is still very central to the energy mix of nations. As oil and some of the other resources key to economic growth are concentrated in a few countries, and as demand has been rising sharply, strategic analysts have been speaking of possible resource wars as the new landscape of global conflict.2 Others suggest that “Nothing better illustrates the dangers of resource wars than the emerging strategic landscape in Asia, where high economic growth rates have fuelled concerns 111

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and competition over raw materials and energy resources.3 The debate around energy currently has the following manifestations, which suggest an increased “securitization”: 1. “Availability” and “affordability”, which were the main characteristics of the quest for energy security earlier, have now hardened into one for “secure” energy resources. 2. Energy independence is becoming very important to nations and, increasingly, nations are coming to design policies by which there is less dependence on foreign sources. 3. Strategies pursued to secure energy — equity investments, bilateral deals and new energy ties, investments in nuclear energy — create regional and global concerns about implications of such ties and relations. 4. Energy choices and strategies are increasingly getting caught up in larger foreign and trade policy considerations; they often reveal a zero sum thinking and therein lie possibilities for conflict. This chapter focuses on India’s sources of energy insecurity, the external room to manoeuvre that India has, and its energy securing strategies that have international implications.

India’s Room to Manoeuvre India is at a particular point in its history when it has a great opportunity to pull its population out of poverty, a key requirement of which is the availability of energy to many of its people who are either unserved or underserved. India’s Integrated Energy Policy 2006 defines energy security as follows: The country is energy secure when we can supply lifeline energy to all our citizens… as well as meet their effective demand for safe and convenient energy to satisfy… various needs at competitive prices, at all times with a prescribed confidence level considering shocks and disruptions that can be reasonably expected.4

This definition includes within it key aspects of energy security: those related to poverty and those related to growth, and is an acceptable definition for India with the understanding that the word “prices” needs to be read as referring not just to monetary costs, but also environmental externalities. India has one-third of the world’s population using polluting fuels for cooking and heating5 with attendant environmental health and mortality issues. India’s GDP is expected to grow at 8–9 per cent per annum. At the

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prevailing energy elasticity of about 0.8, this kind of growth will require energy consumption in the country to grow by about 5.6 to 6.4 per cent. However, if one considers the fact that energy elasticity6 has declined from 1.08 during the 1980s to 0.8 in the 1990s, it would not be unreasonable to assume that the expected growth rates can be sustained even with lower energy growth if efforts are made to improve energy efficiency in the country. As one of India’s energy planners puts it, the challenge for the country is to decouple economic growth (which is key to addressing India’s poverty) from growth in energy consumption, while ensuring universal access to lifeline levels of energy consumption.7 To meet this growth, energy demand needs to grow by 4.5–5.5 per cent per annum which requires total primary commercial energy to increase 7.5 times between 2001 and 2031(286 million tonnes of oil equivalent to 2108 million tonnes of oil equivalent) (Figure 7.1). Figure 7.1 TABLE 7.1 Growth in Commercial Energy Consumption and Fuel Mix

Figure 1: Growth in Commercial Energy Consumption and Fuel Mix 2400

2108

2100 1800

mtoe

1500 1200

1039

900

526

600

286 300 0

2001/02 Coal Natural gas Nuclear Total

2011/12

Year

2021/22

2031/32

Oil Hydro(large +small) Solar and Wind

Source: TERI, The National Energy Map estimates, for India: Technology Source: TERI (2006)Vision 2030, Report No. PSA/2006/3, Office of the Principal Scientific Advisor, Government of India (New Delhi: TERI Press, 2006).

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The share of traditional, polluting fuels to total primary energy consumption thereby decreases by 35 per cent to 4 per cent (from 2001 to 2031). Coal and oil, however, remain the dominant fuels in 2031, with the share of coal being 55 per cent; that of oil and gas, 36 per cent; that of hydro, 2 per cent; of nuclear, 5 per cent; and the share of renewables, 2 per cent. Coal, gas, and oil reserves are expected to last for about fifty years, fifteen years and twenty years respectively, at reserves-to-production ratio under the “business as usual” (BAU) scenario. Such a scenario reflects a high import dependency, with fuel import in 2031 being 78 per cent for coal, 93 per cent for oil, and 67 per cent for natural gas, of total demand. Figure 7.2 summarizes this. Projections done by The Energy and Resources Institute (TERI) with more hybrid scenarios with increased renewables, energy efficiency, and a deeper penetration of nuclear in the energy mix, also reveal a high dependency on fossil fuels. Given the rising oil prices at the time of writing and the limited possibility of prices coming down substantially in the near future, the implications of this high import dependency to India’s balance of payments are indeed serious. India is already a major trader in the global energy market. Of the 2235Mt of crude oil traded globally, India is the sixth largest importer with a share of Figure 7.2 Projection of Import Dependency of Fossil Fuels 2500

80%

80%

2000

70%

63% mtoe

1500

60% 2123

42%

1000

500

90%

1688

285

0 2001

40%

1046

27% 75

50%

222

30%

660

527

20%

2011

2021

2031

Year Import

Consumption

Import Dependency

Source: TERI.

Figure 7.2 Projection of Import Dependency of Fossil Fuels

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4.3 per cent. India has started importing liquefied natural gas (LNG) only in 2004 as it did not have the necessary infrastructure to import it. In 2006–07, India imported about 7.0Mt of gas annually. India’s share of global trade in coal is also quite high despite the fact that its own production capacity is also very high. India is the sixth largest importer of coal. The sources of India’s insecurity thus lie in this current and projected import dependence, both because of the type of fuels that it relies on — oil, gas, and coal, but specially oil — and the sources of oil. India’s current perceptions of risk are thus filtered through the lens of its external hydrocarbon dependence. This external environment since 2001 is characterized by high and fluctuating oil prices, a more competitive and resource nationalist environment, a growing protectionism that is emerging from the fact that India now presents a potential source of trade competition, more transit risks, and diplomatic implications of building energy partnerships with certain energy rich countries. A new looming constraint is emerging from climate change and the pressures to reduce the use of carbon based fuels.

Where Does India Source Its Oil? According to the Integrated Energy Policy,8 the Americas and Central Asia respectively account for 3.55 per cent and 4.74 per cent of India’s oil imports, whereas West Asia and Africa account for 68 per cent (25 per cent from Saudi Arabia alone) and 24 per cent, respectively. For natural gas, the key LNG sources are Oman and Qatar, and for coal, Indonesia, Australia, South Africa, and China. Table 7.1 provides the sources of Indian imports of oil. It is evident that West Asia is India’s key oil source and projections are that it will remain even more so. Depending on West Asia, however, creates three major concerns over: • Delivery to market: Will there be sufficient capital investments made to enhance production capacity? The underinvestment in the oil industry has resulted in a production under capacity. In 2004 the excess capacity in the industry was only 1.2mbd (million barrels a day),9 considerably less than in 2000 and one of the reasons for oil prices remaining high in the last few years. • Sudden supply disruptions due to terrorist attacks and political instability: Since 1967, 90 per cent of all oil lost has happened due to supply disruptions in this region.10 The latest large disruption was due to the US invasion of Iraq in 2003, which led to a loss of 2.3 mbd (million barrels a day) or about 2.9 per cent of world oil demand. Given the continuing

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Table 7.1 Sources of Indian Imports of Oil — 2004–05 Country

% of Total Imports

Saudi Arabia Kuwait Iran Iraq United Arab Emirates Yemen Other Middle East Middle East Nigeria Malaysia Angola Mexico Other (Non-Middle East) Total



24.96 11.85 10.03 8.69 6.71 3.66 1.53 67.43 15.73 3.58 2.55 2.38 6.77 100.00

Source: India Government, Planning Commission, Integrated Energy Policy: Report of the Export Committee (New Delhi: Government of India, 2006).

civil war situation in Iraq, although oil supply has picked up, it will take some time before it stabilizes. The continued hostility between Iran and the United States and the threat of sanctions on Iran for its defiance in complying with United Nations Security Council resolutions requiring it to stop enriching uranium creates a hostile atmosphere around the region in terms of Iran’s threat to choke the Strait of Hormuz if the United States or Israel attacks its facilities. While India has been able to counteract supply disruption from one country by buying from another, the instability does pose long-term concerns. • Chokepoints in maritime lifelines for energy is the key reason for the increased interest in matters relating to energy of the defence forces, especially the navy, in the consuming countries. Given that for Asian countries, imported energy is essentially seaborne, such an interest would be natural. The Indian Ocean, in particular, has many chokepoints, making energy transit from West Asia to East Asia, through this region particularly vulnerable to any hostilities. In 2006, 16 per cent (13.4mbd) of the world’s oil passed through the Strait of Hormuz, while about 14 per

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cent (12mbd) passed through the Malacca Straits.11 Rising imports from West Asia will only increase the importance of these routes. The constraints the country faces, however, are not only with regard to the fuels that it imports, but also because the use of coal, the major fuel in its energy mix, will increasingly be targeted for its carbon emissions potential in a climate change constrained world. Coal may soon come under pressure for its carbon content because of diminishing global carbon absorptive capacity due to what is essentially a failure by developed countries to act when they could. There is also the possibility that coal imports in the future could get mired in climate politics.

Securing Energy India does not, as of now, see the pursuit of its own or the Asian and global energy security interests in competitive and conflictual terms,12 but instead sees a cooperative approach as being the more pragmatic, given its needs and location in the international context. It does sometimes, however, respond to what it sees as trends in the international context, through responses that can sometimes result in its policy seeming a little unfocused and contradictory. After years of following an insulated, state-centred approach that had the national energy companies as the sole providers of energy, this has, since the 1980s, been changing in the oil and gas sectors, although coal is still state dominated. The opening up has resulted in the establishment of offshore natural gas and onshore oil resources; nevertheless, dependence on imported oil will continue. This has resulted in two clear responses: first, to strengthen old energy ties, and second, to create new ones. The old ones are essentially with West Asia, the new ones are with Africa in the energy domain, and with Central Asian countries around the Caspian Sea. There has been an explosion of initiatives in Africa, Latin America, the Middle East, Central Asia, and the Russian Far East, somewhat along China’s footsteps. Table 7.2 summarizes India’s oil and gas investments abroad. It is evident that over the last ten years or so, India has indeed diversified its oil and gas portfolios primarily through OVL (ONGC Videsh Ltd.), the foreign arm of its national oil company, ONGC (Oil and Natural Gas Corporation). These investments are spread over the Asia-Pacific, West Asia, Africa, and Latin America. Given the important link between energy and the economy, it is evident that any possibility of suspension of energy supplies makes it a key issue of national security concern. It is this that is leading to an increased

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FT2000 NC-188 (located in Ghadames basin) and NC189 (Sirte basin) CI-112 Blocks 25, 26, 27, 28, 29 and 36 Mansarovar Energy Colombia Limited

Block XXIV Block – 8, Western Desert Najwat Najem GNOP 5A 5B North Ramadan $720 billion

50

23.5/11.5 30

17.5 45/45 49

25 24.125 23.5

60

20/10 45 40/40/20

20

Equity Stake (Per cent)

19,000bbl per day of production

4000mmb

1000mmb 267mmb 3500mmb

645mmb

4-6tcf 2tcf 540mmb

2300mmb oil and 17.1 tcf of gas

Reserve

OVL

OVL/OIL OVL

IOC/OIL OIL/IOC OVL

OVL

OVL/GAIL OVL OVL (Operator)/ IOC/OIL OVL

OVL OVL

OVL

Acquiring Company

2006

2005

2006 2000

2004 2001 2005 2003 2004 2004 2005

2000 1998 2002

1996

Year

Key: GAIL – Gas Authority of India Ltd, GNOP – Greater Nile Oil Project, IOC – Indian Oil Corporation, mmb – million barrels, OVL – Oil and Natural Gas Corporation Videsh Ltd, OIL – Oil India Ltd, tcf – trillion cubic feet. Source: TERI, National Energy Map for India.

Colombia

Cote d’Ivoire Cuba

Egypt Nigeria Gabon Libya

Syria Iraq Qatar Sudan

Myanmar Vietnam Iran

Sakhalin – 3 $1.5 billion Russian – Kazakh $1.5 billion Kurmangazy Offshore Block A – 1 Lan Tay and Lan Do Fields Farsi Offshore Block

Russia Russia

$12 billion

Sakhalin – 1

Russia

Investment

Block/Company

Country

Table 7.2 India’s Oil and Gas Investments Abroad over the Last Ten Years 118 Ligia Noronha

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source diversification, although the dependence on West Asia will remain important and key.

Emerging energy ties: Competitive? Cooperative? Strategic? With West Asia India’s ties with West Asia are not new. India has been engaged with the region for very many years in terms of energy, labour, and even pilgrims! And the region is not homogeneous, with the result that India’s ties and energy reliability concerns vary with countries in the region. Ties have increased post-9/11 with Gulf countries, in part because “Facing East” has become attractive to the countries in the region, in particular, with China and India,13 which provide large, dependable, and growing energy markets, enable access to energy technology, capital, and consultancies, have the pool of competence to supply non-energy goods and services, and enable a diversification of their security portfolio. Gulf Cooperation Council (GCC) exports to Asia since 2001 have increased, mostly in crude oil, but also in products and LNG. Exports have doubled and even tripled in value. Asian exports to GCC have also doubled and even tripled: From India and China, more than tripled; from Singapore, Malaysia, and Thailand, more than doubled. Almost 80 per cent of the workforce is expatriate, largely drawn from South and Southeast Asia, of whom Indians are the largest group (around four million).14 India and Iran entered into a “strategic partnership” with the signing of the “New Delhi Declaration” and seven other substantive agreements.15 The value of all India-Iran trade in the fiscal year ending March 2005 increased by 36 per cent over the previous year, reaching more than US$1.6 billion.16 India imports 100–150 thousand barrels per day (7.5 per cent of Iran’s exports). An important Indian consortium with regard to access to overseas offshore oil has been the operation in the Farsi Offshore Block in Iran. ONGC has finalized the draft Exploration Service Contract with the National Iranian Oil Company of Iran, for the Farsi Offshore Block. The equity participation interests of the consortium operating in this offshore oil exploration project are — OVL, 40 per cent (Operator), Indian Oil Corporation (IOC), 40 per cent and Oil India Ltd (OIL), 20 per cent. Apart from this, the two countries continue to explore complementary interests in the energy sector, through possible investments in both the upstream and downstream sectors, LNG/ natural gas collaborations, as well as investments in non-energy sectors. The most important and frustrating engagement with Iran has, however, been over the Iran-Pakistan-India (IPI) pipeline. This pipeline epitomizes all the

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benefits and worries this mode of transporting energy generates. Besides being economically viable and linking a gas-rich with two gas-needy countries, it also provides an opportunity to build bridges between nations through energy projects. So far, however, it has been a pipeline of contention rather than a pipeline of peace, given the worry over the history of vulnerability to disruption and trouble in the transit areas in Pakistan. When this issue seemed amenable to a resolution and the transacting parties seemed prepared to move forward on this project, India got caught in the hostilities between the United States and Iran over the latter’s alleged nuclear ambitions, at a time when India was seeking the help of the United States to facilitate its passage to a more friendly, international, civil nuclear trade regime. With Saudi Arabia, Qatar, and Oman, all key oil and gas producing countries for India, the forms of engagement include cross investments in the energy sector, investments in sectors such as petrochemicals, hotels, infrastructure, defence, strategic partnerships to work in third countries, and labour migration from India to these countries.

With Africa (in particular, Nigeria, Sudan) That the African continent should have an attraction for India in its search for oil is evident given its large oil potential. But India’s energy engagement with Africa emerges from its historical association with the continent on non-energy issues.17 Its engagement with energy producing countries on the continent are, however, of varying importance, with Nigeria being the key country, second only to Saudi Arabia as India imports about 15 per cent of its total oil from there. The other countries of importance are Angola, Sudan, Egypt, Equatorial Guinea, and Libya, but together they account for only 24 per cent of India’s crude oil imports from Africa. India’s two major energy partners in Africa have, however, their own problems.18 Nigeria has been increasingly losing control of the oil rich Niger Delta, a region key to global energy security, because of its policies that have radicalized local responses that seek for improved shares in the oil riches.19 This has meant that more than a quarter of Nigeria’s normal production of 2.5 million barrels a day is kept off the market due to militant violence and has led to Angola emerging as the key producer in Africa over the last two years. At the height of the oil prices in 2008, Royal Dutch Shell was forced to shut down production of its Bonga field in the Niger Delta region of Nigeria following an attack by militants on a rig far offshore, which led to another 500,000 b/d (barrels per day) being taken off the market, further adding to the rising prices.

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Sudan-India ties are even older than those with West Asia. In the eighteenth century, Indian merchants regularly visited the major market town of Shendi. India is seen as a developmental model in Sudan.20 OVL has a 24.125 per cent stake in Sudan’s Block 5A and also a 25 per cent stake in Sudan’s Greater Nile Oil Project (GNOP) (Blocks 1, 2 and 4), which produces 280,000 b/d. The list of bilateral agreements is long and comprehensive.21 India’s engagement with Africa, however, is long term and it is evident that there is a large impetus being put by the government through its initiatives to enhance this engagement in sectors as diverse as infrastructure, car manufacturing, pharmaceuticals, healthcare, tourism, and information technology. India must, however, diversify its energy interests within Africa and, as in the case of West Asia, expand its non-energy ties with the countries that it trades energy with.

With China Since 2003, there has been a hyphenation of China and India in the energy debate, given their increased energy demand due to growth and poverty alleviation commitments, searches for additional resources, or the perception of “locking in supplies”, statist approaches that followed, the energy ties being forged, and the future impact on climate. The energy and climate link in particular has added a new geopolitical dimension to the energy debate. The emergence of China and India as important global entities has implications for the competitiveness of established OECD economies. This new competition, coupled with the climate security debates which require the developed economies to reduce their carbon footprint, catapults the climate debate, which was essentially about energy and the environment and ways by which this seemingly difficult trade-off needed to be addressed into one about the competitiveness of nations. Carbon mitigation measures that have to be undertaken by the OECD countries under their treaty obligations are not required to be taken by these two countries, given the absence of historic responsibility. This immediately puts OECD countries on an unequal playing field, and so the debate has changed from historic responsibility to future responsibility for carbon emissions for these two fast growing economies, and pressures to decarbonize are increasing. Such pressures are progressively reducing the room to manoeuvre on energy choices for the emerging economies and are creating pressures for carbon avoiding energy choices or for investments in carbon saving technologies. The two biggest energy consumers in Asia have had instances of both competition and cooperation. Competition was evident in the search for oil

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in Angola, in bidding for Petrokazakh, and in Myanmar; but cooperation is found in Columbia, and in GNOP, Sudan. Despite these instances of competition over equity oil investments, both countries do realize that increased competition will only bid up prices of properties to their common detriment. Very recently, India’s Oil Minister Murli Deora proposed a nocompete agreement on an oil project while suggesting a collaborative and possibly joint acquisition approach to avoid price wars.22 There is a growing recognition in the two countries on the importance of energy collaboration, cooperation, and partnerships, and the fact that energy securing strategies need not be seen in zero-sum terms. India and China have signed a Memorandum of Understanding on bilateral cooperation on hydrocarbons and four agreements were entered into between Indian and Chinese companies.23 Multilaterally, tripartite cooperation has been initiated among China, India, and Russia; and there has been cooperation through cross participation in regional groupings — India is an observer of the Shanghai Cooperation Organisation, and China has become an observer in South Asian Association for Regional Cooperation. The real scope for cooperation, however, is in the realm of technologies: energy conservation, renewable energy, clean coal, and carbon capture and sequestration (CCS).24 The reasons for this are evident:25 (i) current energy trends are not sustainable; (ii) there is a need for serious engagement with less energy intensive lifestyles for the affluent through more efficient energy use and sustainable consumption; (iii) there is a need for “clean technology leapfrogging” to increase per capita energy consumption of the poor; (iv) both countries need to strategize to deal with climate negotiations that can have implications for their development strategies; and (v) it is evident that investing in clean coal technologies and CCS is key to future comparative advantage of nations.

In Central Asia The countries around the Caspian Sea hold a fascination for India given their proximity and potential to help reduce its dependence on traditional oil regions. But this potential has already led to a number of economic and political alliances being forged between the main players — the United States, the European Union, China, and Russia — and the countries of Central Asia. India has joined the game somewhat late, but its interest is evident. Both the Indian national and the private oil sectors are engaged or seeking to get engaged in the region, from OVL, the international face of India’s

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national oil company, to Mittal Steel, which has a joint venture with OVL for operating in the oil and gas sector. OVL has also signed a Memorandum of Understanding with KazMunayGas for the development of cooperation on selected projects. While a number of initiatives are in the pipeline, there are still many issues that need to be resolved in the region, including the legal status of the Caspian Sea.

With the United States The United States has both a stabilizing and destabilizing impact on the energy security of Asian countries. Stabilizing, because it provides a balance of power and security for maritime transit areas; destabilizing because China’s fear of containment by the United States creates a pressure on resources as a means to pre-empt the implications of such actions to its economy; and its West Asian policies tend to vitiate the investment climate in the region and make difficult the much needed investments in bringing oil and gas to market. India’s recent relations with the United States on energy issues stretch from its collaboration on the nuclear energy issue, to the “disapproval” of the United States over India’s engagement with Iran on the natural gas pipeline and other issues. The nuclear collaboration proposed with the United States in July 2005 is with a view to bring India in from the cold and help it to access the international nuclear market despite it not being party to the Nuclear Non-Proliferation Treaty.26 Although the saga is still unfolding, it is evident that to be able to access the global market in the closely guarded areas of nuclear technology and fuel, India will need to get through this hurdle.27 However, while this collaboration seeks to open up access and new opportunities for India in a market that has hitherto been closed, the disapproval over India’s engagement with Iran’s gas pipeline threatens to close access to a key energy resource that lies in India’s neighbourhood. While the former collaboration will address India’s long-term needs for nuclear power, the latter will address its mid-term, more immediate, requirements for natural gas. Though, under the Kyoto Protocol, India is not required to cap its carbon emissions, there is already considerable pressure on India to reduce its carbon footprint. To India’s energy and climate analysts, there is no question about an either-or. In an energy-poor economy, both fuels are important, both ties are key to improved energy and climate security. Natural gas is a good substitute for coal in the power and industrial sectors, and nuclear energy for the power sector. Both are less greenhouse gas emitting and help diversify the fuel mix and sources.

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Conclusion India’s “room to manoeuvre” is thus a balance between competing demands, opportunities, challenges, and constraints. As of now the room to manoeuvre seems tight and complex. On the one hand, its competing demands for energy resources are high and its global engagement has been rising, but on the other hand, the challenges and constraints are increasing. Foreign Secretary Shri Shivshankar Menon, in a speech in 2008, did indeed capture the linked challenges that India faces from being more engaged externally. ….the factors which threaten systemic stability come from larger crosscutting or transnational issues: food security, energy security, climate change and the environment, terrorism and the proliferation of weapons of mass destruction. As the world globalizes, technology ensures that these threats also globalize. No single country can deal with these issues alone, and they require fair and equitable global solutions which involve us all.28

We have in the previous section described India’s bilateral initiatives in a number of energy or energy related ties and cross investments. The logic of criss-cross investments by producers and consumer countries is to have a stake in each other’s energy supplies and thereby reduce the source of energy insecurity, that is, off take in producer or secure supplies in consuming countries. Such investments have the potential of locking producers and consumers into each other; a mutual interest is thereby created, and this serves as a basis of building trust and goodwill between the two groups. Since energy and regional security requires stability, this mutuality of interest helps create incentives towards risk management and more adaptive energy security approaches. However, given our expanded understanding of energy security that includes addressing risks related to poverty, growth, and the environment, mere diversification of the fuel mix and its sources will not address energy insecurity. There is also need for more regional, multilateral, approaches to energy security that focus on less energy use per unit GDP, more rational energy pricing, cleaner technologies, and more secure availability and access. It is evident that although energy security is a “national” objective, it can best be actualized through interaction/engagement with other consumers and producers, which has ramifications for the region and beyond. The “region” is thus an increasingly important lens that can be employed to negotiate competing demands and constraints in the context of energy security and geopolitics; developing a regional perspective shifts focus from zero-sum

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thinking to collaborative mechanisms for energy cooperation that needs to go beyond just hydrocarbons and imported fuels. This will require joint efforts in data generation and pooling of renewable resource information, joint research and development in energy and carbon saving technologies, and carbon capture and sequestration. The need of the times is thus to frame India’s energy security policy to address its national interest while also addressing larger public goods such as global and regional energy security, and public “bads” such as climate change.

Notes

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4



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6



7



8 9

12 10 11



13



14

Ligia Noronha, “India’s Energy Situation: The Need to Secure Energy Resources in an Increasingly Competitive Environment”, in Energy Perspectives on Singapore and the Region, edited by Mark Hong and Teo Kah Beng (Singapore: Institute of Southeast Asian Studies, 2007), p. 138. Michael T. Klare, Resource Wars: The New Landscape of Global Conflict (New York: Henry Holt, 2001). Brahma Chellaney, Asian Juggernaut: The Rise of China, India and Japan (New Delhi: Harper Collins, 2006), p. 94. India Government, Planning Commission, Integrated Energy Policy: Report of the Expert Committee (New Delhi: Government of India, 2006), p. 54. International Energy Agency, World Energy Outlook 2007 (Paris: IEA, 2007), p. 574. Energy elasticity with respect to GDP refers to the “percentage change in commercial energy requirement for one per cent change in GDP”. Surya Sethi, “India’s Energy Challenges and Choices”, in India’s Energy Security, edited by Ligia Noronha and Anant Sudarshan (New York: Routledge, 2009), pp. 19–28. India Government, Planning Commission, Integrated Energy Policy. J.H. Kalicki and D.L. Goldwyn, “Introduction: The Need to Integrate Energy and Foreign Policy”, in Energy and Security: Toward a New Foreign Policy Strategy, edited by J.H. Kalicki and D.L. Goldwyn (Baltimore: Johns Hopkins University Press, 2005), p. 2. International Energy Agency, World Energy Outlook 2007, p. 185. Ibid., p. 171. Talmiz Ahmad, “Geopolitics of West Asian and Central Asian Oil and Gas: Implications for India’s Energy Security”, in India’s Energy Security, edited by Ligia Noronha and Anant Sudarshan (London: Routledge, 2009). Ligia Noronha, the IMF and the World Bank, Presentation at the Program of Seminars Panel on “Facing East: Oil and Ties Between the Middle East and Asia”, Singapore, 16–18 September 2006. Pranab Mukherjee, “Second Plenary Session on India: A Rising Global Player”,

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15



16



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22 23



24 25



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Address at the Fifth IISS Asia Security Summit (Shangri-La Dialogue), Singapore, 2–4 June 2006. India, Ministry of External Affairs, “The Republic of India and the Islamic Republic of Iran ‘The New Delhi Declaration’ 25 January, 2003”. India, Ministry of Commerce, Annual Report 2005–06 (New Delhi: Government of India). Devika Sharma and Deepti Mahajan, “Energising India-Africa Ties: The Energy Sector and Beyond”, South African Journal of International Affairs 14, no. 2 (2007): 37–52. See Soares de Oliveira, Oil and Politics in the Gulf of Guinea (New York: Columbia University Press, 2007) for a fascinating account of why these oil-rich states, despite their performance on governance, continue to attract international attention, and to some extent enjoy a blind eye to their distribution, use, and management of oil revenue. Cyril Obi, “Nigeria’s Oil in Global Energy Security: Critical Issues and Challenges”, Paper presented at International Conference on Africa and Energy Security: Global Issues, Local Responses, at IDSA, New Delhi, 23–24 June 2008. Presentation by Indian Ambassador to Sudan, Federation of Indian Chambers of Commerce and Industry, 2 February 2007. Agreement on Trade and Economic Cooperation; Memorandum of Understanding (MOU) on Annual Foreign Office Consultations; Agreement on Cooperation in the Field of Small Scale Enterprise Sector; Agreement between Foreign Service Institute, Ministry of External Affairs and National Centre for Diplomatic Studies, Ministry of External Relations; Sudan Cultural Exchange Agreement; Agreement between Press Trust of India and Sudan News Agency; Protocol on Cooperation between Prasar Bharati and Sudanese Radio and Television; Bilateral Investment Promotion and Protection Agreement; Double Taxation Avoidance Agreement — already ratified by both countries; MOU on Cooperation in Information Technology; MOU on Cooperation Between Interior Ministries. The Indian Express, 1 September 2008, p. 17. “China, India Sign Five Memoranda on Energy Cooperation”, People’s Daily Online, 13 January 2006, . Ibid. Ligia Noronha and Sun Yongxiang, “The India-China Energy Dialogues of 2006 and 2007: A Report”, China Report 44, no. 1 (January–March 2008): 47–52. India is excluded from trade in nuclear fuel and technology being a non-signatory to the Nuclear Non-Proliferation Treaty. As a result of being outside the loop, India has been able to develop an indigenous nuclear power programme, both strategic and civilian. Nuclear power currently makes up 3 per cent of total installed capacity, but the Department of Atomic Energy aims to supply about 20GWe by 2020 and a quarter of total electricity by 2050. It is stumped in

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its objective, however, by not having enough domestic uranium resources, and not being able to purchase internationally because of the trade restrictions in place. 27 The issues that also need to be considered beyond the fuel question in the context of nuclear energy are the costs involved, public acceptability (the climate change argument notwithstanding), and domestic constraints to having so many nuclear reactors in the backyard. 28 Shri Shivshankar Menon, “India’s Opportunities and Challenges”, Speech by Foreign Secretary of India at the IISS-Citi India Global Forum 2008, New Delhi, 19 April 2008.

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PART III Climate Change

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8 The Strategic Implications of Climate Change Alan Dupont

On 17 April 2007, the United Nations Security Council deliberated on the political and security implications of climate change, a geophysical phenomenon far removed from the traditional preoccupations of international security. Sceptics branded the debate an unwarranted diversion from more urgent matters and argued that climate change ought to remain the preserve of environmental agencies.1 But this view is not shared by an increasing number of influential policymakers and practitioners, who accept that unmitigated climate change will have profound consequences for global security. They include Nobel Prize winner and former U.S. Vice-President Al Gore, French President Nicolas Sarkozy, German Foreign Minister Frank-Walter Steinmeier, Australian Prime Minister Kevin Rudd, and the former and current British Prime Ministers Tony Blair and Gordon Brown. While still in office, Blair observed that “there will be no genuine security if the planet is ravaged by climate change”. His chief climate change adviser, Sir John Houghton, believes that climate change is “a weapon of mass destruction” and, at least, as dangerous as international terrorism,2 a view shared by Rudd’s Federal Police Commissioner Mick Keelty, who sees climate change as “the security issue of the 21st century”.3 Underlining this shift in sentiment, the European Union’s Commissioner for External Affairs, Benita Ferrero-Waldner, declared that global warming has moved to the heart of Europe’s foreign policy, while Steinmeier characterized climate change as “a threat to world-wide peace and 131

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security”, warning that as the polar ice melts rival territorial claims in the Arctic could turn into a “cold war”.4 Hard-headed military and intelligence analysts around the world are also beginning to focus on climate change as a serious strategic issue. In 2002, Andrew Marshall, the long-time head of the U.S. Department of Defense’s Office of Net Assessments and arguably the most influential thinker in the Pentagon over the past three decades, commissioned a report by two consultants to explore the security implications of an abrupt climate change event.5 Although shelved by climate change sceptics in the George W. Bush White House, this path-breaking analysis was followed by a 2007 study reflecting the views of a dozen retired senior U.S. military officers which found that climate change is both a “threat multiplier” and “a serious threat to America’s national security”.6 Both the U.S. Central Intelligence Agency and Australia’s main intelligence assessment agency, the Office of National Assessments, completed classified reviews of the climate change threat to national and international security in 2008. Why has climate change suddenly metamorphosed from a boutique environmental concern to a first-order foreign policy and national security problem that is now being ranked alongside terrorism and the proliferation of weapons of mass destruction? The answer is that sceptics have lost the argument about the significance and consequences of global warming. Policymakers around the world now accept there is sufficient scientific data to conclude that the speed and magnitude of climate change in the twentyfirst century will be unprecedented in human experience, posing daunting challenges of adaptation and mitigation for all life forms on the planet. Climate scientists overwhelmingly agree that the world’s glaciers and northern ice cap are melting at accelerating rates and that sea level rise will threaten many coastal and low-lying areas. And they regard as virtually certain that there will be a doubling of carbon dioxide (CO2) concentrations over preindustrial levels this century regardless of what we do to contain or reduce greenhouse gas emissions.7 As a result, sea levels are projected to rise by between 0.18 and 0.59 metres this century and the earth’s surface will almost certainly warm by more than two degrees Celsius, which is widely accepted as the threshold above which managing the risks becomes progressively more difficult and the consequences more dangerous.8 The central problem is the rate at which temperatures are increasing rather than the absolute size of differential warming. Spread over several centuries, or a millennium, temperature rises of several degrees could probably be managed without political instability or major threats to commerce, agriculture, and infrastructure. Compressed within the space of a single century,

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global warming will present formidable problems of human and biological adaptation, especially for natural ecosystems which typically evolve over hundreds of thousands to millions of years. Without effective mitigation and adaptation strategies, a rapidly warming planet presents palpable geopolitical risks for all countries, increasing national vulnerabilities, exacerbating interstate tensions, and threatening the very survival of some societies. Climate change has always been linked to security. There are many historical examples of climatic shifts or extremes of weather triggering conflict and even contributing to the rise and fall of civilizations and nations.9 Growing aridity and frigid temperatures from a prolonged cold snap caused the Huns and German tribes to surge across the Volga and Rhine into the Roman Empire during the fourth and fifth centuries CE, eventually leading to the sack of Rome by Visigoths. Muslim expansion into the Mediterranean and southern Europe in the eighth century was to some extent driven by persistent drought in the Middle East. The Viking community in Greenland died out in the fifteenth century partly because of a sudden cooling of temperatures across northern Europe known as the “Little Ice Age”.10 And a changing climate may have been responsible for the collapse of China’s Tang dynasty and the disappearance of the Mayan world in Central America a thousand years ago.11 For the most part, however, these climatic shifts were relatively short-lived and far less significant than those in prospect. In a world already populated by 6.5 billion people, a figure projected to reach nine billion by 2050, large deviations from global or regional weather norms, particularly if they occur within the span of a single human generation, would be far more dangerous.12

Food and water scarcity Weather extremes and greater fluctuations in rainfall and temperatures have the capacity to refashion the world’s productive landscape, especially at a time of rising populations in the developing world and concerns that the green revolution of the twentieth century may have largely run its course. Crop yield increases have levelled off since the 1990s and increases in the frequency of extreme weather events, such as cyclones, riverine flooding, hail, and drought, will disrupt agriculture and put pressure on prices. If the gap between global supply and demand for a range of primary foods narrows, price volatility on world markets is likely to increase and will be exacerbated by the reduction in food stockpiles mandated by the implementation of the 1994 World Trade Organization’s Uruguay Round agreement. The world’s food stocks are already at historical lows due to

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a combination of rising demand and crop substitution. Much corn is now converted to ethanol for biofuels, rather than being used for human and animal consumption, and productive farmland is being lost due to environmental degradation and urbanization. Without the moderating influence of substantial grain stocks, a confluence of unfavourable political and economic influences, aggravated by climate change, could create local scarcities, sparking food riots and domestic unrest. If sustained, reduced crop yields could seriously undermine political and economic stability, especially in the developing world. Of course, doomsayers have long warned of an approaching food deficit and been proved wrong. Most food economists believe that global supply will be able to keep ahead of rising demand. But their assumptions have not adequately factored in the impact of climate change, especially the shift in rainfall distribution, rising temperatures, and the probable increase in extreme weather events. Nor have they accounted for the fact that agricultural yields are heavily dependent on high fertilizer use, which links food production to climate change through the energy cycle. The need to achieve greenhouse gas reductions will increase energy costs, making it more difficult to maintain the per capita food yield gains of the previous century. Rising sea levels will inundate and make unusable fertile coastal land, and potential changes in the strength and seasonality of ocean currents will cause fish species to migrate and disrupt breeding grounds. Non-commercial fisheries are likely to decline as coral bleaching takes hold, and the movement of deepwater fish may become more unpredictable, compounding the problem of overfishing and diminishing global supplies of wild fish. Oceans have already absorbed about half the 800 billion tonnes of carbon dioxide humans have pumped into the atmosphere since industrialization, which over time has increased ocean acidity and further degraded the marine ecosystem.13 As carbonate ions in the seas disappear because of increased acidity, tiny marine snails and krill at the bottom of the food chain that are the primary source of food for whales and fish could be decimated, possibly within decades.14 Changes in the variability and distribution of rainfall could also exacerbate freshwater scarcity in water-deficient states. In a world where over two billion people already live in countries suffering moderate to high water stress, and half the population is without adequate sanitation or drinking water, relatively small shifts in rainfall patterns could push countries and whole regions into deficit, leading to a series of water crises with global implications. In Asia, per capita water availability has already declined by between 40 per cent and 65 per cent since 1950.15 By 2025, some five billion people globally could be suffering from serious water shortages, half a billion of them due to climate

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change.16 It is not yet possible to accurately forecast detailed precipitation changes at the national and subnational level. However, it is clear that countries which are already water deficient will be most at risk, as rainfall patterns shift and become more variable. The melting of the Tibetan glaciers illustrates the nexus between climate change, water scarcity, and geopolitics. By China’s own estimates, the glaciers on the Tibetan plateau are melting at a rate of about 7 per cent a year.17 Hundreds of millions of people are dependent on the flow of glacier-fed rivers for most of their food and water needs, as well as transportation and energy from hydroelectricity. Initially, flows may increase, as glacial run-off accelerates, causing widespread flooding. Within a few decades, however, water levels are expected to decline, jeopardizing food production and causing widespread water and power shortages with potentially adverse consequences for India, Bangladesh, China, Myanmar, Thailand, Laos, Cambodia, and Vietnam. With less fresh water available to slake the thirst of its booming population and economy, China has redoubled its efforts to redirect the southward flow of rivers from the water-rich Tibetan plateau to water-deficient areas of northern China. The problem is that rivers like the Mekong, Ganges, Brahmaputra, and Salween flow through multiple states. China’s efforts to rectify its own emerging water and energy problems indirectly threaten the livelihoods of many millions of people in downstream, riparian states. Chinese dams on the Mekong are already reducing flows to Myanmar, Thailand, Laos, Cambodia, and Vietnam. India is concerned about Chinese plans to channel the waters of the Brahmaputra to the overused and increasingly desiccated Yellow River. Should China go ahead with this ambitious plan, tensions with India and Bangladesh are likely to rise, as existing political and territorial disputes18 are aggravated by concerns over water security.

Heightened energy insecurity In addition to its negative impact on food and water, climate change is heightening concerns about future supplies of energy, complicating energy choices by adding to the costs of production and usage. Coal, for example, is relatively abundant but also highly polluting. Fossil fuels are responsible for nearly 80 per cent of the anthropogenic greenhouse gases that are the major cause of planetary warming.19 Even if emissions from fossil fuels are stabilized at 1990 levels, as required by the Kyoto Protocol, greenhouse gases will continue to rise for the rest of this century, further heating up the planet. We know this because the increase in greenhouse gases can be extrapolated from current fossil fuel usage and rates of deforestation.

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In 1990, global emissions of carbon dioxide, the main greenhouse gas, totalled 5.8 billion tonnes of carbon equivalent, which in a business-as-usual scenario, will rise 34 per cent to 7.8 billion tonnes by 2010. If every signatory to the Kyoto Protocol reaches its pledged target, an unlikely eventuality since only two countries, the United Kingdom and Sweden, are within their agreed targets, the increase would still be the equivalent of 7.3 billion tonnes.20 This small reduction would be more than offset by the rise in emissions from developing countries, notably China and India, which are exempt from emissions targets under Kyoto, but have been reluctant to endorse a successor agreement for fear that signing up to mandatory targets would set back their economic growth. Almost all nations anticipate growth in energy usage in the coming decades. The International Energy Agency forecasts that the world’s primary energy needs will grow by 55 per cent between 2005 and 2030, with fossil fuels accounting for 84 per cent of the increase, which will dramatically push up greenhouse gas emissions in the absence of mitigating strategies.21 Thus, at the very time the world’s appetite for energy is growing exponentially, the environmental cost of using fossil fuels may be a greater, long-term constraint than their availability. Climate change is also forcing a major reassessment of the utility of nuclear power, once seen as the energy choice of last resort because of its tarnished public image as a dangerous and dirty fuel. Since nuclear power only emits about 25 grams of carbon dioxide equivalent per kilowatt hour, compared with around 450–1,250g for fossil fuels, it is the one source of virtual carbon-free energy that can make a substantial difference to energy supply in the short to medium term.22 Critics maintain that switching to nuclear power in order to reduce greenhouse gas emissions is misguided and merely replaces one problem with an even more serious one: the proliferation of plutonium and enriched uranium which can be used for manufacturing nuclear weapons. They contend that safely storing and protecting this material from terrorists and criminal groups intent on acquiring weapons-grade material for use or profit is problematic, and the political and security risks too high. But the security consequences of unmitigated climate change outweigh the risk of terrorists or rogue states acquiring nuclear material from expanded global stockpiles. The world is already awash in nuclear material, much of it stored in unsafe temporary storage sites located near nuclear reactors. Even if all the nuclear power plants in the world were to be shut down tomorrow and every nuclear weapon dismantled, the accumulated waste of half a century would still have to be isolated, safeguarded, and eventually disposed of, either in underground repositories or, less desirably, by reprocessing. Arguing against nuclear power on the grounds of safety does little to address

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existing problems of waste disposal or proliferation, and even less the issue of climate change. One aspect of the interrelationship between climate change and energy security that has received scant attention is the impact the submergence of small atolls, rocks, and low-lying islands due to sea level rise could have on the Exclusive Economic Zones (EEZs) of maritime states and disputed seabed resources, including oil and gas. This is a critically important issue since small rocks and islets are commonly used to delineate maritime boundaries and to claim vast tracts of ocean which would otherwise fall outside the EEZs of contiguous states, or be designated high seas, opening them up to exploration and exploitation by other nations. International law currently provides no answer to the question of what would happen to sovereignty and EEZ claims should an island, or even a country, be submerged.23 In the event of significant sea level rise, the low-water marks from which EEZs are measured would shift, raising the real possibility of serious, new, maritime disputes as states argue about the criteria for resetting base lines and redesignating EEZs as high seas. In Asia, rising oceans could make more difficult the resolution of disputed sovereignty claims in the Spratly Islands, a group of low-lying atolls in the South China Sea which sit astride potentially rich deposits of oil and have already been the scene of military tensions between and among China, Vietnam, and the Philippines. Some of these islands are already partially submerged and the highest (Southwest Cay) is only four metres above sea level.24 Beijing has challenged the island status of Okinotorishima, a small offshore islet claimed by Japan, at the southernmost part of the archipelago that is uninhabited and slowly sinking, and is the basis for Japan’s claim to an extended EEZ. Under Article 121 of the United Nations Convention on the Law of the Sea, islands classified as “rocks” are not entitled to a 200-nautical-mile EEZ, unless they are capable of sustaining human habitation and economic life. Japan has already attempted to increase the size and height of Okinotorishima by planting coral around the islet, while some of the claimants to the Spratlys have built large concrete structures grafted onto submerged, naturally occurring coral, which house small military garrisons.25 Warming seas, as a consequence of climate change, are also making it possible to exploit previously inaccessible energy resources under the polar ice caps, threatening what has been characterized as a new “gold rush”, with claimant states jostling for the rights to exploit potentially rich deposits of oil, gas, and minerals on the seabed. The potential for conflict was dramatically brought home by Russia’s successful and highly publicized planting of its national flag on the Arctic seabed on 2 August 2007 by two small submersibles,

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an act that was lauded as “heroic” by Moscow, but condemned by other claimants, notably Canada, which compared the Russian action to a fifteenthcentury land grab.26 Many climate scientists believe that late-summer Arctic ice could disappear entirely by 2060, which would make the exploitation of Arctic resources technically feasible and, therefore, more likely, unless the five claimant states — Russia, the United States, Canada, Denmark, and Norway — can reach an accommodation.27

Infectious disease Climate change will have a number of serious health-related impacts, including illness and death directly attributable to temperature increases, extreme weather, air pollution, water diseases, vector- and rodent-borne diseases, and food and water shortages. 1.7 million people die prematurely every year because they do not have access to safe drinking water, and the situation will worsen if waterborne pathogens multiply as a result of rising temperatures.28 But the greatest security risk is from infectious disease. Temperature is the key factor in the spread of some infectious diseases, especially where mosquitoes are a vector, as with Ross River fever, malaria, and dengue fever. As the planet heats up, mosquitoes will move into previously inhospitable areas and higher altitudes, while disease transmission seasons may last longer. A study by the World Health Organization has estimated that 154,000 deaths annually are attributable to the ancillary effects of global warming due mainly to malaria and malnutrition. This number could nearly double by 2020.29 Currently, some 40 per cent of the world’s population lives in areas affected by endemic malaria.30 Extreme weather events and climate-related disasters could lead to shortterm disease spikes because of the damage to food production, population displacement, and reductions in the availability of fresh water. Poorer nations with limited public health services will be especially vulnerable.31 Health problems can quickly metamorphose into a national security crisis if sufficient numbers of people are affected and there are serious economic and social consequences, as occurred during the devastating flu pandemic of 1918–19, which killed from forty to 100 million people.32 Climate change does not automatically or always provide a more favourable environment for the spread of infectious diseases, since transmission rates and lethality are a function of many interrelated social, environmental, demographic, and political factors, including the level of public health, population density, housing conditions, access to clean water, and the state of sewage and waste management systems, as well as human behaviour. All these factors affect the transmission dynamics

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of a disease and determine whether or not it becomes an epidemic. But where climate is a consideration, temperature, relative humidity, and precipitation will affect the intensity of transmission. Temperature can influence the maturation, reproductive rate, and survivability of the disease agent within a vector, or carrier.33 So climate change will alter the distribution of the animals and insects which are host to dangerous pathogens, increasing or decreasing the range of their habitats and breeding places.

More frequent severe natural disasters Natural disasters seem set to climb in line with the warming of the planet. To be sure, the impact of natural disasters may rise for reasons other than climate change: population growth, higher levels of capital investment, and migration to more disaster-prone areas. But the insurance industry is adamant that the rise in the number of extreme and damaging climatic events is a significant driver of the upward trend.34 Around 188 million people were adversely affected by natural disasters in the 1990s, six times more than the thirty-one million directly or indirectly affected by war.35 While such statistics must be treated with caution since they are not yet sufficiently robust to enable definitive judgements about cause and effect, they do suggest an upward trend in extreme weather events. Scientists are divided about whether this change is due to natural fluctuations or global warming, although the differences are partly explicable by the rigorous scientific tradition which requires a higher level of certainty than do intelligence and national-security analysis when considering risk. However, there is clearly a strong correlation between the steady rise in ocean temperatures attributable to anthropogenic greenhouse gas emissions, and the demonstrable increase in storm frequency and intensity.36 Hurricanes feed off warm water as trade winds blow over the ocean surface, pulling heat from the water as energy. Typically, large storms require ocean temperatures of 27 degree Celsius, conditions which are now occurring much more regularly as tropical waters heat up. The strength of category 4 and 5 storms is a direct consequence of these warmer ocean temperatures. Storms of this magnitude have a clear security dimension because of the death and destruction they bring in their wake and the political, economic, and social stresses they place on even the most developed states. Defence forces often bear the brunt of major emergency and humanitarian operations as they are usually the only organizations with the resources and skilled personnel necessary to respond quickly and effectively to natural disasters. When Hurricane Katrina devastated New Orleans in August

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2005, a full U.S. Army division, the famed 82nd Airborne, was called in to restore order and assist in emergency relief. The devastation was described by Mississippi Governor Haley Barbour as akin to the detonation of a nuclear weapon, and President Bush compared its impact with the terrorist attacks on the United States in September 2001.37 The Australian, Japanese, and New Zealand defence forces were crucial to the success of early efforts to provide humanitarian relief and the restoration of essential services in Indonesia’s province of Aceh, the area worst hit by the December 2005 tsunami. And in one of its largest ever peacetime deployments, tens of thousands of soldiers from the People’s Liberation Army performed a similar task during the disastrous floods of 1998 which inundated large areas of northern China, while a million security personnel were deployed to assist the civil authorities during the severe winter storms of early 2008.38 The involvement of defence forces in emergency-relief operations will almost certainly grow as the scale and frequency of climate-induced disasters increase, transforming militaries into multiskilled institutions in which disaster relief will become a core task — if, indeed, it has not already become so. Natural disasters linked to climate change may prove an even greater security challenge for developing states, displacing affected populations, calling into question the legitimacy or competence of national governments, and feeding into existing ethnic or intercommunal conflicts. In extreme cases, the survival of the nation itself may be in question. For example, the 1998 monsoon season brought with it the worst flood in living memory to Bangladesh, inundating some 65 per cent of the country, devastating its infrastructure and agricultural base, and raising fears about Bangladesh’s long-term future in a world of higher ocean levels and more intense cyclones. In the absence of effective mitigation strategies, a one-metre rise in sea level would flood about 17.5 per cent of Bangladesh and much of the Ganges river delta which is the country’s food basket.39

Environmental refugees In a grimly ironic scene from the Hollywood blockbuster The Day After Tomorrow, thousands of starving, dislocated North Americans stream south across the border to sanctuary in Mexico, fleeing from the frigid winter descending on the continent as the great ocean conveyor, or thermohaline circulation, collapses.40 Although the film is predictably dramatic in its depiction of this high impact but low probability scenario, the possibility that climate change might cause mass migrations of environmental refugees

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and displaced persons, with serious consequences for international security, is certainly plausible and should not be dismissed as a figment of Hollywood’s imagination. We already know that refugee flows and unregulated population movements can destabilize states internally, aggravate transborder conflicts, create political tensions between sending and receiving states, and jeopardize human security.41 One of the defining features of the post-Cold War security environment has been the rapid rise in unregulated population movements around the globe. The causes of these movements are complex and interconnected, but there is growing evidence to suggest that environmental decline is a contributing cause and that, in future, climate change may play a significant ancillary role. Some contend that climate or environmental refugees are now the fastest-growing proportion of refugees globally, and that by 2050, up to 150 million people may be displaced by the impact of global warming.42 Climate-induced migration is set to play out in three distinct ways. First, people will move in response to a deteriorating environment, creating new or repetitive patterns of migration, especially in developing states. Secondly, there will be increasing short-term population dislocations due to particular climate stimuli such as severe cyclones or major flooding. Thirdly, larger scale population movements that build more slowly, but gain momentum as adverse shifts in climate interact with other migration drivers such as political disturbances, military conflict, ecological stress, and socio-economic change, are possible.43 Even the beneficial effects of climate change could lead to conflict. In China’s Xingiang province, for example, a projected increase in rainfall is likely to attract an influx of Han migrants into the Muslim Uighur ancestral lands, further inflaming ethnic tensions between the two communities where a low-level insurgency is already festering.

Wild cards These are some of the security consequences we can reasonably anticipate based on the available scientific data. But what if the speed and extent of temperature increases is greater than projected? Could it be that we have underestimated the threat? After all, climate researchers have identified several episodes of large-scale, abrupt climate change over the past 100,000 years both prior to, and after, the last ice age. In some instances, rapid warming (as great as 16 degrees Celsius) took place over spans as short as a decade, although there is still substantial debate over how global these changes were.44 So what could trigger abrupt, accelerated, or runaway climate change, and what strategic consequences might we expect?

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There are several potential wild cards in the climate change deck. As greenhouse gas emissions increased during the latter half of the twentieth century there was, at least for a time, an accompanying growth in airborne aerosols — primarily sulphate particles resulting from combustion processes — which mitigated the warming that might otherwise have occurred. These particulates scatter solar radiation, releasing more energy to space, cooling the earth’s surface, and producing an effect known as “aerosol masking” or “global dimming”. Initially, the effect was confined to Europe and North America, as manufacturing surged and airborne pollution worsened in the immediate decades after the Second World War. But towards the end of the century, the concentration of particulates began to increase in Asia as first Japan, followed by the Asian tiger economies, and then China and India, emulated Europe and North America. The so called “Asian brown haze”, which has become a semi-permanent feature of the region stretching from the northern Indian Ocean to China and much of Southeast Asia during summer, is graphic evidence of the rise in airborne aerosols in the developing world. The haze has global implications because it can travel halfway around the world, depending on the strength and direction of the prevailing winds. And it is getting worse.45 It is conceivable that the real rate of global warming has been masked by the presence of these aerosols, in which case cleaning up the haze by moving towards alternative fuels and cleaner energy might paradoxically accelerate the rate of climate change.46 Another possibility is that deforestation will reach the point that the global biosphere will no longer act as a carbon “sink”, but instead become a net source of carbon, warming the planet by a third more than scientists have projected. Peter Schwartz and Doug Randall, authors of the Pentagon report commissioned by Andrew Marshall, identified a sudden collapse of the thermohaline circulation as the climate-change event most likely to endanger international security. In their scenario, the warm Gulf Stream cools or shuts down altogether, perhaps irreversibly, creating winters of great severity in the northern hemisphere and triggering catastrophic weather. Rather than causing a gradual heating of the atmosphere over the span of a century, the global warming which has already taken place may suddenly push the climate to a decisive tipping point in which the system that controls the planet’s oceanatmosphere system suddenly flips to an alternative state. North America would then become much colder and the European hinterland might have a climate more like Siberia, precipitating crop losses and population movements. Schwartz and Randall postulate that as water, food, and energy shortages develop, age-old patterns of conflict quickly re-emerge as nations fight for

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control over diminishing natural resources. Initially, countries attempt to deal diplomatically and collegially with the food, water, and energy shortages that develop, along with an upsurge of environmental refugees. But as the decade progresses, international order breaks down because the scale and speed of climate change overwhelms the coping capacities of even the most wealthy and technologically advanced states. Drawing on the findings of Harvard archaeologist Steven LeBlanc, Schwartz and Randall observe that “humans fight when they outstrip the carrying capacity of their natural environment. Every time there is a choice between starving and raiding, humans raid”.47 With these pessimistic assumptions informing their security scenarios, Schwartz and Randall imagine refugees from the Caribbean flooding into the United States and Mexico and struggles over diminishing supplies of oil as demand skyrockets, bringing the US and Chinese navies into confrontation in the Persian Gulf. With fossil fuels unable to meet demand, nuclear power becomes the alternative energy of choice and further nuclear proliferation becomes inevitable as energy deficient countries develop enrichment and reprocessing capabilities. Japan, South Korea, and Germany develop nuclear weapons, as do Iran, Egypt, and North Korea. In Asia, energy hungry Japan, already suffering from coastal flooding and contamination of its water supply, contemplates seizing Russian oil and gas reserves on nearby Sakhalin Island to power desalination plants and energy-intensive agriculture. Pakistan, India, and China skirmish on their borders over refugees and access to shared rivers and arable land. States suffering from famine, pestilence, water and energy shortfalls strike out with “offensive aggression in order to reclaim balance”, thereby jeopardizing their neighbours’ security in pursuit of their own.48 Many of these projections are highly speculative or simply misleading, betraying the authors’ lack of specialized knowledge of the realities of international security. A case in point is the mischaracterization of Steven LeBlanc’s position. In fact, LeBlanc made a much more sophisticated and, in some places, contrary argument — that when people live in states they will often starve rather than fight, “because the government won’t allow them to fight”.49 Similarly, the proposition that South Korea and Japan would develop nuclear weapons as they diversify away from fossil fuels to nuclear power is highly questionable because it ignores the very real domestic and international constraints on either country going nuclear.50 South Korea and Japan have eschewed nuclear weapons despite the fact that they have long produced much of their electricity from nuclear power plants. It is drawing a long bow indeed to suggest that abrupt climate change alone would lead either to reconsider their long-standing aversion to nuclear weapons.

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Nevertheless, Schwartz and Randall should be given credit for thinking the unthinkable and identifying how an abrupt climate change scenario might impact on international security. Even if the probability is low, it is far from zero and, as the potential impact could be very high indeed, policymakers ought to factor them into their security calculations and alternative-futures planning. While most climatologists assess as unlikely a complete failure of the thermohaline circulation this century, others are less sanguine. A 2005 scientific symposium looking at the impact of greenhouse gases concluded that: there is a greater than 50% likelihood of an ATHC (Atlantic Thermohaline Circulation) collapse, absent any climate policy. This likelihood can be reduced by the policy interventions (carbon tax on fossil fuels), but still exceeds 25% even with maximal policy interventions. It would therefore seem that the risk of an ATHC collapse is unacceptably large.51

Another risk factor is the stability of high-latitude permafrost. There is clear evidence that ground which was once frozen all year round is melting at higher and higher latitudes. Although there are no definitive estimates of the volume of gases trapped under the permafrost, their carbon content is thought to be considerable — perhaps as much as 500 billion tonnes, the equivalent of 70 per cent of all carbon currently present in the atmosphere.52 Its release could be quite rapid and widespread as warming progresses and would include a significant amount of methane gas, which is one of the most damaging of the main greenhouse gases. Should this occur, the authoritative Intergovernmental Panel on Climate Change (IPCC) predictions of future global warming would have to be revised upward by a substantial margin, since IPCC calculations only take account of emissions from fossil-fuel combustion. Of all the potential climate wild cards, perhaps the greatest strategic risk is from a larger and more rapid than expected reduction of polar ice, which could dramatically increase sea levels, especially if parts of the Greenland and West Antarctic ice caps disappear. If the Greenland ice cap were to melt entirely, it would contribute about 7.3m to sea level rise, which would flood many coastal cities and low-lying areas, causing enormous economic damage, forced population displacements, and loss of agricultural land.53 While this seems unlikely, scientists are concerned by new evidence of ice loss. The U.S. National Snow and Ice Data Center has concluded that human-induced warming is at least partially responsible for the shrinking of the Arctic ice cap. We know from a variety of independent studies that sea levels have risen by around 10cm globally over the past fifty-five years, essentially because of

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the thermal expansion of water and the melting of terrestrial snow and ice.54 Satellite data released in January 2008 indicate that West Antarctica is losing more ice than previously thought, with ice sheet loss along the Bellingshausen and Amundsen seas increasing by 59 per cent over the past decade. If this trend continues, then Antarctic melt may also contribute to the expansion of our seas and the inundation of coastal and low-lying areas.55 Sea level rise may have particularly dire consequences for low-lying atoll countries in the Pacific such as Kiribati, the Marshall Islands, Tokelau, and Tuvalu. Ultimately, human habitation may not be possible on them even with moderate climate change. If temperature and sea level rises are at the high end of those projected, then the sea will either eventually submerge the coral atolls, or ground water will become so contaminated by salt-water intrusion that agricultural activities will cease.56 Most of Asia’s densest aggregations of people and productive lands are on, or near, the coast, as are many large cities in Europe, the Americas, and Africa, so if sea level rise is at the upper end of the projections, flooding, loss of agricultural land, and population displacements will become a serious global problem. War has customarily been considered the main threat to international security because of the large number of deaths it causes and the threat it poses to the functioning and survival of the state. Judged by these criteria, it is clear that climate change is potentially as detrimental to human life and economic and political order as traditional military threats.57 Environmental dangers, such as climate change, stem not from competition between states or shifts in the balance of power; rather, they are human-induced disturbances to the fragile balance of nature. But the consequences of these disturbances may be just as injurious to the integrity and functioning of the state and its people as those resulting from military conflict. They may also be more difficult to reverse or repair. Protecting and stabilizing our climate is a legitimate long-term objective of security policy, since human survival is dependent on the health of the biosphere and the coupled ocean-atmosphere. Climate change of the magnitude and time frames projected by climate scientists poses fundamental questions of human security, survival, and the stability of nation states, which necessitate judgements about political and strategic risk, as well as economic and environmental cost. Based on the evidence to date, it is difficult to see climate change alone compelling a major reconfiguration of the global balance of power in the foreseeable future. Shifts of this order presuppose substantial redistributions of the relative productive capacities of nation states, but current climate models are still not accurate enough to describe in detail how most individual states will be affected.

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While state weakness and destabilizing internal conflicts are a more likely outcome than interstate war, climate change acts as a stress multiplier on all societies and states. In assessing the long-term consequences of climate change for international security we should be mindful of Jared Diamond’s warning that in many historical cases, a society that was depleting its environmental stocks could absorb losses as long as the climate was benign, but when it became more variable or harsh these societies were pushed over the edge and even collapsed. It was the combination of environmental impact and climate change that proved fatal.58 Whether or not Diamond’s observations are germane to our milieu remains to be seen, but can we afford to ignore the risk? It is sobering that on four out of five previous occasions of mass extinction in the Earth’s history, at least half of all animal and plant species are estimated to have been wiped out during periods of warming that are comparable to those in prospect.59 In the security domain, strategic doctrines and defence budgets are frequently justified on the basis of far less observable evidence than we have about the climate future which awaits us. Yet very little has been done to research, address, or even conceptualize the potential security implications of climate change internationally. Prudence and sensible risk management suggest that policymakers need to take this issue far more seriously. And our strategic planners ought to include worst case climate change scenarios in their contingency planning as they do for terrorism, infectious diseases, and conventional military challenges to national security. For climate change may well be the threshold event that pushes our already stressed planet past an environmental tipping point from which there will be no return.

Acknowledgements This article draws on earlier research by the author and Graeme Pearman for the Lowy Institute for International Policy, Sydney. This article “The Strategic Implications of Climate Change”, by Alan Dupont, in Survival, Vol. 50, No. 3 (2008), pp. 29–54, copyright © The International Institute of Strategic Studies, is reprinted by permission of (Taylor & Francis Ltd, ) on behalf of The International Institute of Strategies Studies.

Notes

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“U.N. Council Hits Impasse Over Debate on Warming”, New York Times, 18 April 2007, .

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Tony Blair, “Prime Minister: ‘Concerted International Effort’ Necessary to Fight Climate Change”, Speech, 24 February 2003, ; John Houghton, “Global Warming is Now a Weapon of Mass Destruction”, Guardian, 28 July 2003, . John Houghton was formerly chief executive of the UK Meteorological Office and co-chair of the scientific assessment working group of the Intergovernmental Panel on Climate Change. Jamie Walker and Andrew Faulkner, “Keelty Warning on Global Warming”, The Australian, 25 September 2007, . Chris Buckley, “EU Makes Climate Change Centre of Foreign Policy”, Reuters, 18 January 2007, , and “In Warmer World, Threat of Cold War”, International Herald Tribune, 24 October 2007, p. 1. See the March 2008 report to the European Council on climate change and international security, which acknowledges that climate change is a serious political and security risk that “directly threatens European interests”. European Council, “Climate Change and International Security”, European Council S113/08, 14 March 2008, . Peter Schwartz and Doug Randall, “An Abrupt Climate Change Scenario and its Implications for United States National Security”, October 2003, . Schwartz was previously part of the highly regarded strategic planning group at Royal Dutch/Shell. He has worked as a consultant for the U.S. Central Intelligence Agency and developed futuristic scenarios for Stephen Spielberg’s film, Minority Report. Randall works on scenario planning at the Monitor Group, a California think tank. Center for Naval Analysis, National Security and the Threat of Climate Change (Alexandria, VA: CNA Corporation, 2007). Alan Dupont and Graeme Pearman, Heating up the Planet: Climate Change and Security, Lowy Institute Paper 12 (Sydney: Lowy Institute for International Policy, 2006). See also Intergovernmental Panel on Climate Change, Climate Change 2007: Mitigation of Climate Change, Contribution of Working Group III to the Fourth Assessment Report of the IPCC (Cambridge: Cambridge University Press, 2007), Summary for Policymakers, p. 4, available at . For temperature changes and sea level rise estimates, see Intergovernmental Panel on Climate Change, Climate Change 2007: The Physical Science Basis, Contribution of Working Group I to the Fourth Assessment Report of the IPCC (Cambridge: Cambridge University Press, 2007), Summary for Policymakers, p. 13, available at . See also M. Oppenheimer and R.B. Alley, “Ice Sheets, Global Warming, and Article 2 of the United Nations Framework Convention on Climate Change (UNFCC): An Editorial Essay”, Climatic Change 68, no. 3 (February 2005).

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On the connection, see David D. Zhang et al., “Global Climate Change, War, and Population Decline in Recent Human History”, Proceedings of the National Academy of Sciences 104, no. 49 (4 December 2007), . For an illuminating account of Norse Greenland’s demise, see Jared Diamond, Collapse: How Societies Choose to Fail or Survive (London: Allen Lane, 2005), pp. 266–67. A compelling narrative of the influence of climate on human history can be found in Elizabeth Kolbert, “The Climate of Man, Part II: The Curse of Akkad”, New Yorker, 2 May 2005, . Gergana Yancheva et al., “Influence of the Intertropical Convergence Zone on the East Asian Monsoon”, Nature 445, no. 05431 (4 January 2007), . United Nations Department of Economic and Social Affairs, Population Division, World Population Prospects: The 2006 Revision — Highlights (New York: United Nations, 2007), p. 1. The Royal Society, Ocean Acidification Due to Increasing Atmospheric Carbon Dioxide, Policy document 12/05 (London: The Royal Society, 30 June 2005), ; R.A. Feely et al., “Impact of Anthropogenic CO2 on the CaCO3 System in the Oceans”, Science 305, no. 5682 (16 July 2004): 362–66; Melissa Fyfe, “Wake Up — This is Serious”, The Age, 12 February 2005, . Deborah Smith, “Shell-shocked Snails Carry Health Warning from Bottom of Food Chain”, Sydney Morning Herald, 29 September 2005, . Alan Dupont, East Asia Imperilled:Transnational Challenges to Security (Cambridge; New York: Cambridge University Press, 2001), p. 117. Author’s own calculations, drawing on data in N.W. Arnell, Impact of Climate Change on Global Water Resources: Volume 2, Unmitigated Emissions, Report to the Department of the Environment, Transport and the Regions (Southampton: University of Southampton, 2000). See also Charles J. Vörösmarty et al., “Global Water Resources: Vulnerability from Climate Change and Population Growth”, Science 289, no. 5477 (14 July 2000): 284, cited in United Nations World Water Assessment Programme, Water for People: Water for Life — The United Nations World Water Development Report (Barcelona: UNESCO and Berghahn Books, 2003), p. 17, . Ben Blanchard and Lindsay Beck, “China Defends Record on Fighting Global Warming”, Reuters, 14 November 2006, . See Brahma Chellaney, “Climate Change: A New Factor in International Security?”, Paper presented at the Global Forces 2007, Proceedings of the

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ASPI Conference, Day 1, Australian Strategic Policy Institute, December 2007, especially pp. 32–33. William Blyth and Nicolas Lefevre, “Energy Security and Climate Change Policy Interactions: An Assessment Framework”, IEA Information Paper (Paris: International Energy Agency, 2004), p. 14. Dupont and Pearman, Heating up the Planet. International Energy Agency, “World Energy Outlook 2007: Executive Summary”, p. 4, available at ; see also Australian Government, Energy Task Force, Securing Australia’s Energy Future (Canberra: Department of the Prime Minister and Cabinet, 2006), . OECD Nuclear Energy Agency, Nuclear Power and Climate Change (Paris: OECD Publications, 1998). On this point I am indebted to Professor Rosemary Rayfuse from the Faculty of Law at the University of New South Wales, Sydney, Australia. CIA World Factbook, “Spratly Island”, 29 March 2006, . See also . Chris Hogg, “Japan uses Coral to ‘Grow’ Islets”, BBC News, 15 June 2007, . C.J. Chivers, “Russia Plants Underwater Flag at North Pole”, New York Times, 2 August 2007, . A major 2004 study found that the “Arctic is now experiencing some of the most rapid and severe climate change on earth”. Arctic Climate Impact Assessment, Impacts of a Warming Arctic (Cambridge: Cambridge University Press, 2004). See also F. Pearce, “Climate Warning as Siberia Melts”, New Scientist, no. 2512 (11 August 2005): 12. World Health Organization, The World Health Report 2002: Reducing Risks, Promoting Healthy Life (Geneva: World Health Organization, 2002), p. 68. “Climate change was estimated to be responsible in 2000 for approximately 2.4% of worldwide diarrhoea, 6% of malaria in some middle income countries and 7% of dengue fever in some industrialized countries. In total, the attributable mortality was 154 000 (0.3%) deaths and the attributable burden was 5.5 million (0.4%) DALYs. About 46% of this burden occurred in SEAR-D, 23% in AFR-E and a further 14% in EMR-D.” World Health Organization, The World Health Report 2002, p. 72. See also Nigel Purvis and Joshua Busby, The Security Implications of Climate Change for the UN System (Washington, DC: Environmental Change and Security Project, The Brookings Institution, May 2004), p. 2. For a good analysis of the impact of climate change on human health, see J.A. Patz et al. “Impact of Regional Climate Change on Human Health”, Nature 438, no. 7066 (17 November 2005): 310–17. A.K. Githeko and A. Woodward, “International Consensus on the Science of

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Climate and Health: The IPCC Third Assessment Report”, in Climate Change and Human Health: Risks and Responses, edited by A.J. McMichael et al. (Geneva: World Health Organization, 2003), p. 49. On the health risk from climate change in the Oceania region, see A. McMichael et al., Human Health and Climate Change in Oceania: A Risk Assessment (Canberra: Commonwealth of Australia, 2002). Michael T. Osterholm, “Preparing for the Next Pandemic”, Foreign Affairs 84, no. 4 (July–August 2005): 24–37, . James J. McCarthy et al., eds., Climate Change 2001: Impacts, Adaptation, and Vulnerability, Contribution of Working Group II to the Third Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge and New York: Cambridge University Press for IPCC, 2001), Section 9.7, . See also Intergovernmental Panel on Climate Change, Climate Change 2007: Impacts, Adaptation and Vulnerablility, Contribution of Working Group II to the Fourth Assessment Report of the IPCC (Cambridge: Cambridge University Press, 2007), section 8.2.8, pp. 403–05, available at . Insurance Australia Group, Sustainability Report 2005, . Purvis and Busby, The Security Implications of Climate Change, p. 2. Kerry Emanuel, “Increasing Destructiveness of Tropical Cyclones over the Past 30 Years”, Nature 436, no. 7051 (4 August 2005): 686–88; C.D. Hoyos et al., “Deconvolution of the Factors Contributing to the Increase in Global Hurricane Intensity”, Science 312, no. 5770 (7 April 2006): 94–97; and P.J. Webster et al., “Changes in Tropical Cyclone Number, Duration, and Intensity in a Warming Environment”, Science 309, no. 5742 (16 September 2005): 1844–46. “Katrina May Wreak Havoc on World Economy”, The Australian, 1 September 2005, pp. 4 and 9. Dupont, East Asia Imperilled, p. 50, and “China Battles Weather”, The Australian, 4 February 2008, . Santiago Olmos, “Vulnerability and Adaptation to Climate Change: Concepts, Issues, Assessment Methods”, Foundation Paper (Winnipeg: Climate Change Knowledge Network, July 2001), pp. 8–9. The major circulation of the deep global oceans is caused by the formation of dense water at high latitudes that sinks and ventilates the deep and middle ocean depths, before moving towards the equator and then upwelling in the tropical regions some hundreds of years later. The formation and sinking of this denser water occurs primarily in the North Atlantic and around the Antarctic coast. This process is an important part of the climate system and is called the thermohaline circulation (from the Greek words for heat “thermos” and salt “halos”).

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Sometimes referred to as illegal or undocumented migration, and less accurately, as the problem of refugees, unregulated population movements may be defined as the forced or unsanctioned (by governments) movement of people across borders and within states for economic reasons, or as a consequence of war, persecution, or environmental factors. 42 Norman Myers, “Global Population Growth”, Paper presented at the Seminar on Global Security Beyond 2000, University of Pittsburgh, 2 November 1995, pp. 17–18, and Norman Myers, “Environmental Refugees: A Growing Phenomenon of the 21st Century”, Philosophical Transactions of the Royal Society B 357, no. 1420 (29 April 2002): 609–13. 43 This assessment draws substantially on the findings of Robert McLeman and Barry Smit, “Climate Change, Migration and Security”, Commentary No. 86 (Ottawa: Canadian Security Intelligence Service, 2 March 2004), . 44 U.S. National Research Council, “Abrupt Climate Change: Inevitable Surprises (Summary)” (Washington, DC: National Academy Press, 2002), p. 564. 45 According to a report by the UN Environment Programme. See Lenore Taylor, “Brown Haze Threatens Asian Growth”, Australian Financial Review, 12 August 2002, p. 11, and Bruce Montgomery, “Killer Cloud over Asia”, The Australian, 16 August 2002, p. 11. This reduction in the amount of sunlight reaching the earth’s surface is sometimes referred to as “global dimming”; see B.G. Liepert, “Observed Reductions of Surface Solar Radiation at Sites in the United States and Worldwide from 1961 to 1990”, Geophysical Research Letters 29, no. 10 (2002): 1421. There are indications that global dimming has reversed, but to what extent this may further enhance the rate of warming is uncertain. M. Wild et al., “From Dimming to Brightening: Decadal Changes in Solar Radiation at Earth’s Surface”, Science 308, no. 5723 (6 May 2005): 847–50. 46 Some research shows that the brown cloud may also be heating up the surrounding atmosphere by as much as 50 per cent and contributing to glacial melt. “Glaciers Being Lost to Asian Pollution”, The Australian, 2 August 2007, . 47 Schwartz and Randall cite Steven A. LeBlanc’s book Carrying Capacity, but, in fact, no book of this name exists. The reference is an inaccurate summation of arguments made by LeBlanc in a book that he co-authored with Katherine Register — Steven A. LeBlanc and Katherine E. Register, Constant Battles: The Myth of the Peaceful, Noble Savage (New York: St. Martin’s Press, 2003). 48 Schwartz and Randall, “An Abrupt Climate Change Scenario”. 49 LeBlanc and Register, Constant Battles, p. 197. 50 For a more detailed exposition of the reasons Japan is unlikely to develop nuclear weapons see Alan Dupont, “Unsheathing the Samurai Sword: Japan’s Changing Security Policy”, Lowy Institute Paper 3 (Sydney: Lowy Institute for International Policy, 2004), pp. 34–36. 51 M.E. Schlesinger et al., “Assessing the Risk of a Collapse of the Atlantic Thermohaline Circulation”, in Department of Environment, Food and Rural 41

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Affairs, Avoiding Dangerous Climate Change (Exeter: UK Meteorological Office, 2006), Chapter 5, . See also Intergovernmental Panel on Climate Change, Climate Change 2007: The Physical Science Basis, p. 16. It should be noted that the Fourth Assessment Report believes that it is “very unlikely” that the Atlantic THC will undergo a large, abrupt transition during this century and that temperatures in the Atlantic region are likely to increase, not decrease, because of the much larger warming associated with projected increases in greenhouse gases. See C. Peng et al., “Simulating Carbon Dynamics along the Boreal Forest Transect Case Study (BFTCS) in Central Canada, 1, Model Testing”, Global Biogeochemical Cycles 12, no. 2 (1998): 381–92. Intergovernmental Panel on Climate Change, Climate Change 2007: The Physical Science Basis, p. 342. See, for example, C. Cabanes, A. Cazenave and C. Le Provost, “Sea Level Rise During Past 40 Years Determined from Satellite and In Situ Observations”, Science 294, no. 5543 (26 October 2001): 840; J.A. Church, “How Fast are Sea Levels Rising?”, Science 294, no. 5543 (26 October 2001): 802; S.J. Holgate and P.L. Woodworth, “Evidence for Enhanced Coastal Sea Level Rise during the 1990s”, Geophysical Research Letters 31, no. 7 (2004): L07305; and N.J. White, J.A. Church, and J.M. Gregory, “Coastal and Global Averaged Sea Level Rise for 1950 to 2000”, Geophysical Research Letters 32, no. 1 (2005): L01601. Eric Rignot et al., “Recent Antarctic Ice Mass Loss from Radar Interferometry and Regional Climate Modelling”, online letters, Nature Geoscience 1 (18 January 2008): 106–10. Intergovernmental Panel on Climate Change, Climate Change 2007: Impacts, Adaptation and Vulnerablity, Summary for Policymakers, section 6.4.2, pp. 330– 36; Jon Barnett and W. Neil Adger, “Climate Dangers and Atoll Countries”, Climatic Change 61, no. 3 (December 2003): 326. For an elaboration of these arguments, see Dupont, East Asia Imperilled, esp. pp. 2–12. Diamond, Collapse, p. 13. Peter J. Mayhew, Gareth B. Jenkins, and Timothy G. Benton, “A Long-term Association between Global Temperature and Biodiversity, Origination and Extinction in the Fossil Record”, Proceedings of The Royal Society B275, no. 1630 (January 2008): 47–53. See also A. Hallam and P.B. Wignall, Mass Extinctions and Their Aftermath (Oxford: Oxford University Press, 1997), p. 4.

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9 Climate Change An ASEAN Perspective Michael Richardson

Introduction Indonesia hosted the United Nations meeting in Bali in December 2007, which launched the current round of international climate change negotiations. The aim is to reach an agreement by the end of 2009 on new arrangements to curb global warming. These are supposed to start in 2012 when the existing control mechanism, the Kyoto Protocol, expires. Adopted in Kyoto, Japan, in 1997, the protocol is an agreement linked to the 1992 U.N. Framework Convention on Climate Change (UNFCCC). More than 180 states have ratified the Kyoto Protocol, which entered into force in 2005. But as the Bali meeting showed, the negotiations on a successor agreement are contentious. Among the many fissures are arguments over which countries are most responsible for accumulated greenhouse gas (GHG) emissions; which have the highest per capita emissions; and which have the fastest growing emissions. This debate sets the scene for one of the most crucial decisions on climate change: how will responsibilities and costs for limiting GHGs be apportioned? The way this is done will affect growth, employment, living standards, and the quality of life in many economies. It will also reshape global competitive advantage as energy-intensive industries and sectors in some countries are hit harder than others elsewhere by GHG emission controls.

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Kyoto and Southeast Asia Under the Kyoto Protocol, only thirty-seven industrialized countries and the European Union (called Annex 1 Parties under the UNFCCC) were obliged to reduce GHGs and set binding national targets for doing so. They undertook to cut emissions by an average of at least five per cent below 1990 levels over the five-year period from 2008–12.1 Developing countries (termed Non-Annex 1 Parties), which form a big majority of U.N. member states, did not have to make commitments to limit GHGs. Among them were the ten countries comprising the Association of Southeast Asian Nations (ASEAN) — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. They are free riders on the protocol. Since the advanced economies were responsible for most of the build-up in man-made global warming emissions in the more than 200 years since 1800 and the industrial revolutions in Europe and North America, the UNFCCC and its protocol applied the principle of “common but differentiated responsibilities” to the parties, allowing Non-Annex 1 developing countries to shoulder a much lighter load than Annex 1 advanced economies. In addition, the advanced economies have to report changes in their GHG emission levels to the UNFCCC each year. As a result, many of these countries have put in place procedures and agencies to measure GHGs in various sectors of their economies. Many have also put a price on carbon and either introduced emission trading schemes or plan to do so. The declared intention is to reduce GHG emissions, although a number of Annex 1 countries have failed to do so. Non-Annex 1 developing countries, including ASEAN members, are subject to much less stringent reporting of their GHG inventories and most have simply given an accounting of their emissions in the five years to 1994, using 1990 as a base year. This contributes to the problem of uneven or incomplete reporting of global GHG emissions. The Kyoto Protocol also excluded several significant sources of emissions altogether — those from tropical deforestation, and from aircraft and ships. Limiting or reducing GHG emissions from burning aviation fuel and marine bunker fuel was left to the two responsible UN agencies, the International Civil Aviation Organisation and the International Maritime Organisation, respectively.

Greenhouse Gas Build-up Six GHGs are covered by the UNFCCC and its protocol. Two of them, carbon dioxide (CO2) and methane (CH4) accounted for 91 per cent of global emissions in 2004. CO2 alone accounted for 76.7 per cent.

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Notes: (a) Global annual emissions of anthropogenic GHGs from 1970 to 2004.5 (b) Share of different anthropogenic GHGs in total emissions in 2004 in term of carbon dioxide equivalents (CO2,-eq), (c) Share of different sectors in total anthropogenic GHG emissions in 2004 in terms of CO2-eq. (Forestry includes deforestation.) Source: Climate Change 2007: Synthesis Report. Contribution of Working Groups I, II and III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Figure SPM.3, IPCC, Geneva, Switzerland.

Figures 9.1a, b, and c Global Anthropogenic GHG Emissions Climate Change: An ASEAN Perspective 155

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Between 1970 and 2004, emissions of these six global warming gases rose by 70 per cent (24 per cent since 1990). The volume of CO2 from human activity released into the atmosphere grew by about 80 per cent in this period (28 per cent since 1990). This has happened because increases in population and per capita income have outweighed decreases in energy intensity of production and consumption. Without additional limits, global GHG emissions are projected to rise as much as 90 per cent by 2030 compared with the level in 2000.2 Since 1751 roughly 315 billion tons of carbon have been released from burning fossil fuels and cement production, greatly increasing the stock of heat-trapping carbon dioxide in the atmosphere. Half of these emissions have occurred since the mid-1970s. The 2004 global estimate of carbon dioxide released from fossil fuels was just over twenty-nine billion tons. This is the equivalent of nearly eight billion tons of carbon. It was an all-time high and a 5.4 per cent increase from 2003.3 Carbon dioxide releases come mainly from burning fossil fuels — chiefly coal, oil, and natural gas — but also from cement manufacture and deforestation. Carbon dioxide comprised 76.7 per cent of reported worldwide GHG emissions in 2004. Fossil fuels are currently estimated to account for 74 per cent of all carbon dioxide emissions and for approximately 57 per cent of all man-made, or anthropogenic, GHGs entering the atmosphere. Burning coal typically releases 1.8 times as much carbon dioxide per unit of energy as natural gas does, and 1.3 times as much as oil. Methane (the chief component of natural gas) made up 14.3 per cent of GHG emissions. This gas is generated from a number of sources, including farming, energy production, and landfill waste. Emissions from energy-related activities — primarily coal mines, oil, and natural gas systems, and landfills — accounted for about 36 per cent of global methane releases related to human activity in 2005. Rice farming added another 10.5 per cent; other forms of agriculture and manure contributed 10.8 per cent; while cattle, sheep, and other ruminant animals, through enteric fermentation, emitted 30.1 per cent. When released without being burned, methane traps around twenty times more heat in the earth’s atmosphere than carbon dioxide, the main global warming gas. The Intergovernmental Panel on Climate Change (IPCC) says that carbon dioxide added to the atmosphere by human activity can remain there for up to several hundred years or longer. The atmospheric lifetime of methane is usually much shorter than this. However, when burned, methane releases up to 25 per cent less carbon dioxide than combustion of the same amount of coal. It also emits no nitrogen

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or sulphur oxides, which poison the air and human health when coal is burned without effective filters.

Warnings from Scientists Meanwhile, scientists advising the United Nations through the IPCC have issued a series of reports in the past few years that have underlined the seriousness of climate change and its impact. In November 2007, the IPCC released its fourth and latest assessment report. It said that warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global average sea level. The IPCC said that eleven of the last twelve years (1995–2006) rank among the dozen warmest years in the instrumental record of global surface temperature since 1850. It also noted that the temperature increase is widespread over the globe and greater at higher northern latitudes while land regions have warmed faster than the oceans. The IPCC concluded that most of the observed rise in global average temperatures since the mid-twentieth century is very likely due to the observed increase in athropogenic, meaning human-made, GHG concentrations. It also warned that continued GHG emissions at or above current rates would cause further warming and induce many changes in the global climate system during the twenty-first century that would very likely be larger than those observed during the twentieth century.4

Consequences for Asia In a table setting out examples of some projected regional impacts of climate change, the IPCC listed the following consequences for Asia (also see Table 9.1): • By the 2050s, freshwater availability in Central, South, Northeast, and Southeast Asia, particularly in large river basins, is projected to decrease. • Coastal areas, especially heavily populated mega-delta regions in South, Northeast, and Southeast Asia, will be at greatest risk due to increased flooding from the sea and, in some mega-deltas, flooding from the rivers. • Climate change is projected to compound the pressures on natural resources and the environment associated with rapid urbanization, industrialization, and economic development.

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Gllobal ave-age annuall ielfllJerawre change relraflve to 0

1

2

19'80~1999

3

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Table 9.1 Examples of Impacts Associated with Global Average Temperature Change (Impacts will vary by extent of adaptation, rate of temperature change, and socio-economic pathway) (0 C) 5"C

4

Increased w