4 June 2014 | Vol. 5, № 19.

From the Editor’s Desk

Dear FDI supporters,

Welcome to the Strategic Weekly Analysis.

We open this week’s coverage with an

evaluation by FDI Senior Visiting Fellow

Associate Professor Claude Rakisits of the

implications of the fracturing of the

Pakistani Taliban.

Next, we examine the issue of the proposed

Oman-India undersea gas pipeline and the

reasons why the project has been

resurrected.

Moving west, we analyse Russia’s bid to

construct eight nuclear reactors in Iran. This

has caused deep concern in both Saudi

Arabia and Israel, but for different reasons.

We then turn our attention to the evolving

nature of arms purchases in South Asia, as

both India and Pakistan look to diversify

their suppliers.

Our next stop is the world’s newest nation,

South Sudan. We evaluate the effect of its

on-going civil war on agricultural production

and the attendant risk of famine.

Next, we turn to the Seychelles and its

agreement with the European Union,

allowing it to fish in the waters off Mayotte,

in the Mozambique Channel. We examine

the implications of this agreement for its

tuna-fishing industry.

We look next to Indonesia, and explore the

continuing incidence of piracy in Indonesian

waters, even as attacks have fallen globally.

We conclude this edition in India, where we

investigate the likelihood of foreign trade

and economic relations becoming the basic

focus of the new Modi Government. We

also consider their influence on India’s likely

relations with its immediate neighbours.

I trust you will enjoy this edition of the

Strategic Weekly Analysis.

Major General John Hartley AO (Retd) Institute Director and CEO Future Directions International

*****

Page 2 of 17

The War on the Pakistani Taliban: Some Good News of Sorts

The Pakistani Taliban (TTP) is fracturing and the military appears to have decided to turn

on some of its former militant allies. On the whole, this is good news in the government’s

attempts – by force or negotiations – to end the terrorist scourge weakening the Pakistani

state.

Background

Two important developments took place last week among the Taliban militants holed up in

the tribal areas of Pakistan along the border with Afghanistan. First, a North Waziristan-

based militant group led by Hafiz Gul Bahadur publicly revoked a peace accord with

Islamabad following an air strike against some of its positions. Second, the most important

faction of the TTP led by Khalid Mehsud, also known as Khan Said, alias Sajna, officially broke

away from the TTP, claiming that elements of the TTP had become too violent and

undisciplined.

Comment

For the last three months, the government of Prime Minister Nawaz Sharif has been

engaged intermittently in negotiations with the TTP. Negotiating with the Taliban had been a

central plank of Sharif’s election campaign last year, but the negotiations have not delivered

anything and are effectively over.

At the same time as these talks were taking place, the militants launched terrorist attacks

against military targets. Having lost some 5,000 soldiers in the war against the TTP and their

fellow ideological travellers in the last decade, the military was never keen on the

government’s policy of talking to the TTP. Accordingly, using fighter jets, helicopter gunships

and heavy artillery, the military decided to retaliate hard against TTP targets in the tribal

areas. While these military operations are on a scale not seen for a long time, this is not the

long-awaited military operation into North Waziristan to dislodge the TTP and the Haqqani

network, an Afghan Taliban faction. Nevertheless, these retaliatory operations have been

very effective in eliminating large numbers of fighters, including a number of field

commanders.

What these operations almost certainly confirm is that the military has decided to no longer

differentiate between the “good” and “bad” Taliban. On the one hand, the “good” Taliban

are those militants who do not attack the Pakistani state and who focus on fighting the

Coalition forces in Afghanistan. On the other hand, the “bad” Taliban are those who attack

civilian and military targets in Pakistan and demand the implementation of Sharia law

throughout the land. If it is indeed the case that the military has finally decided to scrap its

flawed policy of differentiating between terrorists, then we have a game changer. Of course,

there will be blowback.

Already last week, the North Waziristan-based Gul Bahadur militant group publicly ripped up

its 2007 peace accord with the government. But, more importantly, Gul Bahadur has

reportedly asked its fighters to stop operations in Afghanistan and to return home to defend

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the home front, i.e. North Waziristan. An increase in terrorist attacks in Pakistan is a distinct

possibility.

Turning to the second big development, the break-away of the critical Khalid Mehsud faction

from the TTP, it is unclear what this will mean for the government’s attempts to end

terrorism in Pakistan. On the one hand, the fracturing of the TTP means that the terrorists

as a fighting force are weakening and the military could take advantage of this diminished

capability by launching more military operations. On the other hand, the new break-away

faction might be able to bring in new recruits more easily now that it is has broken with the

unpopular leader of the TTP, Maulana Fazullah. Reportedly, Khalid Mehsud has the support

of most of the experienced fighters, as well as the Punjabi Taliban.

It is important to note that the selection of Fazullah as the new leader of the TTP upon the

death of his predecessor, Hakimullah Mehsud, following a drone strike in November 2013

was a controversial one. While Fazlullah was the local TTP leader in Swat in 2009 when he

stood up against the military and earned respect for that, not being a Mehsud also means he

has no following in North Waziristan. Moreover, he resides most of the time in Afghanistan,

away from the main recruitment base for the TTP. Khalid Mehsud, who had been temporary

leader following the death of Hakimullah Mehsud, had expected to be chosen as the new

TTP leader.

Although we know that Fazullah has not been supportive of the talks with the government,

it is unclear what Khalid Mehsud’s position is on negotiating with Islamabad and whether he

will want to cut a separate deal with the government. Given, however, that all past peace

agreements with militants have been broken by them, it is unlikely that the military would

agree to such an accord with Khalid Mehsud, especially if there has been a change in

approach vis-à-vis the terrorists. Certainly, Kabul and the Obama Administration would not

be keen to see Islamabad sign a peace accord with Khalid Mehsud as that would free up

potential fighters to assist the Afghan Taliban fight the departing Coalition forces from

Afghanistan.

So, while the military is finally taking a tougher line against the TTP and other terrorist

groups, the government does not have a clear strategy on how to deal with the on-going

threat of terrorism. Moreover, civil-military relations are probably at their lowest in many

years, and this is very bad news when the country is faced with an existential threat which

will simply not go away.

Honorary Associate Professor Claude Rakisits FDI Senior Visiting Fellow

About the Author: Dr Rakisits is Honorary Associate Professor in Strategic Studies at Deakin

University. He is also Senior Fellow at Georgetown University’s Centre for Australian, New

Zealand and Pacific Studies and Director at Politact, an advisory consultancy firm, both in

Washington DC. His principal research interests are Pakistan and Afghanistan. He has almost

30 years of professional experience and knowledge in defence and strategic issues,

intelligence and international affairs. A/Prof Rakisits has taught at universities in Australia,

Page 4 of 17

Canada, the United States and Switzerland. He writes and comments regularly for Australian

and international media. He visits Pakistan on a regular basis.

*****

Oman: India’s Answer to an Energy Supply Crisis?

India’s recent interest in establishing an underwater energy pipeline with Oman comes out

of the blue, considering that the initiative failed some 21 years ago. There are, however,

new motives behind the renewed interest.

Background

The history of the Oman-India underwater pipeline project dates back to 1985, when the

two states signed an agreement to increase the development of energy-related enterprises

between them. The proposal to construct the Oman-India pipeline came about in 1993,

during a state visit to Muscat by the late Prime Minister, P. V. Narasimha Rao. The proposal

was for a pipeline to connect Sur in Oman to the state of Gujarat, via the Indian Ocean.

Subsequently, the Indian Navy was awarded a US$5 million contract by Oman, to commence

hydrographic surveys of the Omani coast. The idea was buried, however, after extensive

discussions between the two sides and the prospect of the project going ahead faded – until

a few weeks ago.

Comment

February 2013 saw India’s Ministry for External affairs uncover the long-forgotten

infrastructure project to transport natural gas to India from Iran, Oman and, perhaps, Qatar.

Currently, India is already in a long-term gas supply agreement with Qatar and is seeking to

finalise similar deals with Iran and Oman.

The Omani Minister for Foreign Affairs, Yusuf bin Abdullah, met India’s External Affairs

Minister, Salman Khurshid, in New Delhi in February 2014. According to newspaper reports,

the discussions included the idea of an Oman-India deep sea pipeline. India’s Ministry of

External Affairs has made no official announcement to date, but neither has there been any

denial. Though the details remain unclear, the project is obviously highly important for

India’s energy security strategy.

Given India’s quest to be a leading super-power in the twenty-first century, it will require

copious amounts of energy to fuel those aspirations. Of the available energy options, India

requires large quantities of natural gas, this being one of the cleaner ones, to fuel its

petrochemical and fertiliser industries and for its power-generation plants. The International

Energy Association estimates that India will require 190 billion cubic metres of natural gas

annually by 2035. India has, therefore, explored opportunities to widen its fuel mix and

Page 5 of 17

diversify its supply chain. From this perspective, its pursuit of a gas pipeline with Oman gains

added relevance.

There are, however, other factors that might have kindled the renewed interest in the

project. The first is probably the reduction of international economic sanctions against Iran;

this is expected to allow that country to freely market its oil and gas resources. According to

March 2013 estimates by the US Energy Information Administration (EIA), Iran has the

second largest gas reserves in the world at 1,187 trillion cubic feet, trailing only Russia. The

majority of those reserves, however, are undeveloped. Once the sanctions are lifted, Iran is

expected to once again become an important presence in the global oil and gas market.

Even though Japan, China, India and South Korea were exempted from the trade sanctions

against Iran, that country’s markets could soon expand exponentially, making India face

additional competition in acquiring Iranian energy.

Second, the large gas reserves in Oman could be another factor. While liquefied natural gas

has played a major part in Oman’s growing gas exports so far, the number of developed gas

fields pales in the face of the under-developed ones. Large investments will be needed to

develop these fields, which will only be economically possible after Oman has found

committed demand for it. Given India’s strategic need to secure fuel supplies, there could be

mutual interest between the two countries to develop and secure this resource.

Finally, there are geopolitical considerations related to the three transnational pipelines

India once considered joining. Two of them – the Iran-Pakistan-India pipeline and the

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Myanmar-Bangladesh-India pipeline – have been, to all intents and purposes, terminated.

The deal with Oman could be India’s attempt to secure an energy supply that is immune to

transportation costs, bypasses intermediary states and is virtually secure from acts of

sabotage.

If India does succeed in bringing this project to a successful conclusion, it could mark the

beginning of a renewed attempt to get its economy back on track.

Adil Cader Research Assistant Indian Ocean Research Programme

*****

Iran and Russia Increase Nuclear Co-operation despite

Regional Protests

Russia has committed itself to assisting Iran in building eight nuclear reactors. The deal

has sparked concern, particularly in Saudi Arabia and Israel, over growing Iranian power in

the region.

Background

Iran continues to develop its nuclear programme, angering both Saudi Arabia and Israel,

which believe that it is intended for military application. The programme has increased

Russian influence in the region, as it provides special assistance in constructing eight nuclear

reactors. The continuation of Iran’s nuclear programme also appears to be leading to a

makeshift alliance between the two countries, already bolstered by prior economic

agreements. The decision of the US to remove some of the sanctions it placed on Iran has

also had an impact on the situation; Israel and Saudi Arabia believe this will further

encourage nuclear proliferation.

Comment

A nuclear-powered Iran is one of Israel’s greatest regional security concerns. Saudi Arabia is

also concerned, as the situation directly threatens its own goal of regional hegemony. Thus,

when the US started to water down its sanctions and tone down the rhetoric towards Iran,

the two countries became concerned about a more prosperous Iran with the capability of

becoming a nuclear power. Israel is particularly vocal about possible Iranian nuclear

armaments; most likely due to the extreme language of former Iranian President

Ahmadinejad, when he threatened to annihilate Israel. The Israelis fear that a nuclear-armed

Iran would be a precursor to aggression and possible war in the Middle East.

Page 7 of 17

On the other hand, Iran appears to have assuaged Western apprehensions through the

nuclear talks, especially most recently in Vienna. This has gone some way towards satisfying

the US demand for regional peace, as it seeks to shift its primary focus to Asia.

Israel’s response is essentially to take matters into its own hands, increasing communication

with the United Arab Emirates in a joint effort to counter Iran. A nuclear-armed Iran is

certainly not in Israeli interests.

Saudi Arabia is also opposed to a nuclear-armed Iran, but for a different reason. A profitable

and unsanctioned Iran threatens the Kingdom’s position as the world’s key oil supplier, as

well as being the regional power in the Middle East. It is particularly troubling for Saudi

Arabia that Russia appears to be working with Iran, in assisting its nuclear programme.

Saudi Arabia has little influence over Iran, however, particularly since the US seems to have

decided that under its new leadership Iran is far more approachable. In addition, its

relationship with Russia potentially offers Iran protection from a greater power, even if only

to protect its own potential income. Even without the implications of the US-Iran

rapprochement, Saudi Arabia is not able to assert itself as a regional hegemon, especially

with the rising power of Turkey.

Russia certainly appears to want to supplant the US as the dominant external force in the

region, assisting Iran in the face of international pressure designed to stop its nuclear

programme. The growing Russian influence, coupled with the decreased tension between

Tehran and Washington, could lead to Iran becoming the regional hegemon, especially given

its geographical location.

Russia’s support of Iran may, perhaps, be seen in strategic terms. The central location of Iran

and its still unsettled relationship with the US could give Russia a Middle-Eastern presence

and a strong ally in the region. This would counter US and Saudi Arabian strategic goals.

Russia is also assisting India in the construction of its own nuclear reactors. Thus, it appears

that Russia is attempting to expand its influence in this area of the Indian Ocean region,

capitalising on a waning US interest; such a development would also counter what appears

to be a growing economic relationship between Iran and China.

Ultimately, the situation could herald a shift in regional hegemony. With Russian assistance,

Iran is gaining traction while making moves towards the normalisation of ties with the US, as

well as weakening Saudi oil exports. Iran must be encouraged to extend its new-found

co-operation with the West.

Bryn Lacey Research Assistant Indian Ocean Research Programme

*****

Page 8 of 17

South Asian Arms Negotiations Indicate Evolving Security

Relationships

Recent public announcements regarding South Asian arms purchases, where the

negotiating state suppliers are always not the usual vendors, underline the strategic

security shifts that are accompanying wider Asia’s rapid geopolitical developments.

Background

On 2 June, Sergei Chemezov, the head of Russia’s state-owned military supplier, Rostec,

announced that Moscow had lifted its Soviet-era arms embargo on Pakistan and that the

two countries were negotiating the terms of Pakistan’s purchase of Russian attack

helicopters. Soon after, on 3 June, the Times of India reported that long-standing fighter jet

negotiations between India’s Defence Ministry and France’s Dassault, potentially worth

US$20 billion, could be ‘wrapped up in the next three months.’ These emerging arms deals

highlight the strategic security and military shifts that accompany the wider region’s

changing geopolitical landscape.

Comment

A Soviet embargo on weapons and military technology sales to Pakistan has been in place

since Pakistan backed the mujahedeen in opposing the 1979-89 Soviet occupation of

Afghanistan. With the lifting of the embargo and negotiations underway for the Pakistani

purchase of Russian Mi-35 attack helicopters, a new era in Russian-Pakistan military

cooperation appears to be brewing.

India, Pakistan’s arch-rival, remains the largest arms importer in the world. The South Asian

power is diversifying its imports, moving away from its reliance on Russia, its primary arms

provider for decades, to United States, Israeli and European suppliers. The negotiations with

Dassault for 126 Rafale fighters are a case in point. From a strategic perspective, India does

not wish to be constrained to the one supplier. It has, moreover, been forced to look

elsewhere for its military hardware because of extended supply delays, escalating prices and

sub-standard quality issues. Its purchase of the Russian Admiral Gorshkov aircraft carrier

from Russia highlights these very issues.

The perceived need in South Asia for force projection, force deterrence and defence

capability is a product of the region’s insecurity and instability. India and Pakistan’s Kashmir

dispute, their on-going rivalry and their strategic divergences over Afghanistan underscore

South Asia’s complex web of military rivalries, internal insecurities, strategic hedging,

extremist fostering and tacit nuclear posturing. Moreover, Pakistan’s use of attack

helicopters to fight the Waziristan-based extremists who plague the country, and India’s

concern at the extremist threat spreading to its borders, will ensure each country’s military

demands remains high.

Military expansion is also an outcome of China’s growing aggression in the East and South

China Seas. India has territorial disputes with China, which feeds into India’s uncertainty. As

Page 9 of 17

a result, it has diversified its military procurement to encompass arms deals with the United

States and Europe.

As US and NATO/ISAF forces prepare to depart Afghanistan at the end of this year, the post-

2014 security of Afghanistan is uncertain. While their security influence in Afghanistan will

linger, pending a Bilateral Security Agreement (BSA), regional leaders perceive the future of

Afghanistan’s security hinges significantly on developments in Pakistan. The support that the

Taliban fighters receive from institutional elements in Pakistan contributes to their

continued strength and insurgency.

For its part, Russia is probably developing new markets to compensate for its loss of market

share in India. For strategic reasons, presumably to give India pause for thought, it is

engaging in a military sales partnership with Pakistan. Furthermore, as Russia isolates itself

from the wider international community following its engagements in Ukraine, it will likely

pursue broadened relationships with Pakistan and China, which could lead to enhanced sales

of arms and military technology to those countries.

It is difficult to dissociate the timing of Russian openness to new military deals with Pakistan

with the moves from India towards military purchases from sources other than its traditional

Russian suppliers. Developments in the seas off East and South-East Asia, with their

attendant security challenges, also provide Russia with the opportunity to develop markets

in those regions. The sheer force of economics will lead Russia to find markets for its military

products to compensate for its loss of market share in India.

Despite these events, however, it is unlikely that Russia will cease to be India’s primary

supplier of arms and military technology any time soon. India’s existing store of Russian

weaponry precludes that event and its on-going competition with China will further

underscore the need to keep Russia on-side. Arms purchases will help it to achieve that goal.

The secret agreement signed between Russia and India whereby India would pay Russia to

supply arms and armaments to the Afghan National Security Forces to sustain them after US

and NATO forces cease combat operations there this year, moreover, demonstrates that

Russia and India still have a sound relationship. It would appear then that India will still turn

to Russia to obtain its basic armaments but increasingly purchase specifically-required

equipment from other vendor countries.

Hugo Seymour Research Assistant Indian Ocean Research Programme

*****

Page 10 of 17

South Sudan Faces Famine as Civil War Continues

South Sudan is at a high risk of famine, warns the UN, following the displacement of more

than 1.3 million people and the disruption of the planting season, as civil war continues to

affect the country.

Background

The world’s newest country, South Sudan is facing a famine greater than that seen in

Ethiopia in the 1980s. Civil war has been disrupting the country since December 2013 and

has exacerbated existing food insecurity. Crops have not been planted in time for the

coming season, herders have had to abandon their animals or lead them to poor grazing

areas and fishermen have been barred from rivers and waterways. While more international

aid is needed to alleviate the risk of famine, a cessation of the conflict is the only way that

food insecurity can be addressed in the long-term.

Comment

The UN has warned that some 7.3 million people are at risk of hunger in South Sudan. While

the country produced 900,000 tons of food in 2013, food production is expected to be

reduced by a third this year. At least four million people already face alarming food

insecurity. Other estimates show that 223,000 children face severe malnutrition. While

famine has not yet been declared, it is a critical risk for early 2015.

Earlier this month, UN officials outlined the need for US$1.8 billion in aid, an increase of

US$500 million from their previous plea, with US$77 million required for a programme run

by the Food and Agricultural Organization (FAO). The FAO’s programme responds to the

urgent needs triggered by the current crisis. It is also designed to continue vital livelihood

protection and support programmes in less-affected states, ensuring that their agricultural

production continues. The international community is committed to meeting the urgent

humanitarian needs in South Sudan, with the four biggest donors pledging over US$600

million.

Up to 95 per cent of South Sudan’s population depends on farming, fishing or herding to

meet food and income needs. As a result, improving the agricultural sector’s productivity is

essential for long-term development and food security. Increasing the availability of quality

seeds and planting material and improving access to them, will be critical to recovering the

levels of crop and vegetable production. FAO Programmes intend to address the above and

develop agricultural infrastructure to reduce food insecurity impacts in South Sudan.

With an end to the conflict unlikely in the short to medium term, addressing the threat of

famine is a continuing challenge. The civil war is exacerbating the precarious nature of food

security in the country. Attacks on humanitarian personnel and convoys are diminishing the

effectiveness of international assistance. Although the warring parties signed a peace

agreement on 9 May, heavy fighting resumed immediately in the states of Unity, Upper Nile

and Jonglei. Only a rapid termination of the conflict will improve the effectiveness of

international support and create an environment conducive to building improved food

security.

Page 11 of 17

Cécile Levacher Research Assistant Global Food and Water Crises Research Programme

*****

EU Fisheries Agreement Benefits Mayotte and Seychelles

The EU has strengthened the Seychellois fishing industry, granting it access to fish stocks in

Mayotte waters and further developing conservation policies in the region.

Background

The Seychellois fisheries have developed into an integral supply source for states around the

world. Specialising in tuna fishing, it utilises its key strategic position to net migratory tuna

off its coast towards Mayotte. The inclusion of Mayotte in the EU has now had a flow-on

effect for the fisheries based in the Seychelles.

The EU hopes to enhance the industry, while simultaneously developing strong policies to

protect the resource. The landmark agreement, made in late 2013 and formalised in May

2014, allows the Seychelles to operate eight tuna purse seine vessels in the region, subject

to the payment of fees to the Union. This marks it as the first state outside the EU to be

granted permission to fish

in its waters.1

Comment

Mayotte, an island in the

Comoros Archipelago off

the East African coast, has

now become one of the

outer-most regions of the

EU. As an overseas

départment of France, it is

as much a part of France as

Hawaii is of the United

States. While the new

relationship with the EU

1 Uranie, S., ‘European Union allows Seychelles flagged ships to fish in Mayotte waters’, Seychelles

News Agency, 27 May 2014. <www.seychellesnewsagency.com/articles/597/European+Union+allows+Seychelles+flagged+ships+tt+fish+in+Mayotte+waters>.

Page 12 of 17

will reap benefits for the locals of Mayotte, it placed the Seychelles in an interesting

position. Without permission, Seychellois vessels could not legally fish the waters off

Mayotte after 1 January 2014.

The signing of this agreement grants fishing permission to the Seychelles, has and it also

highlights key prerequisites that the EU insists must be followed and further developed. The

fees paid by Seychellois vessels entering Mayotte waters will enable Mayotte to develop its

administrative and control systems, as well as improve governance and undertake capacity

building in the industry.2

Victoria, the Seychellois capital, is one of the five busiest tuna fishing ports in the world, with

the fishing industry as a whole contributing US$370 million ($392 million) to the national

economy. The licence to fish in Mayotte waters does, however, come with environmental

responsibilities. The newly-signed EU agreement falls under the conservation and

management measures established by the Indian Ocean Tuna Commission (IOTC), the body

responsible for the management of the tuna stocks in the Indian Ocean. This means that the

Seychelles will have to follow established protocols in fishing for tuna in these waters. The

Seychelles has welcomed this development, however, as it has previously actively worked

towards establishing efficient and sustainable fishing strategies, while extending its efforts

against illegal fishing off its coast.

This development is a positive step, as it also ensures the future operations of the

Seychellois fleet in the region. As part of the agreement, the Seychelles promises to fulfil its

obligations, enforcing the actions presented by the IOTC. The EU also has a vested interest in

the promotion of the tuna market within the Seychelles. Victoria is a major source of canned

tuna for the EU. In 2012, for example, it shipped nearly five million cans of tuna to Europe, a

929 per cent increase on exports in the 1990s.

The new contract is for six years, building on the existing partnership giving the EU access to

fish in Seychellois waters.3 Effectively, EU-Seychelles relations have taken a small but

significant step forward.

Kyle Sargon Research Assistant Indian Ocean Research Programme

*****

2 ‘EU and Seychelles sign fisheries access agreement’, FIS Australia, 18 November 2013.

<http://www.fis.com/fis/worldnews/worldnews.asp?monthyear=&day=18&id=64820&l=e&special=&ndb=1%20target=>. 3 ‘Seychelles Seiners Licensed To Fish In EU Waters’, ATUNA, 18 November 2013.

<http://www.atuna.com/NewsArchive/ViewArticle.asp?ID=13649>.

Page 13 of 17

Pirates Release Ship, but Indonesia still Worst for Piracy

The recent hijacking of an Indonesian-bound ship has once again highlighted the growing

problem of piracy in Indonesia. As the world’s leading hotspot for attacks, Indonesia will

need to step up its efforts to tackle piracy if it is to show the rest of South-East Asia that it

has the capacity to defend its waters.

Background

Pirates have finally released an Indonesian-bound Thai tanker after stealing its cargo, the

International Maritime Bureau (IMB) said on 2 June. The tanker, which left Singapore on 27

May but soon lost communication, was en route to the port of Pontianak in West Borneo.

The attack is the latest in a string of hijackings in South-East Asia, with pirates recently

stepping up operations in waters off Indonesia, Singapore and Malaysia. While overall

attacks are down 11 per cent globally since 2011, piracy in the archipelago has continued to

soar. Now the top location in the world for pirate attacks, the country must step up its

efforts to combat piracy in the coming years.

Comment

The Indonesian-bound Thai oil tanker was hijacked soon after departing Singapore on 27

May, with pirates destroying its communication system and stealing the tanker’s oil cargo,

the IMB’s Kuala Lumpur-based Piracy Reporting Centre said. While the 14 crew on board

were unharmed, attacks in the region are becoming more frequent as pirates step up their

operations. Between January and March 2014, says the IMB, 23 actual or attempted attacks

were recorded in South-East Asian waters, the vast majority of which occurred off Indonesia.

By contrast, Somalia, once a global hive for pirate activity, had just seven attacks throughout

the whole of 2013.

This underlines a worrying trend for Indonesia. Although global piracy reached a six-year low

in 2013, with attacks down 11 per cent in total since 2011, piracy in Indonesia continues to

go from bad to worse. Last year there were a total of 106 actual or attempted attacks in the

archipelago, making it the worst location in the world for piracy according to a recent report

by Allianz, a global insurance firm. The country’s hapless police and naval forces, already

overstretched in patrolling the Strait of Malacca, can do little to stop the looting it seems;

the past five years has seen attacks in Indonesian waters increase sevenfold. Things are likely

to get worse before they get better.

Unfortunately for Jakarta, there appears no easy fix to the problem. Some of this comes

down to geography: Indonesia is the world’s largest archipelago with 17,500 islands,

stretching across some 5,300 kilometres from east to west. Many of its waterways,

meanwhile, are made up of shallow estuaries and there are bountiful coastal mangrove

forests in which to hide. That makes policing all of its waters near impossible, even for an

advanced navy. Yet Indonesia’s navy is far from advanced. A 2013 defence paper, published

by the Australian Strategic Policy Institute, noted that the Indonesian navy, or TNI-AL, is a

long way off being able to control its territorial waters effectively. Moreover, it says, even

Page 14 of 17

with ambitious plans to upgrade its naval forces in the coming decades, Indonesia’s coastal

defence will improve only ‘incrementally’ in the future. Still, this is only part of the problem.

The country’s constrained naval capabilities are also matched by a lack of political will to

tackle the growing problem. Unlike the high-profile hijackings off the coast of Somalia or

Nigeria, the attacks in Indonesia remain localised, opportunistic thefts carried out by small

groups of bandits. Large, organised criminal syndicates are notably absent from the waters

of Indonesia, and kidnappings for ransoms are rare. International attention, therefore, has

not been nearly as intense. Without such alarm, the issue has never really been a key

political item. But the pirates are becoming more brazen and the Allianz report warns that

‘there is potential for such attacks to escalate into a more organised piracy model unless

they are controlled.’ This means that, at the very least, Jakarta should keep the pirates in

check.

Unlike the Strait of Malacca, however, few countries have a national interest in helping

Indonesia to keep its waterways safe and secure. Even in the Strait, by far the busiest

shipping lane in Asia, regional co-operation is not always totally forthcoming. Despite an

agreement between the governments of Indonesia, Malaysia and Singapore to launch a

public campaign, mistrust remains pervasive and a united front is not always noticeable.

Given this, Jakarta will likely have to battle the pirates alone. For now, it may not seem like

an urgent maritime issue, especially given the rising tensions in the nearby South China Sea.

But, as Indonesia aims to expand its naval capabilities in the coming decades, the piracy

threat should not be ignored. If Indonesia really wants to show the rest of South-East Asia

that it can defend its waters, it will need to address the piracy issue first.

Andrew Manners Research Analyst Indian Ocean Research Programme amanners@futuredirections.org.au

*****

Indian Foreign Policy Priorities: Foreign Investment Likely to

Take Centre Stage under Modi

Foreign trade and invigorated economic relationships are likely to form the basis of Modi’s

foreign policy. India will seek security guarantees amongst its South Asian neighbours and

increased trade and investment with regional actors further afield.

Background

Prime Minister Modi has backed a domestic growth-and-governance agenda. This could

benefit from a foreign policy that encourages greater foreign investment and stronger trade

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relationships. The Indian election campaign focussed little attention on foreign policy issues.

With his pro-business attitude and liberal views on foreign investment, the expectation is

that Modi will pursue improved economic relations with regional actors.

Comment

India’s relations with its nearest neighbours have begun on a positive footing under Modi.

Relations with Pakistan are off to a good start, after the Pakistani President, Nawaz Sharif,

visited India for Modi’s inauguration. Modi also has an interest in furthering the

development of the South Asian Association for Regional Co-operation (SAARC). He has

adopted a brand of fast-track diplomacy, which saw him invite the heads of the SAARC

countries to his swearing-in ceremony. This action suggests that he views improved relations

with these countries as central to his foreign policy doctrine.

There are indications that China will seek a strengthened relationship with India. The

Chinese Foreign Minister will visit India in early June, in a bid to foster closer economic

co-operation between the two countries. Modi has visited China in the past, as the Chief

Minister of Gujarat, and the majority of Chinese investment in India is located in that state.4

Modi has developed a strong economic relationship with China, which he shows every sign

of wanting to develop further, to the benefit of the Indian economy.

The position of India in the global economy means that both the US and India could greatly

benefit from increasing trade relations. Increased US trade and investment in India would

probably push the region in a more democratic direction, which is in the interests of both

countries. US Senator Mark Warner has outlined a US action plan for Modi’s first 100 days in

power. The plan includes recommendations for a joint energy project, foreign direct

investment and a review of US visa policies, which are viewed as being overly restrictive on

Indian business leaders and investors.5

If the Indian Government agrees to these proposals, it could lead to stronger economic

relations between the two countries. Modi does not have a wholly warm relationship with

the US, after Washington refused to grant him an entry visa when he was Chief Minister of

Gujarat. If he is able to put his personal issues behind him, which he surely must, then the

US-India relationship has every chance of flourishing under his watch.

Australia views India as a natural ally in the Indian Ocean region and trade between the two

countries is growing. Australia provides a politically stable and reliable source of energy and

resources for the expanding Indian economy. Modi will wish to conclude the Comprehensive

Economic Co-operation Agreement negotiations with Australia. Such an agreement would

increase investment and decrease trade barriers, to the benefit of both parties.

4 ‘China to Send its Foreign Minister to India to Meet Modi’, Times of India, 29 May 2014.

<http://timesofindia.indiatimes.com/india/China-to-send-its-foreign-minister-to-India-to-meet-Modi/articleshow/35729028.cms?>. 5 ‘Top Senator Proposes 100 Days Action Plan for India-US’, The Hindu, 30 May 2014.

<http://www.thehindu.com/news/international/world/top-senator-proposes-100-days-action-plan-for-indiaus/article6064337.ece?homepage=true>.

Page 16 of 17

Indian energy requirements from Africa and the Middle East have increased in recent years.

India, therefore, has an interest in ensuring that energy flows and freedom of navigation in

the region are not curtailed. As the Indian Navy is growing at a slower rate than its Chinese

counterpart, New Delhi may have to continue to rely upon the US as the premier naval

power in the Indian Ocean. Both governments have strategic interests in limiting Chinese

encroachment into the region. To better guarantee its own strategic interests, however,

India may speed up the process of enhancing its own blue-water naval capability, although

this remains a longer-term prospect.

Foreign policy in India is likely to focus upon economic revival, by expanding trade and

investment relationships with China, the US and Australia. Closer to home, the Indian

Government will seek to improve security ties with its SAARC neighbours and may pursue a

programme that leads to it acquiring a blue-water navy that would allow it to project power

further into the Indian Ocean.

If Modi is able to carry out his agenda, this could be a period of economic growth in India to

rival that experienced in the early years of this century.

Mervyn Piesse Research Assistant Indian Ocean Research Programme

*****

What’s Next?

NATO will discuss the details of its continued troop presence in Afghanistan at a Defence Ministers’ meeting in Brussels on 4 June.

The South Sudanese Government and rebels will resume peace talks, focussing on the formation of all-inclusive interim government, on 5 June.

Beijing will host the sixth ministerial meeting of the China-Arab Co-operation Forum on 5 June.

On 6 June, China will hold the first auction of 200,000 carbon permits in Shenzhen under a new emissions trading scheme.

Bangladeshi Prime Minister Sheikh Hasina will visit China on 6 June.

African Union permanent representatives will meet in the organisation’s headquarters on 6 June to draft the agenda for the July African Union Heads of States Summit.

Afghanistan will hold a presidential election runoff on 7 June.

Chinese Foreign Minister Wang Yi will visit India on 8 June for meetings with new Indian Prime Minister Narendra Modi and External Affairs Minister Sushma Swaraj.

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