Indian Ocean and Power Struggle among Nations

Power Struggle Among Nations

“Colombo matters because the Indian Ocean matters. The great

game of this century will be played on the waters of the

Indian Ocean”Harsh V. Pant

What does this mean for SL?

How will it affect her?

How can she take advantage of it?

55% of the world’s known oil reserves

40% of world’s natural gas reserves

Continental shelves (4.2% out of the total ocean area) rich with minerals like Tin, Gold, Uranium, Cobalt, Nickel, Aluminium and Cadmium

The Indian Ocean is blessed with

natural resources

Critical Waterway for Global Trade and Commerce-Hosts heavy international maritime traffic that includes

½ of the world’s containerized cargo1/3 of its bulk cargo 2/3 of its oil shipment..

On the teetering edge of a nuclear war..

“Unfortunately, it has to be acknowledged that the Indian Ocean

faces a number of threats. Its sheer scale renders it vulnerable to many issues including piracy, terrorism, human

smuggling, drug trafficking and illegal waste disposal. These are all serious threats to the security, stability and

sustainability of the Indian Ocean region. Each of them impact the countries in the

Indian Ocean littoral as well as other nations that rely on these seats to varying degrees for trade, energy

security and global security”

Defense Secretary, Gotabhaya Rajapaksa

Galle Dialogue 2012: Maritime Conference- December 13th

On these troubled waters much is at stake and

suspicion is rife….

China‘Enter the Dragon’

USA‘The Godfather’

India‘Slum dog Millionaire’

Achieving sustainable growth and development in the country.

Monitoring State based threats (eg: China, Iran)

Being the main resident power in the Indian Ocean and preventing strategies that might polarize the Indian Ocean. To be ‘Net Security Provider’

Aggressive soft power diplomacy through aiding and assisting countries in the Indian Ocean Region

Protecting the maritime chokepoints and sea lines of communication.

Having the potential to control Straits of Malacca- 80% and 60% of Japan’s and China’s oil supplies shipped/ half of the world’s container traffic/ US Dollars 70 billion of oil (every year) passes via this strait

Ensuring the security of oil supply and shipping routes (String of pearls)

China’s growing military presence in the Indian Ocean region (String of pearls)

Extracting minerals from the deep sea bed- India is one of the six countries in the world to have developed the technology extract minerals from the sea bed.

Monitoring the expansion of the Indian Navy and India’s Security links with Japan and USA

Preventing extremist groups from harming the interests of the US or allied Indian Ocean littoral states.

China’s growing influence in Indian Ocean littoral states

Ensuring continued access to market, energy supplies and raw materials.

Exclusive economic zone of 772,000 square miles

SRI LANKAThe Crown Jewel in

the Indian Ocean

Sri Lanka’s Strategic location in the Indian ocean

Maritime claimsterritorial sea: 12 nm contiguous zone: 24 nm exclusive economic zone: 200 nm continental shelf: 200 nm or to the edge of the continental margin

India & Sri Lanka:a Turbulent Relationship

“….Sri Lanka is rapidly slipping out of India’s orbit. India failed to exert its leverage over the humanitarian troubles facing the Tamils trapped in the fighting. New Delhi’s attempts to end the war and avert humanitarian tragedy in north-east Sri Lanka proved utterly futile” Harsh Pant

When UN adopted a resolution Against Sri Lanka on war crimes

LOANS GRANTS

CHINA $ 1056.05 mn $ O.16 mn

INDIA $ 443 mn $ 257.28 mn

China and India-in the business of lending & giving

SINO-LANKAN TIES

China’s Investment in infra structure

Hambantota Development Zone

Hambantota Harbor

Shen Dingli, a professor at Fudan University in Shanghai, argues that it is not terrorism or piracy that’s the real threat to China. It’s the ability of other

states to block China’s trade routes that poses the greatest threat. To prevent

this from happening China, Shen asserts, needs not only a blue-water navy but

also “overseas military bases to cut the supply costs.”

Due to a ‘Surge’ of interest shown by the key players on Sri

Lanka, in the short term Sri Lanka feels benefited, a player in the great game…

However….

• The mega infra-structure projects does not seem to generate enough wealth in the country.

• In the long term the country may face a greater debt burden if it does not generate enough income to re-pay its loans.

The rich rule over the poor,    and the borrower is slave to the lender.

- Proverbs 22:7

Pawn? or Player?

To be a player, you need to be

part of the game…

“Everyone is focusing their attention on the Indian Ocean. We are in the center of the Indian Ocean. We need to consider how well we balance this geo-political competition while benefitting from what is happening in the region,” -Commander of the Sri Lanka Navy [SLN] Vice Admiral Jayanath Colombage

KNOWLEDGETRANSFERS

We believe that future economies are knowledge-based.

Knowledge has more of a long term benefit than investment does.

If we can persuade our Chinese and Indian counterparts to share their best-practices with us,

We will not need foreign loans and expertise in building infrastructure.

More job opportunities will be available within the country

The ‘brain drain’ phenomenon might be averted

“Japan continues to be a top partner of Sri Lanka as our bilateral trade with the Land of the Rising Sun topped $ 1.2 b in 2011 and knowledge transfer of Japanese manufacturing practices to Sri Lanka has helped improve quality of manufacturing here.More than 3,000 Sri Lankans have received Association for Overseas Technical Scholarship (AOTS) training on technical and managerial aspects in Japan and are now steadily contributing to industry sectors in Sri Lanka-both products and services.

Japanese concepts hugely improved Lankan manufacturing processes: RishadDaily FT, June 19th 2012

The Executive Committee and the membership of JASTECA consists of returned trainees of AOTS scholarship programs, who have volunteered their services to coordinate scholarship activities and also to disseminate the knowledge and expertise gained in Japan to other Sri Lankans.”

OIL EXPLORATION"An estimated 40% of the world's offshore oil production comes from the Indian Ocean”-CIA World Factbook

Existing data shows that oil and/or gas potential exists in the Mannar Basin to the west, Cauvery Basin to the north, Bengal fan deposits to the east, and newly identified sedimentary basins to the south of the island.

To date, Sri Lanka has identified eight blocks in the Mannar basin, of which hydrocarbon exploration is underway in only one block.

Therefore, of the four exploration wells drilled in the Mannar basin, natural gas deposits have been found in two wells, leading to a 50 percent success rate in the hydrocarbon exploration exercise in Sri Lanka, which is well above industry standards.

HOW DO WE WORK THIS TO OUR ADVANTAGE?

Local companies must take up the opportunity to provide logistical support to foreign companies drilling for oil in our coastal basins (transport, accommodation, minor services)

Offer these foreign investors other business and investment opportunities for perusal.

Making it mandatory for these companies to employ a percentage of local workers from area they are based in-job opportunities

Second best natural harbour in the world

Available water and land area about 10

times that of Colombo

Depth of the natural basin could accommodate the proposed 18000 container-capacity ships

TRINCOMALEE

Trincomalee needs to develop an effective railway network with the Western province (where most of the industries are located) and to the port of Colombo.

Planned industrial development through a special economic zone for Indian investors, Sampur Coal power project, cement bagging plants, Prima Expansion projects etc.

Plenty of commercially viable space for setting up and expansion of shipping and cargo related supporting services.

Sri Lanka: the next

Bollywood?

‘Ranminithenna’ tele cinema village in Tissamaharama

Sri Lanka’s geographical location in the Indian Ocean makes it the ideal venue for shooting low budget films-travel is short and easy and it is one of the few islands in the world with such diverse climates in such a small space.

Anurag Kashyap to recreate Mumbai in Sri Lanka for Bombay VelvetIndian Express, June 10th 2013

"It is set in the 60s and I needed a consistent heritage look and a skyline to loyally depict the era. But, Bombay's skyline has transformed dramatically, most of the heritage buildings have been replaced by high-rises. So it did not fit the period we are looking to recreate. That's why we are shooting in Sri Lanka, starting next month,“-Anurag Kashyap

Sri Lanka is one of the easiest places in the world to see blue whales

Hikkaduwa has some of the region’s best coral reefs

Arugambay is a hotspot for surfing

Unawatuna is popular for scuba diving

PUBLIC-PRIVATE PARTNERSHIPS

The Colombo-South harbour expansion project is a prime example for a successful partnership between the government of Sri Lanka and foreign private companies. These partnerships have great potential in areas of healthcare, education and transport.

Government to partner with foreign private institutions in providing further higher education opportunities for Sri Lankan students.

As with China, PPP opportunities to be extended to other foreign companies in the construction of infrastructure.

Hambantota Harbor

Building Hambantota Port now is debatable, says expertSunday Times, February 2013

“Commenting on the prospects of the new port, Mr. Ogilvy (President, Institute of Chartered Shipbrokers) said it would be able to cater to the largest containers in the world but noted the government would have to take an effort

to ensure adequate education and training was provided for those entering the sector.

He explained that in a bid to establish a hub status in the country it was important to concentrate on these two areas in shipping as this would prove beneficial in competing with their counterparts in Singapore, Dubai and Abu Dhabi.”

140 Sri Lankan students sat for 261 papers with the Institute of Chartered Shipbrokers (ICS)

16 locals have ICS membership

PORT FACILITIES

Build cheap, but comfortable quarters for shipping crew in portsRestaurants

Recreational facilities

SRI LANKA &

USA

www.pathe.org

SRI LANKA’S LARGEST EXPORT MARKET IS STILL THE USA

A significant number of Lankan university students are based in US

How do we expand on this?

Focus on trade in goods, services, and more importantly, knowledge.Technology transfers enabled by the Sri Lankan-American community and Sri Lankan expatriates.Student exchange programmes between the two countries

Are we a pawn in this great game?

BUT ARE WE A PLAYER

YET?

There is only one kind of great power, and one kind of great power tradition…power

is necessarily expansionist. The sooner the world acknowledges this, the better it will

be for global stability. Harsh V Pant

(China’s Naval Expansion in the Indian Ocean and India-China Rivalry for the

Asia Pacific Journal)

THANK YOU