from the editor’s desk - future directions...

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2 July 2014 | Vol. 5, 23. From the Editor’s Desk Dear FDI supporters, Welcome to the Strategic Weekly Analysis. We begin this week’s issue with a consideration of India’s possible response to the latest map produced by Beijing, which includes the disputed territory of Arunachal Pradesh within China’s borders. Our next article looks at the humanitarian consequences of the latest counter- militancy offensive underway in the North Waziristan region of Pakistan’s Federally Administered Tribal Areas. At least 500,000 people have been displaced since the campaign began in June. Looking to Indonesia, we follow the progress of the two contenders as the 9 July presidential election draws ever closer. We note that, regardless of who wins, Indonesia’s new leader will face a number of significant challenges. We then evaluate the latest initiatives from the Seychelles to counter illegal fishing and ask whether, given their success, they could be replicated elsewhere. Next, we look at South Africa and analyse the economic impact of industrial strikes, as the country heads into this year’s “strike season”. We examine both the recently-concluded platinum miners’ strike and the one just begun by the National Union of Metalworkers. Returning to South Asia, we conclude this week’s edition with an examination of the latest developments in the Japan- Bangladesh relationship, especially the recent $1.25 billion loan package to be provided to Bangladesh by the Japan International Co-operation Agency. 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 *****

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Page 1: From the Editor’s Desk - Future Directions Internationalfuturedirections.org.au/wp-content/uploads/2014/07/FDI... · 2019-07-28 · military operation in the region, Operation Zarb-e-Azb,

2 July 2014 | Vol. 5, № 23.

From the Editor’s Desk

Dear FDI supporters,

Welcome to the Strategic Weekly

Analysis.

We begin this week’s issue with a

consideration of India’s possible response

to the latest map produced by Beijing,

which includes the disputed territory of

Arunachal Pradesh within China’s borders.

Our next article looks at the humanitarian

consequences of the latest counter-

militancy offensive underway in the North

Waziristan region of Pakistan’s Federally

Administered Tribal Areas. At least

500,000 people have been displaced since

the campaign began in June.

Looking to Indonesia, we follow the

progress of the two contenders as the 9

July presidential election draws ever

closer. We note that, regardless of who

wins, Indonesia’s new leader will face a

number of significant challenges.

We then evaluate the latest initiatives

from the Seychelles to counter illegal

fishing and ask whether, given their

success, they could be replicated

elsewhere.

Next, we look at South Africa and analyse

the economic impact of industrial strikes,

as the country heads into this year’s

“strike season”. We examine both the

recently-concluded platinum miners’

strike and the one just begun by the

National Union of Metalworkers.

Returning to South Asia, we conclude this

week’s edition with an examination of the

latest developments in the Japan-

Bangladesh relationship, especially the

recent $1.25 billion loan package to be

provided to Bangladesh by the Japan

International Co-operation Agency.

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

*****

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China’s New Map: Should India Retaliate?

China’s new official map of the country can only increase India’s suspicions about its

intentions. While strategists ponder whether India will react to this provocation, it may be

more realistic to examine India’s options if the Modi Government does decide to retaliate

and how it can still hope to obtain financial investment from China.

Background

China recently released a new official map of the country. Previous official maps included

China’s claims in the South China Sea in a little box, reducing the holistic impact of the new

one. While it is interesting that the “nine dash line” – China’s delineation of its maritime

boundary in the South China Sea – in that region has been increased to ten dashes, the

inclusion of its eastern state of Arunachal Pradesh as South Tibet in the map has caused

ruffled feathers in New Delhi. A Ministry of External Affairs spokesman retorted that

Arunachal Pradesh remains ‘an integral and inalienable’ part of India, and ‘cartographic

depiction does not change facts.’ That, however, may not be the end of the matter.

Comment

Arunachal Pradesh is claimed by China as a part of South Tibet, a claim India disputes. Both

the Ministry of External Affairs and the Chief Minister of Arunachal Pradesh, Nabam Tuki,

have protested the depiction of Arunachal Pradesh as part of China. The Chief Minister said,

‘What China has done is not a new thing. We object to and condemn their claim on

Arunachal Pradesh’. He demanded that the Indian Prime Minister, Narendra Modi,

intervene.

Mr Tuki and India have reason to be aggrieved. Apart from laying claim to the Indian state,

China has previously refused to stamp the passports of Indian citizens from there who

wished to travel to China, instead stapling visas to their passports. By this act, they sought to

demonstrate that China considered these people Chinese and not Indian.

In 2010, China denied a visa to the then Northern Army Commander, Lieutenant General B.S.

Jaswal, to demonstrate that the state of Kashmir was disputed territory. India retaliated by

cancelling both his visit to China and military exchanges. In 2012, India cancelled another

military delegation to China after it refused to give Indian Air Force Group Captain M.

Panging a visa. Besides being an Indian citizen from Arunachal Pradesh, Panging was the

Chief Operations Officer at the Tezpur air base in that state. In April this year, Chinese

officials orally demanded that those Indians from Arunachal Pradesh who were part of a

youth delegation to China be excluded from it. India once again mulled over cancelling the

visit altogether.

It is noteworthy that the publication of this map comes at a time when Indian Vice President

Hamid Ansari is in Beijing to celebrate sixty years since the signing of the Panchsheel (Five

Principles) Agreement by the two countries and Burma/Myanmar. Indian officials said the

issue of the map could be raised by Mr Ansari in Beijing. Meeting with Mr Ansari and

Burmese President Thein Sein, however, Chinese President Xi claimed that China remained

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true to the agreement and its principles of peaceful co-existence, mutual non-aggression,

territorial integrity and sovereignty, and non-interference in internal matters.

These platitudes notwithstanding, the Modi Government is likely to take a strong stand

against any claims to Indian territory. After Mr Modi’s speech about India’s sovereignty in

Arunachal Pradesh in the run-up to the recent election in which he effectively said that

Arunachal Pradesh is, and would remain, Indian territory, it is likely he will have no option

but to do so. His government could revisit a precedent from 2007, when the then Chinese

Ambassador to India, Sun Yuxi, stated in a television interview that all of Arunachal Pradesh

belonged to China. India’s response was to invite to New Delhi Ma Ying-Jeou, then

Taiwanese opposition leader and presidential candidate of the Chinese Nationalist Party, the

KMT, all the while denying that his visit had anything to do with the ongoing dispute.

Again, the Indian Government could consider a tit-for-tat rejoinder, publishing maps

showing an independent Tibet. This would irritate Beijing in the same way as India’s joint

statement with the Philippines in October 2013, which called the South China Sea the West

Philippines Sea, as Manila refers to the disputed sea. That statement contradicted India’s

policy until then of calling the area the South China Sea, so as to avoid upsetting Beijing.

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On the other hand, the Modi Government must bear in mind that it is close to signing an

agreement with China to establish industrial parks in India, while also addressing its China

trade deficit of around US$40 billion. The details of this agreement will be announced by the

Indian Minister of State for Commerce, Nirmala Sitharaman, and the Chinese Minister for

Commerce. Also, the Foreign Secretary, Sujatha Singh, recently announced that India is

seeking infrastructure investment by China to the value of a staggering US$1 trillion.

Mr Modi will have to call upon all his diplomacy and balancing skills to achieve an

acknowledgement of India’s territorial sovereignty by China and simultaneously obtain the

financial investments and commercial concessions that he seeks from it.

Lindsay Hughes Research Analyst Indian Ocean Research Programme [email protected]

*****

Pakistan IDPs Face Growing Food and Water Insecurity

Hundreds of thousands of people have been displaced following the commencement of a

new counter-militancy offensive in North Waziristan district in June. The increased number

of Internally Displaced Persons (IDPs) is likely to lead to greater insecurity in the district, as

a mismanaged humanitarian crisis unfolds.

Background

The breakdown of peace talks between the Pakistani government and Tehrik-i-Taliban

Pakistan (TTP) in February has led to intensified offensive action by the military in the North

Waziristan region of the Federally Administered Tribal Areas (FATA). In June, a long-expected

military operation in the region, Operation Zarb-e-Azb, was launched against the known

Taliban safe havens, leading to the displacement of at least 500,000 North Waziris.

Comment

Pakistan has been criticised for its lack of preparedness following the displacement of over

half a million people in North Waziristan. Operation Zarb-e-Azb was launched in the region

in an attempt to drive out the Taliban, with initial airstrikes a prelude to a major ground

offensive. Although they knew that a military operation was imminent in the area; residents

in North Waziristan were reportedly given little warning before the operation actually began

and limited humanitarian support was prepared for those displaced.

According to the New York Times, the displacement is the biggest conflict-driven

humanitarian crisis since 2009, when a previous operation against the Taliban resulted in the

displacement of 1.2 million people. The majority of IDPs have fled to the town of Bannu,

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avoiding the temporary camp set up by the army in Baka Khel due to safety concerns. The

United Nations World Food Program (WFP) is currently distributing the bulk of rations,

including fortified wheat, iodised salt, pulses and cooking oil.

The number of families who have fled North Waziristan has exceeded military predictions,

while larger than expected family sizes have reduced the normal one month ration to two

weeks’ worth of supplies. An additional US$8 million has been donated by USAID to

Pakistan, through the Twinning Programme; it will provide an extra 25,000 metric tons of

wheat to the WFP to enable it to continue supplying rations to IDPs. This will reportedly

extend relief assistance by the WFP till early September.

Long-term support and resettlement for IDPs is critical to avoid greater insecurity in the

region, but reports suggest that the military is preventing refugees from moving into other

provinces where better infrastructure and facilities could be provided. The WFP, UNHCR and

the International Rescue Committee are distributing supplies, along with wealthy Pakistani

businesses, foreign governments and local organisations. Groups designated as terrorist

organisations by the US have also offered food, medicine and shelter to families.

At present, there is an urgent need for food, water, tents, sanitation facilities and medical

supplies. It is currently the hot season in Pakistan, which increases the risk of illness,

including diarrhoea and typhoid. Further concerns have been raised regarding the risk of a

polio outbreak. Pakistan’s northern region is one of the last polio virus hotspots, as militants

have prevented vaccinations in the FATA. The World Health Organization (WHO) and UNICEF

have vaccinated over 28,000 children as families seek refuge, in an attempt to prevent an

outbreak of the virus.

Ongoing insecurity in Pakistan’s northern region will be exacerbated by this large-scale

humanitarian crisis. While IDPs are unable to move on from temporary camps the risk of

increased violence, outbreaks of illnesses and food and water insecurity will grow. Despite

reports from Pakistan that over 300 militants were killed in the operation so far, civilians

have claimed that militants were tipped off and many had left the region before the

operation commenced. Addressing the long-term security of IDPs presents a daunting

challenge. If the government fails to act, however, the operation may do more harm than

good for long-term security in the region.

Sinéad Lehane Acting Research Manager Global Food and Water Crisis Research Programme [email protected]

*****

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Indonesia: Jokowi Faces Fierce Battle as Presidential Election

Looms

With the gap closing between Joko Widodo and Prabowo Subianto, the presidential

election scheduled for 9 July will be fiercely contested. While Widodo is still expected to

claim victory, it will not be by much, especially with outgoing President Susilo Bambang

Yudhoyono now throwing his support behind Prabowo.

Background

Indonesia’s presidential election will be fiercely contested, with former military strongman

Prabowo Subianto closing the gap on the frontrunner Joko Widodo. While Widodo is still

tipped to win, the 9 July vote is likely to be much closer than many observers had originally

anticipated, especially with outgoing President Susilo Bambang Yudhoyono throwing his

support behind Prabowo and the Golkar party. Yet, whoever claims victory next week, the

incoming president of Indonesia will have his hands full, with the South-East Asian giant

needing to address a range of important challenges in the near future.

Comment

With less than a week to go before Indonesians head to the polls, the presidential race is still

wide open, with most analysts suggesting the result will come down to the wire. Mr Widodo,

universally known by his nickname Jokowi, had looked to be the clear favourite only three

months ago; polling in March had given the former governor of Jakarta a 38 point lead over

his nearest rival, Prabowo. But a poor showing for his party, the Indonesian Democratic

Party of Struggle (PDI-P), in April’s legislative elections, has seen him lose much of his lustre.

Prabowo, meanwhile, has formed a large coalition with a number of parties, including

Aburizal Bakrie’s Golkar, as he looks to close the gap between himself and Jokowi.

Recent events indicate that Prabowo has been doing just that. A poll by Indonesian Survey

circle earlier last month put Jokowi’s lead at around six per cent, a far cry from a number of

polls earlier in the year. Now, however, the number is thought to be closer to four per cent.

While such polling is notoriously unreliable, with many polling organisations in Indonesia

politically motivated, the momentum, clearly, is swinging Prabowo’s way ahead of the

election.

That sentiment was evident on 30 June, when the ruling Democratic Party decided to throw

its support behind the 62-year old. The party’s executive chairman, Syarief Hasan, issued a

statement claiming that, ‘the Democratic Party has decided and instructed its members to

fully support and vote for Prabowo.’ Until now, Yudoyono’s Democratic Party had been

neutral and looked set to serve at least a term in opposition but, with the tide turning, the

party seized an opportunity, betting that its support could see it become part of a coalition

government, albeit with a much smaller share of power this time around.

Yet, it remains to be seen what effect this support may have. The party claimed around ten

per cent of the total votes in April’s legislative election. Combined with those political parties

already supporting Prabowo, this would have given his broad-based coalition around 57% of

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the votes in the April election. But such backing may not necessarily translate into more

votes.

Around 20% of Indonesia’s 190 million eligible voters are thought to be undecided and will

prove crucial in determining the outcome on 9 July. The Democratic Party’s image,

meanwhile, has been tarnished by a series of corruption scandals. Its support between 2009

and 2014 dropped by over half largely as a result such scandals. Moreover, with the party

siding with Prabowo, his coalition now resembles that of the current government, which has

been roundly criticised for its inaction and ineptitude. So, while Hasan has insisted that the

Democratic Party’s support of Prabowo ‘will not be bad’, it is unlikely to be a significant

game changer, either.

As will be discussed in an upcoming FDI Strategic Analysis Paper, whoever comes out on top

will face a range of pressing challenges. Indonesia’s economy has slowed in recent times,

and investors are understandably wary of an incoming government; this is especially so

given that both candidates have espoused nationalist rhetoric as a means of gaining

prospective votes. Getting Indonesia’s once-booming economy back on track, therefore, will

prove no easy task, especially if Prabowo, who has appeared fiercely protectionist in the

lead up to the election, claims victory.

But the challenges do not end there: over 30 million Indonesians live on under US$1 per day,

despite some recent improvements; the country’s infrastructure is frequently woeful,

further deterring investors; the government remains hamstrung by costly subsidies,

especially in fuel; there is a stubbornly high current account deficit; Indonesia’s education

system is among the worst in the world; and corruption remains endemic at almost every

level of society. The new president will have his work cut out for him.

Andrew Manners Research Analyst Indian Ocean Research Programme [email protected]

*****

Can Seychelles Anti-Illegal Fishing Initiatives be Replicated

Elsewhere?

The multinational FISH-i Africa project is an exemplary initiative for the prevention of

illegal fishing. Ongoing territorial disputes, however, mean that it is unlikely that this

initiative could be successfully replicated elsewhere in the wider in Indo-Pacific region.

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Background

The Seychelles, an archipelago state dependent on its fishing industry for upwards of 85% of

its exports, has recently made strides towards preventing illegal fishing in its 1.3 million

square kilometre exclusive economic zone (EEZ). The 16-17 June “Our Ocean” summit,

hosted by the US State Department, provided an opportunity for Seychellois Natural

Resources Minister, Peter Sinon, a panellist in the sustainable fisheries component of the

conference, to discuss the steps taken by the Seychelles to ensure the protection of its

fisheries, through initiatives such as FISH-i Africa. Despite its effectiveness in the western

Indian Ocean, however, the programme has limited potential for replication in contested

areas of the Pacific.

Comment

Tourism and fishing are the cornerstones of the Seychellois economy, resulting in a

heightened awareness of the importance of conservation and sustainable development.

Even so, while around 50% of the country’s land area is protected, less than one per cent of

its EEZ is likewise preserved.

The encouragement of sustainable fishing practices is not only important for the Seychellois

economy, but also for preventing the overexploitation of the world’s second-largest source

of tuna, after the Pacific. The fishing industry is essential to the Seychellois economy,

providing over 85% of export earnings in 2013. Tuna fishing and processing alone accounts

for five per cent of GDP, 35% of export earnings and seven per cent of jobs.

During the “Our Ocean” Summit, Seychellois Natural Resources Minister, Peter Sinon,

discussed existing and proposed initiatives for protecting the country’s EEZ. Mr Sinon

highlighted the importance of the Seychelles in the global tuna market, describing the

capital, Victoria, as the most important tuna landing and reshipment port in the Indian

Ocean. Certainly, the Seychelles is indispensable to the global tuna fishing industry, with

around 200,000 tonnes of fish landed and transhipped per year.

Minister Sinon also announced the preparation of a Marine Spatial Plan, which will clearly

identify areas designated for fishing, recreation and oil exploration within the EEZ. This

move, designed to reduce the overexploitation of fisheries and encourage sustainable

fishing practices, was welcomed by other countries attending the conference, in particular

the United States. During the summit, an action plan was proposed that called on all

countries to end overfishing by 2020.

The FISH-i Africa initiative, launched in December 2012, was designed to facilitate the

sharing of intelligence and information between fishing agencies from different western

Indian Ocean countries. It also provides a forum for the workshopping of enforcement

actions against illegal fishing operators. Along with the Seychelles, there are six other

members: Comoros, Kenya, Mozambique, Tanzania, Madagascar and Mauritius. FISH-i Africa

has already had several successes in identifying illegal fishers, including a South Korean

purse seiner owned by Donwon Industries.

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Despite the success of FISH-i Africa, the potential for its replication in some areas of the

Pacific, such as the South China Sea, is limited due to territorial disputes between potential

participants like Japan, China, Taiwan and Vietnam. The recent escalation of one such

dispute between Vietnam and China does not bode well for such co-operation.

Consequently, fisheries crime in that region has the potential to flourish.

Co-operation between countries with neighbouring EEZs is necessary to produce effective

results in the fight against illegal fishing. The FISH-i initiative has shown that replication of

the programme is only likely to succeed in areas without existing, acrimonious, territorial

disputes; for example, it would face serious challenges in areas like the South China Sea. The

fish stocks of the Seychelles are vital to the tuna fishing industry in the Indian Ocean region,

and its recent commitments to sustainable fishing practices are promising for the economy.

Despite the constraints imposed by maritime boundary tensions, it still has the potential to

be significant in global efforts to prevent overfishing.

Natasha Howells Research Assistant Indian Ocean Research Programme

*****

South Africa: One Strike Ends, Another Begins

The five-month long platinum miners’ strike, the longest and costliest in South African

history, has ended. A new strike, however, that began on 1 July, is likely to further weaken

the beleaguered economy.

Background

The Association of Mineworkers and Construction Union (AMCU) agreed to a wages deal

with Lonmin, Impala Platinum and Anglo American Platinum on 23 June, bringing to an end

the five-month dispute. The deal, which applies only to AMCU members, will see the lowest-

paid workers receive an increase of 1,000 rand ($100) per month over the next three years.

Staff will also receive other benefits, such as a pension, housing and health insurance.

Unfortunately, the deal does not mark the end of labour disputes, as the country’s second-

largest trade union announced that a majority of its members would stop work from 1 July.

Comment

Five months of strikes have taken an enormous toll upon the national economy and

particularly the platinum industry. The South African economy contracted by 0.6% in the

first quarter of 2014, partly because of the labour disputes. Affected companies claim that

the strikes have cost them more than 24 billion rand ($2.39 billion). The 70,000 striking

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workers fared no better, losing 10.6 billion rand ($1bn) in wages. The wage increases are

projected to add one billion rand ($99.7m) to the operating costs of platinum producers.

Even though the AMCU strike is now over, recovery will still take time. Since South Africa

may be facing the prospect of two consecutive quarters of negative growth, there are

growing fears that a recession may be imminent. Platinum production is not expected to

return to pre-strike levels for at least the next three months. In a further blow to economic

growth, South Africa faces rolling power blackouts, due to electricity shortages. The

country’s Reserve Bank also attributes the negative first quarter growth to the lacklustre

electricity supply. As a result of both factors, the manufacturing sector is also considerably

weaker, compared to the fourth quarter of 2013.

There is growing concern that other unions will follow the lead of AMCU and down tools.

South Africa is entering the period of the year known as “strike season”, when unions

traditionally enter wage negotiations. Already, the National Union of Metalworkers of South

Africa (NUMSA), the largest union in South Africa, has announced that up to 220,000 of its

330,000 members would strike from 1 July, demanding a 12% increase in wages. The strike

will affect the automotive components, engineering and communications industries and is

likely to have a detrimental impact upon the already strained economy.

There are fears that, if the NUMSA strike is not quickly resolved, it could also have a negative

impact on the state-owned power utility, Eskom. There are 11,000 members of the union

working at Eskom, who are legally not permitted to go on strike because they provide

essential services. Any work stoppage at Eskom, which supplies 95% of South Africa’s

electricity, will affect all economic sectors. The strike could not come at a worse time for

Eskom, which is already several months behind schedule on the construction of new power

plants.

With the signing of a wage deal between the AMCU and international platinum producers,

one of the causes of economic contraction in South Africa has been ameliorated. The failure

to meet the demand for electricity remains, however, and a new round of strike activity is

likely to make this a continuing problem. While the second quarter may show some

improvement in the national economy, it is too soon to tell whether the protracted mining

strike has led to a recession. Even if it avoids an economic contraction in the current quarter,

continuing labour unrest does not bode well for future economic growth or the level of

foreign investment in South Africa.

Mervyn Piesse Research Assistant Indian Ocean Research Programme

*****

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Japanese Financing to Drive New Development in Bangladesh

Large loans and investment by Japan’s international development body will promote

Bangladeshi industrial and infrastructural growth. By focussing on Bangladesh’s weak

energy sector, Japan’s strategic assistance will be beneficial for both countries.

Background

The Japan International Co-operation Agency (JICA) detailed in mid-June that it would

provide a 120 billion yen ($1.25 billion) loan package to Bangladesh for selected industry,

infrastructure and development project works. The JICA package follows the elevation in

May of the Japanese-Bangladesh relationship to the level of a “comprehensive partnership”.

This strengthening of economic, diplomatic and strategic ties was conducted in Tokyo

between Japanese Prime Minister Shinzo Abe and Bangladeshi Prime Minister Sheikh

Hasina, on her first overseas visit since being re-elected in January. The JICA low-interest

loans should supply Bangladesh with the capital to establish a more capable energy industry

and an economy diversified beyond textiles and cheap labour.

Comment

The Official Development Assistance (ODA) low-interest loans to Bangladesh were signed

between JICA President Dr Akhiko Tanaka, JICA Chief Representative Hikio Hataeda,

Bangladeshi Finance Minister Ama Muhith and Economic Relations Division Secretary

Mohammad Mejbahuddin. Included in the package was a US$406 million allocation towards

the Matrabari Ultra Super Critical Coal-fired Power Project, and US$231 million for the

Natural Gas Efficiency Project. Tanaka stated upon signing that, ‘It is time to diversify energy

resources as natural gas is depleting in Bangladesh.’

With Japanese ODA loans to Bangladesh totalling $11.6 billion, the JICA programme is the

first tranche of Japanese loans to Bangladesh totalling around $6.3 billion over the next four

to five years. Aimed primarily at the energy sector, these loans will lay the foundations for a

“Bay of Bengal Industrial Growth Belt” (BIG-B), an Abe-proposed economic hub for

Bangladesh energy diversification, as well as industry development beyond textile

manufacturing.

Since independence in 1971, the South Asian country has made economic gains for the

benefit of its 160 million citizens. Family planning initiatives that empower women, the

prevalence of NGO-driven micro-credit programmes, agricultural productivity gains and the

world’s cheapest textile labour force have enabled Bangladesh to improve life expectancies,

reduce child mortality rates and provide for “sustainable subsistence”.

Bangladesh is still plagued, however, by energy insecurity, poor worker safety standards,

public corruption and political dysfunction. For Bangladesh to overcome these development

impediments, the country requires such measures as targeted international assistance to

improve its energy capacity, promote fledgling industries, provide for higher-wage

employment and facilitate greater socio-economic mobility.

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JICA’s strategic loans are a welcome provision of such support, ensuring a capital supply line

for the construction and commission for much-needed energy projects. The funding for the

large-scale coal-fired power plant will guarantee future improvements in Bangladeshi

electricity production, enhancing the energy mix and increasing commercial and domestic

consumption. Furthermore, private Japanese investment to realise the BIG-B project has the

potential to provide for broader employment opportunities beyond the low-wage garment

sector.

Given Bangladesh’s rapidly urbanising population, there is great long-term potential for

industrial, service and capital markets to proliferate there. Japan thus foresees Bangladesh

as an important future hub in the Indo-Pacific. As Abe seeks to restart the Japanese

economy after two decades of stagnation, the strategic foothold that Japan is gaining in

Bangladesh will be instrumental in cementing long-term two-way trade and investment

partnerships.

JICA’s strategic loans and assistance have also helped to give Abe a regional supporter for his

defence force normalisation agenda. As part of the elevated “comprehensive partnership”

bilateral in May, Hasina advocated her support for Abe’s desire for an increased Japanese

role in promoting regional security. While Bangladesh shares strong diplomatic and

commercial ties with China, it remains concerned at its growing regional influence. The joint

statements by Abe and Hasina robustly advocated regional compliance with international

laws and norms, establishing a Japan-Bangladesh united front against any perceived

unilateral or coercive regional activity.

An IMF report released in late June stated that the biggest potential impediment to

development in Bangladesh is a resurgence of underlying political instability, last seen in

January’s widely-boycotted general election. Thus, Japan’s financial assistance strategy

towards Bangladesh should not be implemented with a purely commercial agenda. Japan

should wield its economic influence in Bangladesh to promote pluralistic politics, the

strengthening of democratic institutions and adherence to the rule of law. As Bangladesh

continues to come to terms with previous violence, Japan should advocate the necessary

political reforms to help prevent any descent into development-hindering political

dysfunction.

Hugo Seymour Research Assistant Indian Ocean Research Programme

*****

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What’s Next?

Foreign Minister Julie Bishop begins her first official visit to Burma/Myanmar in Rangoon on 2 July. Ms Bishop will meet with President Thein Sein and Opposition leader Aung San Suu Kyi during a side trip to the new capital, Naypyidaw.

Iran and the P-5+1 (the five permanent members of the UN Security Council plus Germany) will start their next round of talks in Vienna on 2 July.

A conference focussing on opportunities in the sub-Saharan African oil and natural gas industry will take place in Cape Town on 2 July as part of the Oil and Gas Africa 2014 expo. Also on 2 July, Africa Rail 2014, Africa’s leading transport and infrastructure show, wraps up in Johannesburg.

Laurent Fabius, French Minister of Foreign Affairs and International Development, will host an iftar (breaking the fast) event with the ambassadors of the Organisation of Islamic Co-operation countries at the Quai d’Orsay in Paris on the evening of 2 July.

On 3 July, Bhutanese Prime Minister Tshering Tobgay finishes a five-day visit to Japan.

Afghan and Pakistani officials will meet in Islamabad on 3 July to discuss security co-operation.

Chinese President Xi Jinping will visit South Korea on 3-4 July for a summit meeting with his South Korean counterpart, Park Geun Hye.

Indian Chief of Army Staff, Gen. Bikram Singh, is visiting China until 6 July for meetings with top generals of the People’s Liberation Army.