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BasirAhmed T These nations may try to explore opportunities formutualbenefit and cooperative evelopment. It would be clearly a prematurewisdom to concludethat, all cooperative here is littlethat is ore essential to the dailylife of civilization than energy. Accesstoi.This is more so, in the context fAsian nations, which are fastlygrowingii. relations are conflictual.While it istrue, that, the quest for energy between India and China mayheighten competition between them, but it is not necessarythat, thiscompetition will assume conflictual forms. The emerging patternofinterdependence and mutualism among Asian nations primarily between SaudiArabia, India, and Chinacontests the hitherto held Conflictual assumptions ofsome scholars. The new Gulf Asianeconomic relationship is becoming a harbingerof a new geopolitics of energy, which doesnot necessarily be (sic)militaristic. This new geopolitics of Asian energy explains theadjustment madeby these countries in terms of interest accommodations and benefitsharing. Indeed, for most of the past two decades, the locomotiveofglobal oil markets has beenburgeoning with Asian demand, which grew nearlysix timesfaster that that of western industrialized states, prior to the 1997Asian financialcrisis. Asian oil consumption doubled from 1985 to 1995, and isprojected to double again by 2015. Itis true that, if china and Indiareachedthe same per capita energy use as the United State's,global oil demand wouldincrease roughly threefold This Asian thirst for oil, renewed the apprehensionaboutenergy security. By the mid 1990s, many Asian political militaryspecialists began to voice fearsthat energy security concerns might turn theregions myriad territorial disputes intoresource wars result, rapidmilitarization in the region will take place, andthe emerging energy relationamong these nations would be that of hostility and conflict.But this was not tobe the case, and like several other slained myths in the energy market,thismyth was also slained. The continuing trend towards deregulation andprivatization hasfacilitated profound changes into the energy relations. At thesame time both India and China arebecoming more reliant on imports from theGulf region. Asia will be the world's largest consumer of primary energyby2010, with the overwhelming majority of its oil imported from outside theregion. By 2020,China and India - both with burgeoning middle classes willproduce more carbon emissionthan the United States and Europe in retrospect, itis true that the Asian government viewedEnergy interest in strategic terms.iii.iv. They even felt that as av Therefore, Middle East and Asianenergyinterdependence is a fact of life. Moreover, The strategic view of oil, has beenpart and parcel of theirnational security and foreign policy calculus. In a region whereunderlying suspicion, distrust, hadremained part of the pathology of interAsian and Trans Pacific relations still in a state ofprotracted historictransition also equally true that, they suffer from a similar problem ofenergyinsecurity. And it is quiet likely that, in the long run common energy concernsmay prevailover historical tensions. However, with regard to the energy security of theAsianactors, the importance of Gulf and especially of Saudi Arabia cannot beminimized. One centralconsequence of Gulf Asia oil link would be theconvergence of economic and financialrelationship. Therefore, commerce andmarket forces may shape cooperative inter staterelationship, more than that ofideological or territorial disputes. It may be quiet safe at this stagetoassume that, the emerging energy linkage, instead of a source of volatilityand instability inthe region, could force stability and prosperity. Thesenations shall come together to makesufficient quantities of resources availableat lower prices for themselves. Hence oil interestshall act as a normalizer ofinter state relations. Therefore, contrary to the widely heldconflictual notionof energy security held by several scholars, it is quiet possible thattheemerging energy linkage between Saudi Arabia India and China is headingtowards a convergence ofinterest, and mutual accommodation. The imperative ofchanging energy market demandsit. hile the uncertainty factors like, boundarydisputes, tradewars, political turmoil cannot be discounted, mutualaccommodation of energy interest surpassingall these tensions, is yet a strongprobability. The region has a large and growing oildeficit, already some 12Million barrels, per roughly 60 Percent of its oil is imported withlimitedcapacity to expand production in the region. Already China is the world'ssecondlargest consumer of energy, in 1997, India became sixth largest. By 2020,they will consumemore that one third of world's total energy. This factreflects the emerging pattern of commonenergy interests of these nations. Inthis context it makes some sense, when India andChina, one of the largest oilconsumers in Asia diligently tries to cultivate energy tieswith the Saudis andother major Gulf producers. President Jiang Zemin made the first ever visitby aChinese head of state to Saudi Arabia in November 1999, heading to Damman theheart ofSaudi oil country after a stop in Riyadhvi, itisvii. An Indian team visited Saudi Arabiain1998 to hold negotiations for finalizing the text of the bilateralinvestment promotion and protection agreement betweenthe two countriescordiality between India and china is marked by theconstitution of jointworking group on boundary issue, to seek fair reasonable and mutuallyacceptablesettlement of the boundary question. In 1998 a delegation of Chinesescholars participatedin the Sino Indian Track II dialogue held at New Delhi.The Gulf and the Asian giants areaware of their respective positions on the newoil equation. The Saudi's wants customersfor oil exports, and the Asia is inneed to secure oil supplies. For the first time "we arefocussing on Asia", saysformer Saudi oil minister and senior OPEC official Ahmed ZAki Yamani. Inakeynote address to an annual London Energy Conference in 1998, Asia,Yamaniexplained, can play a crucial role in helping to improve OPEC's prospectsDollars in 1998 rose to 936.3 million US Dollars. There has been a comparative rise of trade between IndiaandChina also, while China imported 1097.7 value in million US Dollars in 1998which roseto 2779.2 during 2002, its exports to India reached 1966.2. two Asiangiants. The improvement in India's external accounts,both current and capitalhas exceeded the most optimistic forecasts with merchandise exportsgrowing at20% in dollar terms in fiscal 1994 growth has averaged over 9% a year. Liberalpolicies towardnon-state enterprises proved a powerful catalyst for rapidgrowth in industrial output andexports In order to overcome the periodic energyshortages, both Indiaand China are trying to develop new international marketsthat can provide stablesupplies in tune with their domestic energyrequirements. Energy security of these countries dependsupon their ability todevelop and consolidate existing energy ties. It also depends upon theabilityof these countries to find markets for their products. And the most importantfactor thatcan provide energy security to these countries would be theirability to accommodate mutualinterest - underplaying tensions and regionalconflicts. In other words, interests in terms ofenergy sufficiency shallprevail over other divisive factors. The convergence of interests onenergysecurity question shall viii.Theix.Saudi Arabia's exports to Indiafrom 774.0 million USxThis explains thegrowing trade relationship betweenthexi.Since China's market oriented reformsbegan in 1978, its realGDPxii. compel these countries to go foraneconomic set up on common benefit sharing basis. The accommodation of interests of different stakeholders is intunewith the globalizing energy market. The joint investments and capital ventureswhichcharacterize the energy market today shall bring in this harmony. Energy is clearly one of the most important factor thatshallforge normal cooperation. Each of the countries has specific needs in the energy sector thatcanat best be met by forging normal trade in energy. This is consistent with the nationalobjectivesof both of these countries: ? To overcome energy deficit?To reduce dependence on unstable energysources.?One means of achieving this would be to boost intra regionalandinter regional cooperation. It would provide specific energy benefits in terms of efficientandstable energy supplies, providing a boost to the regions growth and prosperity. Thereisa direct and straightforward relationship between energy growth and economicdevelopment.When and economy grows more energy is required. In the long run, therefore, itseemsthat the geoeconomics shall prevail over geopolitics. China's energy choices will deepenitsintegration with regional actors like India. In fact, in order to deal with theenergyproblem China has gradually moved towards market reforms, and shall continue to do so infuturealso. The energy sector cannot be fully understood outside the context of economicreforms.China should in the near future increasingly tie up with the Asian countries including Indiatoensure energy security. Sino- Indian similarities are particularly striking in regardtomost aspects of their energy predicaments and their respective responses. The need toalterenergy resource mix, energy deficits, challenges of economic reforms,geopoliticalconsiderations shaping their energy situation structural problems, and difficult energychoicesahead before them. The success in all these respects largelydependsupon their ability to cultivate good relations. India also, like China, is lookingtowardsmarket solutions in order to meet its energy challenges. To seek new international market outlets fornationaloil companies.xiii, throws similar challenges India's policy response began toevolvewith its 1991 economic reforms, initially by allowing private investment in the power sector, then tax holidaysandeasier acces to 100% foreign equity projects also led to the same dependence on the Gulf / Middle East imports are coming from Saudi Arabia, Kuwait, UAE and Iranandthis trend is likely to continue despite India's efforts to diversify oil supply.Overthe long term geopolitical obstacles, even though they will not evaporate, shallcertainlyyield to the dynamics of energy requirements. Energy security will require long term contractualagreementswith the Gulf oil producers and stockpiling precautions to hedge against shorttermdisruptions relationship with the competitive neighbor - China.Furthermoreit includes market oriented reforms, particularly, its growing receptivity toforeigninvestment, and its LNG policies suggest in broad strategic terms, that reliance onglobalmarkets and cross border investments is the core of India's approach to energy security Rising to the challenge of securing a stable energy futurehasbecome one of the central areas of challenge to these economies. Energy is a verycriticalindustry attached with which, is the life and well being of all the three nations. Thereforetheywill craft a balanced policy which can accommodate mutual interests. At the same time theyareaware of the fact that anything short will run the risk of national insecurity. In thiscontext,Saudi Aramco president remarks, we look forward to strengthening our relationships withtheChinese and Indian petroleum sectors, and to help them meet the rapidly expandingenergyneeds for their home markets The energy industry has undergone many changes over the pastfewyears from experiencing higher demand and prices, lower spare capacity andheightenedgeopolitical tensions in the Middle East security issues, which have recently emerged had made it asortof compulsion for these three countries to come together with a common response. Thereemergesa convergence of interest in terms of energy security, energy supply, and energydemand.It is difficult to imagine an area where nations are more dependent than in the confluenceofenergy. xiv. JustlikeChina, India's efforts to assure current and future oilsupplieshavexv. Currently, the bulk of Indian oilxvi . It willalsoinclude goodxvii.xviii.xix. Along with it the geopolitical issues, energy securityissuesand the supply Therefore irrespective oftheapprehension of some scholars like Ratnam, Derek Bander, Heaton, that Chinese and Indian companies shall comeintoconflict in their search for new sources of oil and gas, may not be true. To quote DerekBamberthat, "faced with a growing energy shortage and unable to boost domestic production ofoiland gas to any significant extent, India wants to import more gas from the Middle eastandcentral Asia... While china appears to want all of central Asia's gas for it self" situation. We see a synergy emerging in theirenergyrelationship, which can be cooperative and mutually accommodative due to common energy threat. The quest for energy of both these countries may notescalateinto tensions. India dialogue on hydrocarbons cooperation by setting up a taskforceto identify areas of conflict and cooperation strengthening mutual ties. China itself, which has fordecadeslooked at India with a mix of apathy and suspicion, is beginning to take note ofIndia'seconomy and its attempts to beef up its armed forces. Attitudes in India have also changed andaretrending towards positive sentiments. Policy makers in New Delhi increasingly talkofchina as a core partner than a threat at Dollar 13 Billion in 2004 representing 1% of China'sglobaltrade and 9% of India's The prospects of increasing bilateral trade in futureareimmense. Indian companies want to reap in china's manufacturing prowess and Chinesecompanies'wants to learn from India's success in the services sector balance in Asia and with the Saudi Arabia. Owing to thefactthat both nations India and China, faces stiff energy security, challenges, they shalltryto overcome it by a cooperative response and through forging further stronger ties. The market driven solution to energy question in whicheconomicinterdependence is a key shall prevail over geopolitical tensions. While it is truethatthe globalization of oil markets offers more stability of supply to India than either abluewater navy or a nuclear arsenal is equally true that the geopolitical differences shalllargelyremain and they will continue; xx, maynotnecessarily lead to a conflictualTheTimesof, reported last month that New Delhiwaspreparing "to accept Bejing's offer of axxi. The recent visit of ChinesepremiereWen Jiabao to New Delhi aims atxxii. The real motivator behind currentthawis bilateral trade and commerce which stoodxxiii.xxiv. This improved India - Chinatiesshall forge sort of a softxxv. It from time to time impinge uponthegeo-economics. The convergence of oil security interest of both these countries will lead to a harmonious evolutionofbilateral approaches between them. However, for the time being, quest for stable energysuppliesmay not accelerate tensions and conflicts. Infact, the market may act as an integrativeforce,and the nations in Asia especially India and china might come up unitedly to secure stableenergysupplies. The transnationalising energy market and the imperatives ofenergydemand may hold them intact. In the emerging energy economy the globalization processwhichis characterized by global capital and world wide decentralization of production mayworkas a unifying factor and bring these nations together into a single system by bringingaboutthe organic integration of these countries into a global energy economy. ENDNOTES iManning A.Robert,2000,The Asian Energy Factor: mythsanddilemmas of energy security and the pacific, Palgrave publishers New York pVII ii Power, Instability: East Asia and United States After ColdWar,in no 3, cited in Manning A. Robert, 2000, the pacific future Aron L. Friedberg, Ripe for Rivalry:Prospectsfor peace in a multipolar world, and Richard K.BettsWealthInternationalSecurity Winter1993/94 vol18The Asian EnergyFactor: mythsand dilemmas of energy security and,Palgrave publishers New York, ibid. pVIIIiii 1997, pp22-31 cited in Manning A. Robert, 2000, security and the pacific future William Martin Twin Challenges: EnergyandEnvironment in Asia HarvardInternational Review SummerThe AsianEnergyFactor: myths and dilemmas of energy,Palgrave publishers New York p20 iv ibid. p20 v ibid. p59 vi opp.cite v ibid. p74 viii Annual Report 1998-99, Ministry of external Affairs Government Of India.p40 ix in Manning A. Robert, 2000, future Yamanis speech to the centre for GlobalEnergyStudies, 8th Annual Conference, April 27, 1998,London,citedThe Asian EnergyFactor:myths and dilemmas of energy security and the pacific, Palgrave publishers New York p77 x International Trade StatisticsYearbook2002 , Volume 1 Published byUnitedNations 2004 New York xiTrends inDevelopingEconomies, 1995 published byWorldBank Washington D.C xii ibid. opp.cite xiii Manning A. Robert,2000,The Asian Energy Factor:myths anddilemmas of energy security and the pacific, Palgrave publishers New York p119 xibid. p127 xibid. p131 xibid. p137 xvii ibid. p137x viii Rising to the challenge of 'secureenergyFuture, OPECBulletin,March 2005xix Rising to the challenge of secureenergyFuture, OPECBulletin,March 2005 xx Bamber Derek, FeelingThreatened,PetroleumEconomist March 2005 p13 xxi Bamber Derek, FeelingThreatened,PetroleumEconomist March 2005 p15 xxii Mitre Pramit and Drew Thompson 'ChinaandIndia: Rivals or Partners, FarEastern Economic Review April xxiii ibid. p 31 xxiv ibid. p 31 xxv Manning A. Robert,2000,The Asian Energy Factor:myths anddilemmas of energy security and the pacific, Palgrave publishers New Yorkp138here is little that is more essentialto the daily life of civilization than energy. Access to stable, secureand ample energy supplies is a fundamentalunderpinning of all nations securityand prosperity economies with high-energy demand. The quest for energybringsinto focus, several disparate issues of economics, national security,politics and power. Theregional energy security question has a profound impacton the energy flow in terms ofdemand and supply and on the emerging energyrelations between them. It is a dominant trend among scholars of Asian energy,to viewenergy as a Hostile factor, fomenting regional tensions, conflicts andmilitarization. Theytend to see the question of regional energy situationthrough the prism of militarymodernization, an array of unresolved territorialdisputes, lingering historical distrust, andsuspicion looming behind strategiccompetition. Thus it became received wisdom, at seeminglyendless conclaves onthe future of Asian security, that the specter of competition for dwindlingoiland gas resources is a likely source of future conflicts among increasinglywell armed statesas they played out the region's panoply of territorialdisputes. In the twenty- first century,Asia's future, prominent politicalscientists suggested may be Europe's past Something is clearly wrong with thisview of regional securityscenario. The emerging Asian energy relationshipbetween India, China, and Saudi Arabia maynot be conflictual, rather, assubsequent events tends to suggest, it may be heading towardsConvergence ofinterests. |