BSEIndia: All Stock Market News: 09/12/07

Wednesday, September 12, 2007

$$ DreamGains !! $$ Cold War In Making

Indrani Bagchi | TNN

   Over a period of roughly a hundred years, between 1813 and 1907, the British and Russian empires were locked in a strategic conflict for supremacy over Central Asia. The Great Game, as it came to be called, captured popular imagination with Rudyard Kipling’s classic novel Kim in 1901.
   A hundred years later, another Great Game appears to be unfolding in Asia, and it’s sending a chill through the continent. Ranged on one side are China and Russia, and on the other, US and Japan. If the ongoing military exercise in the Bay of Bengal — dubbed Malabar 07 — is any indication, India by virtue of its participation alongside the US, Japan, Australia and Singapore, is being drawn into an alliance aimed at containing China. Or, so say those who see Malabar and the nuclear deal as proof of Delhi’s growing proximity to Washington.
   Malabar 07, a six-day joint naval exercise (September 4-9) involving 25 warships, is at least for the record aimed at countering piracy and terrorism. But just as the US formed Nato (North Atlantic Treaty Organisation) post World War II by drawing western European nations into an anti-Soviet Union alliance, Beijing views Malabar as a step towards the creation of an Asian Nato to counter China’s growing economic, military and strategic influence.
   China’s making its own moves. It’s formed an innocuous-sounding alliance, the Shanghai Cooperation Organisation (SCO) with Russia and energy-rich central Asian nations of Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan. Last month, SCO put its military and air combat operations on display with a major military drill in China’s Xinjiang province and Russia’s Cherbakul mountains. The ostensible purpose of this war game was to counter terrorism in the region. WHAT’S HAPPENING

1

New oil and gas reserves in central Asia are a bone of contention. SCO now has control over them

2

The Quad wants control over busy Malacca Strait to guard pipelines & block China’s proliferating missiles

3

India wants energy to power its expansion, fears China’s aggressive growth, doesn’t want a 1-power Asia

China acquiring muscle in Asia

   China, which views the Malabar exercise as a step towards the creation of an Asian Nato, has formed the Shanghai Cooperation Organisation (SCO) with Russia and energy-rich central Asian nations. The organisation is aimed at building an axis that will give control of Central Asian energy reserves to Russia and China, which in turn will give Beijing a lot of muscle in Asia.
   So, is our neighbourhood suddenly getting a lot more dangerous? Is Asia feeling the chill of a new cold war? Although experts rule out the possibility of open warfare in Asia, some of them anticipate a ‘‘cold peace’’ descending on the region, marked by new economic and strategic alliances — in short, new faultlines that will define the new millennium’s Great Game in Asia.
   Some Asian countries are still undecided which way to go. So, states like South Korea, Indonesia, Malaysia, Thailand and Vietnam are sitting on the fence, quietly calculating the gains on either side. They are waiting and watching the Great Game unfold before they chip in — which way, no one is sure at the moment. The Left will argue that given the way the new strategic partnerships are panning out, the Indo-US nuclear deal isn’t a mere energy or technology pact but as a grand design on the part of the US to suck India into an alliance that will be ranged against China and give the US the kind of leverage in the region that it doesn’t enjoy right now.
   So, is the Left right? Not necessarily, as warfare is ruled out. Analysts say the world has become much more inter-dependent and strategically complex than the blackand-white shades of the Cold War era. For instance, Russia is a key member of SCO but has a warm relationship with India. Japan may bristle politically at Beijing but China is Tokyo’s closest economic partner. Ditto for Australia, which is as strong an economic partner of China as it is a military partner of the US. What countries are today looking for is not just military might but back-up support for sustaining their economic growth. At one level, economic ties among all Asian powers are booming, but at another no one is willing to put all their eggs into one friendly basket. Especially, when it comes to the real lubricant of economic growth, energy — a resource that is finite.
   The quest for energy, say analysts, is also forging new friendships and fashioning fresh alliances. This is not just about the Indo-US Ndeal, but about China’s sudden bonhomie with Russia — with whom it has had an iffy relationship — which analysts say is aimed at limiting American influence in Central Asia, the world’s most important new source of oil and natural gas.
   Many believe that after 9/11, the US used terrorism as a reason to entrench itself in central Asia, but it’s strategic goal was to check China and Russia and keep its footprint in the oil bazaar there. And the SCO is the counter. The SCO asked foreign powers to clear out of Central Asia in 2005, denied US observer status, and set up an energy club in 2007. And it hopes to control pipeline development in the region.
   The quadrilateral or just the Quad — of US, Australia, Japan and India (Singapore is an additional member in Malabar 07) — is founded on different felt needs. It’s ostensibly aimed against piracy in Malacca Straits, among the busiest waterways in the world. But it has to do with energy security, because a quarter of the world’s oil passes through the straits, and disruption would cripple Japan, China and South Korea. Also, proliferating missiles (from China) also passes through this route, and they can perhaps be discouraged.
   China has done its own containment strategy — the ‘string of pearls’ — by building military bases in Myanmar, Thailand and Cambodia, all close to the Malacca Strait. India, however, fears that this string of pearls can become an iron necklace around it. China is also building a huge container port in Sri Lanka. In the west, it is building a deep port in Pakistan. What is India’s interest in all this? Energy requirements — both oil and nuclear-based — apart, India is possibly heeding the argument that China is growing far too fast and furiously to remain a peaceful power — if not warlike, it might get too aggressive for comfort. Also, it probably wants a say in whether Asia remains a multipower or a single-power continent.

Kipling had made Great Game popular:

The Great Game describes the strategic conflict between the British Empire and the Russian Empire for supremacy in Central Asia. It roughly spanned a period of 100 years from 1813-1907. The centre of activity was in Afghanistan. Although the Great Game is usually taken to refer to the conflict of British and Russian interests in Afghanistan, there was also intense rivalry in Persia and in Tibet. However, the Great Game caught the popular imagination in Britain with Rudyard Kipling classic novel Kim published in 1901. Some believe the Great Game was over-hyped since there was no direct warfare between the two sides. Following the Bolshevik Revolution of 1917 a second, less intensive phase followed. Post World War II, a new Great Game began but this time between the US and Soviet union over the Middle East and its oil resources.