By Francis Hualupmomi
The US$1.37 billion Ramu NiCo project is one of the first mega foreign investments by a Chinese metrological company to have invested in PNG to drive the national economy. With the current legal dispute between relevant parties, these questions need begging, is the project a security threat to PNG’s national economy? How should relevant parties resolve this issue? We begin with some general observations and provide some thoughtful strategies at the end.
Some Observations: Security Perceptions
From observation, the Ramu NiCo project issue can be securitized as a non-conventional security issue as far as national security is concerned. The notion of non-conventional security basically refers to non-military aspect and centrally focuses on human security aspect ranging from political to cultural, for instance, human rights abuse, environmental problems, transnational crimes, food security, health issues, etc.
Socio-Environmental Frontier
The current legal dispute between the state and MCC and resource owners revolves around human rights issues and environmental impact. From information gathered, the MCC is being accused of socio-environmental implications posed to constituency of the resource site. The resource owners led by some environmental lobbyists have been on the forefront in discrediting MCC’s operation and its disposal mechanism. The disposal site has been claimed by them as environmentally unfriendly and a health hazard to local populace and bio-diversity.
There also have been numerous complaints raised by the local laborers on human rights abuses perpetrated by the MCC management which led to recent civil violence. This issue, however, has been resolved peacefully through a Melanesian style of soft power diplomacy.
Consequently, although the human rights issue may or may not hold true to some extent, in contrary, the environmental issue appears to have been calculated otherwise as speculated by state’s official position. The government believes that the MCC has been accused by the environmental lobbyist and Media with invalid and misleading information and therefore accounts to misperception by the public.
Economic Frontier
From an economic security observation, the Ramu NiCo is the first biggest investment project by a Chinese company in PNG in an era of economic struggling with boomerang aid and other Multinational Corporations (MNCs). Neither MNCs nor conventional aid donors have invested such a big slice of capital in PNG’s economy since independence. This implies trust and confidence by Chinese investors in PNG’s economy.
It is forecasted that by 2011 the project is expected to produce economies of scale with 31,150 tonnes of nickel and 3300t of cobalt per annum in a high-grade concentrate over a 20-year mine life and is also expected to extend for another 20-30 years. This economic scenario will construct a tripling effect by setting the take-off stage for the full economization of LNG projects in 2014. We expect PNG to become an economic power should these projects compounded with other factors of production are being fully economized without any distortions such as civil disruptions by landowners.
Although, there are some critical political-economic and socio-environmental implications underpinning foreign investment, playing the right card is what PNG needs to attract foreign investors. Diversifying the foreign investment is a strategic move to drive the national economy. The MCC is an important economic player in Asia. With peaceful rise of China as the second key economic player in the global economy, PNG cannot afford to lose MCC. MCC is the catalyst in driving the national economy.
Political Frontier
It has also been observed that the state through the current government has been accused by the environmental lobbyist and Media as being ill-advised in dealing with the issues. The government has been tied down to claims of governance issues with the MCC. More so, the government has been accused of signing significant deals without thoughtful considerations of its implications such as human rights issues and environmental issues. These criticisms are potentially dangerous to foreign investors.
An interesting observation is an emergence of “Cold War” or “Proxy Wars” syndrome. Some political analysts have calculated that competing interests by conventional major players’ quest for natural resources may have politically engineer an environment to contain China’s peaceful rise in the region. In this calculus, major players may possibly strategically maneuver the game by employing non-coercive forces such as lobbyist groups to influence policy outcomes in consistent with their interests.
Cooperation: “Absolute Gain is Necessary”
Confronted with these non-conventional security issues we posit this key question, how can PNG Government-Resource Owner and China-Developer cooperate to gain a win-win situation? Premised on the observation set in precedence, one can argue that PNG and China cannot afford to gain a loss-loss situation. Cooperation through soft diplomacy is absolutely necessary to gain a win-win situation for all parties, i.e. absolute gain matters.
The Chinese government with the developer should reconsider human rights issue with respect to resource owner’s demands in order to maintain its good reputation. A deeper mutual understanding and recognition between the two parties is required to settle the dispute peacefully and isolate future domino-effects.
PNG government on the other hand should pursue a neutral diplomacy between China-developer and resource owners. The government should work closely with Chinese government and the developer to reach a mutually concessional package for the resource owners without jeopardizing the project. It should also consider mediating with resource owners to peacefully resolve the legal battle.
The resource owner as an important beneficiary of the project should reconsider the case seriously with cautiousness. The project has incalculable benefits to transform its livelihood. Most importantly, the resource owners must not be misled by some politically motivated lobby groups. Adequate advisory services should be provided to the resource owner.
Conclusion
The Ramu NiCo is not a potential threat to national economy. In the interest of all parties, a mutually consensual package should be bargained and reached to gain a win-win situation. Legal disputes should be resolved peacefully in a Melanesian style of soft diplomacy.
The Author studies a Master of Arts in International Relations at the Institute of International Studies, Jilin University, China. His specializes in International Security focusing on Geopolitics of Energy Security in Asia-Pacific and Political Economy of East Asia.
Tuesday, February 15, 2011
Wednesday, February 9, 2011
Geopolitics of Energy Security and its Implications in Pacific Region and PNG: LNG Project as a Case in Point
The LNG project has geopolitical implications in the Pacific region and PNG. I attempt to explain the link between energy and security and foreign policy; and predict future outcomes with some constructive strategies at macro and micro level.
Energy constitutes both renewable and non-renewable resources but is scarce in nature. Energy security is referred to as reliable and adequate supply of energy at reasonable prices, i.e. energy must be supplied without interruption and must meet fully the needs of the world economy.
The limited composite of energy to meet unlimited needs and wants by states at its disposal constructs a global economic and security problem. States need energy to drive their modernization agenda. Since energy is scarce, the problem of allocating it efficiently becomes a security issue. This economic activity itself constructs domino-effects such as price volatility, terrorism, externality (environmental issue) etc.
Energy is both a commercial commodity and strategic tool employed by states to pursue its foreign policies. States strategically use transnational actors as its agent to secure energy resources externally to produce economies of scale to drive its modernization agenda. The unavailability of energy internally and scarcity of energy externally is both an economic and security problem of state which shapes foreign policy. In developing countries, lack of technological efficiency is a problem in utilizing energy resources, for instance, PNG is energy-rich but lack appropriate technology for down-processing and therefore can only export overseas. Big players in most cases seek energy offshore through bilateral or multilateral agreements or arrangements.
Oil and gas has always been states national interest expressed in terms of power projection (capability and capacity or authority) to co-exist in the international system. States will compete antagonistically to secure and protect its supplier sources, i.e. economic and military modernization of a state depends entirely on oil and gas to guarantee its security and survival. Thus, a foreign policy of any state constitutes national interest with an objective to secure and protect energy sources. The thirst and quest for oil is inevitable. Historical evidence strongly supports this hypothesis that imperialism has been the manifestation of “scramble for resources” in resource-rich nations leading to antagonistic competition, conflicts, wars and cooperation. However, today with complex interdependence war is unthinkable.
With globalization, economic development, industrialization, urbanization, demographic challenges, and military capability build-up and market imperatives, the demand of oil and gas will exceed supply. Intriguingly, the biggest consumers are the most advanced industrialized countries (MAIC) and newly industrialized countries (NIC), which will require more oil and gas to drive their modernization agenda. Today, with peaceful rise of China in the global economy, the demand and competition of oil will be steeper than expected with forerunners such as U.S, India, and others.
According to the latest U.S Energy Information Administration (EIA) on International Energy Outlook 2010, the world energy consumption increases by 49 percent from 2007-2035. Total energy demand increases by 84 percent in non-OECD countries than OECD countries with a 14 percent increase. The total energy use rose from 495 quadrillion British Thermal Units (Btu) in 2007 to 590 quadrillion Btu in 2020 and 739 quadrillion Btu in 2035. Oil and gas has approximately 40-60 years life span which constructs a security dilemma.
However, oil supply will be affected given the current unfavorable conditions in the Middle East. The current oil producing field is declining slowly from 2002 to 2030. This can be attributed to factors underpinning conflicts in Middle East, especially Iraq war, terrorism, religious tensions, and political instability. It is this scenario that may induce a foreign policy shift from main importers such as U.S, China, India and EU to other supplier sources such as the Pacific region.
Implications:
Macro Level: The Pacific region in the southern hemisphere is identified by political-economic powers as the last frontier of resource-rich nations, and in fact PNG is one of these key geo-strategic and economic bases or ‘sphere of influence’ for energy supply in international political and economical relations:
1. Geostrategic/military – shift in foreign policies, alliances and military doctrines and structures. As far as geo-strategic relation is concerned competition and tension between US-allies and peaceful China is inevitable. The US assumes traditional hegemonic power in the Pacific through its deputy sheriffs; Australia, New Zealand, Japan and Britain. The return of US in Pacific since Cold War indicates geostrategic shift to contain China’s peaceful rise.
2. Terrorism- there is possibility of terrorist attack on shipment route/pipeline.
3. Re-emergence of Cold War symptom.
4. Transnational crimes (continental and maritime security) – increasing international organized crimes, piratism, illegal immigrants, gun smuggling, money laundering, human rights abuse and trans-border diseases.
Micro Level: It is postulated that LNG project poses a threat and challenge to national security:
1. Terrorism attack in mine sites and in major urban centers.
2. Transnational crimes (continental and maritime security) – increasing international organized crimes, piratism, illegal immigrants, gun smuggling, money laundering, human rights abuse and trans-border diseases.
3. Price volatility – internal conflict can cause price hike affecting global markets.
4. Rebellion against state and MNCs by disgruntled resources which may possibly trigger legitimacy crises and civil violence/war. The Bougainville crisis is a classical case.
5. State graft by government officials and MNCs in siphoning project money covertly into their empires through illegal means.
6. Mercenary (military-like) build-up by resource owners.
7. Re-emergence of Cold War symptom.
8. Externalities or environmental problems.
Challenge
The government’s aspiration to attain a ‘Middle Income Country’ (MIC) by 2050 and thereby, becoming a ‘Wise, Smart, and Happy Society by 2050 may not be fully released if it does not define energy security comprehensively. This new paradigm shift in government thinking is a grand challenge as a nation state in modernization.
PNG is predicted to see a spiraling economic growth rate of about 11 percent annually come full economization of LNG projects by 2014. Although LNG projects may transform PNG into a MIC at forecasted growth rate similar to China echoed by some economic analysts, its security implications are incalculable. Securitization of energy is strategically and economically vital to assess ‘where we are, where we want go and how we will get there’. This will involve analyzing security at macro and micro level that appropriate strategies can be framed to systematically respond thoughtfully to emerging security threats. Security of the state and individual is absolutely vital to fully realize the vision.
Strategies
To effectively manage this security dilemma, a comprehensive strategic package is needed:
Macro level:
1. PNG must play a smart neutral diplomacy with major players in the region;
2. U.S must embrace China’s peaceful diplomacy; and
3. Multilateral cooperation is necessary, i.e. establish a Regional Energy Agency.
Micro level:
• PNG establish must establish an Independent Energy Authority;
• PNG must develop a National Energy Policy;
• PNG Foreign Policy, Defence Policy and Police Policy must embrace energy security comprehensively; and
• PNG must establish a Center for International Security and Strategic Studies.
Energy constitutes both renewable and non-renewable resources but is scarce in nature. Energy security is referred to as reliable and adequate supply of energy at reasonable prices, i.e. energy must be supplied without interruption and must meet fully the needs of the world economy.
The limited composite of energy to meet unlimited needs and wants by states at its disposal constructs a global economic and security problem. States need energy to drive their modernization agenda. Since energy is scarce, the problem of allocating it efficiently becomes a security issue. This economic activity itself constructs domino-effects such as price volatility, terrorism, externality (environmental issue) etc.
Energy is both a commercial commodity and strategic tool employed by states to pursue its foreign policies. States strategically use transnational actors as its agent to secure energy resources externally to produce economies of scale to drive its modernization agenda. The unavailability of energy internally and scarcity of energy externally is both an economic and security problem of state which shapes foreign policy. In developing countries, lack of technological efficiency is a problem in utilizing energy resources, for instance, PNG is energy-rich but lack appropriate technology for down-processing and therefore can only export overseas. Big players in most cases seek energy offshore through bilateral or multilateral agreements or arrangements.
Oil and gas has always been states national interest expressed in terms of power projection (capability and capacity or authority) to co-exist in the international system. States will compete antagonistically to secure and protect its supplier sources, i.e. economic and military modernization of a state depends entirely on oil and gas to guarantee its security and survival. Thus, a foreign policy of any state constitutes national interest with an objective to secure and protect energy sources. The thirst and quest for oil is inevitable. Historical evidence strongly supports this hypothesis that imperialism has been the manifestation of “scramble for resources” in resource-rich nations leading to antagonistic competition, conflicts, wars and cooperation. However, today with complex interdependence war is unthinkable.
With globalization, economic development, industrialization, urbanization, demographic challenges, and military capability build-up and market imperatives, the demand of oil and gas will exceed supply. Intriguingly, the biggest consumers are the most advanced industrialized countries (MAIC) and newly industrialized countries (NIC), which will require more oil and gas to drive their modernization agenda. Today, with peaceful rise of China in the global economy, the demand and competition of oil will be steeper than expected with forerunners such as U.S, India, and others.
According to the latest U.S Energy Information Administration (EIA) on International Energy Outlook 2010, the world energy consumption increases by 49 percent from 2007-2035. Total energy demand increases by 84 percent in non-OECD countries than OECD countries with a 14 percent increase. The total energy use rose from 495 quadrillion British Thermal Units (Btu) in 2007 to 590 quadrillion Btu in 2020 and 739 quadrillion Btu in 2035. Oil and gas has approximately 40-60 years life span which constructs a security dilemma.
However, oil supply will be affected given the current unfavorable conditions in the Middle East. The current oil producing field is declining slowly from 2002 to 2030. This can be attributed to factors underpinning conflicts in Middle East, especially Iraq war, terrorism, religious tensions, and political instability. It is this scenario that may induce a foreign policy shift from main importers such as U.S, China, India and EU to other supplier sources such as the Pacific region.
Implications:
Macro Level: The Pacific region in the southern hemisphere is identified by political-economic powers as the last frontier of resource-rich nations, and in fact PNG is one of these key geo-strategic and economic bases or ‘sphere of influence’ for energy supply in international political and economical relations:
1. Geostrategic/military – shift in foreign policies, alliances and military doctrines and structures. As far as geo-strategic relation is concerned competition and tension between US-allies and peaceful China is inevitable. The US assumes traditional hegemonic power in the Pacific through its deputy sheriffs; Australia, New Zealand, Japan and Britain. The return of US in Pacific since Cold War indicates geostrategic shift to contain China’s peaceful rise.
2. Terrorism- there is possibility of terrorist attack on shipment route/pipeline.
3. Re-emergence of Cold War symptom.
4. Transnational crimes (continental and maritime security) – increasing international organized crimes, piratism, illegal immigrants, gun smuggling, money laundering, human rights abuse and trans-border diseases.
Micro Level: It is postulated that LNG project poses a threat and challenge to national security:
1. Terrorism attack in mine sites and in major urban centers.
2. Transnational crimes (continental and maritime security) – increasing international organized crimes, piratism, illegal immigrants, gun smuggling, money laundering, human rights abuse and trans-border diseases.
3. Price volatility – internal conflict can cause price hike affecting global markets.
4. Rebellion against state and MNCs by disgruntled resources which may possibly trigger legitimacy crises and civil violence/war. The Bougainville crisis is a classical case.
5. State graft by government officials and MNCs in siphoning project money covertly into their empires through illegal means.
6. Mercenary (military-like) build-up by resource owners.
7. Re-emergence of Cold War symptom.
8. Externalities or environmental problems.
Challenge
The government’s aspiration to attain a ‘Middle Income Country’ (MIC) by 2050 and thereby, becoming a ‘Wise, Smart, and Happy Society by 2050 may not be fully released if it does not define energy security comprehensively. This new paradigm shift in government thinking is a grand challenge as a nation state in modernization.
PNG is predicted to see a spiraling economic growth rate of about 11 percent annually come full economization of LNG projects by 2014. Although LNG projects may transform PNG into a MIC at forecasted growth rate similar to China echoed by some economic analysts, its security implications are incalculable. Securitization of energy is strategically and economically vital to assess ‘where we are, where we want go and how we will get there’. This will involve analyzing security at macro and micro level that appropriate strategies can be framed to systematically respond thoughtfully to emerging security threats. Security of the state and individual is absolutely vital to fully realize the vision.
Strategies
To effectively manage this security dilemma, a comprehensive strategic package is needed:
Macro level:
1. PNG must play a smart neutral diplomacy with major players in the region;
2. U.S must embrace China’s peaceful diplomacy; and
3. Multilateral cooperation is necessary, i.e. establish a Regional Energy Agency.
Micro level:
• PNG establish must establish an Independent Energy Authority;
• PNG must develop a National Energy Policy;
• PNG Foreign Policy, Defence Policy and Police Policy must embrace energy security comprehensively; and
• PNG must establish a Center for International Security and Strategic Studies.
Saturday, February 5, 2011
Is a China a Threat to Pacific? The Rise of ‘New Imperialism or New Cold War’
Is a China a Threat to Pacific? The Rise of ‘New Imperialism or New Cold War’
By Francis Hualupmomi
Introduction
Is China a strategic threat in the Pacific Region? The Chinese dominant role and influence in the Pacific region is not a threat as perceived by the conventional hegemon, US, rather a politically meagre to destabilise the region. Chinese expansionism is premised on her Confuciasm philosophy of ‘Harmonious Society through Kindness and Friendship’ to maintain peace and stability. The competition for hegemony by US in the region can potentially or possibly trigger tension with China, which could escalate into conflict. This is calculated as an emergence of ‘New Imperialism’ or ‘New Cold War’. It is strongly argued that US has always misperceived China’s role as a threat and hegemon in the region. The scramble for energy resource is a case in point to support this theory. In order to avoid possible conflict, China must play a soft diplomacy, whilst Papua New Guinea (PNG) plays a neutral diplomacy to maintain a ‘balance of power’ (BoP) in the region.
Political Economy of Energy Security: Power and Competition in Asia-Pacific Region
The demand for these energy resources is so high compared to other market commodities as indicated by trends. The demand exceeds supply as non-renewable resources are over-consumed by industrialised states mostly NICs (Newly Industrialised Countries) and big economies such as the US, China, Japan, etc. The energy supply bases for the global market economy are mostly from resource-rich regions of South America, Africa, Asia and Pacific.
Historically countries within these regions have been conquered by European imperialists in quest for ‘scramble of resources’. The demand and supply of energy is a function of economic and military power. Energy resources will remain the national interest of any state in the drive towards modernisation and industrialisation.
US, China, Japan are the largest consumers of energy followed by ‘New Comers’, India, Pakistan, Brazil, Indonesia and others. Increasingly, as countries face rapid economic development, industrialisation, urbanisation, demographic challenges, and military capability build-up, the appetite for energy will surge and fuel stiff competition among rising powers. The rise of NICs and or emerging powers such as India, and Pakistan will also spur more fierce and intense competition, which has already create tensions between big powers in the Asia Pacific region. More over, this scenario can potentially affect the socio-economic growth instigating civil crisis mostly in developing countries as demand for energy exceeds supply.
US Perception on China
It appears that Chinese rapid expansion in the Pacific region has alarmed US hegemonic role in the region. Recently, analysts, mostly from the West, have empirically examined Chinese motives. The discourse on the motives was strategic in nature and manifold: Securing South Pacific nations’ votes in international organisations; growing Chinese communities in the region and Beijing’s responsibility to protect the Chinese Diaspora; Beijing’s diplomatic rivalry with Taipei; China’s economic interests; its thirst for natural resources; the rise of China; increasingly, China’s strategic interests; and Ideological expansionism.
China’s Foreign Policy: Energy Security and Diplomacy
Energy concerns were a minor in Beijing’s national security and strategic assessment in the first three decades (1949-1979). First oil discovered in Daqing in Northeast China in 1959 to keep her self-reliant. Since end of 1970s China reopened its doors to western community and adopted economic reform policies, its economy has been expanding at an average annual growth rate of 10 percent annually. This rapid expansion requires resources, energy and raw materials to drive and meet its growing demands. Since mid 1990s China has been seeking energy and natural resources in Africa, Middle East, Latin America, Central Asia, South Pacific, South East Asia and elsewhere.
The new energy diplomacy has become a key focus of its foreign policy. Energy is identified as its main strategic and economic tool to drive its economic and military power in 2000-2020. In 2000, about two third of its energy came from coal and over four fifth was used for electricity. In 2007, China has become a net importer of energy. After the financial crisis in 1997, the Chinese government provided stimulus package to expand consumption. Oil accounts for 19 percent in 2000, but it is predicted to increase to be more than double by 2030.This demand forms the basis of her energy diplomacy and security focus in the Pacific region.
Is China a Threat to the Pacific?
Numerous political commentators have alluded that Pacific is the 21st century ‘sphere of influence’ of the ‘New Imperialism’ or ‘New Cold War’. In perspective, the new imperialism is the re-emergence of US imperialism in new form in the region to expand its foreign policies and compete for global leadership. This approach often collides with emerging powers such as China, which can be seen in the form of new cold war. Strategically speaking, the Pacific is not a military threat to China as miscalculated by western analysts. And the reasons are manifold.
First, although it is possible through strategic thinking, that China is compel to position missiles in the Pacific as stated elsewhere, its implementation will be a difficult task. China has not prioritised military build-up in modernisation however, has centrally focused on economic development.
In addition, access to military equipment and technologies from the West is difficult. Therefore, there is still a huge gap between the West and China. China’s recent modernisation of military build-up especially, her ground and land force capabilities in Asia-Pacific is still being neutralised by the US. The US has still maintained a BoP in the region through its naval presence.
More so, China’s Defence Force Policy is mandated to protect the rights of its citizens, and states property. The policy articulated that her main concern is not external rather internal especially, with extremists, nationalist movements, terrorism, poverty, and Taiwan issue. Most importantly its Defence Force is built with a strategic objective of self-defense rather than offensive to promote peace and stability in order to create a harmonious society through kindness and friendship. China will only be offensive should and when her national security is threatened under the defensive principle to protect rights of her citizens and state property to maintain peace and stability (Guangqian, 2004).
China does not perceive Pacific as a military threat. China is a developing country and is still no match to the US. Hegemony and intervention is not in her national interest. Her main strategic high priority threat is Taiwan’s agenda. Interestingly, the current security issue in the region is energy security. The supply of energy resources has become increasingly important than that of military. The Pacific by proximity is unreliable to Chinese offensive strategy against Taiwan.
Ideological differences still exist in the region. Pacific Islands have robust relationship with their cultural and divine philosophy, which is a strong anti-communist philosophy. Chinese immigrants doing business in the Pacific is another concern in the region, which has damaged China’s image (Yang, 2007). For instance, competing in business and corrupting officials. PNG riot in 2009 and Solomon Island civil unrest in 2006 are some of the cases in point.
Although, the Pacific is strategically unimportant to both US and China, the US still maintains a BoP through Micronesia and its deputy sheriffs; Australia in Melanesia and New Zealand in Polynesia.
More increasingly important, the Small Island Developing Economies have a strong close bilateral relationship with China. They perceive China as a true friend in their modernisation and industrialisation drive. And therefore China would seek to maintain that robust cordial bilateral relationship.
Will Energy shift Balance of Power in Pacific Region?
It appears also that energy resources are predicted to shift BoP in the region. It is increasingly obvious now that competition between China, the ‘sleeping dragon’, will rise up over the US, the ‘sleepless eagle’, and assume regional leadership and stabiliser (not a hegemonic leadership as perceived by the West).
The US and Chinese apatite for resources is in high demand, however, with Chinese skilful soft diplomacy she is most likely to score more points by securing strategic and economic corridors in the region. China’s dominant role and influence in the region is an indication of the rise of new power to maintain peace and stability, although US and its deputy sheriffs will still co-exist and ponder in maintaining the regime. This does not dismiss the notion that the US will play an important role in the region.
Indeed, one can argue that China’s economic and military power has the capacity and capability to create an enabling environment for development in the region through friendship. Its unconditional dollar diplomacy is a key strategic tool to harmonise the region through mutual collaboration in sharing and exchanging information and resources in development.
And this is most evident in development aids in PNG and Solomon Islands. China has investments in Ramu Nickel, Sporting Stadium, proposed International Conference, Chinese Scholarship, defence capacity building, only to name a few. More so, China is also investing in middle power, Australia for instance, in Queensland LNG and Coal, and trade with New Zealand respectively.
Consequently, as China assumes the regional leadership as stabiliser it can be predicted that competition in power play will trigger tension leading to conflict. This scenario, one would argue, will be an emergence of ‘new cold war’ or more precisely ‘economic cold war’ between the West and China as discussed below.
Emergence of ‘New Imperialism’ or ‘New Cold War’ in Pacific Region? PNG as a Case in Point
Macro Level: The Pacific region in the southern hemisphere is identified by economic powers as the last frontier of resource-rich nations, and in fact PNG alone has been indentified as a key geo-strategic and economic base or ‘sphere of influence’ for energy supply in international relations. Therefore, Pacific in particular, PNG is or will be big powers’ national interest. As far as geo-strategic relation is concern competition and tension between China and US is inevitable.
At the macro level, the US assumes traditional hegemonic power in the Pacific through its deputy sheriffs; Australia, New Zealand, Japan and Britain. The end of Cold War delineates scaling down of US’s role in the Pacific with some of its missions being closed, for instance, in Solomon Islands.
recently, US increasingly refocus its foreign policy with respect to China’s increasing role in the region. As a result, a strategic shift took place in 2008 when US announced to have its military base be relocated to Guam with a strategic objective to contain Chinese expansionism. This was evidenced in 2008 when the then Bush Administration declared the “Pacific Year” as part of its foreign policy. The US has always perceived China as its major threat in Asia Pacific. The region is closely watched by the eagle eyes in order to contain dragon’s infiltration.
In contrary, China has always played a smart game diplomacy through soft diplomacy to secure friendship with an aim to spread its culture and philosophy across borders. Chinese diplomacy is based on Confuciasm philosophy of ‘harmonious society’. She promotes this philosophy through soft development aids unconditionally to developing countries. In so doing, China provides a win-win situation for all actors. In PNG, Chinese foreign direct investment is voluminous. For instance, Ramu Nickel mine, the proposed International Conference Center, and many others.
Consequently, Chinese dominant role in development bilateral relations in the Pacific region has stimulated and accelerated economic growth; while at the same time increasingly instils fear and insecurity to US and its deputy sheriffs in the region. Australia, though a middle power, have competed to protect US backyard through its conditional loans, is still struggling to contain Chinese influence.
Hence, Chinese soft diplomatic approach in the Pacific in assisting Small Island States such as PNG through investment in energy – LNG Projects - may perhaps be perceived by US as menace as far as regional stability is concerned. More so, whilst US may perceive China otherwise, China is also promoting ‘collaborative diplomacy’ in Pacific to secure its potential energy suppliers of oil, gas, nickel, etc, to build its economy, whilst establishing friendship to maintain peace and stability.
Hence from a hegemonic stability perspective it is argued that diverging interests and ideational dynamics can possibly cause inter-state conflict which can trigger possible conflict.
Micro Level: At micro level it appears that legitimacy crisis and civil war are potential threats to national security as far as energy security is concerned.
First, there is possibility that the disgruntled resource owners may rebel against the state which could trigger legitimacy crisis and civil war. Second, disgruntled resource-rich owners may rebel against the MNCs which can cause civil crisis or possible military intervention especially by the US (but all-out war or grand scale war is unlikely).
In the former, experiences over unresolved issues pertaining to energy economy have demonstrated a rebellious scenario. Resource owners in most mining and petroleum projects in PNG have been treated unfairly in terms of redistribution of wealth by the government. Poor Royalties and lack of development services were a great concern. This problems can lead into civil crisis when the people take the ‘rule of law’ into their own hands. The Bougainville crisis is one of the cases in point.
State graft by government officials and MNCs in siphoning project money covertly into their empires through illegal means can cause legitimacy or civil crisis. For instance, The LNG project in Southern Highlands Province is an assumed scenario. Resource owners in the province have military capability to revolt against the state. The Singirok Gun Report suggested high and semi- powered factory guns owned by the people.
In the latter, civil war between the state and MNCs is highly possible. The operations of Exxon Mobile and G4S in LNG sites have already question the sovereignty of the state and a concern to national security. Exxon Mobil is the richest US Company in the world, which has a close relationship with the US government. Exxon Mobile’s presence in PNG is a US national interest as far as its security is concern.
G4S is a highly militarised private mercenary company of US protecting its interest in different Oil fields under various berets. G4S presence in PNG also questions its immunity to the state law. The nexus between rebellious resource owners against Exxon Mobile is a threat to US and therefore is deemed as its high priority national security. In the event that the state and G4S fail to contain and stabilize the civil rebellion US military intervention is possible, although it may seem unlikely, however the 1994 Gulf War speaks for itself. There are also other civil crises such as in East Timor, Nigeria, Somalia, instigated by energy competition.
The Ramu Nickel and Copper Mine operated by the Chinese company is another case in point facing constant rebellion by the resource owners. Chinese investment in PNG is a form of foreign direct investment (FDI) which has the potential to trigger economic growth. There is already assumption in the current strategic thinking that MNCs competition in energy resources by big powers are indirectly at play influencing social or civil actors such as resource owners to disturb power expansion in the region. For instance, there is already a rumour that the West has covertly influenced the Landowners to push Chinese investors in Ramu Nickel site out of PNG. As far as security of Chinese nationals is concerned, Beijing will always resort to soft diplomacy through peaceful means in settling disputes. Military intervention by China is against her foreign policy.
More interestingly, a focus at LNG project, one would argue that Chinese investors were overlooked by the PNG government and major MNCs players. Ostensibly, it appears that Chinese investment in the project would be perceived by the U.S as a potential threat.
Ultimately, PNG government must embrace china in energy investment. China, as the second largest market economy, has the potential to transform and modernise PNG economy through energy. China as a friend is ready to invest in energy sectors, for instance, nuclear energy – solar energy, geo-thermal (hydropower), bio-fuel and others. More so China is keen in investing in clean energy to support PNG’s role in global warning.
The Challenge for PNG Government’s Vision 2050
The government’s aspiration to attain ‘Middle Income Country’ (MIC) by 2050 and thereby, becoming a ‘Wise, Smart, and Happy Society by 2050 may not be fully released if it does not critically evaluate energy security systematically and respond thoughtfully at a global scale.
This new paradigm shift in government thinking is a grand challenge as a nation state in modernisation. It appears that this vision may not achieve its stated gaols and objectives if security issues are not critically conceptualised at macro and micro level. I am of the view that the greatest conundrum will ultimately rest on energy security.
PNG is predicted to see a spiralling economic growth rate of 8.4 percent annually with the full economisation of LNG projects by 2014. Although energy projects may transform PNG into a MIC at forecasted growth rate similar to China echoed by some economic analysts, its security implications are incalculable.
Securitisation of energy is strategically and economically vital to assess ‘where we are, where we want go and how we will get there’ with energy. This will involve analysing security at macro and micro level that appropriate strategies can be framed to systematically respond thoughtfully to emerging security threats. Security of the state and individual is absolutely vital to fully realise the vision.
The Role of SINO-PNG Relations
In order to avoid possible future conflict China and PNG will have to play an important role to maintain a BoP in the region. PNG as an economic and strategic interest of economic powers in the region will have to play a neutral diplomacy within ‘great and rising powers’ whilst China continues to play a soft diplomacy based on ‘collaborative and consensus diplomacy’. China must convince US misperception in its role in the Pacific region. PNG on the other hand must refocus or res-cope its foreign policy to contextualise the regional security perspective.
Conclusion
It can be concluded that China is not a security threat to Pacific region. This is only a misperception by the West, especially US. China on the hand does not see the Pacific region as a strategic threat rather as a true friend in development.
It can also be said that energy security has the potential to reconfigure power relations in the region. China will assume peaceful regional leadership and stabiliser (not as a hegemon as perceived by the US). China’s rise in power to global and regional prominence is to promote peaceful and harmonious society through kindness and friendship based on her Confucius philosophy.
Energy security is a national security priority of any state. Competition between US and China in energy resources in the region postulates emergence of ‘New Imperialism’ or ‘New Cold War’. At macro level, since energy is scarce, competition between rival powers can cause conflict in the region. At micro level legitimacy crisis or civil war between the state and MNCs, and disgruntled resource owners is inevitable. These scenarios pose a great challenge to PNG with respect to Vision 2050. Therefore, PNG and China will play an important role to avoid such crisis and maintain a BoP in the region.
By Francis Hualupmomi
Introduction
Is China a strategic threat in the Pacific Region? The Chinese dominant role and influence in the Pacific region is not a threat as perceived by the conventional hegemon, US, rather a politically meagre to destabilise the region. Chinese expansionism is premised on her Confuciasm philosophy of ‘Harmonious Society through Kindness and Friendship’ to maintain peace and stability. The competition for hegemony by US in the region can potentially or possibly trigger tension with China, which could escalate into conflict. This is calculated as an emergence of ‘New Imperialism’ or ‘New Cold War’. It is strongly argued that US has always misperceived China’s role as a threat and hegemon in the region. The scramble for energy resource is a case in point to support this theory. In order to avoid possible conflict, China must play a soft diplomacy, whilst Papua New Guinea (PNG) plays a neutral diplomacy to maintain a ‘balance of power’ (BoP) in the region.
Political Economy of Energy Security: Power and Competition in Asia-Pacific Region
The demand for these energy resources is so high compared to other market commodities as indicated by trends. The demand exceeds supply as non-renewable resources are over-consumed by industrialised states mostly NICs (Newly Industrialised Countries) and big economies such as the US, China, Japan, etc. The energy supply bases for the global market economy are mostly from resource-rich regions of South America, Africa, Asia and Pacific.
Historically countries within these regions have been conquered by European imperialists in quest for ‘scramble of resources’. The demand and supply of energy is a function of economic and military power. Energy resources will remain the national interest of any state in the drive towards modernisation and industrialisation.
US, China, Japan are the largest consumers of energy followed by ‘New Comers’, India, Pakistan, Brazil, Indonesia and others. Increasingly, as countries face rapid economic development, industrialisation, urbanisation, demographic challenges, and military capability build-up, the appetite for energy will surge and fuel stiff competition among rising powers. The rise of NICs and or emerging powers such as India, and Pakistan will also spur more fierce and intense competition, which has already create tensions between big powers in the Asia Pacific region. More over, this scenario can potentially affect the socio-economic growth instigating civil crisis mostly in developing countries as demand for energy exceeds supply.
US Perception on China
It appears that Chinese rapid expansion in the Pacific region has alarmed US hegemonic role in the region. Recently, analysts, mostly from the West, have empirically examined Chinese motives. The discourse on the motives was strategic in nature and manifold: Securing South Pacific nations’ votes in international organisations; growing Chinese communities in the region and Beijing’s responsibility to protect the Chinese Diaspora; Beijing’s diplomatic rivalry with Taipei; China’s economic interests; its thirst for natural resources; the rise of China; increasingly, China’s strategic interests; and Ideological expansionism.
China’s Foreign Policy: Energy Security and Diplomacy
Energy concerns were a minor in Beijing’s national security and strategic assessment in the first three decades (1949-1979). First oil discovered in Daqing in Northeast China in 1959 to keep her self-reliant. Since end of 1970s China reopened its doors to western community and adopted economic reform policies, its economy has been expanding at an average annual growth rate of 10 percent annually. This rapid expansion requires resources, energy and raw materials to drive and meet its growing demands. Since mid 1990s China has been seeking energy and natural resources in Africa, Middle East, Latin America, Central Asia, South Pacific, South East Asia and elsewhere.
The new energy diplomacy has become a key focus of its foreign policy. Energy is identified as its main strategic and economic tool to drive its economic and military power in 2000-2020. In 2000, about two third of its energy came from coal and over four fifth was used for electricity. In 2007, China has become a net importer of energy. After the financial crisis in 1997, the Chinese government provided stimulus package to expand consumption. Oil accounts for 19 percent in 2000, but it is predicted to increase to be more than double by 2030.This demand forms the basis of her energy diplomacy and security focus in the Pacific region.
Is China a Threat to the Pacific?
Numerous political commentators have alluded that Pacific is the 21st century ‘sphere of influence’ of the ‘New Imperialism’ or ‘New Cold War’. In perspective, the new imperialism is the re-emergence of US imperialism in new form in the region to expand its foreign policies and compete for global leadership. This approach often collides with emerging powers such as China, which can be seen in the form of new cold war. Strategically speaking, the Pacific is not a military threat to China as miscalculated by western analysts. And the reasons are manifold.
First, although it is possible through strategic thinking, that China is compel to position missiles in the Pacific as stated elsewhere, its implementation will be a difficult task. China has not prioritised military build-up in modernisation however, has centrally focused on economic development.
In addition, access to military equipment and technologies from the West is difficult. Therefore, there is still a huge gap between the West and China. China’s recent modernisation of military build-up especially, her ground and land force capabilities in Asia-Pacific is still being neutralised by the US. The US has still maintained a BoP in the region through its naval presence.
More so, China’s Defence Force Policy is mandated to protect the rights of its citizens, and states property. The policy articulated that her main concern is not external rather internal especially, with extremists, nationalist movements, terrorism, poverty, and Taiwan issue. Most importantly its Defence Force is built with a strategic objective of self-defense rather than offensive to promote peace and stability in order to create a harmonious society through kindness and friendship. China will only be offensive should and when her national security is threatened under the defensive principle to protect rights of her citizens and state property to maintain peace and stability (Guangqian, 2004).
China does not perceive Pacific as a military threat. China is a developing country and is still no match to the US. Hegemony and intervention is not in her national interest. Her main strategic high priority threat is Taiwan’s agenda. Interestingly, the current security issue in the region is energy security. The supply of energy resources has become increasingly important than that of military. The Pacific by proximity is unreliable to Chinese offensive strategy against Taiwan.
Ideological differences still exist in the region. Pacific Islands have robust relationship with their cultural and divine philosophy, which is a strong anti-communist philosophy. Chinese immigrants doing business in the Pacific is another concern in the region, which has damaged China’s image (Yang, 2007). For instance, competing in business and corrupting officials. PNG riot in 2009 and Solomon Island civil unrest in 2006 are some of the cases in point.
Although, the Pacific is strategically unimportant to both US and China, the US still maintains a BoP through Micronesia and its deputy sheriffs; Australia in Melanesia and New Zealand in Polynesia.
More increasingly important, the Small Island Developing Economies have a strong close bilateral relationship with China. They perceive China as a true friend in their modernisation and industrialisation drive. And therefore China would seek to maintain that robust cordial bilateral relationship.
Will Energy shift Balance of Power in Pacific Region?
It appears also that energy resources are predicted to shift BoP in the region. It is increasingly obvious now that competition between China, the ‘sleeping dragon’, will rise up over the US, the ‘sleepless eagle’, and assume regional leadership and stabiliser (not a hegemonic leadership as perceived by the West).
The US and Chinese apatite for resources is in high demand, however, with Chinese skilful soft diplomacy she is most likely to score more points by securing strategic and economic corridors in the region. China’s dominant role and influence in the region is an indication of the rise of new power to maintain peace and stability, although US and its deputy sheriffs will still co-exist and ponder in maintaining the regime. This does not dismiss the notion that the US will play an important role in the region.
Indeed, one can argue that China’s economic and military power has the capacity and capability to create an enabling environment for development in the region through friendship. Its unconditional dollar diplomacy is a key strategic tool to harmonise the region through mutual collaboration in sharing and exchanging information and resources in development.
And this is most evident in development aids in PNG and Solomon Islands. China has investments in Ramu Nickel, Sporting Stadium, proposed International Conference, Chinese Scholarship, defence capacity building, only to name a few. More so, China is also investing in middle power, Australia for instance, in Queensland LNG and Coal, and trade with New Zealand respectively.
Consequently, as China assumes the regional leadership as stabiliser it can be predicted that competition in power play will trigger tension leading to conflict. This scenario, one would argue, will be an emergence of ‘new cold war’ or more precisely ‘economic cold war’ between the West and China as discussed below.
Emergence of ‘New Imperialism’ or ‘New Cold War’ in Pacific Region? PNG as a Case in Point
Macro Level: The Pacific region in the southern hemisphere is identified by economic powers as the last frontier of resource-rich nations, and in fact PNG alone has been indentified as a key geo-strategic and economic base or ‘sphere of influence’ for energy supply in international relations. Therefore, Pacific in particular, PNG is or will be big powers’ national interest. As far as geo-strategic relation is concern competition and tension between China and US is inevitable.
At the macro level, the US assumes traditional hegemonic power in the Pacific through its deputy sheriffs; Australia, New Zealand, Japan and Britain. The end of Cold War delineates scaling down of US’s role in the Pacific with some of its missions being closed, for instance, in Solomon Islands.
recently, US increasingly refocus its foreign policy with respect to China’s increasing role in the region. As a result, a strategic shift took place in 2008 when US announced to have its military base be relocated to Guam with a strategic objective to contain Chinese expansionism. This was evidenced in 2008 when the then Bush Administration declared the “Pacific Year” as part of its foreign policy. The US has always perceived China as its major threat in Asia Pacific. The region is closely watched by the eagle eyes in order to contain dragon’s infiltration.
In contrary, China has always played a smart game diplomacy through soft diplomacy to secure friendship with an aim to spread its culture and philosophy across borders. Chinese diplomacy is based on Confuciasm philosophy of ‘harmonious society’. She promotes this philosophy through soft development aids unconditionally to developing countries. In so doing, China provides a win-win situation for all actors. In PNG, Chinese foreign direct investment is voluminous. For instance, Ramu Nickel mine, the proposed International Conference Center, and many others.
Consequently, Chinese dominant role in development bilateral relations in the Pacific region has stimulated and accelerated economic growth; while at the same time increasingly instils fear and insecurity to US and its deputy sheriffs in the region. Australia, though a middle power, have competed to protect US backyard through its conditional loans, is still struggling to contain Chinese influence.
Hence, Chinese soft diplomatic approach in the Pacific in assisting Small Island States such as PNG through investment in energy – LNG Projects - may perhaps be perceived by US as menace as far as regional stability is concerned. More so, whilst US may perceive China otherwise, China is also promoting ‘collaborative diplomacy’ in Pacific to secure its potential energy suppliers of oil, gas, nickel, etc, to build its economy, whilst establishing friendship to maintain peace and stability.
Hence from a hegemonic stability perspective it is argued that diverging interests and ideational dynamics can possibly cause inter-state conflict which can trigger possible conflict.
Micro Level: At micro level it appears that legitimacy crisis and civil war are potential threats to national security as far as energy security is concerned.
First, there is possibility that the disgruntled resource owners may rebel against the state which could trigger legitimacy crisis and civil war. Second, disgruntled resource-rich owners may rebel against the MNCs which can cause civil crisis or possible military intervention especially by the US (but all-out war or grand scale war is unlikely).
In the former, experiences over unresolved issues pertaining to energy economy have demonstrated a rebellious scenario. Resource owners in most mining and petroleum projects in PNG have been treated unfairly in terms of redistribution of wealth by the government. Poor Royalties and lack of development services were a great concern. This problems can lead into civil crisis when the people take the ‘rule of law’ into their own hands. The Bougainville crisis is one of the cases in point.
State graft by government officials and MNCs in siphoning project money covertly into their empires through illegal means can cause legitimacy or civil crisis. For instance, The LNG project in Southern Highlands Province is an assumed scenario. Resource owners in the province have military capability to revolt against the state. The Singirok Gun Report suggested high and semi- powered factory guns owned by the people.
In the latter, civil war between the state and MNCs is highly possible. The operations of Exxon Mobile and G4S in LNG sites have already question the sovereignty of the state and a concern to national security. Exxon Mobil is the richest US Company in the world, which has a close relationship with the US government. Exxon Mobile’s presence in PNG is a US national interest as far as its security is concern.
G4S is a highly militarised private mercenary company of US protecting its interest in different Oil fields under various berets. G4S presence in PNG also questions its immunity to the state law. The nexus between rebellious resource owners against Exxon Mobile is a threat to US and therefore is deemed as its high priority national security. In the event that the state and G4S fail to contain and stabilize the civil rebellion US military intervention is possible, although it may seem unlikely, however the 1994 Gulf War speaks for itself. There are also other civil crises such as in East Timor, Nigeria, Somalia, instigated by energy competition.
The Ramu Nickel and Copper Mine operated by the Chinese company is another case in point facing constant rebellion by the resource owners. Chinese investment in PNG is a form of foreign direct investment (FDI) which has the potential to trigger economic growth. There is already assumption in the current strategic thinking that MNCs competition in energy resources by big powers are indirectly at play influencing social or civil actors such as resource owners to disturb power expansion in the region. For instance, there is already a rumour that the West has covertly influenced the Landowners to push Chinese investors in Ramu Nickel site out of PNG. As far as security of Chinese nationals is concerned, Beijing will always resort to soft diplomacy through peaceful means in settling disputes. Military intervention by China is against her foreign policy.
More interestingly, a focus at LNG project, one would argue that Chinese investors were overlooked by the PNG government and major MNCs players. Ostensibly, it appears that Chinese investment in the project would be perceived by the U.S as a potential threat.
Ultimately, PNG government must embrace china in energy investment. China, as the second largest market economy, has the potential to transform and modernise PNG economy through energy. China as a friend is ready to invest in energy sectors, for instance, nuclear energy – solar energy, geo-thermal (hydropower), bio-fuel and others. More so China is keen in investing in clean energy to support PNG’s role in global warning.
The Challenge for PNG Government’s Vision 2050
The government’s aspiration to attain ‘Middle Income Country’ (MIC) by 2050 and thereby, becoming a ‘Wise, Smart, and Happy Society by 2050 may not be fully released if it does not critically evaluate energy security systematically and respond thoughtfully at a global scale.
This new paradigm shift in government thinking is a grand challenge as a nation state in modernisation. It appears that this vision may not achieve its stated gaols and objectives if security issues are not critically conceptualised at macro and micro level. I am of the view that the greatest conundrum will ultimately rest on energy security.
PNG is predicted to see a spiralling economic growth rate of 8.4 percent annually with the full economisation of LNG projects by 2014. Although energy projects may transform PNG into a MIC at forecasted growth rate similar to China echoed by some economic analysts, its security implications are incalculable.
Securitisation of energy is strategically and economically vital to assess ‘where we are, where we want go and how we will get there’ with energy. This will involve analysing security at macro and micro level that appropriate strategies can be framed to systematically respond thoughtfully to emerging security threats. Security of the state and individual is absolutely vital to fully realise the vision.
The Role of SINO-PNG Relations
In order to avoid possible future conflict China and PNG will have to play an important role to maintain a BoP in the region. PNG as an economic and strategic interest of economic powers in the region will have to play a neutral diplomacy within ‘great and rising powers’ whilst China continues to play a soft diplomacy based on ‘collaborative and consensus diplomacy’. China must convince US misperception in its role in the Pacific region. PNG on the other hand must refocus or res-cope its foreign policy to contextualise the regional security perspective.
Conclusion
It can be concluded that China is not a security threat to Pacific region. This is only a misperception by the West, especially US. China on the hand does not see the Pacific region as a strategic threat rather as a true friend in development.
It can also be said that energy security has the potential to reconfigure power relations in the region. China will assume peaceful regional leadership and stabiliser (not as a hegemon as perceived by the US). China’s rise in power to global and regional prominence is to promote peaceful and harmonious society through kindness and friendship based on her Confucius philosophy.
Energy security is a national security priority of any state. Competition between US and China in energy resources in the region postulates emergence of ‘New Imperialism’ or ‘New Cold War’. At macro level, since energy is scarce, competition between rival powers can cause conflict in the region. At micro level legitimacy crisis or civil war between the state and MNCs, and disgruntled resource owners is inevitable. These scenarios pose a great challenge to PNG with respect to Vision 2050. Therefore, PNG and China will play an important role to avoid such crisis and maintain a BoP in the region.
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