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The Bay of Bengal Could Be the Key to a Free and Open Indo-Pacific


Over the past decade or so, with the winds of geopolitical change sweeping Asia, the Indo-Pacific has emerged as a focal point in global economics, diplomacy, and security. With its more than half of the global population, fast-rising prosperity, and the challenges of rising regional powers, the Indo-Pacific is the prime strategic hub for deciding the future of existing global order. To maintain the status quo in the region and keep China’s assertiveness in check, the United States, Japan, and Australia, among others, have advanced the idea of a “Free and Open Indo-Pacific.” Although each of these countries has its own vision, the general aspiration to keep the region free from coercion and open for all is the benchmark that they share. Within the Indo-Pacific theater, the Bay of Bengal — situated at the intersection between South and Southeast Asia — is a divider, a connector, and one of the prime battlegrounds. The tumultuous strategic environment of the Bay — driven by traditional and nontraditional security concerns, and a rising economy mainly powered by infrastructure — suggests this subregion is fast becoming one of the key emerging hotspots for the Free and Open Indo-Pacific strategy. This, combined with the fact that climate change poses an existential threat to several states in the region, calls not only sustained focus by extraregional powers, but also for governance structures that can facilitate a rules-based order.

The Bay of Bengal in the Indo-Pacific Fulcrum

Roughly three-quarters of the Indo-Pacific region’s entire surface is water. Yet apart from the South China Sea, the great majority of geopolitical studies concern not those maritime spaces — including the vast Pacific and Indian oceans or critical bays such as the Bay of Bengal — but rather land areas that cover a much smaller share of the whole.

 

 

However, after decades of being regarded as an international backwater, the Bay of Bengal is fast becoming a key area of strategic competition as the Indo-Pacific strategy continues to evolve. It is the largest bay in the world, bookended by India on its western side and Thailand to its east, with Bangladesh, Myanmar, and Sri Lanka as its prominent littoral states. Together they host fully one-quarter of the world’s population with sustained growth in its gross domestic product, which currently is $3 trillion. A quarter of the world’s traded goods cross the Bay, including huge volumes of Persian Gulf oil and liquefied natural gas, providing energy-scarce countries with a corridor to securing resources.

The states around the Bay of Bengal have exhibited a pattern of cooperation based on rule of law and free from coercion, reinforcing the aspiration of a free and open Indo-Pacific. Two major regional organizations — the Association of Southeast Asian Nations and the South Asian Association for Regional Cooperation — lie on the border of the Bay of Bengal. In addition, key nations of the Bay joined in establishing the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation in 1997. In 2012, Bangladesh and Myanmar settled their maritime boundary disputes in the Bay of Bengal through the International Tribunal for the Laws of the Sea, setting a precedent of respecting the rule of law. In contrast, in the contested South China Sea, China disregarded the tribunal’s verdict when it overruled Beijing’s territorial claims over the Philippine’s exclusive economic zone.

Economy at the Center

With the exception of Thailand, countries surrounding the Bay of Bengal largely missed the economic miracle that took place in Asia in the latter part of the twentieth century. This, however, is now changing. Prior to the coronavirus pandemic, South Asia had experienced the world’s fastest growth of 7.3 percent on average per annum throughout the last decade. Low-cost, labor-intensive, export-manufacturing industries such as garments, coupled with rapid urbanization, have been the driver of this fast growth.

Just as industrial economies such as China, Korea, and Japan moved toward high-tech, capital-intensive growth models, Bay of Bengal countries have the potential to benefit from offshoring labor-intensive industries from developed countries. With relatively young workforces, for example — in Bangladesh, 20 percent of the population falls between age 15 and 24 — labor-intensive industries will likely continue to flourish in the coming decades. An important factor in the growing strategic importance of the area is the relatively bright economic prospects of many littoral states.

The Bay of Bengal is also believed to have significant gas reserves. Some unofficial estimates have put Bangladesh’s reserves alone at 200 trillion cubic feet, which would make it the largest source of supply in the Asia-Pacific. Another Bay of Bengal state, Myanmar, is also a significant natural-gas producer and consumer. Myanmar has the fourth-largest proven natural-gas reserves in the Asia-Pacific, and currently the highest reserves-to-production ratio in the region, at 63 years. It exports petroleum gas to both Thailand and China, customers accounting for 75 percent of its production.

The two Asian giants, China and India, have become major consumers and are among the top three oil importers in the world. China’s and India’s dependency on oil imports are expected to rise to 75 percent and 95 percent, respectively, of their total oil consumption by 2030. Japan and Korea are also highly dependent on energy imports, particularly oil and gas — importing primarily across sea lanes passing through the Bay. In addition to energy, the Bay of Bengal region is also critical for commercial shipping routes. About half the world’s container traffic passes through this region, and its ports handle approximately 33 percent of world trade, thus becoming an important economic highway.

However, the full economic potential of the region is currently constrained by the low level of regional economic integration and a dearth of infrastructure, especially transport connections within those countries, to neighboring states and the rest of the world. For example, intraregional trade in Southeast Asia is 25 percent of total trade, while it is only 5 percent in South Asia. This, however, creates a window of opportunity in which major powers’ focus on the Indo-Pacific could catalyze infrastructure development and connectivity in the Bay of Bengal.

Infrastructure and Connectivity

The ever-growing economic activities around the Bay have prompted efforts to build new ports, roads, pipelines, and railways throughout the region, largely sponsored by China and Japan. These projects have been accompanied by considerable competition for political and strategic influence over the Bay states as these powers seek to establish infrastructure connections and production chains to benefit their own economies. In broad terms, this competition might be seen as reflecting the intersection of growing areas of strategic influence of major powers in Asia: China, Japan, and India, as well as extraregional powers such as the United States. This competition concerns but also benefits the infrastructure-hungry countries around the Bay.

South Asia clearly illustrates the pressing infrastructural needs that economic growth is generating within the Bay, and the potential dangers that procuring needed capital investment can entail. According to an Asian Development Bank report, in South Asia, the gap between existing infrastructure investments and the need is $160 billion per year. These needs include physical infrastructure such as ports, bridges, highways, railways, airports, as well as digital infrastructure.

For example, even though Bangladesh has become the second-largest clothing and apparel exporter in the world in recent years, with potential to become the largest producer, it has yet failed to complete a single deep-water port in its 50 years of independence. The construction of the Sonadia deep seaport was long on the national agenda, but the absence of consensus among development partners regarding funding sources led the project to be scrapped altogether. Recognizing geopolitical realities, Bangladesh is currently building a deep seaport in Matarbari funded by Japan.

Explosive growth in China’s Yunnan Province to the northeast is generating demand in Myanmar for transit infrastructure in the pipeline, road, and rail sectors, with the Kyaukphyu-Kunming gas and oil pipelines already completed. Meeting those transit needs would substantially deepen Myanmar’s interdependence with China’s southwest, especially Yunnan. The China-Myanmar Economic Corridor — one of six Belt and Road Initiative economic corridors — is a testimony to this and reflects a potential for Bay of Bengal connectivity on an even greater scale.

The most dynamic areas of infrastructural development in the Bay of Bengal over the past five years have belonged to China’s Belt and Road Initiative, unveiled in the fall of 2013. Its specific applications in the Bay of Bengal region, especially two important projects in Sri Lanka and Myanmar, and aspiration for a Bangladesh-China-India-Myanmar Economic Corridor, are critical. All nations bordering the Bay except India have joined the Belt and Road Initiative, and it holds great potential to significantly transform the political economy of the region — not least by deepening economic interdependence with China. Such a scenario warrants America’s proposed Indo-Pacific Economic Framework to include more Bay of Bengal countries and allocate investment for infrastructure and connectivity to reduce over-reliance on China and ensure plurality in the region. Investing in infrastructure and connectivity will also help the United States and its allies to strengthen ties with the countries in the region, as this is indeed a priority for these countries.

A Multilayered Geopolitical Competition

The geopolitical maneuvering of the regional powers and competition among extraregional powers will further accelerate the geostrategic significance of the Bay of Bengal. The competition will take place in two tiers — both conflicting and converging in nature. The first tier is among regional powers — primarily between China and India and among the mid-size states of the Bay such as Bangladesh and Myanmar, whose relations largely remain competitive and conflictual in nature. The second tier of this competition will be between and among extraregional powers such as Australia, European countries, Japan, and the United States. In this tier, competition is more complementary with each other, but more in conflict with China. These countries are building new types of security architecture such as the Quadrilateral Security Dialogue and AUKUS, and we aresome strengthening of bilateral ties throughout the Indo-Pacific region. Under such frameworks, the division between the United States and its friends with China will sharpen further.

While the United States may seem like the leader or driver of this competition, in fact, the traditional rivalry between India and China may become far more prominent. India is the traditionally dominant regional power in the Bay of Bengal. The influence of China, however, is rising rapidly, driven primarily by the massive financial support it offers and its proactive infrastructure programs under the Belt and Road Initiative. India and China both view the Bay of Bengal as a crucial frontier in their competition over energy resources, shipping lanes, and cultural influence. The competition stemming from the two countries expanding their regional spheres of influence in each other’s backyards may result in skirmishes over energy and sea lanes of communications, not to mention confrontation over political influence in the more fragile states such as Myanmar and non-Bay of Bengal littoral state Nepal.

So far, the strongest manifestation of Sino-Indian rivalry in the Bay of Bengal has been situated in Myanmar, where both countries need overland transit to connect their economically weaker regions, namely India’s northeast and China’s Yunnan province, with the Bay of Bengal. However, between 2011 and 2021, Myanmar opened its economy to the Western world after the United States and Europe lifted sanctions, creating more partnership options as the reforms attracted a wave of foreign investors. This in turn reduced Sino-Indian competition by making space available to new actors, creating more balance in the previously polarized scenario. However, after last year’s military coup, the country has now taken a backslide to the status quo ante as Western investors are leaving and the regime is under strict sanctions, leaving Naypyidaw at the mercy of Beijing.

Competition in the security realm is greater than ever. In recent years, the only multilateral military exercise of this region, the naval Malabar exercise held among India, Japan, the United States, and more recently Australia, has also taken place in the Bay several times. China, the largest supplier of military hardware to Bangladesh and Myanmar, provided two Ming-class submarines to Bangladesh’s navy, which aims, under its “Forces Goal-2030” plan, to modernize its armed forces. In response, India gave a submarine to Myanmar. Under the rubric of Beijing’s “Look South” strategy, the People’s Liberation Army Navy has increased its deployment of warships in the Bay of Bengal and Chinese vessels have even entered India’s special economic zone. Chinese submarine patrols in the Indian Ocean have also increased, particularly near the Andaman and Nicobar Islands, which are considered critical to New Delhi’s regional intelligence and monitoring operations. To counter China’s increasing presence in the Bay of Bengal region, India is setting up coastal surveillance radar systems in the neighborhood, such as in Bangladesh and Sri Lanka. In short, China and India are doubling down on their efforts to reshape the strategic security environment of the Bay of Bengal in their own favor.

Domestic Politics as Underlying Factors

The domestic political constraints on Bay of Bengal states such as political instability, ethno-religious tensions, urbanization, and the coronavirus pandemic will have a knock-on effect on this subregion. To tackle these emerging challenges and establish a rules-based order in the region, the United States, along with its regional allies and partners and international organizations, will need to provide technical, financial, and humanitarian assistance to the Bay countries. Leadership succession in domestic politics in both Myanmar and Bangladesh further complicates the prospect of a sound resolution. Sri Lanka poses the highest risk, as it is currently facing an unprecedented economic crisis in addition to its decadelong ethno-religious and political impasse. India’s responses have been instrumental in ameliorating the recent crisis in Sri Lanka. However, a collective regional response of major Indo-Pacific proponents — India, Japan, and the United States — could change the trajectory of the Bay of Bengal.

The Rohingya issue is a major political problem for Bangladesh and Myanmar, with spillover effects on Thailand, Malaysia, and Indonesia, and thus has significant geopolitical consequences. It is also a humanitarian priority for the international community, due to the human suffering involved, the tensions it provokes between Myanmar and Bangladesh, and the long-term security implications for the region. Bangladesh hosts millions of refugees despite its limited capacity, but as the solution is beyond its control, there should be strong support from United Nations Security Council members, especially from regional countries that may have some leverage over the Burmese military junta.

China and India are on the top of that list, but considering their own national interests in Myanmar, the role they play in resolving this issue has been rather limited. Bangladesh also had high expectations of Japan, its long-time development partner, but it, too, is prioritizing its own national interest. The United States, Europe, and international organizations, however, have a critical role to play in this crisis, from providing assistance to pressuring Myanmar, which resonates with the spirit of the Indo-Pacific vision of establishing a rules-based order for all.

Nontraditional Security — No Less Significant

While traditional security concerns are mostly along or around national boundaries, nontraditional security issues pertaining to the Bay such as climate change, natural disaster, terrorism, refugees, drugs, piracy, and illegal, unreported, and unregulated fishing transect boundaries and affect the region as a whole. The negative impacts of climate change, especially rising sea levels and an alarming level of salinity, pose existential threats to several Bay states, including Bangladesh and Sri Lanka. Two-thirds of Bangladesh is less than five meters above the sea level rise. The latest projection says that if there is a 50-centimeter rise by 2050, 11 percent of Bangladesh might be underwater, making millions homeless. Thus, the issue of potential climate refugees is more salient in the Bay of Bengal region than anywhere else in the world. This demands cooperation, as well as assistance from Indo-Pacific promoters such as the United States. This is particularly critical as the Biden administration made tackling climate change a top priority — an area where the Bay of Bengal could play a leading role, which would ultimately yield stronger ties between Indo-Pacific promoters and the countries in the region.

While strategic interests often dictate conflicting positions, a consensus over the principle of mare liberum (free seas for everyone) as one of the four global commons is required for the protection of marine resources. Since the Indo-Pacific vision aspires to establish international rules and norms, these nontraditional security concerns in the Bay of Bengal could give impetus to other regional organizations, such as the South Asian Association for Regional Cooperation and the Bay of Bengal Initiative for Multi-Sectoral Technical Economic Cooperation, to bring countries to work together on common challenges.

Conclusion

For decades, the significance of the Bay of Bengal remained underappreciated due to the absence of great powers’ interest and lack of economic vitality, but this has changed as strategic competition in the area intensifies according to its own dynamic. The Bay of Bengal now has considerable — and growing — strategic importance for Asia, and for the world as a whole. In many ways, the Bay of Bengal lies at the core of the Indo-Pacific region — a centerpiece of the broader Indo-Pacific concept and the place where the strategic interests of the major powers of East and South Asia intersect. As the Bay will become a test case for a nascent multipolar world order, it is of the utmost importance to establish governance frameworks that can facilitate the integration of rising powers in regulating this order and upholding the principles of a Free and Open Indo-Pacific.

 

 

Anu Anwar is a fellow at the Faculty of Arts and Sciences, an associate in research at the John K. Fairbank Center for Chinese Studies, Harvard University, and a Ph.D. student at the Johns Hopkins School of Advanced International Studies. Previously, he worked as a research fellow at the U.S. Department of Defense’s Daniel K. Inouye Asia-Pacific Center for Security Studies, as an affiliate scholar at the East-West Center and as a visiting scholar at Edwin O. Reischauer Center at SAIS and the University of Tokyo. 

Image: Twitter via @indiannavy





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