INDO-PACIFIC REPORT LAUNCH

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EVENT TRANSCRIPT: INDO-PACIFIC REPORT LAUNCH

DATE: 6.15-7.15 PM, 2ND APRIL 2019

VENUE: COMMITTEE ROOM 1, HOUSE OF LORDS, WESTMINSTER

SPEAKERS: MR DAVID Y. L. LIN, DR. EUAN GRAHAM, DR. JOHN HEMMINGS, PROFESSOR HARSH V. PANT, DR. DAVID SCOTT

CHAIR: LORD ARBUTHNOT

 

LORD ARBUTHNOT: “Ladies and Gentleman, welcome to Parliament. It’s something that on a day like today and at a time like this that’s rather an important thing to say, you’re very welcome.

My name is James Arbuthnot, I’m a member of the House of Lords and I’m very pleased indeed to introduce this launch of the paper about infrastructure ideas and strategy in the Indo-Pacific. There are quite a number of people who might want to say a few things. Ambassador, I’ll call on you now to speak and you may sit in order to say a few things. I have one a pair of glasses here, does anyone claim them? Ambassador, please.”

DAVID LIN: “Thank you very much my Lord.”

LORD ARBUTHNOT: “You said it was informal?”

DAVID LIN: “Yes.”

LORD ARBUTHNOT: “You may call me James.”

DAVID LIN: “Dr. Hemmings, John and Professor Pant and Dr. Scott and all dear friends and also our dear friend the Ambassador of Mongolia.

So it’s indeed a great honour to attend the Indo-Pacific report launch this evening but first of all I still want to thank the Right Honourable Lord Arbuthnot for chairing this event. I’m also deeply grateful to the Henry Jackson Society for publishing this timely, important and informative report. I hope you can all get a copy because this is also an interesting time for us to know more about the region and also to promote peace, stability, prosperity in the Indo-Pacific.

As you may know just a few days ago, our president, President Tsai Ing-wen visited three of our Pacific islands, Palau, Nauru and the Marshall Islands under the theme ‘Oceans of Democracy’. During her transit in Hawaii on the 27th of March, President Tsai also attended video conference with the US Heritage Foundation in Washington D.C.

So President Tsai stressed Taiwan is dependent on the blue waters of the Pacific Ocean and our whole approach to the Indo-Pacific centre’s on three of our core principles. Simply put they are democracy, regional prosperity and collective security. As a vibrant democratic country, the 22nd largest economy in the world and also a responsible stakeholder in the region, Taiwan (inaudible) as US Vice-President Mike Pence said in a major speech last October ‘a better path forward for all the Chinese people’. We are proud that freedom, democracy and human rights are the basis of our values. We are determined to be a constructive partner to other countries across the region.

Despite China’s mounting pressure, we are still doing everything we can to protect our democracy, the rule of law and economic vibrancy in partnership with the United States and all other like-minded countries. Moreover, we are seeking to play a proactive role in fostering regional prosperity through trade, investment and economic cooperation.

Over the past three years, we have actively pursued stronger economic and commercial linkages with South Asia and South East Asia under our New Southbound Policy which reconnects Taiwan with the heart of the Indo-Pacific region. The policy has enhanced connectivity and cooperation in a wide range of areas including infrastructure, agriculture, health, culture, education and tourism. They all form a very positive perspective. Therefore, Taiwan is hoping to join a regional trading bloc in the near future, such as the CPTPP, now this is led by Japan. So we are hoping together that we can all try to strengthen economic partnership in the Indo-Pacific.

In addition, Taiwan is committed to enhancing the sense of collective security across the Indo-Pacific. We’ll continue to seek closer cooperation with like-minded countries to achieve this end in order to maintain peace and stability in the Taiwan Strait. We need to pursue a more stable, predictable and sustainable relationship with (inaudible) China. But however, in facing China’s increasing political pressure and military threat, we must be able to defend our freedom, democracy and way of life.

So with our economic strength and with our due political importance, we feel that Taiwan’s future remains closely tied with the future of the region as a whole. In terms of advancing democracy, regional prosperity and collective security, Taiwan has a lot to offer and contribute so we will continue to play a positive and proactive role in ensuring that Indo-Pacific remains free and open for all countries. So once again, thank you very much Lord Arbuthnot and also the Henry Jackson Society for organising this important event. I very much look forward to hearing (inaudible) from all our speakers. Thank you so much.”

LORD ARBUTHNOT: “Ambassador, thank you very much. I’ll now call on John Hemmings, the Director of the Asia Studies Centre at Henry Jackson Society to speak next.”

JOHN HEMMINGS: “Thank you very much Lord Arbuthnot and I thank you very much for hosting us and I thank Ambassador Lin for the interesting and present comments.

I’ll describe, I suppose, what is this project about and why are we here in front of you? The fact is this report has something like seven different country representatives who are all interested in this thing called the Indo-Pacific. And it’s definitely related to China, it’s definitely related to balancing but it’s not about containment so far as I can tell, it’s also about opportunity and it’s also a mixture of values, competition, mixing with good old fashioned trade. It’s a fascinating topic for myself but also if you look around the room and you see the number of embassies represented here, you realise why people are interested in it.

BRI is definitely the mirror image of this and I don’t think the Indo-Pacific project or this report are particularly anti-BRI but I think there’s some sense that BRI is a kind of ‘all roads lead to Rome’ and there’s been push back against BRI over debt diplomacy and even the European Union, various leaders like Macron and Merkel, have critiqued it for being too much one-way.

The Indo-Pacific project, as this report is concerned, is about trying to understand something that came out of India and Japan. It has more recently been labelled an American construct after President Trump identified the American foreign policy with it. He was very anti-Obama, he didn’t want the pivot, he wanted something new and they looked around and they found that this Indo-Pacific construct put forward by Japanese Prime Minister Shinzo Abe had been floating around the corridors of power for a while. The Indians had taken to it and it had regional resonance, it definitely was Mahanian, it looked at how sea lane control was both infrastructural and economic activity but was also a security activity. So why, for example, are all the ports that China is building across the String of Pearls only financed by their own banks and not by multilateral banks. You know, Hambantota although I’ve heard is going to start making money, China now has a 99 year lease on it and sovereign control on it, makes it somewhat strategic.

So there’s a kind of sense in this report that there’s a redesign of the global order and it’s a region that definitely needs infrastructure. 2017 Asia Development Bank Figure essentially put it at 26 trillion over the next 30 years, I think it’s 1.7 trillion per year and just two-thirds of that is accounted for by current infrastructure spending. So essentially you can see this massive doubling of the global middle class, there’s going to be lots of new Indian and Chinese middle class consumers who want goods, who needs cities that have energy that are provided with container shipping. So if you look at all the numbers in terms of container shipping by volume and by trade figures, they’re all going to go through the roof from West Africa all the way to Singapore and all the way to Japan.

So while Britain is postured as we are going through this phase of internal understanding, a necessary process, but there’s also opportunities beyond and I want to make clear this isn’t a pro-Brexit or anti-Brexit, we’re agnostic at Henry Jackson Society but what it is, is that there is life after Brexit and that we need to focus on a region that will offer both great opportunities and great challenges for Britain if we’re nimble.

We’re very happy and proud to have amongst us a group of real scholars on this topic. I’m a ‘Johnny come lately’ but an eager one and I think what I’ll do is I’ll introduce them and they can go through their contributions. We went by country category so we have three chapters to tell you about their Indo-Pacific strategy today.

Harsh Pant who is from India, he is from a very famous think tank, the Observer Reach Foundation. He is also a Kings College London man so he’s got a foot here in London. Euan Graham is at La Trobe University Asia in Australia, formerly of the Foreign Office so Brit (inaudible) to Australia, just as I am an American (inaudible) to Britain. David Scott is, I think Dr. David Scott is one of the longest standing researchers on the Indo-Pacific in the UK. So I think I felt I was one of the ones pushing the boundaries, I found out he’s been looking at it far longer than I, has a very prestigious academic career. So Euan, would you take us out the door with Australia? And if we can keep it to about 7 minutes each we can see how we go.”

EUAN GRAHAM: “I’d be happy to. Thank you, John, for the introduction. Thank you to Lord Arbuthnot for the privilege to address you here today. With the events that are going on this week, I think it’s no small credit that Parliament still maintaining attention on looking at the wider issues out in the globe so I think that is a positive from which to start.

I’m here to represent an Australian viewpoint on the Indo-Pacific. Australia was the first country to officially embrace the new nomenclature back in 2013 in its Defence White Paper indeed before there was a change of government. Since then we’ve had a switch from Labour to Liberal National Coalition and we may have another switch back before too long with an election pending in Australia in May. So I think it’s important to note also that there is bipartisan support for the shift in nomenclature from Asia-Pacific to Indo-Pacific which may leave some of you wondering.

So what’s in the name? What’s the significance behind this? I think it needs to be seen in broader context in terms of the re-framing of strategic geography which is going on in the region. Many countries are reassessing their place in Asia. How that relates to the wider balance of power which draws in both United States still as the preponderant military player but with an increasingly multi-polar rationing of power in this wider region that brings in China as the obvious rising power but also India with its very long term strategic potential and economic clout. And for that matter South-East Asia which sits at the geographic centre of the Indo-Pacific construct which is very much central to Australia’s vision of it.

I think, as was mentioned before, the Indo-Pacific is not just simply a security paradigm. It goes broader than that and that’s reflected in the major documents that codify Australia’s policy, the Foreign Policy White Paper, which was fairly rare exercise, there’s only been one about 10 years prior to 2017. That went to some length to explain the Indo-Pacific and before that there was a Defence White Paper in 2016, both of which develop the original concept of the Indo-Pacific going back to 2013.

So there’s a bit of momentum now invested in this in Australia and I think across all of government there is buy in into this concept of Indo-Pacific. Maybe a little bit more scepticism in academia of which I’m part, whether I think still some questioning whether the Indo-Pacific is really all it’s cranked up to be. But it is couched both in terms of vectors of opportunity, economic opportunity and vectors of potential threat and the paradox that links these two things. Of course, China is very much front and centre of both.

For Australia which sells over 30% of its trade and goods to China, a lot of its iron ore, some of that iron ore ends up in naval shipping which is then potentially changing the balance of power in a way that is not in Australia’s long term interests. Many countries face this paradox in dealing with China, both as opportunity and threat, but I think it’s particularly acute given the geography of Australia’s position and its rather large economic dependence on one country.

So in that sense, the Indo-Pacific really can be thought of a stretching of the strategic canvas to bring in balance, the idea that balance and diversification both in a strategic sense. There’s logic to that, it plays to Australia’s long standing maritime connections. Throughout its history since European settlement, it’s been allied, of course, first to the United Kingdom but then the United States since the 2nd World War as the great maritime friends which Australia relied. But on a broader Asian canvas there’s obvious logic to extending the Indo-Pacific to bring in some of those Asian democracies which are large markets in their own right. Japan, India, Indonesia, South Korea to name but four which are identified in the Foreign Policy White Paper as particular strategic partners for Australia in the future and they, of course, can all be thought of in a geographical ark which described all the way from Japan in the first island chain through to India. And it’s worth noting that the Indo-Pacific and the Australian official definition extends only as far as the India-Pakistan border. Other countries have a more expansive definition which stretches all the way to Africa. But that perhaps gets to some of the constraints on the Australian side.

Australia is a large country in a geographical sense, it’s a continent. In population terms, it’s still rather small. Still a low population, in fact, to Taiwan. 25 million people. So there are limits on what Australia can do and I think of this, and the way I developed it in the chapter in the Henry Jackson Society report, is that it is high end capability terms, both in an economic and technology sense and in a military sense, the Australian Defence Force has probably never had equipment at the level that it currently does but it’s still small by regional standards, just 60,000 personnel in uniform. So what it offers in capability terms, it doesn’t necessarily offer in capacity terms and that’s where the importance comes of this broader strategic canvas in which a country like Australia will need friends and partners in the region to extend and support its interests.

That does not contradict the importance of the US alliance for Australia, which remains the foundation of its defence and security policy. But in a broader sense, if we are looking for strategic drivers behind this concept, well concern about China’s recent coercive behaviour is, I think, the most important one but also there is uncertainty about United States and the duration of its commitment, the extent of its commitment. The alliance is not going to be rejected by Australia but in this more uncertain environment it makes sense that Australia, like many other countries in the region, is essentially hedging its bets and trying to extend partnerships with like-minded countries in the region. And India, Japan, Indonesia, South Korea are just the largest of those but size is no bar to partnership, even a small country like Singapore has an extremely close and consonant partnership with Australia and they have at the heart of that common belief in the rule of law. So it’s not just about balance of power, it’s also about commonality of values and interests as well. I don’t want to take further time away from my fellow contributors so I’ll stop there.”

LORD ARBUTHNOT: “Thank you very much.”

DAVID SCOTT: “Welcome everyone. I think I want to start with Brexit, for better or for worse, but also end with Brexit. Three broad points really to make. The first is concerning Brexit. In the report, unfortunately I made myself hostage to fortunes by saying that Britain was set to leave on the 29th of March. Anyway I’ve been tearing my hair out.

The point that I’d like to make here is that Brexit has, to some extent, coincided with a renewed UK interest and re-engagement with the Indo-Pacific. However, this UK re-engagement with the Indo-Pacific does not stem from Brexit, it predates Brexit. My colleague here was asking ‘what’s in the name?’ If I was to use a name, the name I would use in UK discussions would be a return to ‘East of Suez’. That is in a sense the UK idea around which strategy is being developed. If we went back in history, 1967, Denis Healy the then-defence minister announcing UK withdrawal from bases in Singapore, Bahrain and Aden, and at the time he said ‘this will represent a dramatic lessening of UK presence in the Indo-Pacific’. He actually used the term Indo-Pacific which is an interesting advancement 40 years before it has caught the headlines again. The withdrawal from east of Suez was announced for the early 1970s, this was not a total withdrawal. There was still some presence, some UK presence in the Indian Ocean and even in the Pacific. However, it did mark a radical, dramatic withdrawal, particularly in the military field.

Interesting thing is that this return to what is called ‘East of Suez’ position can be traced as early as 2012, four years before Brexit. The reasons for this is in a sense, or rather if we are going to ask why? What are UK interests in this area, it’s not territorial. The UK has got virtually no territory or presence in the Pacific. In the Indian Ocean not very much with the important exception of Diego Garcia and the Chagos British Indian Ocean territory, more of that slightly later on. The UK interest is in a sense economic, there may be talk of an interest in the maintenance of the rule of law and so forth, general norms of international law. In reality UK interests are predominantly economic; trade flows, sea lanes communication, secure sea lanes, not be disrupted, be it by piracy or be it by other potential states strangleholds, more of that slightly later on. The UK interest is in a sense economic. It is also reflecting a structural process which again is pre-Brexit. The long term economic growth of that area; China, India, South-East Asia, the economic gravity of centre.

Now, we then come back to Brexit. Please don’t ask me what’s going to happen. I’ve given up. If the UK does exit, particularly if it is a hard Brexit then UK strategy will be to roll over and also develop new trading partnerships that are particularly focused on the Indo-Pacific. Trade agreements with Japan, trade agreements with Vietnam, trade agreements with South Korea to be rolled over. New trade agreements with Australia, new trade agreements with India, new trade agreements with China to be shaped. On the other hand, if the UK remains within the EU, twists and turns, the long term trend of growing trade and growing economic involvement by the UK was already developing as a member of the EU i.e. David Cameron particularly emphasising long term growth of trade with China, long term growth of trade with India. So either way the economics is what makes this region of growing importance for the UK whether or not Brexit happens.

The bare bones of the contribution, looking at UK strategy, how is this re-engagement with the region taking place? Well, it’s a matter of bases, it’s a matter of deployments and it’s a matter of strategic partnerships. It’s been interesting, Britain’s return to an ‘east of Suez’ posture has been associated with the shaping of new basing or support facilities. Bahrain naval base opened in 2018 after a gap of 30-40 years. Other bases are also opening; Oman Duqm has been opened in 2018. We have Diego Garcia in the middle for the moment. And also the Defence Secretary talking about expanding the, sort of, quasi basing arrangements at Singapore. Now potentially the picture presents itself of a ring of bases or logistics facilities going across Bahrain, Duqm, Diego Garcia, Singapore, Brunei. However, there is one slight problem in this which happened in March. International Court of Justice gave an advisory opinion, it’s not binding, an advisory opinion and that in fact the UK should decolonise in Diego Garcia and in effect make arrangements for ending sovereignty and control of that base. So suddenly this very nice tidy basing arrangement potentially is ripped out in the middle.

So looking forward, it really does depend how much political pressure arises from this development. The UK may be able to resist it, it may be able to ignore it but that is one thing that has erupted in March. The final two elements, deployments. A much more increase in and across the region. 2013 to 2018, one destroyer was deployed across the Indian Ocean into the Pacific. In the twelve months from early 2018 to 2019, four destroyers were dispatched in sequence. Some of the activities were interesting, for example, last month UK destroyers bilateral exercises with the US Navy in the South China Sea. So the other thing that is going on is strategic partnerships with Japan, with Australia, with India, in that region. But then we come back to Brexit. The economics. This renewed basing, renewed deployments, renewed spending on actually increasing the Navy depends on finances. Will Brexit damage the economy? Who knows? That might affect things. Will there be government will in the next decade to deploy, to spend that money? Time will tell. Meanwhile in the background lurks the People’s Republic of China. How should the UK pursue trade agreements with China or how far should it more robustly deploy into the South China Sea? The two do not go together very neatly. Lots of choices. Time will tell. Thank you.”

HARSH PANT: “Thank you and let me start by thanking John and the Henry Jackson Society for making me part of this conversation.

This is a very interesting conversation from India’s perspective. I think as has been explained, it’s important from multiple vantage points. But I think what this idea of the construct of this new imagination of the region does is that it situates India at the very centre of these new conversations that are emerging around the way in which new configurations of geographies are mapping out. So whether it is Eurasia, whether it is Indo-Pacific, one is now looking at the world through different prisms. One is looking at the states, are now regional powers, are now remapping their geographies and now re-imagining their own positions in it, partly because there had been a push to the wall because of China’s inexorable rise and how it has reshaped the environment around them. But partly also because I think there is a realisation that unless this happens, the consequences for most of the state actors are going to be largely negative. So what one is witnessing now is suddenly this new invigorated discussions around what used to be a concept that somehow were given up.

So David said Indo-Pacific was long talked about, in fact in India if you go back and study the literature, there are very interesting ways in which Indo-Pacific used to come into our conversations. One of our prominent naval thinkers when India was about to get independence, (inaudible) was talking of the confluence of Indian Ocean and Pacific Ocean and how India is situated in the very centre of this. So in this sense these conversations from various countries was actually part of their imaginations much before, much before rather than other eventualities took over and demolished many of these constructs. They are now coming back and India, partly because of where it is, of how it is situated geographically, and how it has been constrained by this idea of India primarily a South Asian actor is getting transformed.

So in the last 5 years, a conversation about Indo-Pacific which used to be very diffused suddenly has become more centered, suddenly India has become more articulate and last year’s Prime Minister Modi’s speech at Shangri-La was one of the most explicit enunciations of what India means when it says Indo-Pacific. So in that sense we have come a whole circle, we have from (inaudible) perspective there is a recognition that as you map out your own trajectory, as you map out your own role, both because of your rising capabilities as well as because the world expects India to do more. There is a need to re-imagine your own frontiers. So in some ways what India is now trying to do is to look at what it can do in terms of re-imagining its own role in the region and beyond, looking outside the framework of this perpetual India-Pakistan conversation.

So if you think that the Western frontier of India, which is the Pakistan problem, continues to create problems for India in terms of articulating the larger role, India can look to the Bay of Bengal and articulate an extended (inaudible) where its neighbours include not simply Sri Lanka, Bangladesh, Nepal and Bhutan but also Myanmar and Thailand. And if one does (inaudible), you suddenly have the entire South-East Asia in your grasp. So you can then seamlessly connect yourself to South-East Asia, arguing that South-East Asia is actually not your extended frontier, it is your neighbourhood. So the whole concept of neighbourhood and extended neighbourhood gets transformed if you start re-imagining your own role, your own strategic geography. And that’s what seems to be happening with the conversation on the Indo-Pacific because it has pushed India into redefining the traditional roles, traditional geographies that it had and that’s something going forward would be very interesting to see how that develops.

So there is a structural logic here which is beyond just the fact that the centre of gravity is shifting to the east but it is also the fact that India is looking at its geographies differently. And there comes this question of, which I think earlier was raised, that India is defining Indo-Pacific much more expansively than say some other countries. So American definition, Australian definition is still, I think as was pointed out, to the India-Pakistan border whereas India’s own definition is all the way to Western Indian Ocean all the way to the eastern shores of Africa. So in that sense the entire Middle East, which is the maritime crucible for India which some have labelled it, becomes very important. And we have seen what has happened in the last 5 years in terms of India’s outreach to the Middle East where India’s growing engagement with countries like Saudi Arabia, UAE, port engagement in Oman, I think all of them has raised India’s profile in the region much beyond what was expected earlier. So therefore, this concept of how you situate India and where you situate India becomes central to how India will takes its foreign policy forward in the coming years and that has an impact on the institutional framework we are witnessing.

So what sort of a role, what kind of institutions can be built around which India can also take this discussion forward? So we have this traditional issue of what to do with ASEAN. Now clearly as Mr. Modi’s speech last year articulated that India situates ASEAN at the core of the Indo-Pacific. So everything starts and ends with ASEAN and I think that’s a way to make this case that this isn’t all about China, that this is not all about the competitive element in what the Chinese are trying to do in the region. But this is also about the smaller states in the region and what their expectations are from not only China but also other stakeholders, like Australia, America, Japan and even Britain. So therefore the articulation is much more about the smaller states. Articulation is much more about ASEAN and articulation is much more about norms. That how do you define norms? What are the important norms that define the so-called Indo-Pacific space? Because if China through BRI has come in and given us one element of this normative order, can India and other like-minded countries provide an alternative? I think that’s an important conversation to go forward because clearly at least as of now we are not at a stage where in terms of capacity we can say that we can take on China.

So therefore normative discourse allows a certain flexibility in terms of re-positioning the discourse around the Indo-Pacific and that seems to be happening as India has gone forward with the engagement. It is also interesting that India was one of the only major powers at the very beginning to repudiate BRI. It did so partly because of the sovereignty concerns that it had but it also did because of some fundamental value issues. And if you read the initial statement of India opposing BRI it was very interesting because while it talked about the sovereignty issue that there is (inaudible) and the passing through contested territory, it also talked about norms, about inclusivity, about consultation, about rule of law, about financial and environmental sustainability of these projects. Now almost all of these variable are now part of the common discourse on BRI today. In fact, if you look at the European discourse on BRI, western discourse on BRI, it almost seems to have taken the Indian position lock, stock, and barrel. And I think that is a very important contribution that India has made in terms of articulating and being the very first to articulate and in fact at that point in time very few countries in the West supported India’s case. And so when we look at the ark of BRI, India’s position is now being accepted by the wider international community is an important reflection of how this conversation has moved and where India wants to take this conversation forward.

There is a catch in this approach because the catch being that India itself has not been very effective in delivering. So there is a problem in terms of India’s own role in infrastructure and connective delivery around the world. In fact, even in its periphery there are many complaints that India’s not really up for the game and that means that India willy-nilly will have to collaborate. So we have seen now how India, Japan for example, Asia-Africa Growth Corridor, which aims to link South-East Asia all the way to Africa. Again, here it’s important because that’s the definition that Japan and India have of the Indo-Pacific. So you’re looking at this connectivity project all the way from South-East Asia to Africa to important points for India and Japan in so far as they look at connectivity and in so far as they look at this re-imagining strategic geography. Similarly there are now conversations between India and European Union; if you look at the European Union’s strategy on India that came out a few weeks back, it also talks about how European Union and India can work together towards creating a new infrastructure environment for the region.

So because India’s own impact on delivery has been poor relatively, I think the idea here is to get back with other like-minded countries, to get together with like-minded countries and provide an alternative. How far that succeeds remains to be seen but clearly, normatively and institutionally, India has (inaudible) rare cases where India has been at the forefront of shaping the discourse of this very important issue and India will continue to take this leadership position whether or not Mr. Modi returns to power, I think if Mr. Modi returns to power in Delhi the clearly this will get a new momentum. If he does not then there will be some setbacks in the short-term but there is no alternative for India apart from taking the kind of positions it has taken, there is no alternative in terms of articulating a vision for its own role in the region because at the end of the day this is about the balance of power in the region, this is about what normative institution framework wants to see in the region and ultimately it is about India’s own position in the global committee of nations and in particular in the Indo-Pacific. Thank you.”

LORD ARBUTHNOT: “Several very different but complimentary and extremely interesting contributions there. Now we’ve got another 15 minutes or so in which you would be welcome to make comments or ask questions. Please before you do, say who you are. Let’s begin with you, sir.”

AUDIENCE MEMBER 1: “Thank you very much. Euan Grant from law enforcement intelligence analyst. Sometime review of which Chatham House Tim Marshall’s Prisoners of Geography.

My question is for all the panel but particularly based on Dr. Hemmings comments about financing of BRI and exclusively Chinese banks at key points in relation to the port infrastructure, suspect that applies to here, airports as well. How much do you think the Chinese are (inaudible) the international aid from international organisations as well?

The hidden message or not so hidden message from that is I’ve seen first-hand in the Horn of Africa and Pakistan of how the UN, IMF, World Bank usually don’t really understand the geo-politics and that leaves a gap where rather more focused people can come in. I noticed people did spot this and realised this gap typically tended to be often expatriate Indians working in these organisations, Europeans rather less.”

LORD ARBUTHNOT: “Who would like to begin? John, would you like to?”

JOHN HEMMINGS: “I’ll say something about the financing side and I have to say it’s not my research, I’m just going to state that. I’m also working on a project in CSIS in Washington and Shino Watanabe, who is a Japanese scholar, I’m kind of voicing her, she looks at infrastructure, financing across the region and she notes that actually to be honest the multilateral banks, to some extent, the Chinese didn’t invent that gap there was a gap already that was not being met. So I don’t think there was anything nefarious about it and there’s probably, to some extent, a bit of opportunism where China has offered to get rid of excess capability but realise there is also geo-strategic opportunity there.

Maybe with the ports is a bit more forethought, the choke-point strategy and the String of Pearl strategies have both been things that we’re all familiar with every time but if you’re really interested, I really highly recommend anyone to read her working paper, it’s called ‘China’s Infrastructure Development in the Indo-Pacific Region: Challenged and Opportunities’. Try not to hit the mic there.”

LORD ARBUTHNOT: “You’re having a bit of trouble with the microphone.”

JOHN HEMMINGS: “Yeah, it is life. But anyway it just went live today that project so Shino Watanabe. And there is a lot of good, solid data in here. I would say, unfortunately hes not with us today, but (inaudible) from Cambridge University wrote a very excellent chapter in here on container shipping and how China is using port strategy to essentially shift trade routes around and I think these are the real experts, I’m just trying to get their findings out to the geo-strategic community and the public.”

LORD ARBUTHNOT: “OK, anybody else want to contribute there? Gentleman over there.”

AUDIENCE MEMBER 2: “Hi there, (inaudible) from Ministry of Defence. There is an assumption that I (inaudible) to have Indo-Pacific strategies but there are (inaudible). I’d ask the writers here, do we know any areas where there might be points of friction or daylight between nations in the Pacific area?”

LORD ARBUTHNOT: “You look as though you would like to answer that.”

DAVID SCOTT: “To some extent you get different shading, both the United States and Japan talk about a free and open Indo-Pacific and when you hone in on it, both of them are talking about norms, both of them are talking about maritime security and both of them are talking about infrastructure but nevertheless Japan is probably tending to emphasis the economics more than the security and the United States seems to be emphasising the security more than the economics, even though in the package they’ve got similar alignments. India talks about a free and open Indo-Pacific but also throws in the inclusive catchword. The United States and Japan then says well they’re happy with inclusiveness but to some extent that’s not quite where they’re heading for given their more over China concerns. Indonesia talks about a Indo-Pacific cooperation concept so you certainly get different emphasis and then you have the surrounding question of how far is ASEAN given a central role and then how far is that rhetoric and how far is that really substantial? They’re complimentary enough but there are different shades of emphasis I would say.”

LORD ARBUTHNOT: “Euan.”

EUAN GRAHAM: “It’s a good question. I mean the old truism that where you stand depends on where you sit comes into play. It obviously depends partly on geography. We see some tensions around the actual definition of the Indo-Pacific which we touched on earlier, how far west it goes. I think there is also an issue about inclusivities.

So ASEAN is particularly keen that it maintains it centrality within any vision for the region. I think that has to be understood by players like Japan, Australia and India that have bought into the Indo-Pacific that needs to be part of getting ASEAN to buy into it and I think we’re some way into that process. Indonesia, I think, is starting to talk more openly about the Indo-Pacific but elsewhere in South East Asia we still see some skepticism and also skepticism about whether this is a framing concept to contain China.

I think that’s the unspoken, sometimes spoken, security fear but I think threat perception is also part of this. It’s partly about economic opportunity but I think we need to be honest that it is also balance of power in part and that threat perception is not unified between the players. That’s part of the reason why we don’t see the quadrilateral among the United States, Australia, India and Japan yet fulfilling its potential, it’s been held at a very recess, low key level, partly because of that reason.”

LORD ARBUTHNOT: “OK. Lady there.”

AUDIENCE MEMBER 3: “Hi my name is (inaudible). I’m an Australian national (inaudible). My question is how does Taiwan fit into this Indo-Pacific strategy and how can Taiwan be used as a catch-weight to the BRI project?”

LORD ARBUTHNOT: “Ambassador, did you hear that?”

DAVID LIN: “Yes. Thank you very much for the question. As I mentioned earlier, we like to play a very consistent, proactive and constructive role in the whole process. So that is why you see over the past few years we have tried to focus on how strengthen our partnership with ten ASEAN countries ad also six countries in South Asia. But again we are trying to develop a more positive approach by developing a substantial cooperation in any way possible.

For instance we have some infrastructure projects in Vietnam, we are talking to the Indonesian government, we are seeing how to enhance investment. We also have a lot of investment already (inaudible). In Thailand, actually Taiwan is also a very economic partner. You see many Thai businesses and you see at the same time we have more students from the region to Taiwan including from India and then from Indonesia, from Thailand, from Malaysia, from Vietnam.

So all this shows that we want to play a more positive role in partnership, of course, with the United States and with Japan and with all other regional partners. Even in our relationship with China, as you can see, we still want to develop. You see a consistent, predictable, good dialogue mechanism but of course the timing now is more difficult but we can sense that. So we are hoping if China can also exercise some restraint in this operation in the South China Sea and also in all its (inaudible). We can sense that some of the projects which are not economically viable, for instance the project the high speed railway in Indonesia and also some (inaudible) in Malaysia, in Maldives, in Malaysia.

So we see this kind of difficulties all those countries are facing because of the project so we are hoping that there will be maybe more dialogue, more coordination among all countries but we are hoping things are moving in the right direction. The most important thing, the most important common denominator for all countries, for all stakeholders in the region is still to maintain peace, stability and prosperity. I thing that’s the most important thing for all countries including China.”

LORD ARBUTHNOT: “Euan, you would like to add a word?”

EUAN GRAHAM: “Briefly. Taiwan can’t be an economic counterweight to China. That ship has sailed and its military ability to be a counterbalance is also limited. But I think one very important way in which Taiwan can is through its democracy as a thread of connection between the maritime democracies elsewhere in the region from India through to Indonesia, to Australia, Japan, South Korea, Taiwan obviously has that in common and I think that’s a very important qualitative addition that Taiwan can thread, that it can help connect.”

LORD ARBUTHNOT: “The gentleman behind you. Yes.”

AUDIENCE MEMBER 4: “Hi (inaudible) from the International Institute for Strategic Studies. Question for all of the panel. How much do you think that China means what it says when it states that there shouldn’t be any destabilising major power competition in the Indian Ocean? Thank you.”

LORD ARBUTHNOT: “Yes. Would you like to answer?”

HARSH PANT: “Well I think no part in the region wants to actually destabilise if you think about it more pragmatically. So the question is why is it that we are thinking of destabilisation at all? And the reason, I think, one looks at this question of destabilisation is because there has been a structural change in the ready nature of the Indian Ocean’s balance of power. And so whether or not Chinese behaviour in other parts of the Indo-Pacific is going to have an impact on the Indian Ocean remains a matter of concern to all the resident powers in the region.

Now, of course, China has articulated this point very different in different ways. At one point it used to say we are not an Indian Ocean power so therefore we don’t have a direct stake in the region but then it also articulates that we don’t want Indian Ocean to be India’s ocean and therefor one country can’t have a monopoly over an ocean. And then as major power rivalries have become more prominent and as China’s role in the Indian Ocean region has grown, both because of economic connectivity, as well as now infrastructure connectivity, there are genuine concerns at least in Delhi about what China is doing in certain countries and the case of Sri Lanka was symptomatic of problems that many countries in the region might face.

If this question is not resolved properly, so the question about this connectivity project being imposed almost unilaterally, BRI being something that was not very consultative process, is a major problem. And the fact that it happened in a context where there was a) a sovereignty question for India but b) there was also a question as to what kind of investments, what kind of projects that China was doing in the Indian Ocean perhaps in the long term but even in the medium term maybe very detrimental to the economic health of the region. Actually that turned out to be true because we are now looking at a number of these projects which have become white elephants and we are looking at some of these problems getting enhanced.

Now the question is whether China recognises this and changes track and adapts very quickly or whether the push back from the other countries will be strong enough to create a certain balance in the system. And I think when you look at the alternative strategies for infrastructure funding, my sense is that the more the merrier. So if you have many different countries coming out with their own connectivity projects, infrastructure projects that gives smaller states in the region, greater agency to decide where they want to go rather than having one project being decided in Beijing or in Delhi or in Canberra or in Tokyo. I think if you have multiple projects and you have multiple partnerships emerging in the region that is perhaps a better way of relieving the problem, of infrastructure connectivity in the region.

But I think it must argued that a lot of these discussions happening in a context of China, it is not to belittle China because I think China has done something very, very constructive. China has actually made us aware of this gap. Before that we all knew that it existed but none of the major powers were willing to fund it, they were not willing to put their money and willing to shape this discourse. So once China came into the mix, it really actually woke all the major powers up and made us realise where the real problem is.

So it was not China that is actually the problem, it is some ways the gap in what the supply and demand gap in the region and when China came to fund it, we all became aware that ‘look there is a problem here’, the next phase of globalisation would depend on how this connectivity conundrum is resolved. And now that China got in there, you also realise the challenges that come when you have monopoly in any field. So in this field when the Chinese monopoly started in certain roadblocks, I think the response from the other states has come into the mix and hopefully this will address the balance.”

LORD ARBUTHNOT: “Ladies and Gentleman, I’m going to have to draw it to a close here but what a fascinating hour we’ve just had. Lots of very different contributions. I’d like to say to our panel, to the Henry Jackson Society, and to the Taiwanese Ambassador, thank you very much indeed. I’d also like to say to all of you for turning up and for joining in because without you it wouldn’t have been so interesting. Thank you very much indeed. That brings us to a close. Thank you very much.”

HJS



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