West Asian energy constitutes an important geo-economic dimension to China’s growing stakes in West Asia.
In a world of geopolitical and geo-economic shifts, the People’s Republic of China turned yet another page in recent history by bringing together two Asian adversaries -- the Kingdom of Saudi Arabia and the Islamic Republic of Iran. China brokered a peace agreement that will help to restore diplomatic ties between the adversarial neighbours.
Way back in 2011, I was in Bahrain reading a paper at an international conference on “The Gulf and Asia”. By using the word “Gulf” rather than the “Persian” or “Arabian” Gulf, the conference organiser, the London-based International Institute of Strategic Studies (where I subsequently worked as the director for geo-economics and strategy), was buying peace from the neighbourhood. The Arab states never liked the Western prefix of “Persian”. Iran always viewed itself as the region’s grandest civilisation, viewing the Arabs as bedouins (nomadic tribes).
In my paper on “India and the Gulf”, I used the official Indian term West Asia to refer to what the West views as the “Middle East”. After my session was over, the tall and handsome adviser to the Crown Prince of Bahrain, Sheikh Mohammed bin Essa Al Khalifa, walked up to me to say: “I always appreciate the fact that India refers to our region as West Asia. It is the appropriate term. Not Middle East.”
Call it what you will, but through the last century the region has had two dimensions to its global identity -- Islam and Oil. The British defined the borders. The Americans offered security guarantees as long as they controlled the flow of oil. The West befriended the Islamic elites of the region, seeking their oil and the petrodollars that the latter reinvested in the West. States were established, like Saudi Arabia, and other regimes destabilised, as in Iran, in the name of religion but in fact for oil.
The focus of the 2011 IISS conference was on the change underway in the global oil economy and its implications for the security of the Gulf. The participants at the conference recognised that the United States was becoming less dependent on Gulf oil, having chosen to increase domestic production, and Europe was diversifying its sourcing, including from Russia. China and India, along with Japan and South Korea, had emerged as increasingly important customers.
The distinguished analyst of the global energy economy, Daniel Yergin, had just published his book, The Quest: Energy, Security and the Remaking of the Modern World (Penguin Press, New York, 2011), which drew attention not just to China’s growing importance as a consumer of oil, but also to Russia’s emergence as an important supplier of oil.
Oil and gas have remained at the core of global security issues over this past decade as China began to wield a buyer’s clout and Russia the clout of a supplier. In the Gulf, they constitute the focus of regional security. While Russia is now engaged in a war that has reduced its clout as a supplier to Europe, it has turned its attention eastwards to the growing markets of China and India. The two Asian giants have also been, and will continue to be for some time to come, major markets for West Asian oil and gas.
Before China-India relations turned for the worse, due to the border clashes, both countries were exploring ways to join forces as major consumers of West Asian energy to counter the sellers’ cartel. While this attempt to create a formal alliance of buyers has not yet borne fruit, the fact that West Asia has become dependent on Asian rather than Western markets has the potential to increase the buyers’ clout provided that the Asian consumers can come together.
While access to West Asian energy constitutes an important geo-economic dimension to China’s growing stakes in West Asia, there is also the geo-political aspect defined by the declining influence of the United States in the region. What should India do? Imports constitute 85 to 90 per cent of India’s oil consumption. Over 60 per cent of oil imports come from the Persian Gulf region. While the Gulf’s share of oil imports and inward dollar remittances into India has been declining, it still remains substantial. Millions of Indians still live and work in the region. Clearly, the Gulf is of both geo-economic and geopolitical significance for India.
Through its membership of what has been called the West Asian Quad – I2U2 -- comprising the United States, India, Israel and the United Arab Emirates -- it appeared as if India was enhancing its clout in the region. It remains to be seen if this was indeed a well-advised move. India has historically had a presence both in Southeast Asia and West Asia.
Has it strengthened or diluted its influence by joining hands with the US and Australia in one Quad and with the US and Israel in the other?
Joining hands with Japan in the east and with UAE in the west is quite understandable, given the historical and contemporaneous links with both nations. However, it is not clear if the wider Asian region to India’s east and west appreciate India joining hands with the other two, in each instance, or whether India would be better off pursuing an independent regional policy in its wider Asian neighbourhood.
India would be well advised to pay closer attention to China’s strategy of establishing bilateral links with countries in its neighbourhood, not riding piggyback on others. Both in Southeast Asia and in West Asia, India’s neighbours would like to see India stand on its own feet, rather than with the aid of diplomatic crutches provided by the Western powers.
At the 2011 Bahrain conference I was asked by an Arab participant: “What does India want in West Asia?” My reply was quick and categorical. Stability, peace and development. The West has not provided this to the region. It is in India’s long-term interest that there is greater stability in its wider Asian neighbourhood. Today, China promises to provide it. However, then and now, India in fact remains a force for stability and development in West Asia. A clear articulation of this worldview is necessary before the region once again becomes a theatre of Big Power conflict.