STRATEGIC COMPETITION IN SOUTHERN ASIA Arms Racing or Modernization? May 17, 2017 Organized by The Stimson Center, Washington, D.C. 12:15 Panel 2: Boomers, Baburs, and Bastions: Competitive Maritime Developments Nilanthi Samaranayake, CNA Chris Clary, University at Albany Iskander Rehman, Salve Regina University Moderator: Sameer Lalwani, Stimson Center 1:45 Closing – Michael Krepon and Sameer Lalwani, Stimson Center Sameer Lalwani: Thanks so much for sticking around with us for the second panel here. We’re joined by another great group of scholars who think a lot about these areas of competition, particularly in the naval domain. I think it was really helpful that Sannia teed us up really nicely by saying that this is an area that, when we think about particularly the Indian-Pakistan conflict, or competition, but also the India-China competition, we tend to think about the land borders and the disputed land territory, but in some ways the naval domain is becoming increasingly more consequential and apparently always was even back to 1971. As in the last panel, I think the speakers will all be talking a little bit about some trend lines, some potentials with drivers for some of these changes that are occurring in the naval domain, or the maritime domain rather, some consequences of it, and different perceptions of this competition and of these developments. Initially I had suggested that the title of this panel should be "Bobbers, Babus, and Bastions." I was told that was a bad idea, but I just want to let you know what the alternative would have been. The Boomers, Baburs, and Bastions: Competitive Maritime Developments, and our speakers today are Nilanthi Samaranayake, Chris Clary and Iskander Rehman, who actually is perfect for this, in order right here. We'll go in that order, you have their bios on your sheets in front of you. Let me just say a quick word about each of them, so Nilanthi is a strategic studies analyst, at CNA whose research focuses on South Asia and Indian Ocean security. She was the project director of a 2015 CNA study, water resource competition at the Brahmaputra River Basin: China, India, and Bangladesh. It’s an excellent study; you should take a look at it. It’s becoming increasingly relevant as sort of a tool for coercive leverage in the water domain. Chris Clary is an assistant professor of Political Science at the Rockefeller College of Public Affairs and Policy at the University of Albany, that's a mouthful. Previously he was a postdoctoral fellow at the Watson Institute for International and Public Affairs at Brown University, a pre-doctoral fellow at Belfer Center at Harvard, a Stanton Nuclear Security Fellow at RAND, a Council of Foreign Relations and International Affairs Fellow in India, and I'm sure the list goes on and on but that's what I have here in front of me. Iskander Rehman is a senior fellow for international relations at the Pell Center for international relations and public policy at Salve Regina University, previously a postdoctoral fellow at Brookings, and before that a fellow at CSBA here in town, and also the Carnegie Endowment, so these folks have been all around town, out of the country and back, and they're here to offer some thoughts on competitive developments in maritime domains. Nilanthi why don't you start it off. Nilanthi Samaranayake: All right. Sameer Lalwani: I'll hold everyone to eight minutes, so no more than 10 minutes please. Stimson Center 5-17 Panel 2 Transcript Page 2 of 27 Nilanthi Samaranayake: Can everyone hear me okay? Mic's working? All right. Thank you Sameer for the invitation, thank you to the Stimson Center for the invitation to be here today. It's an honor, and I'm happy to provide some of my personal views about the topic. Given the title of the panel, I think we have seen a set of maritime developments that are perceived as being competitive to varying degrees by observers in China, India, and Pakistan. So first I'll start by discussing some of these developments, then I'll turn to these countries' interests at sea, both diverging interests and converging interests, and then I'll finish by offering some future scenarios that we might want to consider and plan for. First, I think it's useful to think about these maritime developments in terms of military developments and commercial developments, but to acknowledge that an uncomfortable blurring of the two categories occurs. So first in the military realm, there have been some concerning developments. In January, Pakistan announced the successful test firing of a submarine launched cruise missile, the Babur-III. In April, India announced a successful test firing of the land attack version of the BrahMos cruise missile from an Indian Navy ship. And last year China won a 10-year lease to build its first overseas military base in Djibouti. And this is in the larger context of China's regularly sending naval task forces across the Indian Ocean for counter-piracy operations. And it's compounded by the fact that in recent years China has started sending submarines as part of this mix of assets that it sends into the Indian Ocean. So this clearly upsets India. Okay, then in the commercial realm I think there are some developments that appear to be competitive, like Gwadar Port, Chabahar Port, I think it's worth mentioning though that in the maritime domain it inherently involves a dimension of economic interests such as the free passage of goods and resources, and I think Sannia mentioned this economic dimension as being a driver to some of these developments. I think we should just take that economic driver into account when interpreting developments that are seen as competitive. First with regard to Gwadar Port in Pakistan, this port has been in existence for over a decade, but ill-used, but it gained some momentum in reason years after a Chinese company gained operational control of the port after the Port of Singapore authority left, and the fact that it's been placed under this wider construct of One Belt, One Road by China. There has now been this push to actually make use of the port, make it profitable, develop a wider economic zone. Gwadar I think is the most unsettling to Indian observers against the wider backdrop of China's One Belt, One Road. But, in one sense, one belt one road, it is a sweeping vision of connecting Asia with Europe, with Africa, in terms of connectivity projects, but I think in another sense though it represents the branding of a set of existing projects in the Indian Ocean region. A series of ports, airports, sea sports, road, railways, and even pipelines in multiple sites in Stimson Center 5-17 Panel 2 Transcript Page 3 of 27 the Indian Ocean like Sri Lanka, Bangladesh, Myanmar, and even outside South Asia, like Kenya and Djibouti. There are Chinese construction activity, or financing, or commercial operations. Now, Chabahar Port in Iran, some say this is competitive, perhaps India's response to Gwadar in Pakistan is less than 100 kilometers from Gwadar, and Narendra Modi's visit to Iran helped to re-inject life into this project which had kind of languished for some time due to sanctions on Iran. The Port project essentially allows India to bypass Pakistan and connect to trade with Afghanistan, and also allows India to connect to the overall international north/south transport corridor and trade with central Asian countries, and at present, there are two Indian port trusts that have set up a joint venture with an Iranian company to develop berths at the port itself, but there's also a pursuit of land connectivity through a railway link from Chabahar to inland Iran. Those are some of the military commercial developments that are seen as competitive between the countries. Now I'll turn to their interest at sea—some diverging interests, and converging. The major source of tension we've heard this morning between India and Pakistan, is sovereignty, Kashmir. There's a sea based dispute over Sir Creek, but it's minor compared to Kashmir of course, and unfortunately CPEC runs through this disputed territory so naturally India contests it, and unfortunately this long standing tension on land, it extends to the naval theater where countries are increasing their capabilities like India's submarine launched ballistic missile program and Pakistan's active pursuit of conventional submarines from China. I think it's worth mentioning that they also have some common interests, mainly insuring the security of the sea lanes. The Indian Ocean is the life line of the world's economy. About half of all container traffic transits this body of water, including two thirds of global oil shipments, so for both India and Pakistan, roughly 90% of all of their trade comes from the sea, and similarly China is heavily dependent on energy imports that travel across the Indian Ocean. These countries have also shown their commitment to these interests by actually committing their navies to support the counter-piracy operations off the horn of Africa, and in the Gulf of Aden, and China and India as independent deployers, and Pakistan as part of the U.S. led combined maritime forces, and Pakistan, the navy has actually commanded the task forces on counter-piracy eight times and on counter-terrorism nine times by my count. Operationally they work together at sea. China and India, they have coordinated their escort convoy schedules and Oriana mentioned the cooperation on a piracy hijacking incident.