Energy should influence Asia's politics

Energy should influence Asia's politics

By Sayidiman Suryohadiprojo

JAKARTA (JP): East Asia's economic growth is the highest in
the world and will remain so at least for the coming decade. Yet,
Japan and the Asian Dragons (South Korea, Taiwan, Hong Kong and
Singapore) are not the only nations to have demonstrated their
economic drive.

Other East Asian nations are joining the high growth club.
China, although officially a communist country, is practicing a
market economy, in spite of calling its endeavor a "social market
economy".

However, China's economic growth of over 10 percent annually
is the highest in the region. The ASEAN nations -- including
Brunei, Indonesia, Malaysia, the Philippines, Thailand and
Vietnam -- do not like to be left behind by their fellow ASEAN
member, Singapore. That is why all of them are registering
economic growth of more than 7 percent. So far, only North Korea,
Cambodia and Laos are yet to enter the race for high economic
growth.

Consequently, all East Asian nations have more energy
requirements than before. Although some of them are utilizing
coal to satisfy their needs, oil and gas remain the most
important items on their energy lists.

The rising oil demand has changed many East Asian nations from
net exporters of oil into net importers. Such a dramatic change
has taken place in China. If a decade ago, China was able to
export nearly a quarter of its production, in November 1993, the
country became a net importer of about 600,000 barrels a day.

Looking at China's industrial progress and the ambitious
economic program it is implementing, we can foresee a dramatic
increase in oil imports in the future.

In addition, Indonesia and some other ASEAN nations have
become or are in the process of becoming net importers of oil.
This is happening in spite of the resource potential and increase
of oil production in the region.

China has large oil deposits, but unfortunately, they cannot
be satisfactorily developed on account of its remote geographic
location. Some experts suggest that China's reserve in the Tarim
Basin in Xinjiang province could equal Saudi Arabia's proven
reserves of 250 billion barrels.

However, it is very difficult to extract the oil because of
its distant location near the border with Russia, deep
underground within the desolate Tarim desert. It would require an
enormous amount of investment to mine it. That is why today, it
is reported that Xinjiang accounts for less than 7 percent of
China's oil production.

If East Asia's oil-producing nations are forced to import
oil as a result of their economic growth, this is more so case
for non oil-producing nations like Japan, Korea and Taiwan, whose
levels of economic growth also require them to increase their oil
import levels.

A report by APEC's Advisory Committee for Energy predicted
that by the year 2010, the oil market -- dominated by Japan (77
percent of Asia's oil imports in 1992) -- will change into one
that is balanced among Japan (37 percent), China (19 percent),
Korea (18 percent), the ASEAN countries (17 percent), and Taiwan
and Hong Kong (9 percent).

The logical outcome is that East Asia will become very
dependent on oil from the Middle East, including oil from Iran
and Iraq. The East West Center estimates that by 2000, East Asia
will import 87 percent of its oil needs from the Middle East, up
from 70 percent today. By 2010, dependence could reach 95
percent. In the next 15 years, the oil flow from the Middle East
to East Asia could equal more than 15 percent of global
consumption.

It is therefore rather easy to conclude that there will be a
closer relationship between East Asian nations and the Middle
East, including Iran and Iraq. This situation could have
political and security implications with global consequences.

Remember Samuel Huntington's analysis that the East-West Cold
War of the past will be replaced by a Clash of Civilizations
between the West (including the former communist nations in
Europe and Russia) and the Non West (including the Moslem
countries and the East Asian nations). Was that analysis made
with the foresight of the developments in East Asia and its
energy requirements?

The West -- in particular the U.S. and Western Europe -- are
certainly not interested in a confrontation with a united East
Asia and the Middle East. Not only could it create dangerous
economic repercussions for the West, the security dimension will
also threaten Western global domination.

It is therefore understandable that the West will prevent the
realization of Huntington's analysis. If many people in the West
are arguing against Huntington's prediction, it is not only
because they cannot agree with Huntington's logic, but perhaps
more so because they do not want the prediction to become a
reality.

The best way to prevent a close relationship between East Asia
and the Middle East is to create alternative sources of oil. At
the same time, East Asia's dependence on the West must be
enhanced, while measures must be taken to forestall East Asian
unity.

We have already observed a strong U.S. interest in exploring
the oil fields of the former Soviet Union. In Central Asia around
the Caspian Sea and in Russia's Siberia, U.S. oil companies are
anxious to develop new oil producing centers which can compete
with the Middle East.

However, these companies are facing many difficult problems
and it is still questionable whether they will be successful. A
strengthening of Russian and Central Asian nationalism will
certainly add to these problems.

We have seen a strong U.S. disagreement with Malaysia's con
cept of an East Asian economic cooperation body because Malaysia
does not consider the U.S. to be a member. So far, Malaysia's
concept cannot become a reality, since the U.S. is pressuring
Japan to refuse to participate in the Malaysian plan. On the
contrary, the U.S. is urging Japan to cooperate in assisting
China to develop its huge oil reserves.

But at the same time, the Western press is creating strong
anxieties among East Asian nations by repeatedly emphasizing that
China is building a military force far above its defensive needs.
If China and the other East Asian nations are falling into the
trap of the traditional colonial practice of divide et impera,
East Asian unity can never become a reality. That is already the
case with the Spratly Islands.

President Clinton's visit to Japan and South Korea in April
shows an American concern about its position in the future East
Asia. Rising anti-American sentiments in Japan triggered by the
Okinawa case can harm close U.S.-Japan relations, which the
Americans need to safeguard U.S. leadership in East Asia.

These relations are already in a bad state because of the
large U.S. trade deficit with Japan, which has angered many
people in the U.S., including congressmen and labor unions. It is
therefore becoming a very interesting question about whether
people in Japan want to be more independent from the U.S.. There
is a noticeable change in the overall attitude they had assumed
following their defeat in World War II.

Another way to lessen East Asian dependence on Middle Eastern
oil is by using more nuclear power. Such development will be
heartily welcomed by Western manufacturing companies, because
they are in the best position to supply the reactors.

East Asia currently represents roughly 14 percent of global
nuclear capacity. But the U.S. Department of Energy predicts that
it can increase to 48 percent between 1992 and 2010. Furthermore,
at least $160 billion in capital spending is scheduled for the
next decade alone.

That will certainly benefit Western manufacturers. Today,
Japan generates nearly a third of its electricity from nuclear
power, while in South Korea, it is around 40 percent. The use of
nuclear power could become attractive, since it is yielding large
quantities of energy at a low marginal cost. With the fastbreeder
reactor, nuclear power becomes a self-renewing source of energy.

However, there will be a strong resistance to the use of
nuclear power by environmentalists and Western strategists.
Environmentalists do not believe that adequate safety measures
can be established.

They will again and again stress the Chernobyl and the Three
Mile Island tragedies and their terrible impact on human life.
Environmentalists will fight every decision to increase nuclear
power. Meanwhile, Western strategists will oppose the increase of
East Asian nuclear power because it will not only produce
electricity, but also large quantities of plutonium: the raw
material for nuclear weapons.

It will be very interesting to see what will actually happen in
the future, given the facts we know today.

Lt. Gen. (ret) Sayidiman Suryohadiprojo is former governor of
the Institute of National Resilience (Lemhanas) and presently
Ambassador-at-large to the Non-Aligned Movement.