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.