Friday, July 20, 2012

America’s Pacific Century is not about China alone…..

Hussain Saqib

When President Obama revealed America’s intentions to shift focus from Middle East for an expanded engagement in Asia, the analysts thought unanimously that this new focus comes amid growing concerns among America's regional allies that its leadership role in the Asia may be fading – just as China has begun to enhance its military and assert claims to territories in the East and South China Seas. This move and sweet-talk of America’s Pacific Century led many to believe, for solid reasons, that the Clash of Titans in the Pacific was imminent.

To put the plan into action, the new US Defense Strategic Review was finalized showing the emphasis on challenges in the Asia-Pacific region and the goal to foster progress in the Middle East, Central Asia and North Africa. This can be considered as a strategy to counter attempts by China and Iran to block US power projection capabilities in areas like the South China Sea and the Strait of Hormuz. US President Obama, who unveiled the new strategy at the Pentagon, highlighted the re-orientation of the US’ strategic focus towards the region: “We will be strengthening our presence in the Asia Pacific, and budget reductions will not come at the expense of that critical region.” Officials in the Pentagon are particularly concerned about the rise of China’s military power and efforts to broaden its presence in the Asia-Pacific region, which could jeopardize America’s military dominance in the region.

China is purchasing and developing a new generation of weapon systems that US officials fear are designed to prevent US air and naval forces from projecting power into the Far East. According to US Secretary of Defense Leon Panetta, the smaller and leaner force envisaged will be shaped to operate flexibly in the region. The document itself expresses this re-orientation and indirectly addresses the Chinese government: “US economic and security interests are inextricably linked to developments in the arc extending from the Western Pacific and East Asia into the Indian Ocean region and South Asia, creating a mix of evolving challenges and opportunities.  The growth of China’s military power must be accompanied by greater clarity of its strategic intentions in order to avoid causing friction in the region.”

US plans for global dominance apart, the analysts now believe that America’s loss of interest in the Middle East is not about China alone. The oil-rich Middle East is losing its importance due to its terminally declining oil reserves. According to a report carried by The National Interest, a confluence of developments—including rising prices and production costs, declining reserves, and the availability of alternate fuels and unconventional sources of oil—will decisively undermine the defining role of the Middle East in the global energy market. Meanwhile, the United States has vital interests at stake elsewhere in the world at least as pressing, if not more so, than its interests in the Middle East. These include thwarting the proliferation of weapons of mass destruction, fighting transnational terrorism and maintaining stability in key strategic locations of the world.

The comparative advantage in producing oil is based on four factors. First, Middle Eastern oil is the cheapest in the world to produce because of simple geology, most Middle Eastern oil is a superior product, Middle Eastern oil developers benefit from economies of scale because the cheap oil there is so plentiful and the Middle East’s dominance of oil production and reserves makes it “too big to fail,” which effectively lowers producers’ risks. Other than the Middle East’s comparative advantage in oil production and the world economy’s need for oil to power transport, the region would not be as strategically important otherwise. But this comparative advantage in oil production is eroding because oil-production costs in the Middle East are certain to rise and some oilfields producing continuously for eighty years are rapidly maturing (meaning they are almost past their peak production). This is pushing the producers to develop new production capacity in other regions and through unconventional methods. Middle East now accounts for only 46 percent of remaining reserves of oil and liquid natural gas ultimately recoverable with conventional means and that is only “proven” reserves.

With these developments, the Middle East suddenly becomes a minor player. Since 1945, the United States has sought to prevent any single power from dominating the Middle East’s oil supplies and supported anticommunist monarchies and autocracies in Saudi Arabia, Kuwait and Bahrain, among others, during the Cold War. The U.S. military’s Central Command, formed in 1983, has a forward headquarters in Qatar, and the U.S. Navy’s Fifth Fleet is based in Bahrain. This military infrastructure guarantees a long-term U.S. military presence in the region. Those policies now make less sense in light of the brewing realities in the world oil market. These developments—the world’s increasing energy efficiency and the Middle East’s loss of its comparative advantage in oil production, the region will no longer be able to act as the “central bank of oil,” and it will forever lose the ability to credibly threaten to wield oil as a weapon. The sword of Damocles that has implicitly hovered over the West since the 1970s will be gone.

However, the US interests in the Middle East will remain intact because the region is considered a hotbed of terrorism and may become a major locus of WMD proliferation. But South Asia hosts terrorist groups, including Al Qaeda, that threaten the United States more directly. Middle East has two of the world’s most important choke points for ocean-going trade: the Suez Canal and the Strait of Hormuz. But governments in the region, heavily reliant on exports, have strong interests in keeping trade routes open. Despite Iranian leaders’ recent threats, no government is likely to cut off its own economic lifeline voluntarily. Meanwhile, the Malacca Strait in East Asia will remain important for a diverse array of ocean-going trade for the foreseeable future.

The United States is also committed to Israel’s security. If Iran succeeds in building a nuclear weapon, Israel could face a potential existential threat—the same threat fellow U.S. allies in East Asia, including South Korea, Taiwan and Japan, have been facing from North Korea since 2006. Once again, U.S. interests in the Middle East are no more, and probably less, important than U.S. interests in other regions.

The changing realities of the world energy market do not mean the United States can or should ignore the Middle East. In the final analysis, it is now only Iran which can lead to extended stay of America in the Middle East. Once Iranian threat to Israel is neutralized, US can pay its full attention to Asia Pacific which is its new-found darling to deal with growing economic and military might of China. This will define its relations with India and Pakistan. With Iran continuing to defy the dictates of American World Order, US presence in South Asia will be imperative. This will be quite a distraction from its focus on its Pacific Century.

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