DPG Indo-Pacific Monitor

Vol.I, Issue.3

Date: April 01, 2020
The most notable development to occupy the attention of the Indo-Pacific, and indeed the rest of the world during the previous month, was the rapid spread of Novel COVID-19, or the Coronavirus.   The number of people infected globally multiplied more than seven-fold from end-February 2020, with over 34,000 fatalities.  Governments across the region took several measures to contain the crisis, including sealing borders and shutting down international travel, imposing internal lockdowns and quarantines, suspending all scheduled events involving people coming together, and announcing fiscal stimuli to ameliorate the adverse economic impact.   China, on the other hand, began lifting its internal lockdown and going into a production overdrive to fulfil global demand, while keeping its international borders sealed to avoid recontamination due to carriers coming in from abroad. Despite the economic stimulus introduced by many countries, there was global recognition of the likelihood of an impending recession.
 
High-profile international events postponed due the pandemic included the 36th ASEAN Summit, President Xi Jinping’s visit to Japan, the Russia-India-China (RIC) Summit, the Indian Navy’s ‘Milan 2020’ multilateral exercise and the 2020 Tokyo Olympics. On the other hand, leaders turned to international video conferences to discuss cooperation in response to COVID-19. A teleconference between SAARC leaders, initiated by Prime Minister Narendra Modi, was held on 15 March and led to the creation of a COVID-19 Emergency Fund. An Extraordinary Virtual G20 Leaders’ Summit was also convoked by Saudi Arabia as current G20 chair on March 26, during which leaders committed to taking all necessary measures to shore up the world economy and fight the pandemic by contributions to the WHO led COVID-19 Solidarity Response Fund.  Foreign Ministers of the G7 countries also  participated in a video conference on March 25 to discuss response.  Successive G7 teleconferences are to be held in April and May, instead of the in-person summit scheduled for June this year in the US. In the South-Western Pacific, during a scheduled port visit to Guam, 36 personnel on board the USS Theodore Roosevelt tested positive for COVID-19. The 5,000 crew members on the warship are undergoing testing and numbers are expected to rise.
 
Preparations began to put into effect the U.S. brokered peace deal presaging the potential end to US presence in Afghanistan that was concluded at the end of last month. Representatives from the Taliban and the government held talks over Skype and the President of Afghanistan Ashraf Ghani offered to release 1,500 prisoners as opposed to the 5,000 that the Taliban had initially demanded. Of these, 100 will be released at the end of March on humanitarian grounds such as health, age and vulnerability to COVID-19.  President Ghani also launched the intra-Afghan dialogue, announcing a team of 21 to facilitate talks with the Taliban. The Masoom Stanekzai led team also includes representatives from the Abdullah Abdullah faction and has his support. However, the Taliban claimed that the negotiating team was not representative, raising concerns about whether negotiations would begin. Additionally, the peace process faces other challenges such as the attack on a Gurudwara in Kabul which killed 25 people and the outbreak of COVID-19, which may result in lockdowns in parts of the country. There are been reports of classified annexes to the peace deal that have been concealed from American lawmakers, U.S. allies and the public.  The road to Afghan peace still remains difficult and full of obstacles.
 
One impact of the falling energy demand due to COVID-19 was the Saudi Arabia - Russia oil price war, with these major players unable to come to an agreement on production cuts in an effort to preserve market share. Brent Crude prices plunged to USD 23.03 per barrel, their lowest level since 2002, before stabilising at around USD 30 per barrel.  The impact of this price war was felt by the U.S. shale industry, severely impacting its financial viability.  Washington has been pressuring Riyadh to end the price battle and make amends to stabilise the global oil market. The tussle has also put severe strain on the economies of other oil producers. The crisis could, however, benefit India’s fiscal position, resulting in massive reductions in the crude import bill.  This will have to be weighed against the impact of lower economic output due to the lockdown, resulting in lower tax collections.
 
In the Indian Ocean region, India was admitted to the Indian Ocean Commission (IOC) as its fifth observer earlier this month. This move will allow India to increase engagement in the Western Indian Ocean in accordance with its SAGAR vision. The Western Indian Ocean also witnessed the first ever India-France navy patrol,  embarking from Reunion Island.
 
In Southeast Asia, Vietnam hosted the USS Theodore Roosevelt at Da Nang, in a visible sign of its opening up to the possibility of greater bilateral military cooperation. The U.S. Navy carrier became the second to anchor in the country since the conclusion of the Vietnam War. Vietnam also announced its decision to host the second ASEAN Multilateral Naval Exercise (AMNEX 2/2020) off Mah Trang in May 2020. Three planning conferences will be held in preparation for the exercise. In the same region, the USN upped the tempo of its activity with a FONOPS off the Paracel Islands by USS McCampbell on March 10, 2020; tactical manoeuvres by USS Gabrielle Giffords and USS America; and the live firing of a Standard SM-2 missile by USS Barry in the Philippine Sea, all widely reported as a signal to China. On the other hand, Manila officially announced its decision to scrap the 1998 Visiting Forces Agreement (VFA) with Washington this month.  Meanwhile, Indonesia has come to a preliminary agreement to hold its first joint naval exercise with Russia, symbolising the growing possibilities for military cooperation between the two countries.
 
In East Asia, China expelled at least 13 American journalists working for the Washington Post, New York Times and the Wall Street Journal as retaliation for the U.S. tightening restrictions on Chinese state media outlets in the country. As the diplomatic row escalated, Beijing justified its decision by calling it a response to Washington’s ‘unreasonable oppression’ of its journalists.  North Korea conducted four weapons tests involving either short-range ballistic missiles or multi-tube rocket launchers. The latest test was conducted on March 29, when two short-range ballistic missiles were fired off the country’s east coast from the port city of Wonsan. Meanwhile, Australia concluded negotiations with Singapore on a  Digital Economy Agreement to deepen economic and trade cooperation with the help of technology in the region. The announcement was made by Prime Ministers Scott Morrison of Australia and Lee Hsien Loong of Singapore via teleconference on March 23.
 
Official statements and media reports for the highlights mentioned above can be found in the relevant sections of this monitor.