DPG Indo-Pacific Monitor

Vol.I, Issue.4

Date: May 01, 2020
ABSTRACT
 
The COVID-19 pandemic continued its destructive march across the world.  At the time of writing, the number of confirmed cases had crossed the 3.17 million mark, with nearly 225,000 fatalities globally.  The number of US casualties alone stood at 61,361 people, above the 58,220 toll of the decade long Vietnam War.  Societal and international lockdowns which have disrupted global supply chains will, according to IMF projections, result in the global economy contracting by 3% this year, the worst recession since the Great Depression.  The International Labour Organisation has estimated that around 81% of the world’s work force has been impacted.  World trade, according to the WTO, will dip by anything from 8 - 20%, depending on the nature of post-pandemic recovery.  International and domestic travel restrictions have decimated travel, tourism and related industries, apart from stranding students and tourists in foreign lands, with no means of support.  Global oil prices have collapsed, with WTI oil futures dropping to (-) $ 37.63 per barrel at one stage.  The United Nations Secretary General, António Gutteres, has described the situation as the biggest crisis to have hit the world after World War II.  Predictions regarding the end of globalisation and talk of the ‘Suez moment’, the ‘Pearl Harbour moment’ and China’s Chernobyl, are in the air.  
 
Despite the severity of the global impact, the United Nations Security Council could not agree on a collective response.  China, which presided over the UNSC in March, refused to entertain proposals for a discussion.  When a discussion did take place on April 10, 2020 after China handed over the Presidentship to the Dominican Republic, China claimed that the subject was outside the UNSC’s mandate.  The US and countries traditionally associated with it called for a probe into China’s compliance with responsibilities under the WHO’s International Health Regulations, with some sections even seeking reparations, while China on its part launched an all out offensive, both to prevent any such outcome  and  to propagandise the extent of its “aid” to the world.  The US withdrew its financial support to the WHO pending an investigation into its role, putting a major dent in the organisation’s budget. Opposing US and Chinese outlooks resulted in insurmountable divisions in UN organisations, depriving them of the ability to deal effectively with the crisis. Similar divisions were visible in the EU and ASEAN.  
 
China used preoccupations with the pandemic, including infections on board USN ships forward deployed in the Indo-Pacific, to extend its control over the South China Sea Islands and bring coercive pressure to bear on Taiwan.  Exercises involving fighter aircraft off Taiwan to bring home the power differential between the two, the deployment of its aircraft carrier Liaoning in the South China Sea, the sinking of a Vietnamese fishing boat, intimidation of Malaysia over the latter’s exploration in oil blocks within its South China Sea waters, the creation of the new Nansha and Xisha administrative districts for the disputed Paracel and Spratly Islands and the renaming of over 80 features were among the coercive activities by China during the month.  There was, however, a pushback, with USN warships making two transits of the Taiwan Straits and in company with an Australian warship, demonstrating the deterrent impact of US presence on China’s attempts to create a fair accompli.  This added a substantive military element to the existing diplomatic, technological and informational domains already in play by the US to contest China’s assertions.
 
China’s aggression was evident on the diplomatic front too.  Its Ambassador in Australia went public with a thinly veiled threat of stopping Australian beef and wine exports to China, as also Chinese students turning away from Australian education centres, if Australia continued with its anti-China policies.  The emerging reality, however, was that there are increasing moves towards selective economic decoupling from China, notwithstanding the adverse impact on export-dependent economies.  Japan announced incentives totalling 220 billion yen to companies that shift production back to Japan and 23.5 billion yen to companies ‘seeking to move production to other countries.’ India, meanwhile, amended its FDI rules to prevent hostile takeovers of Indian companies by Chinese businesses.
 
That the pandemic will change the nature of global interaction is certain.   The ability of the US to sustain the competition, particularly if the economic impact of the pandemic results in significant reductions of budgetary support to the US military, remains in doubt.  There is continuing speculation that the ‘America -First’ approach will increasingly shift the US focus to homeland defence, including greater focus on the cyber and space domains rather than land, sea and air; reduce reliance on forward deployment; and increase importance of military reserves. If this transpires, the nature of the Indo-Pacific will change beyond recognition.
 
In other developments, rumours about the demise of North Korea’s Kim Jong- Un spread, particularly after he failed to attend his grandfather Kim Il Sung’s birth commemoration on April 15, 2020 which is among the biggest events in North Korea’s official calendar.  South Korean officials, however, were confident that they knew where Kim was, and that he was merely protecting himself from the pandemic.
 
India experienced the largest number of cases and fatalities from the pandemic in the Indian Ocean, after Iran. Lockdowns across the country were extended until May 3, 2020. This did not, however, prevent India from stepping up its role as a first responder to COVID-19 in the region. Humanitarian aid was provided to neighbouring countries including Bangladesh, Nepal, Mauritius, Seychelles, Bhutan, Afghanistan and the Maldives. Reaffirming its Neighbourhood First policy, India was the first country to provide aid to Bangladesh in the form of surgical masks and head covers while also supplying medical aid to Bhutan. India’s Ministry of External Affairs announced that the country has gifted 5 million tablets of hydroxychloroquine to neighbouring countries and countries in the IOR (Indian Ocean Region), Africa, Latin America, Central Asia, Eurasia and WANA (Western Asia and North Africa).
 
Singapore, which was initially touted as a pandemic success story due to its effective initial action, was struck by a second wave, with COVID-19 breaking out in the country’s migrant worker population. Even though fatalities remained under control, infections increased from 1,000 at the end of March to over 14,000 at the end of April, making it the most affected ASEAN country. Vietnam on the other hand received plaudits for its response to COVID-19, with no fatalities among 270 affected (of which 225 have recovered).  The country has eased lockdowns and is preparing to reopen businesses.
 
Meanwhile in Afghanistan, the Taliban released 20 Afghan security force prisoners after the government released 300 Taliban prisoners on the basis of factors such as age, health and the remaining length of their sentence. This development came after talks almost broke down earlier in the month over the prisoner exchange provision of the US-Taliban agreement. Despite this progress, hostilities continued and the Taliban also rejected the government’s call for a ceasefire during the holy month of Ramadan so that the country could focus on COVID-19 response. Due to limited testing and a weak healthcare system, official statistics of the number of patients remained uncertain. Whether the peace process will survive remains to be seen.
 
Iran, in an action with significant geopolitical implications, launched its first military satellite using a three-stage launch vehicle and a mobile launcher on April 22, 2020.  The satellite, which was placed in a 425 Km orbit, will reportedly provide imagery, navigation and communication capability to the Iranian Revolutionary Guard.  Concerns were expressed about the launch vehicle being modified into an ICBM.  Meanwhile, Secretary of State Pompeo was reported to be considering a legal argument that the US remains a participant in the JCPOA (despite having pulled out of the deal in 2018), so as to pressurise the UN to extend or tighten sanctions against Iran.
 
As oil prices plunged to historic lows, producers and consumers were running out of storage space. Russia and Saudi Arabia reached agreement on April 9, 2020 to cut OPEC Plus oil production by 10 million bpd, far less than the 30 million bpd reduction in actual global consumption due to the pandemic. In Yemen, the Joint Forces Command announced a unilateral ceasefire extending to all ground, marine and air operations with effect from April 9, 2020. The ceasefire was reportedly initiated by Riyadh in order to curb the spread of COVID-19.
 
Official statements and pertinent analyses for the highlights mentioned above can be found in the relevant sections of this Indo-Pacific monitor.