Why Asian countries are scrambling for resources

Asia is the world’s most resource-poor continent and its booming economies cannot sustain growth without access to them

By Brahma Chellaney  / 

Sun, Apr 07, 2013 - Page 9

Competition for strategic natural resources — including water, mineral ores and fossil fuels — has always played a significant role in shaping the terms of the international economic and political order. However, now that competition has intensified and it encompasses virtually all of Asia, where growing populations and rapid economic development over the past three decades have generated an insatiable appetite for severely limited supplies of key commodities.

Asia is the world’s most resource-poor continent, and overexploitation of the natural resources that it does possess has created an environmental crisis that is contributing to regional climate change. For example, the Tibetan Plateau, which contains the world’s third-largest store of ice, is warming at almost twice the average global rate, owing to the rare convergence of high altitudes and low latitudes — with potentially serious consequences for Asia’s freshwater supply.

In other words, three interconnected crises — a resource crisis, an environmental crisis and a climate crisis — are threatening Asia’s economic, social and ecological future. Population growth, urbanization and industrialization are exacerbating resource-related stresses, with some cities experiencing severe water shortages and degrading of the environment — as anyone who has experienced Beijing’s smog can attest. Fossil fuel and water subsidies have contributed to both problems.

Faced with severe supply constraints, Asian economies are increasingly tapping other continents’ fossil fuels, mineral ores and timber. However, water is extremely difficult — and prohibitively expensive — to import. And Asia has less fresh water per person than any continent other than Antarctica, and some of the world’s worst water pollution.

Likewise, food scarcity is a growing problem for Asian countries, with crop yields and overall food production growing more slowly than demand. At the same time, rising incomes are altering people’s diets, which now include more animal-based proteins, further compounding Asia’s food challenges.

The intensifying competition over natural resources among Asian countries is shaping resource geopolitics, including the construction of oil and gas pipelines. China has managed to secure new hydrocarbon supplies through pipelines from Kazakhstan and Russia. This option is not available to Asia’s other leading economies — Japan, India and South Korea — which are not contiguous with suppliers in Central Asia, Iran or Russia. These countries will remain dependent on oil imports from an increasingly unstable Persian Gulf.

Furthermore, China’s fears that hostile naval forces could hold its economy hostage by interdicting its oil imports have prompted it to build a massive oil reserve and to plan two strategic energy corridors in southern Asia. The corridors will provide a more direct transport route for oil and liquefied gas from Africa and the Persian Gulf, while minimizing exposure to sea lanes policed by the US Navy.

One such corridor extends 800km from the Bay of Bengal across Myanmar to southern China. In addition to gas pipelines — the first is scheduled to be completed this year — it will include a high-speed railroad and a highway from the Burmese coast to China’s Yunnan Province, offering China’s remote interior provinces an outlet to the sea for the first time.

The other corridor — work on which has been delayed, owing to an insurrection in Pakistan’s Baluchistan Province — is to stretch from the Chinese-operated port at Gwadar, near Pakistan’s border with Iran, through the Karakoram mountains to the landlocked, energy-producing Xinjiang Province. Notably, in giving China control of its strategic Gwadar port in February, Pakistan has permitted the Chinese government to build a naval base there.

Given the significant role that natural resources have historically played in global strategic relations — including driving armed interventions and full-scale wars — increasingly murky resource geopolitics threaten to exacerbate existing tensions among Asian countries. Rising dependence on energy imports has already been used to rationalize an increased emphasis on maritime power, raising new concerns about sea-lane safety and vulnerability to supply disruptions.

This partly explains the current tensions between China and Japan over their conflicting territorial claims to islands in the East China Sea, which occupy an area of only 7km2, but are surrounded by rich hydrocarbon reserves. Disputes in the South China Sea involving China and five of its neighbors — including Taiwan — and in southern Asia, are equally resource-driven.

While strategic competition for resources will continue to shape Asia’s security dynamics, the associated risks can be moderated if Asia’s leaders establish norms and institutions aimed at building rule-based cooperation. Unfortunately, little progress has been made in this area. For example, 53 of Asia’s 57 transnational river basins lack any water-sharing or cooperative arrangement.

Indeed, Asia is one of only two continents, along with Africa, where regional integration has yet to take hold, largely because political and cultural diversity, and historical animosities, have hindered institution-building. Strained political relations among most of Asia’s sub-regions make a region-wide security structure or more effective resource cooperation difficult to achieve.

This could have significant implications for Asia’s ostensibly unstoppable rise — and thus for the West’s supposedly inevitable decline. After all, Asian economies cannot sustain their impressive economic growth without addressing their resource, environmental and security challenges — and no single country can do it alone.

Brahma Chellaney is a professor of strategic studies at the New Delhi-based Center for Policy Research.

Copyright: Project Syndicate