July 3, 2023

The Blue Economy in the Indian Ocean: Framing Policy Challenges and Choices

Written By: Dr Sinderpal Singh


The Indian Ocean Region (IOR) is often identified as a strategic region subject to increasing geopolitical contestation while serving as a potentially dynamic economic region. This paper will examine the prospects and challenges for increased co-operation within the IOR in the context of both these observations. It will specifically examine the ‘Blue Economy’ and how it impacts patterns of both competition and co-operation in the IOR.

This paper will make three main points. It will firstly examine the Blue Economy as a policy goal within broader public policy debates in the IOR. The second point is outlining traditional and non-traditional security threats in the IOR and how they possibly impact the pursuit of Blue Economy goals. The third point lies in identifying the overlap between geopolitical concerns and geo-economic imperatives in the IOR.

The Blue Economy in the IOR: Pursuing a Public Policy Goal  

The Blue Economy (sometimes also referred to as the ‘oceans economy’) concept originates from the United Nation Conference on Sustainable Development, held in Rio de Janeiro in 2012. Following on from this conference, in 2014, the United Nations published the Blue Economy Concept Paper, wherein it clearly defines the public policy goal ‘of the Blue Economy concept is the de-coupling of socioeconomic development from environmental degradation’. The World Bank, in 2017, viewed the Blue Economy as ‘the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem’. The Blue Economy, as a public policy goal, involves negotiating the tension between the opportunities the ocean economy provides and the threats such activities pose.

States in the IOR have consistently declared their intentions to achieve Blue Economy goals. The Jakarta Declaration on Blue Economy of 2017 committed the member states of the Indian Ocean Rim Association (IORA) to twenty-three principles in pursuit of Blue Economy goals in the IOR. These range from building stronger legal and regulatory regimes, developing more robust public-private partnerships as well as leveraging various sources of finance in pursuit of Blue Economy goals, including collaboration with partner states outside the IOR (some of which are Dialogue Partners of the IORA).

These Blue Economy goals have been fiercely debated by various groups in the IOR, comprising academics, economists, and conservationists, amongst others. The tension between conservation and growth is a key policy quandary for leaders in the IOR, specifically for Small Island Developing States (SIDs) as well as for local leaders in coastal communities in these states. For leaders in many IOR states, there is a strong political imperative to tolerate the long-term (and not easily discernible) effects of climate and environmental change in return for economic growth. This, of course, is a broader global public issue related to the principle of ‘Common but Differentiated Responsibilities and Respective Capabilities’, first established at the 1992 United Nations Conference on Environment and Development. The key issues to emerge from this tension are over-fishing, marine pollution and ocean governance and they relate to the nature of traditional and non-traditional security threats faced by states in the IOR.

Blue Economy in the IOR: Dealing with Traditional / Non-Traditional Security Concerns

The key difference between traditional and non-traditional security threats are the targets of the threat and the source of the threats. Direct military threats towards a state from another state is the most obvious example of a traditional security threat. Non-traditional security threats comprise of threats that don’t target specific states but are transnational in nature and don’t emerge completely or directly from a specific state. The effects of climate change, natural disasters, illegal, unreported and unregulated (IUU) fishing, and maritime pollution are just some examples of non-traditional security threats in the maritime domain. However, the distinction between the two types of threats is not always clear and there is some overlap in specific contexts. For many states, energy, food, and water security, consisting of the ability to access both renewable and non-renewable energy sources as well as food and water sources is increasingly a traditional security issue. In other cases, responses to non-traditional security threats becomes a site of inter-state competition and rivalry, driven by broader, pre-existing inter-state rivalries.

The IOR, for much of the Cold War, was not a key site of strategic competition, with Southeast Asia the main arena of strategic rivalry. In the early post-Cold War era, the broader East Asian region was the focus of strategic rivalry, with several maritime ‘hotspots’, especially the South China Sea, becoming sites of strategic rivalry between China, the US and countries within East Asia. The IOR, meanwhile began to garner increasing attention from the early 2000s, leading to Robert Kaplan’s much discussed 2009 commentary in Foreign Affairs, where he described the IOR as the ‘center-stage’ for ‘power plays’ between leading states in the twenty first century and his book in 2011 described the IOR as the key site for the US’s global strategic outlook. China’s ‘Westwards Strategy’, accompanied by its increasing economic and military presence in the IOR, has been a key driver for the growing interest in the IOR. The nature of China’s growing presence in the IOR, both militarily and economically, has increasingly shaped responses to non-traditional security threats in the IOR. China’s growing presence in the IOR is viewed as an obstacle in trying to achieve Blue Economy goals, specifically in dealing with non-traditional security threats in the IOR. This is because of the perception that China’s actions in the non-traditional sphere increases the potential traditional security threat it poses for some states in the region.

Illegal, unreported and unregulated (IUU) fishing is a major non-traditional security threat for littoral states of the IOR. Sustainable fishing is a crucial Blue Economy goal contained within both the Jakarta Declaration as well as the earlier Mauritian Declaration, acknowledging the threat that IUU fishing poses both for the livelihoods of coastal fishing communities as well as to ocean wildlife ecosystems. In the IOR, there are several littoral states with large expanses of both territorial seas and EEZs which they do not have the capacity to closely govern and monitor illegal fishing. In these situations, states require jointly setting up regimes and processes to govern and monitor their adjoining EEZs and territorial seas.  In certain cases, they may require assistance from outside the region or sub-region from international organisations, regional organisations or individual countries outside the region/sub-region. A good example of this model is the Extended Regional Coordination Unit (ERCU) of the Regional Fisheries Surveillance Plan, an initiative amongst eight countries in the South-West Indian Ocean (comprising Comoros, France/La Reunion, Kenya, Madagascar, Mauritius, Mozambique, Tanzania and Seychelles). With funding from the European Union, this set of countries have accomplished certain significant Blue Economy goals since 2007, specifically by reducing IUU fishing incidents by significantly improving the region’s monitoring and surveillance capacity.

However, in other sub-regions of the IOR, such mechanisms for states for joint monitoring and surveillance capacity are under-developed. Besides monitoring the contiguous EEZs and territorial seas of littoral states, there is also the issue of over-fishing and illegal fishing of protected and endangered species in the high seas or international waters. Within the specific context of pursuing Blue Economy goals, the over-lap between traditional and non-traditional security threats, is particularly apparent vis-à-vis such IUU activities. In the South China Sea, there is an increasing overlap between traditional threats, associated with maritime disputes and issues of sovereignty, and alleged intrusion by foreign fishing fleets in areas deemed to the EEZs and territorial seas of certain littoral states.  The case of the Philippines publicly claiming that Chinese fishing fleets acting as a de facto Chinese maritime militia in disputed areas of the South China Sea is a case in point. In such cases, states begin to define solutions to non-traditional security threats as zero-sum in nature, involving the use of military force and diplomatic pressure, rather than jointly crafting, and pursuing Blue Economy goals to resolve non-traditional security threats that affect various states.

In the IOR, there have been increasing overlaps in perceptions of non-traditional and traditional security threats, specifically in relation to IUU fishing in the high seas. Chinese flagged fishing vessels have reportedly been involved in unregulated fishing of squid within the high seas of the IOR, putting further strain on sustainable seafood stocks in the IOR. In addition, Chinese vessels have also reportedly been illegally catching tuna in parts of the IOR which already exhibit dangerous levels of over-fishing. These reported incidents of IUU fishing in the IOR by Chinese flagged fishing vessels are increasingly viewed as part of a wider range of traditional security threats emanating from China. There are two key reasons for these perceptions.

Firstly, there is a growing view that IUU fishing by Chinese flagged vessels in the IOR is part of a broader response by China to the notion of a global rules-based order. In this view, China perceives rules and norms governing the maritime domain as illegitimate and thus not binding on it. Several observers have drawn parallels between China’s maritime claims and actions in the South and East China Sea, which are viewed to be in contravention with China’s obligations under UNCLOS and Chinese flagged fishing vessels involved in IUU fishing in contravention of its obligations via-a-vis various statutes related to IUU fishing. This leads to a growing view that joint Blue Economy Goals would be difficult to pursue within the context of China’s approach towards its own obligations in relation to protecting marine ecosystems and seafood stocks within the IOR. As a result, a non-traditional security issue such as IUU fishing is increasingly viewed as part of the broader range of traditional threats which China poses to states within the IOR and beyond. Seemingly driven by increased domestic seafood demand within China, there is a perception that Chinese flagged vessels are trying to satisfy domestic demand to the detriment of littoral states in the IOR.

Secondly, certain littoral states in the IOR view the specific activities of Chinese fishing vessels with a great deal of suspicion. There are concerns that the crew on certain Chinese flagged fishing vessels comprise of People Liberation Army Navy (PLAN) personnel and these vessels are used for ocean reconnaissance for military intelligence purposes. These concerns again view Chinese flagged vessels as instruments of broader Chinese military goals in the IOR. In such a context, it is clear to see how and why IUU fishing increasingly ceases to be a non-traditional security issue and instead a clear national security threat to certain states in the IOR.

 Blue Economy Goals in the IOR: Geo-politics and Geo-Economics

Geo-politics is the impact of geography on the conduct of relations amongst states, while geo-economics as a concept has largely been used in relation to geo-politics. Geo-economics is the “use of economic instruments to promote and defend national interests, and to produce beneficial geopolitical results.” Proponents of geoeconomics often point to two benefits it enjoys over geopolitics as a strategy. Firstly, from the perspective of individual states, economic instruments lend themselves to greater flexibility and lower longer-term costs, both financial as well as social. Secondly, the use of economic instruments provides greater possibilities for ‘win-win’ outcomes for states, especially when such instruments lead to net economic growth and development of all states concerned. Geopolitics, in comparison, with the use of military options which leverage on specific geographical advantages, are less likely to result in ‘win-win’ outcomes amongst states, according to this view.  More broadly, as a driver of relations between states, geoeconomics creates greater possibilities for co-operation as compared to geo-politics driving relations between states.

In recent years, China has been perceived to increasingly use economic instruments to safeguard and advance its national interests. China is ready, in this view, to use the threat of superior military power as well as diplomatic pressure especially in the South China Sea, but in the IOR, economic instruments seem to be preferred over demonstrations of military power or diplomatic pressure. China is perceived to increasingly prefer geoeconomics over geopolitics as a means of furthering and advancing its interests. A key aspect of China’s geoeconomics strategy is its Belt and Road Initiative (BRI). In the IOR, the BRI has been linked to accomplishing Blue Economy Goals, specifically the sea-based Maritime Silk Road (MSR).

In 2017, China announced its blueprint ‘Vision for Maritime Cooperation under the Belt and Road Initiative’, with an emphasis on developing a Blue Economy with sustainable development a key element of this vision.  China envisions three global ‘blue economy passages’, and one of them is the China-Indian Ocean-Africa-Mediterranean Sea Blue Economic Passage.  In addition, China has also stated its commitment to assist littoral states in the IOR towards the economic development of its coastal communities and the wider national economy. In essence, this blueprint aims to fulfil the two key, sometimes competing, imperatives of the Blue economy – helping littoral states harness their maritime locations for economic development while ensuring environmental and sustainability concerns are addressed.

China’s building of commercial ports in the IOR as part of the MSR has been justified in terms of helping the economic development of states in the IOR in three ways. Firstly, certain coastal communities in IOR littoral states have not economically benefitted from their geographical location and building new ports away from earlier established and busy ports would benefit these communities. The case of Hambantota port was a case in point, where a new commercial port would help raise economic activity and development, which was earlier largely concentrated in Sri Lanka’s busiest port in Colombo, and thus benefit the communities in that area of Sri Lanka. Secondly, it would raise the overall economic development of that country, as it leverages the strategic geographical location of these countries to increase economic activity within the whole national economy. Thirdly, it would benefit other states as well, as new ports and the increased economic activity that stemmed from it would increase economic activity in the region and with it, development across the region. This ‘win-win’ logic also included economic gains for China as it seeks to utilise excess capital and human resources within China for such projects abroad.

The MSR was touted as an example of geoeconomics driving relations between states, with ‘win-win’ outcomes for all states involved, rather than the zero-sum outcomes often attributed to geopolitical drivers. In addition, China made commitments towards meeting the sustainable development benchmarks of the Blue Economy goals that were set as part of the MSR. However, there is a growing sense amongst certain states that China’s MSR aims to establish geopolitical control over littoral states in the IOR rather than helping their economic development. In addition, there have been an emerging view that China’s sustainable development commitments are largely lip-service and that its perceived record domestically on environmental protection and on IUU fishing in ‘distant waters’ are mirrored in its approach to MSR projects.

There is an emerging view that China’s MSR is driven as much by geopolitics as it is by geoeconomics and the perceived overlap between geopolitics and geoeconomics in China’s MSR has significantly hindered the accomplishment of Blue Economy Goals in the IOR.  The construction of new ports by China in the IOR is increasingly not economically viable (at least in the short to medium run) and the takeover of these economically distressed projects by China’s state-owned enterprises (SOEs) has raised concerns about China’s ability to translate such ownership into constraining the geopolitical choices of recipient states. This has led to countries such as India increasingly viewing port development projects not as part of larger Blue Economy development goals for communities within the IOR but instead as part of a wider geopolitical contest with China.

Author Brief Bio: Dr. Sinderpal Singh is Senior Fellow and Assistant Director, Institute of Defence and Strategic Studies.

Note: This article was published by India Foundation in the Indian Ocean Conference 2023 Theme Paper Booklet.


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