26 March 2014 | Vol. 5, № 9.

From the Editor’s Desk

Dear FDI supporters,

Welcome to the Strategic Weekly

Analysis. We begin this week’s edition by

examining the long-term food security in

the Philippines after the destruction

caused by Typhoon Haiyan.

Moving west, we analyse the threat posed

by the Don Sahong Dam to food security

in Laos, Vietnam and Cambodia.

In Indonesia we examine the

government’s decision to continue with

its ban on the export of minerals and its

long-term implications.

Continuing westwards, we look at the

incursion of Chinese troops into Indian-

administered territory in the Ladakh

region and gauge how a flare-up of

hostilities could endanger Sino-Indian

trade links.

Still in India, we look at the growing trade

links between that country and Iran to

determine if a long-term trade

relationship is in the offing.

We next examine the first official visit of

the King of Bahrain to Pakistan in four

decades and ask if there is an opportunity

for the two countries to draw the Middle

East closer together.

In Afghanistan we look at President

Karzai’s refusal to sign the bilateral

security agreement and determine if this

could hamper international planning in

the post-2014 era.

Moving to Africa, we examine the Kenyan

Government’s decision to prioritise water

access in towns over regional

development, possibly leading to a

reduction in food and water security in

the Turkana region.

Moving to Somalia, finally, we note that

Somali forces, backed by AMISOM troops,

have regained territory from al Shabaab

fighters. This, however, is only the first

step in re-establishing the rule of law in

Somalia.

I trust you will enjoy this edition of the

Strategic Weekly Analysis.

Major General John Hartley AO (Retd) Institute Director and CEO Future Directions International

*****

Page 2 of 18

New Plan Focuses on Long-Term Development and Food

Security in Post-Relief Philippines

Typhoon Haiyan has made clear the importance of improving the resilience of the

Philippines to natural disasters, but barriers such as corruption and the lack of

transparency in local governments, need to be addressed before long-term development

plans can truly become effective.

Background

In November last year, Future Directions analysed the Long-Term Food Security Risk in the

Philippines after Typhoon Haiyan. More than three months after the catastrophe,

emergency relief work has mitigated the threat of a large-scale food crisis. Although the

country seems on its way to recovery, however, food security remains dependent on long-

term solutions to social, agricultural, economic and political issues.

Comment

The Philippines government has launched an $8.2 billion, four-year plan to focus on

rebuilding areas affected by Typhoon Haiyan and developing resilience to natural disasters.

The Reconstruction Assistance in Yolanda (RAY) plan, includes budgets for both short-term

and long-term needs. The plan also allows $780 million for critical actions focused on

agriculture, shelter and livelihoods, among other elements.

Problems that could hinder the success of these programs include corruption and

governance issues. Despite recent improvements, corruption in the Philippines remains a

considerable barrier to achieving food security, as funds go missing. In response to this, the

government has launched the Foreign Aid Transparency Hub, a web portal allowing the

public to track international disaster funds.

The Transparent Accountable Governance Program of The Asia Foundation, is designed to

help local governments address their lack of transparency and accountability mechanisms,

through technical assistance, support of civic engagement and by working with local

governments.

Ensuring that programmes and relief efforts are sustainable beyond current aid is critical for

long-term food security. Typhoon Haiyan destroyed a number of important mangrove areas

and coral reefs. The Department for Environment and Natural Resources in the Philippines

has allotted $7.94 million for the restoration of the mangroves, with some 19 million

seedlings and propagules from mangrove trees to be planted over 1,900 hectares of

coastline. The reconstruction of boats and the replacement of fishing gear both need to be

managed sustainably, to ensure that the marine ecosystem is not further damaged or

overfished before it has time to regenerate.

The diversification of community livelihoods is another important challenge. Coconut

farmers, having lost most of their trees, will not be able to quickly prosper from recently

planted trees; not before they reach maturity in six to eight years. The UN Food and

Agriculture Organization (FAO) is developing a recovery plan, which would include clearing

Page 3 of 18

felled trees through coordinated cash-for-work programmes and introducing crops that can

grow alongside the newly replanted coconut trees.

Shortly after Typhoon Haiyan, the UN designed a Strategic Response Plan to support the

government’s activities in meeting immediate humanitarian needs. Through this

programme, the FAO was able to provide 75 per cent of the rice seeds requested by the

Philippines. This much-needed assistance allowed 44,000 farming families to plant in time

for the December/January planting season. Those seeds are expected to yield enough to

feed about 800,000 people for more than a year, once they are harvested in March/April.

The FAO also distributed 4,000 tonnes of fertiliser, along with 13,000 farming tools, which

will allow more than 80,000 rice farming families to reach full yield potential. This

international help is a critical step towards achieving short-term food security.

Because South-East Asia is often subjected to natural catastrophes, there is a need for

greater coordinated effort within the region to find long-term solutions to improve food

security. The ASEAN Plus Three Emergency Rice Reserve takes reserves from member

countries, which act as a buffer against food-stock loss during food emergencies. Such

initiatives are, however, dependent on the ability of member states to address political

commitment and distribution constraints.

The programmes put in place in the Philippines are a step in the right direction. The World

Bank has supported the Government’s actions to improve the country’s resilience to natural

disasters and lead it towards food security. Economic prospects seem to point to further

growth. For the whole country to benefit from these prospects, however, more needs to be

done to improve the performance and reliability of local governments. With the

decentralised power in the Philippines, complete transparency and accountability are

needed in local governments to ensure long-term food security.

Cécile Levacher Research Assistant Global Food and Water Security Research Programme

*****

To the Bitter End: Indonesia Pushes Ahead with Mining Laws

as Investor Climate Weakens

A recent deal may pave the way for mining operations to resume in Indonesia following

months of disruption. But, as Indonesia pushes ahead with its controversial ban on raw

mineral exports, critics continue to question its long-term value.

Page 4 of 18

Background

As Indonesia’s mining sector continues to falter following a controversial ban on raw mineral

exports, a number of deals between the government and mining companies may finally be

within reach. On 19 March, the Jakarta Globe announced that Freeport Indonesia, which is

90 per cent owned by the world’s largest copper miner, Phoenix-based Freeport-McMoRan,

had agreed to comply with most of the country’s new regulations. The move means other

companies may soon follow suit. Yet it remains to be seen whether the laws will have the

desired effect, with analysts suggesting the new regulations will only worsen Indonesia’s

shaky investment climate.

Comment

Agreements between the government and mining companies operating in Indonesia may

soon be reached, following months of political turmoil and tense negotiations. Since

January, miners have been at loggerheads with Jakarta over a much-maligned ban on raw

mineral exports. The 2009 law, which came into effect on 14 January, prohibits all exports of

unprocessed ore and introduces a new export tax on ore concentrates. The immediate

fallout was disastrous.

Many firms were forced to scale back production. Some, including Freeport, which operates

the world’s third-largest copper mine in Papua and had seen its copper exports decline 60

per cent as a result of the ban, had threatened to quit operations altogether. Mining,

currently Indonesia’s second-largest industry after manufacturing, has ground to a virtual

standstill in many parts of the country.

But that may not be for long. Many of the country’s mines could soon be back in business

following a tentative deal struck between Freeport and government officials. Early reports

suggest that Freeport, the country’s single-largest taxpayer, has agreed to the majority of

the country’s new regulations. On 19 March, Hatta Rajasa, the Coordinating Minister for the

Economy, said that the government had received an offer from the company requesting a

public-private partnership (PPP) to build a copper smelter, enabling it to process raw

minerals which could then be exported. Two days later, the government confirmed Freeport

had agreed to a PPP with state-owned miner, PT Aneka Tambang (Antam), to set up a

smelter.

The move caught many observers by surprise. Having passed a last-minute exemption

allowing companies to export raw minerals, albeit with a hefty export tax imposed, some

analysts had suggested the government would eventually cede to the miners’ demands and

repeal the unpopular laws. That has not been the case, however; instead, the Freeport deal

suggests that Indonesia is pushing ahead with its mining laws. Other companies, it seems,

will be forced to follow suit, with dozens of miners now in the process renegotiating their

contracts with the government.

Jakarta insists that the move will add long-term value, keeping money and jobs within the

country. But most analysts disagree. The World Bank, in its recent Indonesian Economic

Quarterly, has questioned the government’s much-touted line that the mineral export ban

will capture added-value currently lost to foreign smelters and refineries. They estimate that

Page 5 of 18

the ban will cost Indonesia some US$6.5 billion in revenues in the next three years and will

have a US$12.5 billion negative impact on the country’s trade deficit, already a major

financial headache for Jakarta. The report concludes that domestic processing of copper and

other minerals are unlikely to succeed in the long run given international conditions. These

include slumping demand and the higher cost of smelting in Indonesia, which may force

many mines to close early.

But even if the new regulations do succeed in the longer term, they are likely to weaken

Indonesia’s already shaky investment climate. South-East Asia’s largest economy is infamous

for its regulatory uncertainty and its mining sector is frequently cited by executives as the

worst in the world with which to do business. The new ban will do little to alleviate that

image, even if investors are slowly making their way back to the country following a capital

flight last year.

Looking ahead, however, it seems unlikely Indonesia will alter the laws, at least in the near-

term. With economic nationalism increasingly in vogue ahead of parliamentary and

presidential elections scheduled for the coming months, few candidates have been willing to

speak out against the ban, fearing a backlash from voters. That could at least provide one

positive: maintaining the ban, however unpopular, should bring some certainty for miners

going forward.

Whether the government eventually repeals or amends the law following the 9 July

presidential election remains to be seen. Much will depend on the next few months and, in

particular, how mining companies proceed from here. Indonesia, having pushed ahead with

its new regulations, will be hoping the gamble eventually pays off.

Andrew Manners

Research Analyst

Indian Ocean Research Programme

amanners@futuredirections.org.au

*****

Don Sahong Dam threatens food security in Laos, Vietnam and

Cambodia

Construction of the Don Sahong Dam along the Lower Mekong River is scheduled to

commence in December this year. Concerns have been raised that the project will

exacerbate existing malnutrition in the region and jeopardise the livelihoods of villagers

and commercial fishers.

Page 6 of 18

Background

The government of Laos aims to become the “battery” of South East Asia, by exporting

electricity to its neighbours and generating much needed national income. The Don Sahong

hydro-project, due to begin in December, will be constructed for this purpose. The project is

expected to have a serious impact on the livelihoods of millions of people throughout Laos,

Cambodia and Vietnam. Predicted disruptions to migratory fish patterns will impair the

ability of commercial and non-commercial fishermen to earn a living. They will also threaten

the food security of a population already at serious risk of malnutrition.

Comment

Construction of the Don Sahong Dam in Laos is expected to begin, along the Hou Sahong

channel of the Mekong River, in December. The dam will be located less than 2km upstream

from the border between Laos and Cambodia. On completion it is expected to generate at

least 240 megawatts of power.

The Lao government aims to become the region’s “battery”, by providing electricity to its

neighbours who currently experience chronic electricity shortages. The Don Sahong Dam

and up to 12 other dams earmarked for construction along the Middle and Lower Mekong

River, are together expected to boost the electricity generated in the region by 25 per cent.

While proponents of the project suggest that it will lower electricity costs and only require

minimal resettling of villagers, its opponents argue that the project will cause significant

harm to 60 million people throughout Laos, Cambodia and Vietnam. Dr Robert Mather,

from the International Union for Conservation of Nature, rates the lower Mekong River as

“the most productive inland fishery anywhere in the world”. Many migratory fish species

travel hundreds of kilometres in either direction along the Mekong River, sustaining both

commercial and non-commercial fishers along the way.

The Hou Sahong is critically important to livelihoods, as it is the only channel that allows

year-long migrations both up and downstream. Migratory fish also sustain people employed

in further processing the catch (drying and smoking fish and manufacturing fish sauce or

animal feed). WorldFish puts the yearly economic impact of the project at around US$200

million.

Inland fish stocks are the most important source of animal protein for many regional rural

populations, with yearly per capita consumption estimated at 32.3kg in Cambodia and

24.5kg in Laos. Many of these rural populations are already malnourished. For example, 45

per cent of children under five are underweight in the Stung Trung province of Cambodia

and, in rural Laos, a further 50 per cent experience malnutrition. Consequently, disruptions

to migratory fish patterns will seriously threaten the food security of many in the region.

The environmental impact assessment for the project proposed a number of mitigation

solutions, such as expanding the Hou Xang Pheuak and Hou Sadam (two channels flanking

the Hou Sahong) or diverting more water into the Hou Sadam. These proposed solutions,

however, would produce other problems, as they would involve diverting water away from

Page 7 of 18

the Hou Phapheng, impacting other populations. Further, widening the long and narrow Hou

Sadam is likely to be economically infeasible.

Laos is heavily dependent on both foreign aid and foreign investment. The World Bank, in an

effort to promote cleaner energy sources, encourages countries such as Laos to construct

hydro-projects. With access to food being still precarious in the Mekong region, projects

such as the Don Sahong Dam will harm villagers along the river; they rely on what they can

catch in the Mekong, both to feed themselves and earn a living. Mitigating the impacts on

villagers living both upstream and downstream, should therefore be a high priority when

decisions are being made about new large-scale infrastructure projects.

Jinny Collet Research Assistant Global Food and Water Crises Research Programme

*****

Ladakh Hot Flash Might Fry India-China Trade Relationship

Chinese incursions into Ladakh and an increasing trade deficit might derail current Indian

trade negotiations and push India towards trade agreements with Russia.

Background

The People’s Liberation Army of China (PLA) made a recent incursion into the Indian territory

of Ladakh. On 16 March, nine soldiers from the PLA made a bid to cross into the territory,

but were stopped by Indian jawans (soldiers). Ten more PLA soldiers tried to make a fresh

incursion but this resulted in more Indian troops joining the wall, which led to the eventual

Chinese retreat.1 This is not an isolated event. Ladakh has been the focal point for growing

tensions since 2012, when the PLA dropped Chinese troops by helicopter to dismantle Indian

storage tents.

In 2013, a fifteen-day stand-off took place due to the construction of Indian bunkers

overlooking Chinese territory. In conjunction with this, five cattle farmers were abducted by

PLA soldiers and taken across the border, seemingly in a bid to stake a greater claim on the

area.2

1 ‘Chinese troops make fresh attempt to violate LAC’, Times of India, 18 March 2014.

<http://timesofindia.indiatimes.com/india/Chinese-troops-make-fresh-attempt-to-violate-LAC/articleshow/32249024.cms> 2 ‘Chinese troops detain five Indians in Chumar’, NDTV, 15 December 2013.

<http://www.ndtv.com/article/india/chinese-troops-detain-five-indians-in-chumar-first-incident-at-lac-459083>

Page 8 of 18

Comment

The geographic landscape of the area usually limits the amount of activity from the Chinese

border, due to the presence heavy snowfalls until late April. Increased activity this early in

the year means that China has either identified the area as a threat and is moving to disable

it, or that it wants to increase its surveillance in the area.

This hot flash has come at a very inconvenient time for Sino-Indian trade relations. India is

currently seeking to sign a substantial IT deal with China, during the third round of strategic

and economic dialogue on 25 March in Beijing. India wants to increase its access to the

Chinese market, to reduce the trade deficit with China. Unfortunately, however, China wants

increased access to the Indian electronic and hardware markets, which would be disastrous

for Indian employment rates and manufacturing, especially as it wants to develop this

domestic market.

There are, of course, possible benefits to a trade deal. China has offered to help develop

India’s infrastructure, focussing on improving its railway network. While India is keen to have

this development and is interested in the Chinese offer, it cannot help but view it with some

suspicion. From 2000 to 2013, China has only contributed 0.15 per cent of India’s overall

foreign direct investment. While India’s domestic structure does need improvement, there

are doubts that New Delhi

will accept the Chinese

proposal. The risk of

increased Chinese imports

and improved Chinese

knowledge of Indian

infrastructure is too high,

without strong

reciprocation from China.

According to Indian

officials, the current level

of imports from China has

resulted In India having to

borrow from abroad to

finance the trade deficit.

Deputy Chief of the

Planning Commission,

Montek Singh Ahluwalia,

said, ‘India’s trade deficit

over the last three

successive years has been

in excess of US$35 billion

per annum, which is not sustainable.’3

3 ‘India calls for China investments to offset huge trade deficit’, Business Today, 18 March 2014.

Page 9 of 18

India’s trade deficit can only be reduced by increasing exports to China, while also protecting

India’s domestic markets from Chinese goods. IT-related services, cotton textiles and

pharmaceuticals are all areas awaiting Indian expansion into China. India must maintain a

strong border policy, but will want to treat the latest border incursion as being outside the

economic relationship.

If improved trade relations between the two giants cannot be achieved, India must look

elsewhere to improve its economic position and infrastructure. One avenue could result

from the US imposed sanctions on Russia. These sanctions could result in increased trade

between India and Russia, in the areas of pharmaceutical products and technology. Current

economic forecasts predict that trade will grow into a twenty billion dollar industry by 2015,

increasing to fifty billion by 2020.4

While India is in a difficult position, a strong border policy and new trading partner in Russia

may, in fact, encourage China to shape more diplomatic trade agreement, which, in the long

term, will benefit both countries.

Kyle Sargon Research Assistant Indian Ocean Research Programme

*****

Growing India-Iran Ties: A Possible Long-term Relationship?

India and Iran are ideally positioned to initiate long-term ties as India enhances mutual

trade and infrastructure development with Iran, reversing previous geo-political

difficulties.

Background

India and Iran, separated geographically by Pakistan, have previously had a difficult

relationship, due to geographical issues and political pressures. India, however, imported

US$11.6 billion of Iranian oil in the last fiscal year and is Iran’s second-largest purchaser,

behind China. With much of this trade conducted in Indian rupees, it is beneficial to the

Indian economy on many levels.

Comment

<http://businesstoday.intoday.in/story/india-for-china-investments-to-offset-trade-deficit/1/204381.html> 4 ‘Russia has China, India to trade with if West imposes sanctions – expert’, The Voice of Russia, 19

March 2014. <http://voiceofrussia.com/2014_03_19/Russia-has-China-India-to-trade-with-if-West-imposes-sanctions-expert-4853>

Page 10 of 18

The division of India in 1947 increased its distance from central Asia and, with a hostile

Pakistan situated between them, also introduced a geostrategic disadvantage. This situation

has continued after the end of the Cold War. The post-9/11 era, however, allowed Iran and

India to update their relationship. They soon found common ground in their respective

Afghanistan policies.

In recent years, moreover, India has tried to reduce its geographical handicap vis-à-vis the

Central Asian republics, by improving relations with Iran. It sees the Chabahar port as an

alternative to land routes through Pakistan. Iran, for its part, has sought to improve its trade

infrastructure and, since the recent collapse of the Iran-Pakistan (IP) gas pipeline project due

to Pakistan's inability to meet its end of the contract, also seeks to strengthen trade links

with India.

India, Iran and Afghanistan are on the verge of signing an agreement to start developing

Iran's long-awaited Chabahar port in the Gulf of Oman. This signifies an improved

relationship and an alliance that could potentially play a large role in maintaining the future

balance of power in Asia. The port will give India access not only to Afghanistan, but also to

the resource-rich landlocked countries of Central Asia, while avoiding Pakistan. Some

estimates indicate that India will make an initial investment of more than US$100 million in

the development of the port.

Iran, though, is more interested in developing its trade infrastructure, with plans for a trade

corridor between Chabahar and the Russian city of St. Petersburg. The Indian army helped

construct a road connecting the towns of Delaram and Zaranj in the southern province of

Nimroz; the project costing more than US$1 billion. This road, also called Route A71, was the

missing link between the Iranian border and the A1 highway in Afghanistan, which runs to

Kabul. Together, these links connect Kabul to Zaranj and, in turn, to Chabahar on the Iranian

side.

India also has the second largest population of Shia Muslims, after Iran - a tacit factor in

their combined stance against the Taliban in Afghanistan and Pakistan. The Taliban are

perceived as Sunni-Islamic extremists - a threat to Shia Muslims in Iran and an extremist

enemy that India is fighting in Kashmir.

India does not support Iran's nuclear programme and maintains a considered lower profile

while taking a strong stance against it. Consequently, it welcomed the nuclear deal struck by

Iran and the world’s six major powers in November 2013, which, it hopes, will eventually

lead to the lifting of the sanctions on Iran.

The West's sanctions and its unreliable partnership with Pakistan, have been factors

motivating Iran to consider India as a strategic partner. Many Indian critics, however, believe

that as soon as the sanctions from the West are eased, Iran’s incentives for trading with

India will be much lower, as it can immediately expect increasing demand from the West.

This situation will potentially jeopardise the millions of dollars India has already invested and

its plans to further invest in Iran. So far, though, even after the lifting of some sanctions in

late 2013, India has still increased its imports of Iranian oil.

Page 11 of 18

On the downside, Israel is not happy with India’s growing ties with Iran; Israel is a key source

of India's military imports. It also does not help that the US is actively trying to charm India

by offering military assistance in its own quest to encircle China with militarily strong allies.

Whether it's due to a new presidency in Iran last year, Iran's dented confidence in Pakistan's

ability to meet contractual obligations, or India's growing economy, both India and Iran

seem to have overcome some major barriers to strengthening their relationship. Their joint

projects require a long-term relationship, but uncertainty casts a shadow over how long the

Indian-Iranian interests will coincide and how external powers can be kept from hijacking

the relationship.

Jahangir Qazilbash

Research Assistant

Indian Ocean Research Programme

*****

Pakistan and Bahrain: A Chance to Bring the Middle East

Together?

The first official visit to Pakistan by the King of Bahrain in four decades has opened up the

chance of improved ties between those two countries. With Pakistan in the role of

mediator, it could also be a first step on the long path of reconciliation between Iran and

the Gulf countries.

Background

During King Hamad’s recent three-day official visit to Pakistan, at the invitation of Prime

Minister Nawaz Sharif, 17 bilateral agreements were signed. The provisions included the

creation of a joint ministerial commission, an investment protection scheme, a food security

agreement and an air services agreement. According to the Pakistani foreign office, the

purpose of the trip was to take advantage of a good opportunity to promote and strengthen

a diverse range of interests. Furthermore, more than 450 Bahraini business institutions are

considering investments in the development of Pakistan, which will only advance the current

economic ties between the two countries.

Comment

Pakistan has strong and long standing connections with Bahrain. There are more than

100,000 Pakistanis residing in the country (comprising just under eight per cent of the

population). Apart from this large expatriate Pakistan population living in Bahrain, there is

also the new attitude of goodwill from the PML (Pakistan Muslim League).

Page 12 of 18

In addition, there are other reasons why there is a sudden interest in this Gulf country. It is

in Pakistan’s interest to have strong relations with almost every country in the region.

Pakistan and Iran have had strong relations since Pakistan’s independence in 1947. Iran was

the first country to recognise that independence and they also formed a strong relationship

during the 1979 revolution. On the other hand, however, Bahrain’s relations with Iran have

been volatile, to say the least. Bahrain has long suspected Iranian interference in its

domestic affairs, especially during the 2011 uprisings. With Pakistan’s close ties with Iran

and Bahrain’s conflicting relations with that country, this could possibly be seen as an

obstacle to relations between Bahrain and Pakistan; especially given Pakistan’s interest in

building strong relations with other countries in the region. Diplomats from both countries,

however, insist that this will not be the case.

Bahrain’s Foreign Minister, Shaikh Khalid bin Ahmed bin Mohammad Al Khalifa (Shaikh

Khalid), has stated that Pakistan’s influence in the region can play a role in balancing

bilateral ties between the two countries and, furthermore, between Iran and the Gulf

countries. At a media conference in Pakistan’s capital Islamabad, Shaikh Khalid said that ‘we

want to take steps to help mend this relationship’. Experts on Pakistan, also see Pakistan as

a possible mediator in healing Iran’s ties with the other Gulf Co-operation Council (GCC)

states. According to Shaikh Khalid, Iran has failed over the past three years to take the

agreed steps to mend ties with Bahrain. There is still some hope, however, that Pakistan can

help overcome the long standing political bitterness between them. Although Shaikh Khalid

has denied having asked Pakistan for support or mediation, it was clear at the press

conference that he was hinting at Manama’s desire for outside help in fixing the problems

with Iran.

At the conclusion of King Hamad’s visit to Pakistan, it was clear that ties between the two

countries will only be strengthened, judging by the numerous pacts that were signed during

the official visit. The interest by both countries in ensuring that Iran has stable relations

within the Gulf region has opened up the possibility of a rapprochement. It is too early to

entertain the idea that the strained relations of the past few decades between these

countries will suddenly be healed. But, with Pakistan in the role of mediator, it could very

well be the first step on the long path to healing relations between Iran and the Gulf

countries.

Edward Smith Research Assistant Indian Ocean Research Programme

*****

Page 13 of 18

Afghanistan: Karzai’s Reluctance to Sign Bilateral Security

Agreement Hampers Post-2014 International Planning

The refusal of President Karzai to sign the Bilateral Security Agreement between

Afghanistan and the US makes future strategic planning for post-2014 missions difficult.

Background

The Afghan President, Hamid Karzai, used his final address to parliament on 15 March to

restate his unwillingness to sign the Bilateral Security Agreement (BSA) with the United

States. Karzai maintains that peace talks with the Taliban are a precondition for him to sign

the BSA. The US has so far refused to accept Karzai’s conditions and has instead pinned its

hopes upon his successor, hoping that he will be more willing to sign the agreement. All ten

presidential candidates have voiced support for the BSA and have committed to signing it,

should they come to power. If the 5 April election is inconclusive, a run-off poll is expected

to take place in July. This means that there may not be a new Afghan president until towards

the end of the year, which would make forward planning for the US post-2014 mission

increasingly difficult.

Comment

The BSA would provide the legal framework for US troops to remain in Afghanistan after

2014; which General Joseph Dunford, the commander of US-led forces in Afghanistan, has

argued is desirable. America’s post-2014 mission would focus upon training, advising and

assisting Afghan forces. Under current plans, the US wishes to maintain a presence of up to

10,000 troops in Afghanistan. General Dunford believes that, should the new Afghan

president sign the BSA by August, the US will be able to provide the level of post-2014

support advocated by the US and NATO. After August, it will become increasingly difficult for

the US to plan and implement its proposed post-2014 mission.

Given Karzai’s reluctance to sign the BSA, Washington has begun to prepare for the full

withdrawal of troops from Afghanistan. President Obama has informed Karzai that the

Pentagon is undertaking additional contingency planning that includes planning to

completely withdraw US troops, on the assumption that the BSA will remain unsigned. If the

US were to fully withdraw from Afghanistan, the strength of the militants would very likely

increase and they would be in a better position to challenge the Afghan Government,

throwing the future stability of the country into question.

At a Loya Jirga, or grand council, meeting in November 2013, some 2,500 Afghan elders

voted in support of the BSA and the continued involvement of the international community

in maintaining the security of their country. Karzai has been heavily criticised within

Afghanistan for his continued refusal to sign the agreement. The Afghan Ambassador to the

United Nations, Zahir Tanin, provided a view on the issue that was sharply at odds with that

of Karzai, stating in his address to the UN Security Council that ‘we are certain that the

Bilateral Security Agreement with the United States will be signed soon’.

Page 14 of 18

The level of popular support for the BSA in Afghanistan and the fact that it is unanimously

supported by Afghanistan’s presidential candidates, suggests that it will be signed by the end

of the year. It remains to be seen, however, whether it will be signed in time for

international forces to fully plan for, and implement, their post-2014 strategic engagement

in Afghanistan.

Australia and other international partners will use the BSA as a basis for their own Status of

Forces Agreements (SOFA) with the Afghan Government. Australia’s SOFA will provide legal

indemnities and other assurances for its defence personnel. The Defence Minister, David

Johnston, is hopeful that Australia will be able to continue to support Afghanistan beyond

2014; without the SOFA, however, it is very unlikely that Australia will maintain its defence

operations. The continuation of its role in Afghanistan therefore depends upon the Afghan

president signing the BSA.

The uncertainty surrounding both the BSA and the outcome of the Afghan election is making

it difficult for the US and its international partners to strategically plan for their involvement

in Afghanistan post-2014. It is very likely that Karzai’s successor will sign the BSA, but, given

the time it may take for Afghanistan to decide upon a new president, international forces

may have to adapt their post-2014 missions or abandon them altogether.

Mervyn Piesse Research Assistant Indian Ocean Research Programme

*****

A Shift in Priorities over Kenya’s Groundwater Resources

Hopes for increased food and water security in Kenya’s Turkana region fade, as the

government prioritises water access in towns over regional development.

Background

Drilling has commenced on the Lotikipi Aquifer, the largest of the groundwater reserves

discovered in the northern Turkana region in September 2013. An announcement by Kenyan

officials that the town of Lodwar (120 km from the groundwater location) will be the

principal recipient of the piped water raises questions over the government’s priorities.

Contrary to initial plans to primarily utilise the water to tackle food insecurity within the

region, the shift in the government’s strategy prompts concerns about its impact on the

country’s food and water insecurity.

Comment

The current proposal to pump water to the town of Lodwar risks overlooking neighbouring

water scarce rural areas in the Turkana region. In this severely underdeveloped and resource

Page 15 of 18

scarce area of Kenya, access to this groundwater has the potential to increase both food

production and economic development.

Kenya is in a precarious position, in both the geographical and geopolitical sense. It is

experiencing a lengthy drought, with almost half of its 41 million citizens lacking access to

clean water and living below the poverty line.

How piping water to Lodwar will benefit the Turkana County, one of the poorest regions in

Kenya, is questionable. While the existence of such reserves is crucial to development,

rendering them accessible is the greater challenge. Opting to transport the water primarily

to Lodwar, 120km from the aquifer, would necessitate the significant development of

supporting infrastructure: boreholes, sewage, and pipelines.

The expectation is that 15,000 acres of land in Lodwar will be irrigated once supply from the

aquifer begins, thus boosting the agricultural industry. The government also aims to expand

the level of investment in Turkana, as this region is abundant in oil and water resources.

Having more robust infrastructure, cultivated land and accessible water in Tukana’s capital

city, could be the key to further development that will improve economic conditions.

Prioritising urban access to the groundwater, however, will delay access for rural

communities facing severe water constraints. This will constrict their water supply and leave

poverty-stricken families with unwelcome options: spend a substantial portion of income on

bottled water, or rely on contaminated water. Neither of these options would improve

livelihoods, nor reduce the uncertainties of these communities. Land in Kenya is arid and the

lack of available water results in unsuitable soils for farming generally and especially growing

crops to supply food. Additionally, the potential for conflict between individuals increases as

they continue to compete for staple resources.

Water access in these isolated areas is vital, with the bulk of the population living in rural

areas and dependent on limited water resources to produce livestock and crops. They are

very vulnerable to problems such as food and water insecurity. Providing them with initial

access to the reserves, could offer the opportunity that will allow these communities to

break the poverty cycle.

Without doubt, the discovery of ground-water reserves is a step forward in tackling the food

and water dilemma in Kenya. It is unclear, however, how such resources will be utilised and

allocated. In this instance, there are positive facets to the changes implemented by the

government regarding the aquifer, but it is important that it acknowledges that any decision

will have a profound impact on the local population. Ensuring that resources benefit

everyone and not just urban populations, will require transparency on decision-making from

officials and genuine community consultation and participation.

Natazsa Bariacto

Research Assistant

Global Food and Water Security Research Programme

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*****

Somalia and Al-Shabaab: Reclaiming Territory is the First Step

in Remaking the State

During a joint March offensive, the Somali National Army (SNA) and the African Union

Mission (AMISOM) regained eight Somali towns from the Islamist group, al-Shabaab.

Regaining territory, however, is only the first step in Somalia’s re-development.

Background

The 22 March liberation of the Lower Shebelle town of Qoryooley, followed the recent

recovery of Buulobarde (Hiiran region) and six other Somali towns, by the UN-mandated

allied force. The Head of AMISOM, AU Special Representative, Mahamat Saleh Annadif,

described these hard fought gains as a “major boost to our efforts to bring peace and

stability to Somalia.” From a civil development perspective, the recent retaking of

population centres by Government forces and their international allies is crucial to stabilising

the country. Institutional disunity in Somalia, however, continues to threaten the political

accord that is required for peace and continued strengthening of the country.

Comment

Somalia’s President since late 2012, Hassan Sheikh Mohamud, has made a commitment to

his people that al-Shabaab will be evicted from population centres and comprehensively

defeated, by the end of this year. In hard fought battles, the militants have been pushed

back from some of their territories, with concerted AMISOM assistance.

President Mohamad’s claim is still bold. The fragility of Somalia’s security was highlighted by

a deadly gun battle on 21 February between Somali security forces and Islamic extremist

fighters, outside the President’s Palace in the capital Mogadishu, and also a post-liberation

suicide attack in Buulobarde on 19 March. . Somalian leaders, State personnel and civilians

face a constant threat of both targeted and indiscriminate violence.

The twenty-two thousand AMISOM troops in Somalia, mostly from the neighbouring

countries of Ethiopia, Kenya and Uganda, support the new Somali Federal Republic in its

attempts to restore peace, effective Statehood and the rule of law.

The military gains in March follow the ejection of al-Shabaab from Mogadishu in 2011 and

from the port city of Kismayo in 2012. Many population centres in the central and southern

regions of the country, however, such as the coastal town of Baraawe, remain as al-Shabaab

strongholds. Liberating and securing these territories is only the first step in what is required

to create the conditions for peace.

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The al-Qaeda affiliated al-Shabaab group is a fractured and fragmented movement. Despite

its recent military setbacks and internal power struggles, it still stages violent attacks inside

Mogadishu, across Somalia and in AMISOM nations. Even though international cooperation

to counter offshore piracy has restricted al-Shabaab’s access to illicit funds, last September’s

Westgate Shopping Mall attack in Nairobi, violently showcased its insurgent and retaliatory

capacity.

It is difficult to envisage al-Shabaab’s complete defeat, when there are widespread

grievances amongst the Somali people and a lack of Central Government legitimacy. There

are nearly 370,000 internally displaced people living in squalid camps in Mogadishu. These

factors feed sympathy for, and engagement in, the group’s extremism.

Only consistent security and concerted development efforts, will allow people to return to

their homes and improve their living standards. Some progress has been made in the last

few years, with Mogadishu markets and businesses bustling with more activity than for

decades past. Embassies have been reopened and the Kismayo International Airport

refurbished.

A major hurdle in guaranteeing the consolidation of these gains is the civil disunity in the

fledgling Somali Administration. While Somalia’s new federal parliamentary system evenly

represents its various clans, the marginalisation of minorities and strict clan loyalty in

government representation and decision-making, reflects underlying divisions and interests.

Last year’s no confidence motion against the former Prime Minister, coincided with the fall

of two central bankers; one dismissed for alleged corruption and the other resigning after

alleging corruption. While these developments were in line with new accountability

mechanisms, the frequent occurrence of such scandals blurs the line between the

strengthening of public accountability and the intractability of Somalia’s political crises.

The challenge will be for AMISOM and the international community to translate territorial

gains into increased State capacity and civilian support for the President, his Cabinet and the

Parliament. For this to occur, Somalian institutions and civilians will need to overcome their

clan-based political and societal differences. With the opening of the 4th session of

Parliament last week, a key agenda item in the agenda must be an effective process of

national reconciliation.

Since the 1991 fall of the autocrat Siad Barre and Somalia’s protracted civil war, the nation

has had a history of humanitarian disasters and failed transitional governments. Coordinated

and concerted military, civilian and humanitarian programmes, which will promote stability

and security, need to continue, to prevent another Somali false dawn of civil development.

Hugo Seymour

Research Assistant

Indian Ocean Research Programme

Page 18 of 18

*****

Any opinions or views expressed in this paper are those of the individual authors, unless stated to be those of Future Directions International. Published by Future Directions International Pty Ltd. 80 Birdwood Parade, Dalkeith, WA 6009 Tel: +61 8 9389 9831 Fax: +61 8 9389 8803 E-mail: lluke@futuredirections.org.au Web: www.futuredirections.org.au

What’s Next?

Iranian President Hassan Rouhani will visit Kabul to attend the fourth international Nowruz Festival on 27 March

High-level Roundtable on 'Food and Nutrition Security through Sustainable Agriculture and Food Systems in the Post-2015 Agenda' will be hosted by the Government of Benin with the support of the Government of Switzerland in New York from 27-28 March.

Anticipated signing of the Comprehensive Agreement on Bangsamoro (CAB) between the Philippines government and the MILF on 27 March.

Myanmar will conduct its first national census in more than three decades from 29 March.

Bangladesh will hold elections to fill fifty parliament seats reserved for women on 29 March.

Thailand to hold Senate elections to fill seventy seven seats on 30 March.

The Philippines will submit its memorial or written pleading on the territorial feud against China in the West Philippines Sea to the International Tribunal for the Law of the Sea's (ITLOS) arbitral tribunal on 30 March.