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Emerging Powers: Strategic Profile

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Emerging Powers: Strategic Profile

S. Samuel C. Rajiv*

Apart from established power centres like the G-8, a lot of attention in recent years has been focussed on some emerging countries which are playing an increasing role in international affairs. Countries which make up groupings like the BRICS (Brazil, Russia, India, China and South Africa) are an example. There are others too which are significant regional powers and have a growing strategic profile.

This section of the book seeks to examine the potential of such countries to play a meaningful role in the global balance of power in future. The countries include Bangladesh, Brazil, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Africa, South Korea, Thailand, Turkey and Vietnam. The criteria for selection of these countries have been given below. Their evaluation will be attempted across issues relating to three broad categories – domestic political stability; economic strength; and foreign relations.[1] Further, data tables capture their latest available economic, military, technological, population and infrastructure profiles.[2]

Eleven of these countries correspond to those marked out by Goldman Sachs in their report ‘The N- 11: More than an Acronym’.[3] The chapter additionally has included Brazil, South Africa (two of the BRICS countries) and Thailand, one each from Latin America, Africa and Asia respectively. The selection criteria delineated for purposes of this chapter are:

Population above 50 million. OnlySouth Korea andSouth Africa have slightly less populations but they have been included because of their geo-strategic importance.

GDP above $200 billion. Bangladesh and Vietnam have GDP of $119 bn and $138 bn respectively. They have been included given their huge populations (over 91 million for Vietnam and over 161 million for Bangladesh) as well as their geo-strategic importance.

Defence budget above $2 billion. Only Bangladesh among countries chosen has a defence budget less than this at about $1.5 bn.   

1.      Bangladesh

Prime Minister Sheikh Hasina of the Awami League (AL) has been ruling the country since 2008. In fiscal year 2012-13 (July-June), Bangladesh economy grew at 6 per cent, at almost the same rate as during the previous year. The Hasina government took significant initiatives to come to terms with the country’s difficult history. It established the Bangladesh International Crimes Tribunal (ICT-BD) in 2010. In January 2013, the ICT-BD sentenced Abul Kalam Azad for crimes against humanity committed during the 1971 Liberation War. In December 2013, convicted war criminal Abdul Qader Molla was executed, after he was given the death sentence by Bangladesh’s highest court, the Apellate Division of the Supreme Court.

The parliamentary democracy however went through a period of political uncertainty in the run-up to and the aftermath of the controversial January 2014 elections. More than half of the 300 seats were uncontested, as the principal opposition Bangladesh National Party (BNP) led by Begum Khaleda Zia boycotted the elections. While the US expressed its ‘disappointment’ with the exercise, Zia called it a ‘scandalous farce’.

The government on its part has blamed the BNP as well as its electoral ally the Jammat-i-Islami for resorting to ‘indiscriminate violence’. It highlighted the economic loss to the country as a result of opposition tactics like the November 2013 railway blockade which resulted in a loss of over $760,000 over a period of four days.

Bangladesh-US relations were also on the upswing during the past year. Both countries held their second ‘Partnership Dialogue’ in May 2013, as well their second dialogue on security issues in April. The US in June 2013 however suspended Bangladesh’s trade benefits under the generalised system of preferences (GSP) ‘in view of insufficient progress by the Government of Bangladesh in affording Bangladeshi workers internationally recognized worker rights’.

Chinese developmental assistance to Bangladesh meanwhile is set to witness a substantial increase, with Beijing pledging to provide Dhaka with 600 million RMB for 2014 during the visit of Foreign Minister Dipu Moni in October 2013. In 2012, China had offered about 150 million RMB as developmental assistance.

2.      Brazil

President Dilma Rouseff, who has been in office since January 2011, will also contest the October 2014 presidential elections as she was confirmed as the candidate of the ruling party in February 2013. She however faced loss of approval ratings due to series of domestic challenges including corruption scandals and rise of smaller regional parties. Over 200,000 people took to the streets in June 2013 in protest against the increase in public transportation fees and the high construction costs related to the 2014 FIFA World Cup.

The Brazilian economy continued to exhibit what has been termed ‘lacklustre’ growth, registering a growth rate of 1.47 per cent in 2012, coupled with inflation at over 5 per cent. Standard and Poor’s cut Brazil’s credit rating to negative in June 2013, on account of the weakening economic growth and loss of credibility with investors, further hurting the Brazilian currency the Real.

US-Brazil relations were hurt on account of the revelations that the US National Security Agency (NSA) had spied on the phone conversations of Rouseff and Mexican President as well emails and other correspondence of major Brazilian oil companies like Petrobas. Rouseff postponed her October 2013 state visit to Washington. Reports indicated that a fall out of the scandal was Brazil in December 2013 choosing Sweden’s Gripen fighter aircraft rather than Boeing F/A-18 fighter jets in a contract worth over $4.5 billion.

Brazil has argued for urgent reforms to the United Nations Security Council (UNSC). The Brazilian Foreign Ministry in April 2013 insisted that an UNSC ‘that excludes new centres of regional and global influence and disregards the need for proportionality and diversity in its composition adds to the growing frustration and doubts about the legitimacy of its decisions’.

Brazil and its G-4 partners (India, Japan and Germany) at the 68th UN General Assembly (UNGA) in September 2013 reaffirmed their commitment to advancing the UNSC reforms process and pledged to ‘intensify efforts to achieve concrete outcomes by 2015’, the 70th anniversary of the establishment of the UN. The G-4 also highlighted the need for greater civil society participation as well outreach to regional groupings to generate momentum for their respective candidatures.

Scientists associated with the Brazilian Panel on Climate Change in a September 2013 report stated that Brazil could witness higher temperatures, drastic changes in rainfall, lower productivity in crops such as soy as well as episodes of intense flooding and drought if current trends in greenhouse gas emissions continued. Brazil’s climate-change related challenges included growing energy use, increasing energy intensity and deforestation.

Brazil is also the world’s largest producer and consumer of bio-ethanol and is the biggest producer of soy, having overtaken the United States in 2013. It has been a net exporter of oil since 2011, with massive fields being routinely found along its coast. The state-run oil company Petrobas for instance reported in September 2013 that it had discovered huge oil fields off the country’s northeastern coast, in exploration blocks jointly owned with two Indian companies Bharat Petroleum Corp Limited (BPCL) and Videocon Industries.

3.      Egypt

Egypt continued to witness significant political convulsions during the year. President Morsi was removed from office by the Army in June 2013. His removal followed huge demonstrations with millions of Egyptians protesting against his policies. These included the November 2012 decision to curtail the powers of the judiciary and a ‘constitutional logjam’ in May 2013 resulting from the objections of the Supreme Constitutional Court to the legislation pushed through by Morsi in the previous year regarding the election of the Lower House, among other provisions.

Egypt’s new constitution was eventually approved in a referendum held in January 2014, which saw a turnout of close to 40 per cent of the registered voters (more than double than that witnessed in December 2012 when Morsi pushed through his constitutional legislation), strengthening the hands of the military-backed government and the Defence Minister Gen. Abdul Fattah el-Sissi.

The rule of the Muslim Brotherhood (MB) saw increased attacks on Egypt’s Christian minorities, who constitute more than 10 per cent of the population. In the aftermath of Morsi’s removal, the new government had to confront pro-Morsi supporters who took to the streets. There was widespread concern over the military-backed government’s decision to use force against protesters in August, which resulted in the death of more than 500 people. The government took further strong measures to crackdown on the MB, including by arresting its top leader in end-October 2013.

Egypt’s stagnating economy did not help matters, with growth stuck at below 2 per cent in 2012 and unemployment at over 13 per cent. Egypt’s economic situation got a boost with pledges of monetary support from the Gulf Cooperation Council (GCC) amounting to over $12 billion in September 2013. Kuwait and Qatar infused much needed cash into the Central Bank of Egypt, pushing Egypt’s foreign exchange reserves to $19 billion by end-August, up from about $15 billion in June. Reports noted that Saudi Arabia, Kuwait and UAE had pledged close to $14 billion in grants since Morsi’s ouster, out of which more than $10 billion had been disbursed by January 2014. 

Regionally, the visit of President Ahmadinejad to Cairo in February 2013, which followed the visit of Morsi to Tehran to attend the NAM Summit in August 2012 – the first such visit by an Egyptian President in 33 years, led to reports of increased bonhomie between the two regional rivals. Analysts however noted that with the ouster of Morsi, there was renewed opportunity for Saudi Arabia to strengthen its relations with Egypt, especially since Riyadh has been wary of what it sees as the negative influence of the MB and its cadres inside Saudi Arabia.

The US meanwhile did not characterise the June 2013 removal of Morsi as a coup, though it expressed its ‘deep concern’ at the developments. In the aftermath of his removal, the US continued to insist that a democratic Egypt was the ‘best, most reliable’ partner for US strategic interests and welcomed the January 2014 referendum.  

4.      Indonesia

Susila Yudhoyono has been in office since 2004 and is serving his last term having won the elections again in 2009. His Democratic Party (PD) has been rocked by corruption scandals during the year with senior leaders implicated, thus effectively making him in charge of the party as well as the government. The party launched a difficult ‘US-style primary’ process to select a possible candidate for the July 2014 presidential elections in September 2013. Among prominent candidates from other parties include former president Megawati Sukarnoputri and the mayor of Jakarta, Joko Widodo, who belongs to her party, the Indonesian Democratic Party-Struggle (PDI–P). 

The Indonesian economy grew at a rate slower than the previous 3 years, registering a growth rate of less than 6 per cent in 2013. Reports noted that among reasons for the slowdown included deteriorating investment climate due to government’s decision to erect tariff and non-tariff barriers and higher interest rates put in place by the central bank of Indonesia coupled with inflationary trends.

Foreign Minister Marty Natalegawa in his annual press statement for the year 2014 released on 7 January 2014 insisted that ‘as a regional power with global interests, Indonesia will continue to speak forcefully in favour of diplomatic means in addressing various disputes or conflict situations’. Jakarta has consistently called for the cessation of armed violence in Syria and deplored the massive loss of life in that country. It gave aid worth $500,000 to Syria during 2013.

The Indonesian representative at the UN General Assembly in November 2013 called for the ‘comprehensive’ reform of the UNSC so that it will ‘be more representative, efficient and transparent’. He further stressed that reforms should be ‘by consensus, or at least through the greatest political acceptance that was well beyond the two-thirds majority’.

US-Indonesia security relations were strengthened during the year. In August 2013, Indonesia agreed to purchase Apache attack helicopters worth $720 million. Both countries also initiated a Defence Planning Dialogue to strengthen bilateral defence cooperation. The US-Indonesia Comprehensive Partnership initiated in November 2010 involving six working groups covering security, education, climate change, among others continued to be operative.   

Fires in Indonesia’s peat wetlands continued to be a big source of CO2 emissions as well as a source of major concern for neighbouring countries like Singapore and Malaysia. President Yudhoyono issued a formal apology to these countries in June 2013 on account of fires in the province of Riau, where farmers/companies have been alleged to have started them in order to clear the land for palm oil cultivation.

5.      Iran

Hassan Rouhani’s victory in the June 2013 presidential elections set in motion a series of tumultuous developments that have the potential to have far reaching implications for Iran as well as the region. The 24 November 2013 interim agreement that Iran reached with its P5+1 interlocutors is a prominent example. Under the terms of the deal, Iran agreed to cap its enrichment activities at below 5 per cent and pledged not add to its extant nuclear capacities, pending the finalisation of a comprehensive agreement, within one year of the deals implementation. The interim deal began to be implemented from 20 January 2014.

Apart from Rouhani’s electoral victory and his pledging to follow a policy of ‘moderation’ in Iran’s foreign policy (in contrast to the rhetoric of the Ahmadinejad administration), other reasons that were put forth to explain the success of the negotiations with the P5+1 included the difficult state of the Iranian economy on account of the US, European, and UNSC sanctions.

Analysts pointed out that as a result of the various sanctions, Iran had ‘unencumbered access’ to only about $20 billion of its foreign exchange reserves of about $100 billion. The Iranian currency Rial suffered hugely and lost two-thirds of its value against the US dollar relative to 2011. The Central Bank of Iran (CBI) noted that the country’s oil GDP registered a negative growth of 5.8 per cent in 2012, on account of loss of oil revenues of more than $25 billion during that year.

Regionally, Iran’s role in Syria and in places like Bahrain and Lebanon was under the scanner with the Saudi Arabia-led Gulf Cooperation Council (GCC) wary of its influence in these Shia-dominated countries. Riyadh and Israel have also been unhappy with the terms of the interim nuclear deal. Both countries have insisted that a final deal will have to more specifically put constraints on Iran’s enrichment capabilities and convincingly address concerns about its alleged weapons-related pursuits. The November 2013 agreement however states that a final solution would ‘involve a mutually defined enrichment programme with practical limits and transparency measures’.

The agreement followed unprecedented levels of contacts between the US and Iran. These included secret talks facilitated by Oman, attended by high US officials like Undersecretary of State William Burns, and a first-of-a-kind telephone conversation between President Obama and Rouhani at the end of the UNGA sessions in September 2013. It remains to be seen how effectively Iran and its interlocutors can address outstanding issues of concern and conclude a ‘comprehensive solution’ that could involve supply of Western nuclear technology, and treating the Iranian nuclear programme ‘in the same manner as that of any non-nuclear weapon state party to the NPT’.   

6.      Mexico

President Enrique Pena Nieto was inaugurated in December 2012 for a six-year term having secured 38 per cent of the vote in the elections. He has since faced considerable challenges. These included continuing drug-related violence, which claimed more than 1200 murders in the first two months of his administration. The government initiated an ambitious programme to deploy 10,000 soldiers to deal with organised crime, in addition to the 40,000-strong federal police.

Delays in executing the programme however led to criticism that it was a PR exercise in order to showcase the government’s ‘new’ security policy in contrast to the previous administration, which was accused of following a soft approach to deal with the drug cartels. More than 60,000 people were killed in drug wars in the previous administration. The force was eventually launched in October.   

A positive development very early in his term was the signing of the ‘Pact for Mexico’ involving the top three political parties. The pact envisaged forging a consensus on issues concerning economic growth and reducing social inequalities, among others. Contentious debates surrounded energy reforms with the centre-left party the PRD opposing private investment in the oil sector, as proposed by Pena in August 2013. The party however left the pact in November 2013, paving the way for the passing of reforms in December that was expected to bring cash and technology into the oil sector, long-controlled by state-run monopolies like Pemex. It is pertinent to note that these were the first moves to involve greater private sector participation in the oil sector that was nationalised in 1938.

A report by the National Statistics Institute in June revealed that the middle class in Mexico was about 39 per cent of the total population and that nearly 60 per cent were in the ‘lower class’ category. The report characterised these as ‘not necessarily poor’ but that they had a real risk of falling back into poverty on account of macro-economic or personal shocks.

The US and Mexico announced the formation of the High Level Economic Dialogue (HLED) in May 2013, which was launched in September. The initiative is intended to promote mutual economic growth and global competitiveness of the two economies. Bilateral trade between the two countries reached $500 billion in 2012. Reports noted that the US exports more to Mexico than China and Japan combined and that Mexico was the second largest export market to the US and the third largest import market. President Obama visited Mexico in May 2013 in order to further strengthen the relationship.

Among other developments, Mexico became the 42nd member of the Australia Group (AG) in August 2013. The AG controls technologies relating to the spread of chemical and biological weapons.

7.      Nigeria

The ruling People’s Democratic Party (PDP) split in August 2013, threatening its chances of victory at the 2015 general elections. The split highlighted various ethnic and regional cleavages, the most pertinent among them being the north-south divide. President Goodluck Jonathan is a southerner, who took over after the death of incumbent president Umaru Yar’Adua in May 2010. There were also many defections from the PDP to the opposition All Progressives Congress (APC) at the end of the year, making the APC the largest party in the House of Representatives (with 174 of the 360 seats, as against PDP's 171).

While the split and the defections weakened the ruling party, Africa’s most populous nation - with more than half the population estimated to be below the age of 15 years - continued to face significant challenges from Islamist groups like the Boko Haram (literally ‘Western Education is a Sin’). It was responsible for the killing of vaccination workers in April and of over 160 civilians in Benisheikh in September 2013. The US designated Boko Haram and its splinter group Ansaru as foreign terrorist organisations (FTO) in November 2013.

More than 3,300 people are estimated to have died since May 2011, when Mr. Jonathan took office. The Red Cross in a report in February 2014 stated that more than 40,000 people have been hit by the insurgency in the northeast of the country, with more than 20,000 fleeing to neighbouring Cameroon and Niger. Three northeast states were placed under emergency by President Jonathan in May 2013.

While the US condemned Boko Haram’s ‘campaign of terror’, it also expressed ‘deep concern’ at ‘credible allegations that Nigerian security forces are committing gross human rights violations …’ It urged Nigeria to ‘apply disciplined use of force in all operations, protect civilians in any security response, and respect human rights and the rule of law’. Among other developments, the US-Nigeria Binational Commission (BNC) was held in August, focusing on regional stability and civilian security. 

Nigeria, Africa’s top oil producer, has registered an average growth rate of nearly 7 per cent from 2005-13. The country became Africa’s largest economy at the end of the year, surpassing South Africa. It however faced significant economic challenges, including teething infrastructural deficits. Reports noted that Nigeria’s electricity production capacity for instance was one-tenth that of South Africa.

The World Bank in its Nigeria Economic Report released in May 2013 stated that high growth rates have not translated into better economic and social welfare for Nigerians.  The World Bank also placed the country at 147th position out of 189 countries on the parameter of ‘ease of doing business’. Among other negative factors included rampant corruption and the declining percentage of the oil sector relative to the economy (less than 20 per cent in 2012).

Nigeria became a non-permanent member of the UNSC for the period 2014-15. At the UNGA in September 2013, President Jonathan expressed concern at ‘the slow pace of effort and apparent lack of progress in the reform of the United Nations, especially the Security Council’.He insisted that ‘democratisation’ of the UNSC was essential for ‘the promotion of a sense of inclusiveness and balance in our world’. It is pertinent to note that the African Union (AU) in 2005 adopted the Ezulwini Consensus which set out a common African position on UNSC reform to include two permanent and five non-permanent seats to be allocated by the AU.

8.      Pakistan

The Pakistan Muslim League (Nawaz) secured a landslide victory in the May 2013 general elections, with Nawaz Sharif taking over as Prime Minister. This marked the first time in Pakistan’s history that a civilian government completed its full term of 5 years and transferred power to another democratically-elected government. Apart from strong performance in its primary base of Punjab province, the PML(N) however remained in opposition in three of the country’s four provinces. The Pakistan People’s Party (PPP) formed the government in Sindh, the Pakistan Tehreek-e-Insaaf (PTI) in Khyber Pakhtunkhwa while a coalition government was formed in Baluchistan.

Pakistan’s economic situation continued to be difficult, with fiscal deficit at nearly 9 per cent of the GDP during 2012-13 (July-June), nearly double to the then government’s target of 4.7 per cent. Infrastructural deficiencies such as chronic electricity shortages were compounded by theft and non-payment of dues. The Sharif government in its budget for 2013-14 proposed measures to increase the country’s tax-to-GDP ratio, which stood at just over 10 per cent. Nearly 25 per cent of the budget was related to defence-related spending while close to 40 per cent was related to the repayment of foreign and domestic loans.

Pakistan’s foreign exchange reserves stood at $6.4 billion in July 2013 – equivalent of two months of import cover – and which was less than nearly one-third to that in July 2011. The government secured a $6.6 billion loan from the IMF in September 2013, to be disbursed over a period of three years subject to quarterly reviews, in order to tide over a possible balance-of-payments crisis.

The difficult economic situation was not helped by Pakistan’s considerable domestic security challenges. Sectarian violence continued unabated in Karachi, with more than 1,700 people losing their lives in the first six months of 2013. The government on its part explored avenues to open peace talks with the Pakistani Taliban (Tehreek-e-Taliban Pakistan). The prospects of the talks however suffered when Pakistan’s top military officer in the Swat valley was killed by militants in a roadside explosion in September.

Pakistan deployed more than 150,000 troops in six out of the seven agencies in the tribal areas (barring Waziristan) in order to contain the terrorist challenge, with Sartaj Aziz, foreign affairs advisor to Sharif, describing the deployment as ‘stretched’. Even as India-Pakistan tensions were on the rise during the year on the back of series of border incidents which led to the death of troops, Pakistan got a new Army Chief (Gen. Raheel Sharif) and a new defence minister (Khwaja Mohammad Asif) in November.

US aid to Pakistan, which had been frozen in the aftermath of the killing of Osama Bin Laden, resumed in October with the US deciding to disburse $1.6 billion. This was ahead of a visit of Prime Minister Sharif to Washington, the first such visit since 2008. US-Pakistan relations however continued to be frosty (despite Aziz stating in January 2014 that both sides were striving to transform a ‘transactional relationship into a strategic partnership’), primarily on account of continued US drone strikes, which killed about 150 people in about 20 such attacks in 2013.  

9.      Philippines

President Benigno Aquino’s six-year term that began in June 2010 faced many challenges during the year including natural disasters, corruption charges as well as the ongoing Islamic insurgency in the province of Mindanao. The country was battered by powerful cyclone Haiyan/Yolanda in November 2013, the most powerful typhoon to ever hit the country. More than 6,000 people lost their lives. The response of the Aquino government however was criticised as being ‘inadequate’.

Reports noted that the US military undertook faster relief measures than the Philippines government. The US for instance provided $86 million in immediate relief aid. The US military numbering 13,000 soldiers transported nearly 2,500 tonnes of relief supplies and evacuated more than 20,000 people from the areas hit by the storm. 

The country’s highest court in November 2013 ruled that the Priority Developmental Assistance Fund (PDAF), wherein legislators channelled money to projects some of which turned out to be non-existent, as unconstitutional and ordered that the money be returned. Reports noted that this was a major blow to President Aquino, as more than $200 million of such funds was involved. In the 2013 Corruption Perception Index by Transparency International, the country was ranked at the 94th position, out of 177 countries. It was however placed better than Thailand (102), Indonesia (114) and Vietnam (116) among countries in the region.

As for the Islamist insurgency, a new Islamic militant group, Khilafa Islamiyah (KI) emerged, with purported links to the Bangsamoro Islamic Freedom Fighters (BIFF). The government and the Moro Islamic Liberation Front (MILF) had signed a peace deal in October 2012, which was followed by further signing of annexes to the previous deal in July 2013. The July agreements involved a revenue-sharing agreement between the government and the MILF.

The KI and the BIFF stepped up their attacks in the aftermath of the July agreements opposing the provisions of the MILF-government deal. Among others, in return for the laying down of arms by the MILF, a new political entity the Bangsmoro is to be created replacing the self-governing autonomous region in Mindanao.

The Philippines-China relations were frosty, with the Philippines opposing China’s announcement of setting up an Air Defence Identification Zone (ADIZ) in the East China Sea in December 2013. Foreign Secretary Albert Del Rosario stated that the Chinese move would transform the area into China’s ‘domestic airspace’ which would ‘compromise safety and security of affected nations’. Philippines further expressed alarm at the possibility of a similar move by China in the South China Sea.

President Aquino’s statement in February 2014 comparing China’s claims over the Spratly Islands in the South China Sea to Nazi Germany claims over Sudetenland in Czechoslovakia were criticised by China as ‘ignorant’. The bilateral trade between the two countries meanwhile stood at $14 billion in 2013, which was 14 per cent of Philippines total trade. Analysts noted that such statements could further raise hostility against the country among the Chinese as well as hurt investment and tourist prospects.

10.  South Africa

South African icon Nelson Mandela passed away in December 2013, plunging the country and the world into mourning. World leaders paid their tributes and celebrated the life of one of Africa’s greatest leaders.

Domestically, the country continued to face problems in the mining sector, which accounts for half of South Africa’s exports. Widespread strikes, pit closures, and consequent losses of jobs hurt the economy. Labour unions became more aggressive in their demands, with the National Union of Mineworkers (NUM) demanding a wage hike of 50-60 per cent. Reports noted that apart from difficult working conditions and the poverty of workers, inter-union rivalry was also a factor. The NUM demands for instance it was pointed out followed the growing strength of the Association of Mineworkers and Construction Union (AMCU), which became the leading union of platinum workers.

Apart from mine workers, the National Union of Metalworkers of South Africa (NUMSA) representing the automobile sector demanded a 20 per cent increase in wages over the next three years beginning in May 2013. When their demands were not met, over 30,000 workers went on a strike in August. Given that the auto sector contributed about 7 per cent to South Africa’s GDP, reports noted that the move could deter crucial FDI into the country. Their action was followed by strikes by workers in the construction, textile, transport and gold-mining sectors. On account of these strikes compounded by the economic slowdown in Europe – one of South Africa’s biggest markets, the country recorded a sluggish GDP growth of about 2 per cent during the year.

In December 2013, NUMSA announced that it would not support the ANC at the April 2014 general elections and further explore the possibility of forming a political party. The move was considered significant in that the country’s largest trade union (with 320,000 members), which is a part of the Congress of South African Trade Unions (COSATU), had been supporting the ANC along with the South African Communist Party since the end of the Apartheid era. The ANC was also facing challenge from the populist rhetoric of the party established by a former president of its Youth League, the Economic Freedom Fighters (EFF), which was registered in September 2013.   

The fifth BRICS Summit was held in Durban in March 2013, coinciding with the 50th anniversary of the AU. Leaders agreed to establish a new development bank as well as the Contingency Reserve Arrangement (CRA) initially worth $100 billion that could be tapped into to strengthen financial stability.

South Africa, which served a two-year term as a non-permanent member of the United Nations Security Council (UNSC) which ended in December 2012, held that the UNSC will lose its legitimacy if it continued to be unrepresentative. The Foreign Ministry’s Annual report 2012-13 insisted that ‘it will not be in our best interest to celebrate the 70th anniversary of the UN in 2015 with an un-reformed Security Council’.

South Africa welcomed the November 2013 interim nuclear deal between Iran and its interlocutors. In a position in tune with the other members of BRICS, Pretoria insisted that the IAEA ‘remains the only internationally recognised competent authority responsible for verifying and assuring compliance with the safeguards agreements of States Parties concluded in compliance with their obligations under the NPT’. Among other developments, South Africa was elected to the UN Human Rights Council in November 2013, securing 169 out of 193 votes, for a two-year term.

11.  South Korea

Park Guen-hye of the conservative Saenuri party won the presidential elections in December 2012, and took office in February as South Korea’s first-ever female president. She followed a policy agenda of ‘economic democratisation’ which had two prongs – improving social security and welfare spending and ‘create a level-playing field between small and big business’. It also entailed better job creation leading to more equitable income distribution.

Her government also embarked on efforts to improve the employment rate to 70 per cent, as against the extant 64 per cent, improve the status of part-time workers by introducing the concept of ‘equal pay for equal work’, reduce the number of working hours (given that a South Korean worker put in an average of 400 hours more than his/her OECD counterpart annually), among other ambitious efforts.   

In the first press conference of her presidency in January 2014 – close to a year after she took over – Guen-hye reiterated her administration’s priority to shift focus away from export-oriented growth to one driven by domestic demand. Promoting the growth of the ‘creative economy’ and venture-driven companies to help job creation was high on her administration’s list of priorities, as indeed increasing the percentage of women in the work force. The government intended to increase the country’s GDP growth rate to 4 per cent over the course of the next three years, and per capita income to $40,000 from current figures of $24,000.  

The US and South Korea celebrated 60 years of their relationship in 2013. President Guen-hye travelled to Washington in May for a summit meeting with President Obama. Later in June, she visited Beijing. Reports noted that historically, South Korean leaders first visited Tokyo before going to Beijing. China is South Korea’s largest trading partner

Guen-hye’s government followed a ‘trustpolitik’ approach that raised prospects of détente between the two Koreas, which was exacerbated by the third North Korean nuclear test of February 12, 2013. The North Korean nuclear test led to concerns that if highly enriched uranium (HEU) was used instead of plutonium as widely believed, Pyongyang could have enough HEU to build one-two nuclear bombs per year given its installed enrichment capacities.

In the aftermath of the test, the Kaesong Industrial Complex (KIC) which employed close to 50,000 North Koreans working for over 120 South Korean companies was closed. In September however, the KIC was reopened, and long stalled (since 2010) family reunions of separated families were also restarted.

The US on its part insisted that the North Korean policy of ‘Byungjin’ which envisaged economic development co-terminus with developing their nuclear capability was a ‘dead-end’, in the words of US Special Representative Glyn Davies in January 2014. Among other developments, the US and South Korea extended by another two years their nuclear cooperation ‘123’ agreement. The 1972 agreement was set to expire in March 2014.   

12.  Thailand

Prime Minister Yingluck Shinawatra who has been in office since mid-2011 called for early elections in December 2013, a few weeks after ruling out the possibility on account of mounting protests against her government’s move to pass an amnesty bill. Protesters accused her of following policies that would allow her brother Thaksin Shinawatra, who has been in exile since being toppled in an Army coup in 2006, to return. The protesters were being led by Suthep Thaugsuban, a former Deputy prime minister during 2008-11.

There was also criticism against the Shinawatra government’s economic policies, like the tax sops to first time buyers of cars and homes. Critics viewed the move as designed primarily to help her party’s (Peau Thai) core constituents in the country side. The Thai economy meanwhile, dependent on tourist revenues, suffered on account of the mounting political protests. Nineteen countries issued travel advisories to their citizens to avoid visiting the capital.

Reports noted that continued political disturbances could hurt the country’s ambitious growth target of generating $65 billion in revenues and 28 million international tourist arrivals in 2014. The tourism and travel competitiveness index (TTCI) of the World Economic Forum (WEF) in its latest report released in March 2013 placed Thailand in the 9th position in the Asia-Pacific region and 43rd overall. Regionally, Indonesia was placed 12th while Vietnam was in the 16th position.   

Despite the political uncertainty, the government’s massive infrastructure upgrade programme bill worth $67 billion was passed in November 2013. Among its provisions included high speed rail networks connecting neighbouring countries. Insurgency in the south of the country involving Muslim insurgents meanwhile intensified. Top insurgent leader nicknamed ‘Back Pele’ was killed in October. More than 9,000 people have been killed since the insurgency began in 2000.

The US and Thailand celebrated the 180th anniversary of treaty relations in October 2013. Both countries also have a formal defence relationship since 1954 and engage in close defence cooperation, including in over 40 exercises annually. Bilateral trade was worth more than $37 billion annually. Thailand hosted a proliferation security initiative (PSI) bilateral table top exercise in August 2013, for the first time since it joined the PSI in November 2012.

Thailand-China relations were also on the upswing, with Prime Minister Li Keqiang visiting Bangkok in October 2013. Both sides intend to increase the volume of bilateral trade from $47 billion to more than $100 billion by 2015. 

13.  Turkey

Prime Minister Recep Tayyip Erdogan, who has been in office since 2003, faced a difficult year. In June, huge protests broke out in many parts of the country opposing his government’s policies ranging from ban on alcohol sales to redeveloping green spaces like Gezi Park in Istanbul. In December, there were renewed protests on the back of a corruption scandal that rocked Erdogan’s government. Three ministers resigned (Interior, Environment, Economy) when their sons were arrested by the police on being involved in charges including those relating to money laundering, gold smuggling and bribery. The Economy minister was accompanying Erdogan on a state visit to Islamabad when the crisis broke out.

Erdogan criticised those behind the investigations as trying to create a ‘state within a state’. Reports noted that Erdogan’s charges were primarily directed against supporters of the US-based cleric Fetullah Gulen, who has a substantial following in the police and judiciary. Reports noted that tension was building up between the AKP and Gulen – two erstwhile allies – on the back of the decision of the government to ban private prep schools, a large part of which are owned by Gulen. The Army on its part on both occasions reiterated that it would stay away from the political protests.

The December crisis hit the Turkish currency, with the lira registering an all-time low against the dollar (2.1 liras to a dollar). Reports noted that the government’s high-handed response to anti-government protests and the regional instabilities exacerbated by the situation in Syria affected investor confidence in Turkey, with the benchmark Istanbul stock Index losing one-third of its value by September after hitting a record-high in May 2013.

It was speculated that if Istanbul won the bid for the 2020 Sumer Olympics for which it was one of the finalists, it could give a big boost to the Turkish economy. Istanbul however lost in favour of Tokyo in a decision announced by the International Olympic Comiittee (IOC) in September 2013. Overall however, the Turkish economy performed better in 2013 (registering a growth rate of over 3.5 per cent) as against less than 3 per cent in 2012.

Erdogan’s initiatives to change the constitution giving the president more powers to dissolve parliament and authority to send the military into undertaking actions among others has been another area of discord. The Constitutional Reconciliation Commission (CRC) was set up in May 2012 with members from the four parties which have representation in the parliament. There have however not been able to reach a consensus on issues relating to the Kurds, on secularism, on the definition of citizenship (with the AKP pointing out that the ‘Turkish’ definition excludes Kurds) among others.

If there is consensus however among all political parties (requiring two-thirds majority in the 550-seat parliament), the country’s first president would be elected by popular vote in August 2014. If not, reports noted that given the AKP’s strength (326 seats), it could still force a referendum on the issue given that such a step would require 60 per cent support (330).

Turkey has been uniquely affected by the bloodshed in Syria. The UNHCR in February 2014 stated that an estimated 600,000 Syrian refugees have been registered in the country. In other significant developments, Israel in March 2013 apologised for the May 2010 Navi Marmara incident in which 9 Turkish activists on the ship delivering aid to the Gaza Strip were killed by Israeli soldiers.

14.  Vietnam

The government took steps to improve the state of the country’s state-owned enterprises, which contribute over 40 per cent to the country’s economic output. In a bid to hasten the restructuring of the national ship-building company which had nearly collapsed with debts of over $4 billion in 2010, the government decided to guarantee a $600 million loan in February 2013 on which the company had defaulted. The government also took steps to restructure national shipping lines as well as sell 35 per cent stake in the country’s largest garment maker worth $240 million. The economy meanwhile continued to register a strong growth at over 5 per cent in 2013.

China-Vietnam tensions flared up during the year when Chinese patrol boats fired flares at Vietnamese fishing boats near the Paracel Islands in the South China Sea in March 2013. Vietnam insisted that it had ‘indisputable sovereignty’ over the area when the Chinese unveiled tourism plans to the islands in April.

In the light of Chinese assertiveness, Vietnam strengthened its relations with the US and Japan. Two US naval vessels visited Vietnamese ports in April, to share expertise in disaster relief and medical training. The Vietnamese President Truong Tan Sang visited Washington in July and discussed issues relating to the Trans-Pacific Partnership (TPP) and the South China Sea, among others. 

The US in December 2013 provided $18 million to enhance the capacity of Vietnamese coastal patrol units, including 5 fast patrol vessels in 2014. The US-Vietnam Comprehensive Partnership was launched covering the areas of maritime capacity building, education, climate change, among others. Annual bilateral trade was worth more than $25 billion while more than $7 billion in remittances are received from Vietnamese living in America.

The US and Vietnam also signed a civil nuclear cooperation agreement in October. The Vietnamese nuclear energy market is expected to be second only to China in East Asia, in the words of Secretary Kerry by 2030. The country’s first nuclear power plant being built with Russian assistance is expected to be operational by 2020, while two more plants are expected to be ready by 2025. 

Japan on its part pledged to provide 10 patrol boats to the Vietnamese coast guard in July. During the visit of the Vietnamese Prime Minister Nguyen Tan Dung to Tokyo in December 2013, Prime Minister Shinzo Abe reiterated that cooperation with Vietnam was ‘extremely important for regional peace and stability, especially for maintaining maritime order as well as international aviation order’.

Endnotes


* The author is Associate Fellow, Institute for Defence Studies and Analyses, New Delhi. He would like to thank Prof. Satish Kumar for his guidance in writing this chapter.

[1]Sources to build a strategic profile of these countries include the Economist Intelligence Unit, the US State Department website, and relevant country foreign ministry websites.

[2]Data tables are sourced from information available in IISS Military Balance 2013, World Bank website, UNDP Human Development Indicators and World Development Indicators 2013.

[3]See Dominic Wilson and Anna Stupnytska, Global Economics Paper No. 153, March 2007, at http://www.chicagobooth.edu/alumni/clubs/pakistan/docs/next11dream-march%20%2707-goldmansachs.pdf. Wilson and Stupnytska note that these countries, next in importance to BRICS, comprise 7 per cent of the world economy and 9 per cent of world energy consumption.

Note: This study done by the Foundation for National Security Research and was also published in India's National Security Annual Reveiw 2013, edited by Satish Kumar

 

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