Center for a New American Security

The United States is participating in an annual bilateral exercise in Southeast Asia, Cooperation Afloat Readiness and Training, intended to build the capacity of partners to respond to a range of challenges, including humanitarian assistance and disaster relief and other missions critical to the region. In this photo, Indonesian Boy Scouts and Girl Scouts complete a tour of the guided missile frigate USS Vandegrift and USCGC Waesche in Surabaya, Indonesia.

Photo: Courtesy of Chief Mass Communication Specialist Aaron Glover and the Department of Defense.

The Indonesian government retreated from a planned increase in government-subsidized fuel prices on Saturday due to widespread protests that caused the government coalition that initially backed the plan to fracture. Indonesians have long enjoyed subsidized fuel prices, with gasoline prices at about US$2 a gallon. More than 10,000 demonstrators gathered around parliament to protest the legislation during parliamentary debate, with police reportedly firing tear gas and using water cannons to disperse the crowd.

Failing to increase fuel prices could potentially have a wide political reach as the Indonesian government struggles to rein in a ballooning budget that could stall the country’s economic growth. “The subsidies accounted for 20 per cent of government total spending last year, and analysts have said that cutting is needed if the government wants to limit its deficit and make room for investing in long-term growth projects,” The Financial Times reported on Saturday. “The country's fuel-subsidy bill has ballooned to more than $15 billion a year and could climb to close to $30 billion as global oil prices have been rising this year,” The Wall Street Journal added on Sunday. “The amount of money Indonesia spends to keep petroleum prices low is more than 15% of the country's budget and more than it spends on its military or its infrastructure.” What is more, the failure to pass the legislation could portend a difficult political future for Indonesia’s President Susilo Bambang Yudhoyono. According to The Wall Street Journal, “His inability to control his coalition and get the original plan passed could not only trigger a bigger budget deficit for Indonesia, analysts said, but it could also signal a political deadlock that could hurt future policy making.”

China is just one of the many East and Southeast Asian states that continues to pursue nuclear power in the wake of the March 2011 disaster at Japan’s Fukushima Daiichi nuclear generating station. But China, like most other states with nuclear reactors or aspirations, has not been blithe about the Fukushima crisis. According to The Wall Street Journal on Saturday, “China was one of the world's fastest-growing nuclear markets before the March disaster at Japan's Fukushima Daiichi nuclear-power facility.” That changed in March when “China's State Council, China's cabinet, ordered a suspension of approvals for new nuclear plants and began a nationwide nuclear-safety review as public fear over nuclear power widened after the Fukushima Daiichi incident.”

To help China improve its safety standards and develop other expertise, The Wall Street Journal reported that the U.S.-based Exelon Corps – which provides support services to the nuclear industry – will partner with China’s state-owned China National Nuclear Corps (CNNC), a move, the Journal says, that suggests that “China's secretive state-owned nuclear companies are determined to learn Western safety practices and other expertise in the aftermath of Japan's nuclear incident in March.”

Last night, CNAS hosted the official launch of Robert Kaplan’s new book, Monsoon: The Indian Ocean and the Future of American Power. As Nate Fick said in his opening remarks, we had a twofer: Robert Kaplan was joined by NPR’s award-winning correspondent Tom Gjelten who moderated the discussion. We will be posting videos, photos and a podcast of the event soon, but I wanted to share a part of last night’s discussion that I think is worth mentioning. 

During the Q/A portion of the event, Tom Gjelten asked Robert Kaplan about climate change; specifically how the rest of the world views the challenges and potential implications of climate change and the lack of American leadership to combat it. Gjelten prefaced his question by wondering aloud about the prospects of the next congress taking up climate and energy legislation given that a number of conservatives (some of them climate change skeptics) won seats in last week’s election.

For Kaplan, Bangladesh seemed to be the most apt example to use to respond to Gjelten’s question. As Kaplan notes in his book, Bangladesh may look small on a map (considering it’s surrounded by India), but if you look at the overall population, it has more people than Russia and a greater Muslim population that Iran. Now consider that most Bangladeshis are living at or below sea level.

Kaplan paints a vivid picture of what this means. Indeed, an interesting observation he makes in his book (and that he made last night) was how precious dry soil is in Bangladesh and how as sea level rise inundates Bangladesh, dry soil for agricultural and domestic use could become more scarce. (Kaplan noted that when people move their homes in Bangladesh, they often take the dry soil with them – that is how scarce it is.) 

The twentieth century witnessed Europe unfold as the center of gravity for world history. And in this still early century, the Middle East and South-Central Asia have been focal points for American policymakers and others around the world. But the Greater Indian Ocean may well be the defining geo-political cauldron in the twenty-first century, according to CNAS Senior Fellow Robert D. Kaplan in his latest opus, Monsoon: The Indian Ocean and the Future of American Power.     

Monsoon is a carefully crafted examination of the future of American Power in the context of the Indian Ocean, a region that once upon a time was the epicenter of world culture, travel, trade – wrestled over by empires of yesteryear – once again rising in prominence.

As the reader learns early on, historically, the region’s monsoon system (specifically its winds) shaped international engagement in the region, allowing travelers from the Horn of Africa and the Middle East to make the journey to India and beyond in a fraction of the time it would take states to cross the Mediterranean (which is also a much shorter distance than the leg from North Africa to India). The short duration made travel and trade expedient, allowing states to share goods and culture throughout the entire Indian Ocean region. (Indeed, we learn how the monsoon winds helped to spread Islam across the ocean.)

Today, the Indian Ocean remains a crucial region for trade, both commercial and energy. Kaplan writes:

Today, despite the jet and information age, 90 percent of global commerce and two thirds of all petroleum supplies travel by sea. Globalization relies ultimately on shipping containers, and the Indian Ocean accounts for one half of all the world’s container traffic. Moreover, the Indian Ocean rimland from the Middle East to Pacific accounts for 70 percent of the traffic of petroleum products for the entire world.

For those of you familiar with Kaplan’s work, you won’t be surprised at the level of detail and depth into history he provides the reader to help ground his or her understanding of how important the region was, which of course is necessary to fully understand the region’s resurgence in geo-political affairs. Of course, Kaplan’s personal accounts from his voyage across the Indian Ocean help the reader connect with the story he unveils as he hops across the greater region, from Oman, Pakistan, India, Bangladesh, Burma, Sri Lanka, Indonesia, to Zanzibar.

With the president preparing to depart India for Indonesia tomorrow, I thought it was appropriate that The Washington Post had a piece over the weekend on Indonesia, a country that has been prominent on the administration’s agenda, especially as the administration touts Indonesia’s potential to be an export market for U.S. energy and other firms. But in addition to that, Indonesia is strategically important for the United States and the Obama administration’s regional engagement; it is the world’s largest Muslim-majority country, rich in natural resources and a burgeoning economy in the region.

According to the Post’s Howard Schneider:

In plotting a path to boost U.S. exports, the Obama administration has turned a keen eye to the trillions of dollars Indonesia and other Asian nations plan to spend on power plants, transportation and other infrastructure in coming years, expecting it to boost American makers of heavy equipment and other top companies.

But as Schneider suggested, U.S. firms may have an uphill battle. “China, Japan and South Korea have made deep inroads into the Indonesian market over the past 15 years, even as the United States slipped as a source of its imports,” Schneider wrote, “and nearby countries such as Malaysia and Australia are aiming to benefit from increasingly tight regional ties.”

“U.S. firms are long-established here in the energy and mining industries,” Schneider noted. “But U.S. officials say that recent regulations adopted by Indonesia - rather than opening the market in areas of U.S. expertise - have heightened restrictions on industries important to U.S. exports, such as pharmaceuticals, energy and telecommunications.”

Nuclear critics are likely to take the most recent earthquake in Indonesia as a new opportunity to protest the construction of a nuclear power plant on Java.

Indonesia has a growing population (currently 230 million people) and growing energy demands (estimated 10% annual growth). Indonesia’s economy is growing at a pace that exceeds its ability to provide electricity. Beginning in the ‘70s, nuclear power is mentioned every few years as a partial solution to Indonesia’s energy needs.

The idea has gained more traction as the world confronts climate change climate-friendly technologies. Indonesia has pledged to reduce its emissions by 26% over the next decade. In an interview earlier this year, the head of Indonesia’s Nuclear Atomic Energy Agency (BENAT) predicted that despite maximizing other energy sources, such as geothermal, the need for nuclear power is almost inevitable if Indonesia is going to meet its goals.

Predictions like this are a call to battle stations for nuclear opponents: “No new nukes!” Protesters claim that the country’s geography and geology – causing earthquakes, tsunamis, and the like -- would lead to nuclear disaster, despite a 2002 study conducted under the auspices of the International Atomic Energy Agency which concluded that a commercial nuclear power plant was technically feasible.

I’m not arguing that nuclear power is the best solution for Indonesia’s energy needs, but the seismic activity in the area does not make nuclear power impossible. Nuclear engineers have confronted the issue of shock waves before; I have three examples:

#1 Indonesian research reactors: Perhaps the most obvious example, but frequently overlooked. A commercial nuclear power plant will not be the first nuclear reactor to operate in fault-line riddled Indonesia. The country has been operating research reactors successfully (much, much smaller than commercial power reactors but similar technology) since the ‘60s.

#2 Japan: Japan, another country sitting on the ring of fire, has safely used nuclear power for decades. Lacking the fossil fuel resources of other developed countries, Japan invested early in nuclear power. It now boasts 54 reactors that produce 25% of the country’s electricity. Five were built in the last decade, and eight more are planned for the next decade. All of this despite the fact that Japan experiences earthquakes regularly.

#3 Nuclear submarines and aircraft carriers: The Japanese are not the only ones who must account for sizable shock waves in their reactor designs. The US Navy (ok, its contractors) has been designing reactors for warships since the 1950s. The design requirements for these reactors ensure they can withstand the demands of battle – demands that aren’t so different from an earthquake. Admittedly, extra requirements don’t come cheap. Indonesia may not be able to afford the hefty price tag of robust reactors, but that’s different from saying they couldn’t be “safe.”

After considering all the pros and cons of nuclear power, Indonesia may opt to get its electricity from another source – but let’s not assume seismic activity is a deal breaker for nuclear power.