20 August 2014 | Vol. 5, № 30.

From the Editor’s Desk

Dear FDI supporters,

Welcome to the Strategic Weekly

Analysis.

We open this week’s edition with an

analysis of the possibility that the

extremist Islamist State militia, in concert

with radical Pakistani cleric Abdul

Maulana Aziz, may be turning its attention

towards the Chinese province of Xinjiang,

in defence of its Muslim Uighur residents.

Next, we go to the Seychelles, with a look

at what may be the country’s next big

export earner: oil. While it is still only at

the exploration stage, the challenge in the

future will be balancing the requirements

of both the oil and tourism sectors.

Heading to mainland Africa, we report on

the famine now looming in South Sudan,

as fighting intensifies in the world’s

youngest country.

Our next article examines the role being

played by Qatar in the Israel-Hamas

ceasefire negotiations. Doha may be

reprising its earlier foreign policy role as a

regional meditator.

We conclude this week’s edition by

analysing some of the factors that are

contributing to an upsurge in the

incidence of the HIV/AIDS virus in

Indonesia. Despite some progress, the

2014 UNAIDS Gap Report lists Indonesia

as one of just six countries globally that

are ‘being left behind’ in the fight against

HIV.

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 12

Could the Islamic State Expand into China via Pakistan?

Abdul Maulana Aziz, the leader of a radical mosque in Islamabad, has allegedly voiced his

support for the Islamic State (IS). If his support becomes active, it could further the militant

organisation’s plans to expand further abroad, particularly since Aziz holds something of a

personal vendetta against China.

Background

Terrorist activity is rising in China, with Pakistani elements usually blamed. Militant

organisations, based in Pakistan, are often accused of providing training and support to

Chinese militants. Many of these individuals come from the north-west Chinese province of

Xinjiang and belong to the Uighur Muslim ethnic minority. Many Uighurs feel the Chinese

state represses their religious and cultural freedoms, leading some to conduct terrorist

activities against it.

Estimates indicate that about 3,000 Uighurs currently live in Pakistan. During the nineteenth

and early-twentieth centuries, many Uighur traders moved into modern-day Pakistan. Since

the 1940s, however, most of the Uighur population consists of migrants fleeing repression in

China. Prior to 2008, Islamabad generally took a strong stance against Uighur militancy

within its borders. Those suspected of engaging in terrorist activity were deported. Since

then, however, militant Uighur organisations have grown in size and gained much support.

The largest issue souring an otherwise strong China-Pakistan bilateral relationship stems

from the difficulties involved in eradicating such international terrorist organisations.

Comment

In his 4 July address, Abu Bakr al-Baghdadi, the leader of the radical Islamist State, declared

that he seeks vengeance against those who supposedly took away the rights of Muslims in

twenty countries, including China, India, Palestine, Somalia, the Arabian Peninsula and the

Caucasus. In the video address, China, and more specifically its restive Xinjiang province, was

mentioned numerous times. Xinjiang is already a hotbed of dissent, with frequent ‘terrorist’

attacks inside the province.

Many terrorist attacks outside the province are also believed to either originate within it or

be carried out in support of the aims of Uighur militant groups. Uighur groups, such as the

East Turkistan Islamic Movement (ETIM), demand the creation of a separate Uighur state.

The Chinese special envoy for the Middle East, Wu Sike, has expressed concern that Uighur

jihadists have joined the IS in Iraq and Syria. If IS-linked fighters were to find their way into

the province, it would worsen an already tense security situation. The South China Morning

Post recently reported that the group had plans to carry out attacks in Malaysia and

Indonesia; there can be no doubt that the IS harbours international ambitions beyond the

Middle East.

Abdul Maulana Aziz, the leader of the Red Mosque (Lal Masjid) in Islamabad, has declared

his support for the IS, according to a Pakistani journalist. If the allegation is true, this is

worrying news for China. The Red Mosque has many Uighur members and was the target of

a violent siege in 2007, after its followers targeted Chinese sex workers as part of a

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purification campaign. As the campaign progressed, radical Islamists targeted other Chinese

communities in Pakistan, leading China to call on General Pervez Musharraf, the President at

the time, to intervene. Musharraf sent troops to storm the mosque and bring an end to the

violent acts committed against Chinese nationals. Disguised in a burka, Aziz attempted to

escape the siege but was captured and arrested and his brother and elderly mother were

killed in the assault. The death of two of his family members, as a result of collaboration

between China and Pakistan, could lead him to seek retribution against the Chinese

Government, by supporting the spread of the IS into China.

After the Red Mosque incident, the Tehreek-e-Taliban (TTP) united 13 different militant

groups in the Federally Administered Tribal Area of Pakistan. The organisation also has a

small presence in neighbouring Afghanistan. Their main aim is to wage a defensive jihad

against the Pakistani military and uphold sharia law in the Swat valley. Reports suggest that

the TTP is willing to host Uzbek and Uighur militants and to become involved in Xinjiang

province. The TTP has claimed responsibility for trans-national terrorist attacks in the past.

The failed Times Square bombing in New York, in May 2010, was claimed by the

organisation. Its leaders continue to threaten both the United Kingdom and the United

States with terror attacks; given this support for international terrorism, it is possible that

the group could seek to help the IS move into China.

An on-going peace dialogue between the TTP and the Pakistani Government does not

appear to be making much progress. Aziz has played a key role in representing the TTP at

these talks. He could build upon this relationship with the TTP to move IS fighters into

Pakistan and from there into China, using his ETIM links.

China-Pakistan relations are well established. Any Pakistani-based terrorist organisation

facilitating an attack upon Chinese soil would cause major problems for Islamabad. Aziz

currently resides in Islamabad and may be reluctant to act upon his vocal support for IS, as

he may wish to avoid legal issues. On the other hand, he has reason to harbour personal

grievances against Beijing, which could lead him to support the spread of terrorism into

Xinjiang.

Mervyn Piesse Research Analyst Indian Ocean research Programme mpiesse@futuredirections.org.au

*****

Page 4 of 12

Oil in the Seychelles: A Delicate Economic and Environmental

Balancing Act

Anticipating the discovery of commercial quantities of oil, the Seychelles has introduced

legislation that aims to ensure that wealth flows back to its Government, while it is also

managing the challenges of balancing the needs of the resources and tourism sectors. If

successful, it is an approach that will help it to avoid the “resource curse”.

Background

Until 2013, only two companies held exploration licences for oil and gas in the Seychelles,

but that number is about to increase. In June 2013, after a two-year delay while the

government reviewed its hydrocarbon legislation, the Seychelles invited oil and gas

companies from around the world to bid for blocks of up to 10,000 square kilometres each,

in its 1.3 million km2 Exclusive Economic Zone. By August 2014, the board of the Extractive

Industries Transparency Initiative (EITI), which sets the standard for transparency in the

disclosure of oil revenues in 45 countries, accepted the Seychelles as a candidate. The

growing interest and exploration activities increase the likelihood of commercial discoveries

and the accompanying flow of oil revenue.

Page 5 of 12

Comment

Interest in oil exploration in the Seychelles is increasing dramatically. Under the watchful eye

of the state-owned regulatory company, PetroSeychelles, the politically-stable country is

ready to do business. Japanese state oil firm JOGMEC signed an agreement with the

Seychelles to survey offshore in 2013. Two other resource companies, WHL Energy of

Australia, and UK-based Afren, have recently concluded seismic surveys in their respective

blocks.

The economy of the Seychelles is based on the farming of specialty crops, fishing and

tourism; now it is anticipating the discovery of commercial quantities of oil. There is always

the possibility of falling victim to the so-called “resource curse”, but the Seychelles is taking

steps to ensure that it does not become an “enclave economy”, where its resources are

extracted but little of the wealth is returned to the source country.

The invitation to foreign companies to bid for exploration blocks came after a two-year

moratorium. During that time, the Seychellois Government enacted the Model Petroleum

Act, to ensure that all activities remain transparent. The Act also provides a fiscal regime of

international standards. The Seychelles Petroleum Taxation Act was also amended to

produce greater benefits for the Seychelles from the taxes that mining companies must pay

to drill. The intention of these legislative reforms is that any future discovery will see

proportional wealth flow back to the Seychelles, while the country remains an investor-

friendly environment.

Resource sectors are, by their extractive nature, frequently in conflict with the environment;

raising concerns that resource extraction might damage the country’s famous pristine

environment. In the Seychelles, the tourism sector brings in more than two-thirds of its

foreign earnings and employs 25 per cent of the labour force, in a country with a population

of just over 91,000. In response, the Chief Executive of PetroSeychelles, Eddy Belle, has

stated that, ‘The tourism industry is a pillar of our economy. We will not destroy this for the

sake of oil.’ The challenge of exploiting one industry, while protecting another, could lead to

the adoption in the Seychelles of a “green” approach to resource extraction. But that is not

the usual approach and it will be a challenge for PetroSeychelles to find the technology to

help make it a reality.

As to how much oil the Seychelles may have, data from the late-1970s onwards indicates the

potential for natural gas and oil reservoirs, but nothing has yet been found in commercial

quantities. Eddy Belle confirmed that the company is reluctant to make any statement

before the data from the latest drilling can back it up: ‘That’s the way the industry works.

We want to keep expectations low.’

The Seychelles knows that it has a potentially wealthy discovery still waiting to be made. In

preparation, it has constructed a legal framework to secure its financial interests. It is also

attempting to take a long-term approach by mitigating any side-effects on the environment

and its vital tourism industry.

Page 6 of 12

Bronwyn Fraser Research Assistant Indian Ocean Research Programme

*****

Famine Looming in South Sudan

Celebrating three years of independence, the world’s newest country is experiencing acute

food insecurity. Aid agencies warn that famine could occur in the coming months as civil

war continues.

Background

Conflict in South Sudan started in December 2013, after the president accused his former

vice-president of attempting a coup against him. The situation escalated when the vice-

president decided to lead an armed uprising. Since then, food insecurity has emerged as a

major issue within the country and is likely to get worse. Tensions between ethnic groups

are adding to concerns, with Navi Pillay, the UN High Commissioner for Human Rights,

warning that ‘many of the precursors of genocide’ are emerging. Food insecurity will be

difficult to tackle amidst the complexities of the conflict and the UN has stated that the food

crisis in South Sudan ‘is now the worst in the world’.

Comment

Fighting in South Sudan has intensified in the last few months. More than one million people

are internally displaced (IDPs) and the number of refugees is expected to reach 715,000 by

the end of the year. According to the UN, out of 10.3 million inhabitants, four million are

facing food insecurity. Children are particularly at risk. Already 235,000 children under five

will require treatment for malnutrition this year. Food insecurity is not new to South Sudan.

The population is highly vulnerable after decades of conflict and instability. In January 2012,

even before the conflict started, the UN had warned of an upcoming food crisis.

In South Sudan, 90 per cent of the population relies on the agricultural sector for their

livelihoods; farming is the primary occupation. With population displacements and growing

insecurity, farmers have missed the planting season, which usually lasts from mid-March to

mid-June. The rainy season has already started and harvests in October are expected to be

insufficient.

Famine could hit the country as soon as the end of August. It is now too late to increase

agricultural outputs for the harvesting season ahead. This will lead to severe food shortages

if food cannot be sourced from elsewhere. It will take some time before agricultural

production gets back to normal, as the conflict has disrupted markets and broken the supply

chain. Even if warring parties were to reach an agreement now, worsening food insecurity is

likely.

Page 7 of 12

At the moment, the population relies on food provided by aid agencies, but the lack of

access and increased risks for aid workers are making it more and more difficult to fulfil their

mission. Aid efforts are also hindered by floods, looting and an outbreak of cholera. The

International Committee of the Red Cross (ICRC) had to organise food airdrops, a method

that they had not used since 1998, in Afghanistan. Aid group Médecins Sans Frontières

reported that the situation was the worst it had seen in years.

Stopping the fighting is essential to reducing food insecurity and overall vulnerability, but is

very unlikely in the short term. At the moment, there is no sign that the situation will

improve. The ceasefire, signed in May, was never applied; just as the commitment to allow

humanitarian corridors was never respected. More diplomatic efforts are needed to prevent

the deadly conflict from turning into genocide.

Given the difficulty of the task, however, the priority here will be to focus on finding funding

for the aid agencies. The UN launched an appeal to raise money for the deteriorating

situation in South Sudan, but said only 50 per cent was funded. As South Sudan cannot face

this challenge by itself, the mobilisation of the international community is essential to avoid,

or at least minimise, what is expected to be the worst famine in more than 30 years.

Soazic Heslot Research Assistant Global Food and Water Crisis Research Programme

*****

Qatari Foreign Policy: A Return to International Mediator

Role?

Qatari involvement in the Israel-Gaza peace process may be indicative of a return to the

role of international mediator, but the pragmatism underpinning Qatari foreign policy

means that Doha may choose to end its support for such groups as Hamas and the Muslim

Brotherhood, if it is deemed to be in the national interest.

Background

Following independence in 1971, Qatari foreign policy was closely aligned with that of Saudi

Arabia. That changed in 1995, when Emir Hamad bin Khalifa al-Thani overthrew his father,

who was favoured by Saudi Arabia, in a bloodless coup. Under Emir Hamad, Qatar pursued a

more independent foreign policy, forging closer ties with the United States and playing the

role of mediator in conflicts in Sudan, Yemen and Lebanon. Qatar’s foreign policy

independence was underpinned by a rapidly growing economy, based on the exploitation of

large oil and gas reserves. Tensions with the other Gulf states emerged during the Arab

Page 8 of 12

Spring, when the Qatari Government supported a number of protest movements that had

gained momentum across the Middle East.

Comment

Qatari Foreign Minister, Khalid bin Mohamed al-Attiyah, recently joined US Secretary of

State, John Kerry, and Turkey to broker a ceasefire deal between Hamas and Israel. The

resulting deal was flatly rejected by Israel for being too accommodating of Hamas’s extreme

demands. It criticised Qatar’s involvement in the process. Responding to the Israeli criticism,

Foreign Minister al-Attiyah told CNN on 10 August, that Qatar wishes to ‘facilitate

communication between the United States, the United Nations, our Arab neighbours, Israel

and Hamas, as the various parties struggle to find a peaceful solution to the violence in

Gaza’.

An Israeli official speaking to a group of pastors on a trip organised by Christians United for

Israel, stated that, although Israel may be pessimistic about Qatar’s involvement, there are

many other players that have interests in the peace process. Qatar’s involvement in the

peace process is part of a recent foreign policy shift. It is focussed on establishing an

international profile as a stable and influential regional actor, which would be a valuable

partner to the West. It was an approach that was also used in Lebanon, where Qatar proved

itself to be a capable mediator, able to make good progress, which resulted in the Doha

Agreement of May 2008. Whether or not other interests will influence Qatar’s efforts in the

Israel-Gaza peace process, is yet to be seen.

Recent developments have revealed holes in Qatar’s current foreign policy towards its

regional neighbours. Saudi Arabia, the United Arab Emirates and Bahrain withdrew their

ambassadors from Doha in early March 2014. The Saudi foreign minister noted in a media

statement that a dispute over Gulf security will not be solved unless Qatar ends its support

for the Muslim Brotherhood. Qatari support for Islamist organisations, such as the Muslim

Brotherhood, has strained relations within the Gulf. Qatar’s neighbours perceive these

movements as very real security threats. According to Bernard Haykel, professor at

Princeton University and director of the Transregional Institute, however, Qatar’s support

for Islamist organisations has worked in its national interest by further strengthening the

legitimacy of the al-Thani family.

Although some Qataris may subscribe to views that are similar to those held by the Islamists

being supported by the Qatari Government, many deeply religious members of the royal

family have been politically sidelined and are unable to be involved in the relationship with

those organisations. This discounts assumptions that Qatar’s foreign policy in the Middle

East is ideologically driven. Instead, Qatari foreign policy is essentially driven by national

interest and is thus largely pragmatic in nature.

Qatar’s relationship with the United States has continued to blossom since the first Gulf War

in 1991. Qatar currently serves as a host to major US military facilities, including the largest

US foreign air base, at al-Udeid. Recently an arms deal worth US$11 billion was signed, along

with a ten-year Defence Co-operation Agreement. Bilateral trade has also been strong, with

US exports to Qatar reaching US$3.8 billion in 2013, double the previous year. The recent

Page 9 of 12

leadership transition in Qatar has not hampered the future outlook for US-Qatar relations,

either. The new Emir, Tamim bin Hamad al-Thani, is expected to continue following a similar

path to that taken by his father: actively pursuing the national interest, while bolstering

relations with the US and continuing the domestic focus on economic development and

diversification.

Qatar’s current foreign policy is driven by a largely pragmatic approach, both regionally and

globally. Doha’s recent involvement in the Israel-Gaza peace process indicates that Qatar

will pursue a foreign policy focussed on creating an international profile that presents it as a

stable and influential regional actor, which the West can rely on to promote peace and

security in the region. That goal is hindered by the regional fallout of its support for a

number of Islamist organisations that some of its neighbours have labelled as promoters of

terrorism. That support, however, is an attempt to promote Qatar as valuable partner for all

sides, not only to the West. But that same pragmatic approach means that Qatar may yet

withdraw that support, if those groups prove to be too much of a hindrance in its

relationship with the US.

Jarryd de Haan Research Assistant Indian Ocean Research Programme

*****

Indonesia Must Do More to Fight HIV/AIDS Scourge

A recent report claims that Indonesia is losing the fight against HIV, with a dramatic rise in

incidences over the past few years. While Jakarta has implemented a number of impressive

programmes, a shift in attitude is sorely needed to address the growing crisis.

Background

Experts have warned that Indonesia is losing the fight against HIV, with a significant upsurge

in AIDS-related deaths recorded between 2005 and 2013. According to the 2014 UNAIDS

Gap Report, released on 16 July, the country is ‘being left behind’ and faces ‘the triple threat

of high HIV burden, low treatment coverage and no or little decline in new HIV infections.’ In

fact, while incidences of the virus are falling around the world, the spread of HIV has risen

across the archipelago. Jakarta insists it is on the right track, but a renewed focus, including

a shift in attitude, is sorely needed if the crisis to be addressed successfully.

Comment

A new report by the UNAIDS has identified Indonesia as one of six countries globally that are

‘being left behind’ in the fight against HIV. According to the Geneva-based organisation,

Indonesia, along with the Central African Republic, the Democratic Republic of the Congo,

Page 10 of 12

Nigeria, Russia and South Sudan, must do more to improve treatment coverage and reduce a

worrying increase in HIV incidences.

The embarrassing comparison to some of the poorest countries in the world was questioned

by some Indonesian officials, with Indonesian Health Minister Nafisiah Mboi criticising the

details of the report. Yet the overall picture is grim: between 2005 and 2013, the report says,

there was almost a 50 per cent increase in new infections in Indonesia, with a 427 per cent

rise in AIDS-related deaths during the same period. By contrast, neighbouring countries,

including Cambodia, Thailand and Burma/Myanmar all posted steady falls. That means that

Indonesia now has the third-largest number of people living with HIV in the region. Just as

worrying, too, is the fact that only eight per cent of those living with HIV in Indonesia are

using, or have access to, antiretroviral drugs.

Explanations for the upsurge in HIV incidences in Indonesia are not clear-cut. Local HIV/AIDS

experts acknowledge the increase in new infections and deaths. But they also point out that

the epidemic is a new phenomenon in Indonesia compared to other states in the region;

after a rapid spike in infections, they say, numbers are likely to level off. That could prove to

be the case. Countries such as Cambodia and Thailand have both managed to rein in the

deadly disease after experiencing highly publicised crises in the late 2000s.

Still, that is only a part of the dilemma facing Indonesia. Jakarta has implemented some fine

programmes and has important long-standing partnerships with donors, local communities

and international organisations. But deep-seated cultural attitudes make it virtually

impossible to combat HIV. For instance, although nine per cent of Indonesian sex workers

are HIV positive, compared to just 0.3 per cent of the general population, the country has

some of the most draconian laws against sex workers in the region; this is despite the fact

that criminalisation of sex work is one of the most significant barriers to controlling the

transmission of HIV among sex workers. Improving the conditions of sex work, rather than

dismissing it as “immoral” and running it underground, is urgently needed.

As 42 per cent of Indonesians with HIV are aged between 20 and 29, making sex education a

compulsory subject in Indonesian schools is also vitally important. Unfortunately, the taboo

that continues to surround sex means that many young people go without sexual education.

As a result, they are often are hopelessly unaware of the dangers. According to a 2011

survey by the Ministry of Health, only 20 per cent of Indonesians aged between 15 and 24

had comprehensive knowledge of HIV. That makes prevention a particularly challenging task

for health workers on the front lines.

Similarly, although the HIV rate is devastatingly high among drug users in Indonesia, with

more than one-third of all new cases due to intravenous use, many people are slow in

seeking help. This is not surprising given the harsh laws against drug use and the

discrimination and stigma that surround it. Yet, in nearby Vietnam and China, a gradual shift

in attitudes has seen the rollout of a number of drug treatment programmes aimed at

reducing the frequency of intravenous drug use. Indonesia would do well to follow suit.

While Jakarta has made some impressive strides to combat HIV in recent years, a shift in

attitude, to one that involves helping the most vulnerable, is now needed. Ultimately, no

Page 11 of 12

amount of programmes will reverse the worrying increase of HIV incidences in Indonesia if

those that are most in need are unable or unwilling to access them. That must change.

Andrew Manners Research Analyst Indian Ocean Research Programme amanners@futuredirections.org.au

*****

What’s Next?

Trade and Investment Minister Andrew Robb is heading a business delegation to Singapore from 20 August that is to promote broader economic ties between Australia and Singapore.

Chinese and Uruguayan authorities will meet on 20 August to discuss sanitation measures and other requirements for increasing Uruguayan agricultural exports to China.

Chinese President Xi Jinping will visit Mongolia on 21 August. President Xi is expected to discuss a natural gas project and supply accord with China.

French President François Hollande will visit the Indian Ocean island départments of La Réunion and Mayotte on 21 and 22 August, before travelling to the Indian Ocean Commission summit.

Thailand’s National Legislative Assembly is to appoint an interim prime minister by 22 August.

Mamata Banerjee, Chief Minister of the Indian state of West Bengal, continues a six-day visit to Singapore until 22 August. Ms Banerjee is heading a business delegation of 12 Calcutta industrialists and local chamber of commerce presidents.

The rescheduled fourth Summit of Heads of State and Government of the Indian Ocean Commission (Commission de l’Océan Indien) will take in place in the Comorian capital, Moroni, on 23 August. The theme of the summit is “Indianocéanie: Building a Future Together”.

Dhaka will host a two-day Business Conclave held by the India-Bangladesh Chamber of Commerce and Industry on 23-24 August.

The Foreign Secretaries of India and Pakistan will meet in Islamabad on 24 August.

Russian, Kazakh, Kyrgyz and Tajik troops will conduct joint counterterrorism drills in China’s Xinjiang province from 24-29 August.

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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