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Ladies and Gentlemen
It’s both an honor and a privilege to welcome you here in Berlin. We’ve come together today in a new cross-regional format to take a fresh glance at an up-and-coming geopolitical and geo-economic area.
International actors have raised the stakes in East Africa. There are many telling indicators: Consistent and remarkable above-average growth over the past decade. Increasing economic and political integration within the East African Community, the EAC. The wealth of natural resources, including oil and gas finds. They all tell us, that East Africa is poised to become one of the most promising post-BRICS emerging markets in the global context.
But there’s more to today’s conference. While our topic here is East Africa, our vision goes well beyond one region. The world of the 21st century is “hyper-connected” and very complex, which holds opportunities and challenges alike.
Your regions, ladies and gentlemen, are of utmost strategic relevance: all three – Africa, India, China. For you, of course, but no less for us here in Europe. After the Atlantic and the much hyped “pivot” to Asia – to the Pacific –, I believe that the Indian Ocean will be the new center of the international limelight.
Why is the Indian Ocean region so important?
Firstly, it is a littoral region which is economically thriving and continuously gaining stability. It is littorals where global issues like climate change, sea level rise, urbanization, population growth become most relevant. One third of the world’s population already lives in the 37 states around the Indian Ocean. The Indian Ocean is quite simply one of the world’s maritime lifelines and one of its most strategic flashpoints. This says something about the relevance of great security risks in fragile parts of the region, of political voids, of governance vacuums.
Secondly, it spans a truly vast area. It stretches from East Africa’s shores on its western side, encompasses the Arabian Sea, the Persian Gulf, the Bay of Bengal up to Indonesia on its eastern side. And it is connected through the Strait of Malacca to the South China Sea and through the Red Sea to Europe. Already 500 years ago, Muslim-Hindu Indian Ocean trade connected Java in the east to Zanzibar and Mombasa in the west, well before the arrival of Vasco da Gama and other Europeans after him. These centuries old trade connections regain their strength.
Thirdly, Asia’s rising powers look towards Africa. Asia’s three major economic powers China, India and Japan and other Asian tigers are looking towards Africa for resources, a continent with 40% of the world’s raw materials, food and energy resources. China already gets one third and India a fifth of its oil supply from Africa. Strategic oil and gas finds off East Africa’s coast will again change that equation and increase its geopolitical relevance.
Geography, however, is static. Policy is not. The way we manage the risks, the security voids, the governance gaps, the challenges, the opportunities will impact on the prospects and the stability of the region. The way and the degree in which we cooperate (or expand cooperation) will impact on the prospects and the stability of the region. The way or the degree in which we compete (or limit competition) will impact on the prospects and the stability of the region.
I can think of three very different scenarios involving Africa, India and China. One would involve conflict. The second would amount to a stalemate. And the last – and by far best – of all would yield sustainable and mutually reinforcing growth. Let me explain.
First, there’s the conflict scenario. Let’s have a look at the map. The map shows us where influence of today’s major powers overlap in the Indian Ocean, and it shows who is geographically best positioned to pursue their respective national interests.
Nowadays, with compelling energy and resource security needs, there is increasing competition in the oceans. We see rapidly increasing naval presences in the Indian Ocean. With countries steadily expanding their military naval capacities to underpin influence, there is always a risk that the situation could harden. In this scenario, opportunities – be they political or economic – are lost, at best.
Confrontation looms large. The second scenario is stalemate. Let’s assume that wise governments and patient navy commanders refrain from open confrontation. Which indeed they normally do, jointly protecting key trading routes in piracy hotspots like the Horn of Africa or the Strait of Malacca. So in the world of stalemate we would not see hostile posturing, nor harassment of merchant ships or tankers, and no excessive arms race. Instead, we would see cautious planning, and a healthy degree of mistrust. On the bright side, this would not trigger a downward spiral. But it would not unlock the region’s huge potential either. Again, opportunities would be lost.
Now let’s take a look at the best case scenario – cooperation. Imagine what could be achieved if East Africa, India and China could agree on a mutually beneficial exchange of trade and investment, of development and resources, of ideas and cultures. East Africa would benefit from a strong China and a dynamic India. The soaring interest of emerging donors and a larger number of external players would lead to Africa’s international revaluation. This would bring about higher growth rates, possibly a diversification of trading partners and easier access to loans.
To be sure, it’s not all about oil and gas: A number of countries in East Africa like Ethiopia, Uganda and Rwanda would manage to sustain high growth rates which were not mainly due to the resource sector. It could be attractive for all trading partners to look for market outlets which would have winners on all sides.
There would be healthy competition in this region, to be sure: certainly commercial, possibly political, but not military. To be quite honest, our German business community would also compete with you. As they do anywhere in the world.
Why am I telling you all this? And why in Berlin? What is Germany’s interest in that region? Just as China is connected to the Indian Ocean on its Eastern side by the Strait of Malacca, Germany and Europe are connected to it by the Suez Canal on its Western side. Neither China nor Germany is a rim country, but as the world’s strongest export nations we both have an eminent interest in open sea lanes of communication and free trade.
Globalisation has changed the nature of power. Global power shifts have been triggered by impressive economic growth, even if UN structures still reflect a world order based on military power.
If we look at the economic data, Germany is – just like China – a strong trading partner for the Indian Ocean rim countries. Trade and economy hinge on security and stability. We realize that. The EU-Operations Atalanta and Nato’s Ocean Shield have done much for combating piracy in that previously haunted waters. We have taken on a responsibility that benefits all. And it reflects what I believe should be a shared interest in stable political conditions and rules of cooperation. Of course, we want both because ruled-based systems would guarantee all nations the same rights and opportunities to growth and prosperity. But when we state our interest in secure and stable conditions for trade and cooperation with Indian Ocean rim countries, and beyond, we believe it goes both ways. After all, we are the world’s largest and arguably most innovative free trade area, and the Indian Ocean is your pathway to it.
Security also involves burden sharing in stabilizing fragile, underdeveloped countries. The case of Somalia has shown us that threats and risks for all of us can stem from neglect and absence of support in the Indian Ocean region.
Thus, we want to strengthen and render more dynamic cooperation and interconnectedness, interaction and interdependence in the Indian Ocean region. We want to strengthen and render more dynamic the Indian Ocean Trade System. After all, trade is a great equalizer among countries, cultures and religions and perhaps the best means to prevent conflict and confrontation.
These were just a few random thoughts, quite unfinished and speculative. I hope they will challenge us to step up our efforts – both intellectual and diplomatic – to make our gathering here today worth your time. Let me say that I greatly appreciate your contribution to this exercise, and I wish you all a stimulating and productive conference.
Thank you very much.