US seeks to neutralise China influence in Bay

By Shubha Singh May 10 2012

US secretary of state Hillary Clinton assured investments for West Bengal, confirmed the bounty on Lashkar-e-Taiba chief, Hafiz Saeed, and urged India to further reduce oil imports from Iran during her four-day tour of India. Clinton’s visit to Bangladesh, first by a top US functionary in several years, signalled Washington’s new focus on the region, taking US-Bangladesh relationship to a new plane, with plans for regular annual consultations.

On her part, West Bengal chief minister Mamata Banerjee claimed that Clinton did not raise touchy issues relating to the Teesta River agreement or foreign investment in retail trade. While Clinton may not have mentioned the water agreement, the issue remains important for the region. Bangladesh foreign minister Dipu Moni, who was in Delhi at about the same time as her American counterpart, said the Teesta River water agreement was pivotal to improving relations between India and Bangladesh. The US wants closer ties between the two neighbours, which means encouraging greater cooperation among the Bay of Bengal rim countries.

Cordial relations between the rim countries has to be viewed in the context of the larger American strategy for Asia, especially following the changes taking place in Myanmar. During her visit to India last year, Clinton travelled to Chennai where she stressed on Chennai’s historic ties with countries across the Bay. She had then described India, together with the US, as “stewards” of the waterways from the Pacific Ocean to the Indian Ocean. Both countries were deeply invested in “shaping the future of the rapidly changing region they connect”, she had added.

Kolkata is the other great port on the Bay of Bengal and would be the natural gateway for trade and commerce with Bangladesh and the newly opening economy of Myanmar.

The United Nation’s International Tribunal for the Law of the Sea (ITLOS) verdict on the disputed maritime boundary between Bangladesh and Myanmar earlier this year has opened enormous opportunities for oil and gas exploration. Bangladesh’s oil exploration strategies have been hampered by disputes with Myanmar over the maritime boundary. With a settled boundary, both countries can now consider offering new blocks for offshore oil and gas exploration. Myanmar has already held a prospective investors’ conference in April. The Bangladesh government plans to hold a new round of bidding for awarding exploration rights.

Foreign oil companies have shown interest in oil exploring in Bangladesh waters. Among them is ConocoPhillips of the US, which had to forego its exploration rights in 2008 after the dispute erupted with Myanmar. Chinese oil companies, which are active along the Myanmar coast, have also shown interest in Bangladesh oil reserves.

The US would like to neutralise the growing Chinese influence in the Bay of Bengal region by promoting greater interaction among littoral states. India is an obvious customer for surplus oil and gas production in the Bay. Indian oil companies were edged out by China when it tied up a purchase agreement with Myanmar’s military junta for oil from wells drilled with Indian collaboration. Friendly, cooperative relations between the littoral states of the Bay of Bengal would ensure that outsiders do not get easy access to the region.

India and the US have several areas of convergence, including Afghanistan and Central Asia. They also hold similar views on China. The bilateral relationship has acquired a momentum that is carried forward by regular consultations, and is not impeded by differences of opinion. There is growing understanding of their differing perceptions regarding Iran, as external affairs minister SM Krishna pointed out Iran’s importance to India’s energy security.

Bilateral trade between India and the US is growing, and is expected to touch $100 billion this year. Investments by either country in each other’s economies have been increasing. Indian investments in the US went up by more than $26 billion during 2004-2009. There is movement on the issue of nuclear energy cooperation with American companies having begun “substantive” discussions with the Nuclear Power Corporation of India in recent months. The third meeting of the Indo-US strategic dialogue due in Washington next month would take forward the bilateral exchange.

The writer is a foreign affairs correspondent