Brunei silenced on South China Sea claims

Apr 30, 2016

Brunei is an absolute monarchist, Islamic state of 420,000 people on the north coast of Borneo, wedged into the Malaysian state of Sarawak. Indonesia and Malaysia own 99 percent of Borneo, which is the third largest island in the world, located at the maritime center of Southeast Asia. It has become a key pawn in China’s offense to control the South China Sea.

The United Nations Permanent Arbitration Court in The Hague is due to rule on the Philippines’ claim to the Scarborough Shoal – expected end-May or June. China is scrambling to find global and regional support for “direct bilateral negotiations” rather than international arbitration. It refuses to recognize the jurisdiction of the Court and says it will not abide by its rulings.

China is particularly keen to disable ASEAN from uniting against its ‘nine-dash line’ claim to 90 percent of the South China Sea. It has declared that Laos and Cambodia agree disputes should be settled through direct bilateral negotiations. It has now added Brunei to that list, removing three of the 10 members of ASEAN, which works only through group consensus.

‘Resource Curse’ grips Brunei

Over three decades since its independence from Britain in 1984, the kingdom flew on the magic carpet of oil and gas exports. Earnings from this natural resource enabled its society to be tax-free and well-provided with employment, public health, subsidized housing and free education. Its 29th Sultan, Hassanal Bolkiah, is one of the world’s richest men, with personal net worth estimated at US$20-27 billion.

The oil price is now off 70 percent from its 2008 peak. Like all countries overly dependent on commodity exports, Brunei suddenly finds itself hostage to a global pricing slump. As 90 percent of government finances come from oil and gas, that has unhinged the entire economy. Plans to diversify from oil dependency are drafted in an ambitious grand plan called Vision Brunei 2035. Almost 80 percent of citizens are employed directly by the government or its statutory corporations.

Brunei’s ground oil reserves are estimated to run out in two decades as well. Deep-sea drilling and exploration for oil and gas, is prohibitively expensive. China has reached out to jointly explore deep-sea opportunities for production sharing. Brunei has accepted the deal and made its peace on overlapping sea claims.

Aside from The Philippines, the other littoral ASEAN states with Exclusive Economic Zones (EEZs) cutting across China’s nine-dash line are Brunei, Malaysia, Indonesia and Vietnam. The United Nations Convention on the Law of the Sea (UNCLOS) grants an exclusive economic zone of 200 nautical miles off the coasts of maritime countries.

Establishing facts & dishing cash

China’s nine-dash line claim is recognized by no international body. It converts its claim into practical reality through forward deployment and occupation of islands in dispute. It is doing so at speed.

ASEAN states’ EEZs will remain unexploited, without the cash to invest in deep-sea drilling tests, and technology to extract reserves. China has the financial capacity to fund deep-sea exploration and the strategic need for hydrocarbon energy. It is using the cash bait to co-opt littoral ASEAN states into its South China Sea co-prosperity scheme. It also has infrastructure goodies on offer in its ‘Belt and Road’ master plan.

Block passage, checkmate Taiwan

Brunei is an important pawn neutralized on the chessboard, to stymie any ASEAN pushback. The parallel strategic benefit for China in the South China Sea, would be military control over these waters, to choke timely arrival of US Forces to defend Taiwan or Japan – both of whom have defence pacts with the USA.

China calculates that the US would rather avoid confrontation with an assertive power with military assets in place. Its South China Sea militarization is rapidly reaching critical mass. The US has shown no firm resolve to challenge that. The ASEAN nations have no capacity to stop China’s navy, or its rampaging fishing fleets.

The reunification of Taiwan is a highly charged national dream which President Xi Jinping has stoked. He already enjoys huge popularity with the masses – although not in Taiwan – for his sustained anti-graft campaign, which has snagged ‘tigers and flies’ at all levels of the government and party – sweeping away factions and personalities opposed to his unprecedented consolidation of personal power.

He has seven more years left of his two-term limit. If Taiwan is reunited with the mainland under his watch, Xi would be elevated to the level of Mao and Deng, on the altar of historic CCP heroes. Neither of these CCP strongmen could lock-up Taiwan. The last ruler who unified China was Emperor Qin Shi Huang in 221 BC.

Control over the South China Sea would bring that glorious day closer. US aircraft carriers just need to be delayed long enough for the PRC to reintegrate Taiwan. Political formulae for a high degree of autonomy and a separate local legislature, are well discussed exchanges in the long-running cross-straits talks.

After all, the US has accepted One-China sovereignty. It would be checkmate and game for China, without a shot being fired. Isn’t that what war strategy is all about – winning without a fight?