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Subject: [INDONESIA-P] WSJ - US Navy Wants Southeast Asia Sea Lanes Open
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Subject: [INDONESIA-P] WSJ - US Navy Wants Southeast Asia Sea Lanes Open
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INDONESIA-P
The Wall Street Journal Interactive Edition[ISMAP]-Asia
[ISMAP]-Table of Contents
March 19, 1997
U.S. Navy Stresses Need to Keep
Southeast Asian Sea Lanes Open
By EDUARDO LACHICA
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- The U.S. government needs to commit itself to keeping
Southeast Asia's strategic sea lanes open to commercial ships, a U.S.
navy-sponsored study says.
That's because closure of Southeast Asia's strategic waterways for an
extended period could seriously harm Asian economies with which the
U.S. has important trading links.
The study is the U.S. defense community's first hard look at the
economic consequences of the possible disruption of merchant shipping
in the straits of Malacca, Sunda and Lombok and in the disputed waters
around the Spratly Islands. Protecting these sea lanes for economic
reasons should become "as important a national priority as protecting
them for military reasons," says John Noer, the head of a Center for
Naval Analyses team that produced this extensively researched work.
The study also concludes that Japan and other Asian countries that
depend heavily on seaborne trade should assume more of the burden of
keeping these waterways open.
Heavy Traffic
An enormous amount of trade flows through these sea lanes. In 1993,
boats passing through carried $568 billion of cargo, or more than 15%
of the world's cross-border trade, not counting a still unmeasurable
volume of intraregional shipping that also uses these routes, the
study says. The CNA team reports that in 1993 alone 1,121 supertankers
with cargoes valued at $35.3 billion sailed eastward through the
Malacca strait, headed mostly for Japan and other Northeast Asian
economies.
Since more than half of the world's registered tonnage transits these
sea lanes, a local maritime contingency can quickly turn into a
"globalized economic event," says Mr. Noer. The study notes that these
chokepoints can be effectively closed even without being physically or
militarily blockaded. If the Spratly waters are declared a war zone,
for instance, shippers would be compelled by prohibitively high
insurance rates to reroute their cargoes through the Sunda, Lombok or
Makassar straits at higher shipping costs.
The "worst case" that the study envisions is the shutdown of all four
strategic waterways as a result of regional conflict or a failure of
international freedom-of-navigation conventions. Such an eventuality
would require a detour of oil and other bulk shipments to a much
longer route around the southern coast of Australia.
Impact on Japan
The shipping industry would be the only winner if such a disruption
occurs. Most of the world's idle vessels would have to be called back
into service and freight rates might rise by as much as 500%, the
study says,
Japan would be among the hardest hit. Some 42% of its (two-way)
maritime trade with a combined value of $255 billion passed these
waterways in 1993. And if Japan's supplies of crude and liquefied
natural gas from the Persian Gulf have to be diverted around
Australia, as much as $1.5 billion would have to be added to its
shipping costs alone, the study says.
Japan also has a major stake in these routes as a ship-owning nation.
In 1993, it owned 27.6% of the tonnage that passed through the Malacca
strait, or four times more than any other nation, the study says. The
next largest owners of this tonnage were Greece, the U.S., Britain and
Singapore. Many of these vessels carried Panamanian, Liberian or other
flags of convenience.
Southeast Asian countries also could be severely affected by an
interruption of normal traffic. Some 55.4% of the maritime exports of
the region moved through these sea lanes in 1993. Singapore in
particular could be badly hurt since the indefinite closure of these
sea lanes would also have the effect of shutting down or severely
reducing its port and oil-refining operations. Australia's trade
likewise would suffer since nearly 40% of its exports and 53% of its
imports move through these routes.
Even with less than 4% of its maritime shipments dependent on these
sea lanes, the U.S. still has a vital economic stake in keeping them
open. "Our own prosperity is linked to the economic health of those
Asian countries," Mr. Noer says. American consumers are bound to feel
some pain, too, as rising freight rates world-wide makes imported
goods more expensive.
U.S. Navy's Role
The study is circulating among the U.S. navy brass amid an intense
review of post-Cold War roles and missions. Some navy planners want to
shift more resources toward "littoral," or close-to-shore operations
in support of ground troops, but the CNA study may justify a
continuing sea lane protection role for the U.S. Seventh Fleet.
The study recommends exercises among "cooperating navies" to practice
escorting merchant fleets through alternate routes in the event of the
closure of the Malacca strait or the Spratly passages. It also calls
attention to problems of maritime safety in that strait which is
dangerously shallow and narrow in places. Malaysia and Indonesia have
sought voluntary contributions to improve navigational and safety
aids, but aren't getting an adequate response from Japanese and other
shipowners, according to the study. The competing claims of
navigational safety, national sovereignty and the
freedom-of-navigation principle are yet to be fully resolved, Mr. Noer
says.
The study does cite one "stabilizing" factor. The countries most
capable of defending or closing these sea lanes also have strong
economic reasons for keeping them open. For instance, China's military
actions could make the Spratly route effectively impassable for
maritime traffic but such actions also would put at risk some $31
billion in annual Chinese trade with other countries.