17 April 2013 | Vol. 4, № 12.

From the Editor’s Desk

Dear FDI supporters,

Welcome to the Strategic Weekly

Analysis. This week’s issue starts with the

recent agreement between Australia and

India to share Australian water modelling

technology, to assist India in developing

water resource management plans to

address its worsening water security

issues.

We then look at the impending Malaysian

election and the effect of the increasingly

cosmopolitan nature of its population.

Sticking with election commentary, we

examine the role of the controversial

Narendra Modi as the likely candidate for

India’s BJP opposition party in the

upcoming elections.

Still in India, we look at their UN

Peacekeeping presence. We ask whether

its contributions to the international

humanitarian and peacekeeping

operations are as a responsible global

citizen, or a more calculated approach to

win a seat on the UN Security Council.

We also look at the upcoming elections in

Pakistan and Afghanistan, in particular the

role of the increasingly radicalised and

irrational youth votes.

Across the gulf we examine the

consequences of the recent US$5 billion

loan given by Qatar and Libya to Egypt to

aid in its economic concerns. Will the

gesture reduce or only increase Egypt’s

problems?

Finally we look at Africa. Here we analyse

Ethiopia’s potential to continue East

Africa’s energy surge as a result of recent

oil and gas exploration and production

reports from SouthWest Energy.

I trust that 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 17

*****

Murray Darling model to support water management in India

Australia and India have signed an agreement to share Australian water modelling

technology that will assist India to develop water resource management plans to address

its looming water insecurity.

Background

In October 2012, the Australia-India Water Technology Partnership was announced;

initiating bilateral collaboration on the common challenge of managing scarce water

resources. The agreement’s first stage began on Wednesday 10 April, with the signing of a

memorandum of understanding between the Indian Institute of Technology and the publicly

owned Australian NGO eWater. It covers the sharing of Source, a hydrological modelling

platform developed to improve water management in the Murray Darling Basin.

Comment

In its Asian Water Development Outlook 2013, the Asian Development Bank assessed India’s

water security outlook as ‘hazardous’, citing inadequate levels of public investment,

regulation and enforcement and particularly poor environmental, urban and household

water security prospects. India’s National Geophysical Research Institute estimates that

ground water supplies in Hyderabad could run dry in about three years, with Delhi

experiencing the same difficulty within five years. India’s water demand is forecast to be

more than double its available supplies by 2030. As groundwater supplies dwindle, closer

attention is being paid to the management of surface water resources and river basins.

India’s Ganges river system is toxically polluted and the mixed use of the river poses serious

challenges to public health, food security and the supply of clean water.

The Water Technology Partnership (WTP) is an A$12 million dollar project that will run for

four years. It will involve eWater, AusAID, CSIRO and the International Centre for Excellence

in Water Resources Management. There are similarities between India’s river basins and the

Murray Darling Basin; both experience highly variable rainfall, competing water demands

from various sectors, inter-state conflict over water rights, and they are subject to threats

from climate change.

Australia is a global leader in water resource management and the only country in the world

with a fully-fledged drought policy. Decades of investment in water research and extensive

water reforms recently allowed Australia to successfully steer through South Australia’s

worst drought on record. The hope is that this capability can be of assistance to India, where

the government has identified “drought proofing” to be a national priority, as the state of

Maharashtra experiences its worst drought in over four decades.

Source is an integrated river basin-scale water modelling system, developed in Australia over

fifteen years at a cost of more than A$300 million. Its enterprise platform provides data

necessary to develop integrated water management strategies. The first stage of the WTP

involves piloting the application of Source in the Brahmani Baitarani river basins in eastern

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India. The riparian zone of the Brahmani Baitarani basin contains three of India’s poorest

states: Odisha, Jharkhand and Chhattisgarh. In developing water management plans, India

will face different challenges to Australia. Factors like farm size and poverty levels will render

successful Murray Darling mechanisms, like water pricing, inappropriate. Despite this,

Professor Ashvin Gosain, who will head IITs programme, says Source will ‘allow models for

India’s future water use and needs to be built, to determine where water should be

allocated.’

Patrick Suckling, the Australian High Commissioner to India has said that ‘this agreement

marks a high point in our bilateral cooperation on water resource management. The

technology transfer and partnership demonstrates our commitment to sharing expertise to

support sustainable development in India.’ Efforts to improve water management,

particularly of river basins, are essential to securing India’s future water supplies and

minimising the threat of regional conflict. In addition to pressures from overconsumption,

drought and declining water quality, India is likely to face reduced water flow in coming

years as the upstream states of China and Pakistan construct dams on upper reaches of

major subcontinental river systems. Having sound water management systems in place may

reduce the risk of such developments inciting international conflict. Future Directions

International will further explore these issues in an analysis of river based areas of potential

conflict to be released later this year.

Lauren Power Research Analyst Global Food and Water Crises Research Programme lpower@futuredirections.org.au

*****

Increasingly Cosmopolitan Malaysia Heading for Close

Elections?

The Malaysian electorate for the upcoming national election is very different, in

geographical location and age, even from that which voted in the 2008 election. These

changes have made the result the most difficult to predict in years.

Background

Malaysia’s unique historical circumstances have seen its ruling Barisan Nasional (BN)

coalition effectively maintain an uninterrupted grip on power since independence in 1957.

An earlier history of ethnic conflict and widely held apprehension over its potential return,

has given rise to an ethnic power-sharing model of governance by the BN coalition.

Democratic shifts however, have created a more urban and cosmopolitan Malaysia, easing

those fears, but also reducing support for this model, known as “consociation”.

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Comment

During the Malayan Emergency, under the Briggs Plan almost half a million people were

identified by the British as actual or potential communist supporters. They were forcibly

relocated and confined to designated areas. Over 85 per cent of these people were ethnic

Chinese, mostly small-scale “squatter farmers”. Courting their support in the conflict, these

large areas, known as “New Villages”, were well serviced by new British-supplied utilities

and infrastructure, albeit behind security fences and guard towers. On the one hand, this

produced resentment among the non-Chinese, especially the Malay population, whose

neighbourhoods were not so well cared for. When the conflict ended, many Malaysian

Chinese remained in these areas, creating ethnic-Chinese neighbourhoods. On the other

hand ethnic tensions were strained by often discriminatory British colonial policies, which

sought to protect the Malay population from the perceived threat of Indian and Chinese

mass immigration.

After it gained independence, Malaysia’s new constitution granted citizenship to its

previously-unlawful Indian, Chinese and other non-Malay populations. In return, these

ethnic groups were compelled to accept the constitutional enshrinement of “Malay

Dominance”. Under Article 153 of the constitution, the King has in fact a responsibility to

‘…safeguard the special position of the Malays’. Accordingly, ethnic Malays continue to

enjoy various state-sanctioned forms of affirmative action and/or positive discrimination.

When this is combined with Malaysia’s idiosyncratic history, there is some reason for

concern over possible ethnic conflict.

It is precisely such national apprehension that has seen the emergence of, and continuing

public support for, Barisan Nasional’s “consociational” model of government. It is often

claimed that this form of governance is useful in countering ethnic or other social divisions.

It tends to involve élite representation of most, if not all groups or parties concerned. Final

decisions require consensus, with each group holding veto a power. Each group enjoys

representation in state agencies and other positions, roughly proportional to their

percentage of the relevant population. Culturally-based community laws allow each group to

determine its own policies on culturally-sensitive issues1. Historically, this model has been

popularly supported as a buttress against national division, but public opinion is shifting.

The demographic profile of Malaysia, in particular that of its electorate, is changing in two

significant ways. First, among the approximately 13 million Malaysians who will vote in the

coming months, around 3.2 million will be first-time voters (owing almost exclusively

because they have recently reached voting age). Over the longer term this is likely to have

two effects. It diminishes the influence of historical factors among the generation of voters

born after the worst of Malaysia’s ethnic turmoil. Second, a common critique of the BN

government has been that it has co-opted the various organs of state, especially state-run

media, for its own political ends. As a result, the distinction between state, government and

party/coalition has become blurred. But the on-line media, most popular among the

relatively young, has largely managed to avoid such government influence. Consequently, it

1 A. Lijphart, Democracy in Plural Societies: A Comparative Exploration, New Haven CT, Yale University

Press, 1977.

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has been far more critical of the BN government, possibly influencing the outlook of young

Malaysians.

The second major demographic change in Malaysia – as elsewhere around the world – has

been large-scale urbanisation, with non-urban areas depopulated accordingly. This is

particularly relevant to Malaysian politics, as urban areas tend to be ethnically diverse, while

non-urban ones are more ethnically homogeneous. Urban migration is thus leading to more

cosmopolitan outlooks, as primarily ethnic identities give way to a more cohesive national

one. Ethnic Malays, Indians, Chinese and others are increasingly thinking of themselves as

Malaysians, diminishing the potential for ethnic conflict.

Few pundits are prepared to predict the upcoming election result, polls remain tight, and

there is still some ethnic tension in Malaysia. With an increasingly confident opposition

movement, the BN coalition will have to rely on more than traditional support for its

“consociation” policy to maximise its electoral chances. The recent announcements by Prime

Minister Najib Razak, of increased welfare and transfer payments and government

concessions and subsidies, may be indicative of this. Whether these and other measures are

enough remains to be seen, but this and future Malaysian elections will be decided by an

increasingly younger, more cosmopolitan electorate.

Jeff McKinnell Research Assistant Indian Ocean Research Programme

*****

The Modi Factor in India’s 2014 Elections

Narendra Modi, Gujarat’s Chief Minister, has the populist vote in his home state.

Allegations he knowingly permitted violence against the Muslim minority there in 2002,

however, has polarised public opinion in the rest of India about his suitability for the role

of Prime Minister.

Background

India’s opposition Bharatiya Janata Party (BJP) has not yet announced who will be Prime

Minister should they win the 2014 general election. The Gujarat Chief Minister, Narendra

Modi, appears to be the most likely person. Modi is a polarising figure; while his economic

and administrative achievements in Gujarat are lauded by his supporters across India, in the

minds of his detractors he is inextricably linked with the organised, anti-Muslim violence of

February 2002.

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Comment

India’s Lok Sabha, the Lower House of Parliament, comprises two main alliances - the ruling

United Progressive Alliance, dominated by the Indian National Congress, with 226 seats, and

the BJP-led National Democratic Alliance with 155. The Indian National Congress (Congress)

has been led by a member of the Nehru-Gandhi dynasty since 1947. The BJP, on the other

hand, allegedly answers to the nationalistic Rashtriya Swayamsevak Sangh (RSS), which

together with the Vishwa Hindu Parishad (VHP) espouses Hindutva or Hindu principles. The

RSS wants to return India to its Hindu roots. The BJP, which belongs to the same nationalist

umbrella organisation as the VHP, the Sangh Parivar, emphasises India’s Hindu roots but

does not, for political expediency, call as stridently for this goal.

The Congress is a quintessential part of India’s freedom struggle. It has governed India for

most of the time since its independence. Its locus has been the Nehru-Gandhi dynasty.

Jawaharlal Nehru fought for independence alongside Mohandas Gandhi and became India’s

first Prime Minister. His daughter, Indira, followed him. Her son, Rajiv, also served as Prime

Minister. Rajiv’s wife Sonia is the current leader of the Congress Party and their son, Rahul,

who is the deputy leader of the Congress Party, is allegedly being groomed to govern India.

Lacking this unique personification, the BJP inducted Mahatma Gandhi’s grandson into the

party but without much success because it lacked a drawcard. Enter Narendra Modi.

Modi’s is, to mix metaphors, a rags-to-king-of-the-hill story. Though from a poor family, he

became Chief Minister of Gujarat which, under him, has gone from being an also-ran to a

major investment destination. He cut through India’s infamous red tape, providing licences

to start businesses, pollution-control approvals and land acquisition in one-stop processes.

The city of Kutch, devastated by an earthquake in 2001, is now an industrial hub. Ports have

been developed, major advances made in the production and distribution of power, and

industrialisation has burgeoned. Roads have been widened and public spaces greened. The

once rancid and sluggish Sabarmati River with slums on its banks now flows past

Ahmedabad’s lush promenades. The rapid transit bus system is the model other Indian cities

try to emulate. Emphasising India’s abilities, Modi says the country should strive for “zero-

defect” manufacturing á la Japan. His mantra, “Government has no business in business”,

resonates with the business class.

Modi turned Gujarat around by retaining critical portfolios: energy, industries,

petrochemicals, and ports. He is an authoritarian who brooks no dissent when it comes to

achieving state goals. He is also a BJP member and holds strongly to the principles of

Hindutva.

On the other hand, his detractors highlight the February 2002 communal riots in Gujarat.

When a train carrying Hindu pilgrims was set on fire, allegedly by Muslims, killing fifty eight,

the VHP laid the bodies out for public viewing and called for a state-wide strike. In

subsequent retaliatory violence, close to eight hundred Muslims and two hundred and fifty

more Hindus were killed. Modi was blamed for the violence, an allegation which has dogged

him since and polarised public opinion about him.

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The BJP, unsurprisingly, emphasises his achievements. They compare his economic reforms

to the tired and stagnant ones of Prime Minister Singh. Modi, they declare, can take India to

the next level. Mindful, however, of the genocide allegations, they have not formally

declared him the future Prime Minister should they win the 2014 election.

If they do, the magnitude of their win will dictate whether Modi is able to repeat his

economic achievements country-wide. Not having witnessed these at first hand it is unlikely

his authoritarian style will be unquestioningly accepted by all given India’s history of broken

political promises and endemic corruption. If the swing to the BJP is moderate, Modi is likely

to look for political alliances to support his (probably watered down) reform agenda. If, on

the other hand, it is large, there is little doubt that Modi will push his reforms through while

alleviating suspicions by keeping citizens well informed of what he is doing and why. If his

reforms succeed and the economy grows rapidly, Modi will probably push for even more

reforms.

And what of the Nehru-Gandhi clan if the BJP wins the election? Theirs is an entrenched

heritage. Despite economic or political setbacks, they will retain their political base. They will

remain parliamentarians, elected by supporters in power-bases like Amethi and Rae Bareli.

They will bide their time and await a return to power.

Lindsay Hughes Research Analyst Indian Ocean Research Programme lhughes@futuredirections.org.au

*****

India’s UN Peacekeeping Presence: Responsible Global Citizen

or Aspiring Security Council Member?

An attack on 9 April by 200 armed rebels in Jonglei, South Sudan, against a United Nations

escort has left 12 dead including five Indian peacekeepers, placing pressure on India’s

contributions to UN operations.

Background

The recent attack by rebels in South Sudan against a UN escort for a civilian convoy has

reached the highest echelons of Indian society, with Prime Minister Manmohan Singh

expressing anguish, and stating, ‘I pay tribute to our brave soldiers.’ The attacks serve to

highlight the growing pressures the Indian Government may face as its public becomes more

critically aware.

Comment

India is one of the largest suppliers of personnel to UN peacekeeping missions, committing

6,812 personnel. India’s contribution to the United Nations Mission in South Sudan

Page 8 of 17

(UNMISS) comprises 2,200 personnel out of 7,176 UN staff, making India one of the largest

contributors of troops. New Delhi’s altruism, though, is not without self-serving motives.

The positive publicity New Delhi receives from its UN troop contributions is a key agenda

role. Large scale participation by India enhances its global standing, hopefully furthering its

goal of becoming a permanent member of the UN Security Council. But, New Delhi’s

proportionally large commitment has come at a cost. India has historically been the greatest

recipient of casualties, having lost 153 personnel since 1950.

The recent loss of five army personnel is unlikely to deter India’s UN peacekeeping mission

contributions, despite growing public pressure to scale down such contributions. The

evidence of this can be seen in local protests in India against having Indian troops in the

Democratic Republic of the Congo. Though the protests achieved little that time, it provided

the precedent for future public demonstrations. Prime Minister Singh did not need to

respond to public pressure on that occasion, but still withdrew troops from the DRC after a

political confrontation with the UN involving an Indian Colonel was reported to have paid

homage to the leader of South Sudanese insurgent group, the Yau Yau, leader Laurent

Nkunba.

The Indian Government’s ability to escape criticism over UN troop deployments is unlikely to

last. With an emerging educated and socially minded public, the government is increasingly

accountable to its public. New Delhi may soon face the dilemma of choice regarding

domestic pressure and foreign policy. This can clearly be seen after the 1993 Battle for

Mogadishu, following which President Clinton was forced to change foreign policy based on

public outcry at the level of danger to which US troops had been subjected.

The deaths of the 12 UN troops is demonstrative of the key issues facing the South Sudanese

Government. The internal insecurity of South Sudan may compromise its ability to be a

reliable hydrocarbon exporter, creating security vulnerabilities for both Khartoum and Juba.

Khartoum and Juba are mutually dependent as South Sudan contains 75 per cent of the

Greater Sudan oil, while the Sudanese government possesses the infrastructure needed by

South Sudan for exportation. For Juba, the recent attack highlights the instability in South

Sudan, preventing the prospect of future foreign investment. Opportunities for economic

and political growth may be lost if South Sudanese President Salva Kirr fails to integrate the

security efforts of the African Union, the UN, and the South Sudanese armed forces.

President Kiir and his Sudanese counterpart President Omar al-Bashir met on 12 April to discuss economic co-operation. The talks centred on the implementation of an economic agreement made in March 2013, following the cessation of hostilities in September 2012 through African Union mediation. The increased economic potential resulting from the South’s resumption of oil exports may contribute to greater stability along the fractious border. Presidents Kiir and al-Bashir have agreed to further discussions.

South Sudan and India face two diametrically opposed political pressures illustrated in the 9

April attacks. The South Sudanese Government may face a severe limiting factor on much

needed economic growth as a result, with Juba having few responses available. Conversely,

India faces a dilemma in the near future as its civil society becomes ever more affluent and

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politically aware, creating a situation in which the Indian Government may need to choose

between its desire to promote its humanitarian image or play election politics, all while

managing its push for a permanent seat on the Security Council.

Gustavo Mendiolaza Research Analyst Indian Ocean Research Programme gmendiolaza@futuredirections.org.au

*****

Peaceful Transitions in Pakistan and Afghanistan?

With elections soon to be held in Pakistan and Afghanistan, regional political stability is at

a crossroads. These elections, combined with the ISAF drawdown in Afghanistan, will help

reshape regional relations

Background

Pakistan made history on 16 March 2013, as the civilian government successfully completed

its five-year term in office. Unless there is a military coup, the country will hold general

elections on 11 May this year. Meanwhile, the Karzai Government in Afghanistan has

scheduled presidential elections for April 2014 and faces the withdrawal of the International

Security Assistance Force (ISAF) soon afterwards.

Comment

Pakistan faces an historic moment next month, as the process of transition from one civilian

government to another begins. As a prelude to the elections, the national and provincial

parliaments will be dissolved and a caretaker Prime Minister will be nominated to lead an

interim administration. Pakistani Army chief, General Ashfaq Parvez Kayani, reportedly

supports the electoral process, which has alleviated fears of another military coup. Despite

this, a deep cynicism remains amongst ordinary Pakistanis, due to governmental failure on

key economic, political and security issues. The most serious problems are: energy

shortages, which have caused blackouts throughout the country; sectarian attacks by Sunni

militants on Shi’as; and the damaging effects of the ongoing insurgencies in the country’s

north and south-west. Among Pakistan’s young people, the idea of military or Islamic rule is

regarded far more favourably than civilian democratic governance. The weakness and

failures of the civilian government are eroding its legitimacy.

With an average of ten to twenty people killed per day in major cities, spiking to over 100

deaths in a large attack, militant violence forms the backdrop to the electioneering process.

Recently, there was intense fighting in the Tirah Valley of Northern Pakistan, as Taliban

fighters seized the area and fought off a counter-offensive by the Pakistani Army. The

fighting has displaced tens of thousands of civilians into neighbouring tribal regions,

furthering civil strife and giving the Taliban a base from which they may be able to disrupt

Page 10 of 17

provincial elections with violence and intimidation. This is of particular significance to the

country’s secular parties, which militant groups such as the Taliban have designated as

“legitimate” targets. This serves as an example of the broader political environment in

Pakistan, where large gatherings are under threat from militant attack, helping to mute the

election process and reduce voter turnouts.

In Afghanistan, there are doubts that the elections will be held on schedule. The last

presidential election was delayed for months in 2009, due to weather, security and logistical

issues. Provincial elections, due this year, have already been delayed to 2014 because of

logistical difficulties. They will be held concurrently with the presidential elections on 5 April

2014. Parliamentary elections will also be held in 2015, highlighting an expensive and

disruptive election process, which is prone to delay. Fraud is another factor that could

disrupt the Afghan Government’s ability to handle the 2014 transition; across the

international community the need for an “acceptable” election is considered paramount. US

aid to Afghanistan in support of the election process is US$200 million, around half of which

will ‘support Afghan institutions directly and promote voter education and election observer

groups’. Domestically, observation bodies, such as the Free and Fair Election Foundation of

Afghanistan, have detailed demands for election reform and may ‘fulfil some of the

oversight and accountability roles that were lacking in 2009 and 2010.’ Corruption at all

levels of government also damages efforts to promote free and fair elections, with even

mundane governmental functions requiring ‘bribes in exchange for action.’2

Across the country, there is much anxiety over this transition, as any number of issues could

impede a successful vote. Examples are the widespread illiteracy and the lack of formal

identity documents amongst the populace, but none are as significant as the Taliban. A US-

Afghan initiative to reach a settlement faces many difficulties, requiring that the Taliban

drop some of its key demands, including the expulsion of foreign troops and the imposition

of Islamic law. This is unlikely, considering that Afghan officials have not held direct talks

since dialogue efforts were suspended by the Taliban a year ago. Only sporadic contact has

been maintained since then, despite the establishment of a Taliban Office in Qatar. This

ensures that violent disruption of the election process remains possible. If that occurs, it

may precipitate talks to bring the elections forward to ensure substantial Western security

support, which will be absent by 2015.

Both Pakistan and Afghanistan face an uncertain transitionary period, marked by the high

probability of militant violence, disillusionment with the electoral process and anger at

corruption and governmental failure. In both countries, the prospects for a peaceful

transition are slim and the legitimacy of their governments remains precarious. The situation

is perhaps more dangerous in Afghanistan. The Pakistani military still enjoys some popular

support, while the Afghan central Government is without that luxury, relying on

international support. Disagreements between NATO, the US and the Karzai Government

also add another element of instability, as it is still unknown how many ISAF troops will

remain and for what purpose. Whatever the result of the Pakistani and Afghan elections, the

2 Katzman, K., ‘Afghanistan: Politics, Elections, and Government Performance’, Congressional

Research Service, 19 March 2013. <http://www.fas.org/sgp/crs/row/RS21922.pdf>

Page 11 of 17

situation will be critically monitored by all regional powers, as the results will determine the

future stability of those countries and thus the region.

Daniel Barnes Research Assistant Indian Ocean research Programme

*****

Survey of Pakistani Youth Reveals Alarming Trends

Pakistan’s large youth population is expected to play an important role in the upcoming 11

May general election. Their increasingly conservative views may shed some light on

Pakistan’s uncertain future.

Background

This year is a crucial time for Pakistan. For the first time in its history, Pakistan will start its

first democratic transfer of power between two civilian governments after the election in

May. This is also an important opportunity for young Pakistani voters to shape the future of

their country. A survey titled “The Next Generation Goes to the Ballot Box”, conducted and

published by the British Council, paints a clear picture about what kind of country the youth

would like Pakistan to become and suggests what could be in store for Pakistan in the future.

Comment

A March 2013 publication of a survey titled “The Next Generation Goes to the Ballot Box”3

surveyed 5,200 Pakistani youth aged 18-29 years. The survey concludes that Pakistani youth

will be an important constituency in the coming election. Pakistan has a notably large

number of young people. As of 2010, Pakistan has 104 million people, or about 57 per cent

of the population, under the age of 30. The survey revealed some important, yet alarming

facts about the political beliefs of many young Pakistanis.

The survey found that 40 per cent of Pakistani youth believe that sharia, or Islamic law, is an

ideal political system. They believe that Islamic law is the best remedy for government

corruption, immorality and the provision of public services. Religious conservatism is

important in Pakistan. Of male youths, 64 per cent of respondents described themselves as

conservative and religious. Of the women surveyed, 75 per cent described themselves as

conservative and religious.

Pakistani youth are overwhelmingly pessimistic about the direction of their country. More

than 90 per cent reported believing that Pakistan is heading in the wrong direction. While

the military and religious institutions are generally held in high regard, political parties and

3 ‘The Next Generation Goes to the Ballot Box’, The British Council, March 2013.

<http://www.britishcouncil.org/pakistan-next-generation-ballot-box-report.pdf>.

Page 12 of 17

parliament are generally viewed negatively, with the survey revealing widespread

disillusionment with democracy. Young people are increasingly attracted to military or non-

democratic Islamic rule. Less than a quarter of respondents believed that democracy has

benefited themselves or their families.

How will these concerns and views influence outcome of the election? It is likely that large

numbers of young Pakistanis would support a conservative, religious party. Political parties

backed by religious institutions would stand to gather strong support from youthful voters.

This could move Pakistan in a more conservative, possibly radical Islamic direction. With a

favourable view of the military, the youth are likely to support the use of the military to

solve political problems. Given their dissatisfaction with democracy, the youth could support

a regime change from democracy to military or Islamic rule.

Pakistan’s success as a democracy may very well hinge on the next government’s ability to

increase employment and improve the economy. The survey cites the economy as the most

important driver of youth pessimism. The survey revealed that inflation was viewed as the

biggest problem with Pakistan, followed by unemployment. A party promising social stability

and economic opportunity will likely gain a large following among the youth. A government

unable to achieve a higher employment rate for young Pakistanis will find itself in trouble. A

large number of unemployed youth is also a breeding ground for terrorism.

Pakistan could be on the verge of significant change. The pessimism of Pakistani youth

towards democracy and their government lends the country to instability. It seems

increasingly likely that a reactionary government could come to power by popular vote if the

political beliefs of young Pakistanis remain consistent over the coming years. Internally, this

could solidify the Pakistani state. Another internal ramification could be less educational and

job opportunities for women. Regionally, this change could lead to increased tension

between India and Pakistan. Such a political change could also lead Pakistan to pursue closer

ties with its neighbour Iran, as, according to Pew Research, 76 per cent of Pakistanis hold a

favourable view of Iran, the highest favourable response rate of all countries queried.

Kyle Springer Research Assistant Indian Ocean Research Programme

Page 13 of 17

*****

Qatar, Libya Give Egypt Loan but Economic Woes, Unrest Continue

Arab allies Qatar and Libya have granted Egypt a US$5 billion loan which will help ease pressure on President Mohamed Morsi amid growing economic concerns. In the long term, however, the loan is unlikely to solve Egypt’s economic woes and further unrest is likely.

Background

Qatar and Libya have pledged US$5 billion in aid to Egypt, easing pressure on President

Mohamed Morsi after repeated delays in loan talks with the International Monetary Fund

(IMF). The loan will see Qatar provide $3 billion with Libya delivering the remaining $2

billion. The financial injection should buy time for the Muslim Brotherhood as they look to

avert growing protests over a faltering economy. But with Morsi reluctant to implement the

necessary political and economic reforms, Egypt’s financial woes look set to continue and

further unrest is likely.

Comment

The loan, the second from Qatar following a previous $5 billion loan in recent months,

should help Cairo shore up its finances amid growing economic worries. The world’s largest

exporter of liquefied natural gas, Qatar is looking to expand its influence in the region and

has also promised to cover Egypt’s gas export obligations over the summer. The move will

help ease the pressure on Egypt’s leaders, especially over rolling blackouts occurring ahead

of summer. In addition, with rising prices and fuel shortages, the financial injections should

offer some much-needed relief to ordinary Egyptians.

In the long term, however, such loans cannot address Egypt’s mounting woes. The sixth

fastest growing economy in 2008-09, with a growth of 7.2 per cent, two years of political

turmoil has left Egypt’s economy growing at its slowest rate in two decades. Officially, its

currency has dropped ten per cent in the last four months alone while tourism, which

previously accounted for 12 per cent of Egypt’s economy, has evaporated. Meanwhile,

inflation and unemployment continue to rise, sparking angry backlashes which have resulted

in near-daily protests and an escalation of violence. The recent loans may alleviate some of

these concerns in the short-term, but without major political and economic reforms, the

situation in Egypt will only deteriorate and further unrest is likely.

Despite this, Morsi has refused to implement the very reforms his country so sorely needs. If

Egypt is to find its feet again, its leaders will need to raise taxes and cut subsidies on food

and fuel that have crippled its economy. The problem is that the Morsi Government, like

those before it, fears the electoral backlash it would surely face should it implement these

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hard-hitting reforms. With voting scheduled for some time later this year, it has begged

other countries for money and borrowed heavily from local banks instead of imposing

austerity measures. In the meantime, the IMF has refused to loan Egypt $4.8 billion, critical

of its economic mismanagement and wary of the unrest and violence that may erupt as a

result.

Already there have been violent clashes between Muslims and Christians leaving many dead.

Moreover, with one in four people living in poverty, Egyptians are quickly growing tired of a

government that has failed to deliver on its promises. As Mark Lynch wrote in Foreign

Policy on 10 April, ‘The Brotherhood’s behavior [sic] in power… has been appalling,

strategically inept, and enormously destructive of the broader social consensus’. Some

commentators have now gone so far as to predict a second revolution.

So how to prevent the country’s economy spiralling even further? One solution recently

proposed by The Economist was for the Muslim Brotherhood to form an emergency

government with its opponents. Such a government could implement the necessary

economic reforms while preparing for fair parliamentary elections later this year. Further,

with a plausible austerity plan in place, the IMF should finally be swayed to unlock the

billions of dollars in aid Egypt needs to restart its economy. The Brotherhood would lose

much of its power of course, but it would also be able to share some of the blame and enjoy

greater legitimacy.

For now, however, the Morsi Government appears unwilling to compromise. It has

continued to crack down on opponents and many worry that it will now try to disrupt

elections. Predictions of another revolution may appear premature, but the most populous

and geopolitically pivotal Arab state does seem to be sliding in that direction.

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

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*****

Ethiopia’s Potential to Continue East Africa’s Energy Surge

Joint reports from energy consulting firm Senergy and oil and gas exploration and

production company SouthWest Energy, have identified Ethiopia as the newest potential

energy hotspot in East Africa, with up to an estimated three billion barrels of oil in the

Gambella and Jijiga basins. The region has remained largely unexplored, due to a long

history of coups and civil wars.

Background

A Senergy Competent Persons Report (CPR) commissioned by the Ethiopian oil and gas

company, SouthWest Energy, has estimated that the western Gambella and eastern Jijiga

basins have potential oil resources of between 1.56 billion and 2.9 billion barrels. The

company will now look for

investors to fund the

continuation of the project,

which will involve refining the

seismic data set and starting a

well programme. SouthWest

Energy is expected to begin

drilling three initial exploration

wells in the Jijiga Basin during

2013/14. Should the current

estimates be accurate, Ethiopia

could join Mozambique and

Tanzania in turning East Africa

into a potentially major global

oil and gas producer, as well as developing higher local market demand.

Comment

SouthWest Energy is one of the largest holders of potential oil and gas acreage in East Africa,

totalling 46, 000 square kilometres. The company owns one of the largest blocks in the Jijiga

Basin, a subset of Ethiopia’s largest proven hydrocarbon system, the Ogaden Basin. Covering

approximately 29,000 square kilometres of land, the three adjacent blocks that make up the

Jijiga Basin are located along the country’s north-eastern border with Somaliland. The

Gambella Basin in the country’s west, bordering South Sudan, covers 17,000 square

kilometres and is an extension of South Sudan's Melut Basin, which has been estimated to

have reserves of 900 million barrels.

Ethiopia currently imports approximately 85 per cent of its fuel from Sudan. Developing its

own oil reserves would help the government limit energy imports and diversify its economy.

Currently, the Etiopian economy relies on agriculture and the exports of products such as

Page 16 of 17

coffee, for approximately 46 per cent of its GDP and 85 per cent of employement in the

country.

As an exporter, with major trade partners such as Saudi-Arabia, China, USA, Germany, Italy

and Belgium, it is evident Ethiopia already has strong global ties. The country is seemingly in

a position to adapt these ties to the energy market. For potential Australian investors,

particularly those in the oil and gas companies, the Gambella and Jijiga basins represent an

opportunity to continue expanding Australian influence in East Africa. Australian companies

such as Beach Energy, Jacka Resources and Bounty Oil and Gas, are already involved with

operations in other parts of East Africa, such as Tanzania.

SouthWest Energy is currently raising an additional US$100 million for the next stage of its

exploration. Although emphasis is often placed on the commercial viability of such a

development, investors in the project will have to remain cognisant of the various challenges

associated with a venture such as this. For example, because the country is landlocked,

transportation of oil for the international market would have to be done through one of its

coastal neighbours. It is likely that Ethiopia would need to enter into an agreement with

Djibouti, similar to that of South Sudan, to act as the primary export hub as it has the closest

port. Should this occur, pipeline infrastructure will be needed. In addition, communal

conflict and the threat of rebel groups remain a security risk in both the Gambella and

Somali regions, where the Gambella and Jijiga basins are located respectively.

In Gambella, intermittent unrest over land, natural resources and disputes between local

agro-pastoralist Nuer and mainly agrarian Anuak communities, have displaced thousands of

people in recent years.

In the Somali region, risks stem from the presence of the rebel group, Ogaden National

Liberation Front (ONLF), which is engaged in low-level conflict against the government. The

group has been responsible for various incidents, which have resulted in civilian casualties

and kidnappings. The group has also targeted foreign workers, including those in the

resources industry. Although there have been no recent incidents, in 2007 at least 74 people

were killed when the rebel-group attacked a Chinese drill site in the town of Abole. Most

recently, in February 2013, the ONLF issued a statement warning the Canadian-owned

African Oil, which operates in the Ogaden Basin, to cease operations until the rebels had

completed peace talks with the government. Although the ONLF is thought to be largely

factionalised, there is a risk of localised fighting in the region, which has the potential to

affect those operating in the area.

Robert Keenan Research Assistant Energy Security Research Programme

*****

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Any opinions or views expressed in this paper are those of the individual author, 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: tdavy@futuredirections.org.au Web: www.futuredirections.org.au

What’s Next?

15-19 April: The International Court of Justice will hold hearings on Thailand's case against Cambodia over the disputed border region surrounding the Preah Vihear Temple.

15-19 April: The Conference of African Ministers promoting regional integration will be held.

18-19 April: Indian officials will travel to Beijing to discuss Afghanistan.

18 April: National Army Day in Iran will be marked by parades by the Iranian army and

announcements of new achievements by the Iranian navy.

18 April: A South African High Court will review the army's plan to ship helicopters to Zimbabwe.

20 April: Elections will be held in 14 provinces in Iraq.

New Zealand Foreign Minister Murray McCully continues a two-week visit to Africa and Europe. Mr McCully will visit South Africa, Botswana, Namibia, Lesotho, Mauritius and Mozambique and meet with the Secretary-General of the Indian Ocean Commission before heading to Brussels to attend NATO meetings on Afghanistan.