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1. Caribbean Economies and the Year Ahead 2018

Author:
Scott MacDonald
Publication Date:
01-2018
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
Caribbean economies face 2018 with mixed prospects. While overall trends are positive for most countries, a number of economies are still struggling from the damage sustained during last year’s hurricane season. The positive forces at work are a stronger global economic expansion, improving prospects for tourism, development of the oil industry in the Guiana Shield, and a strengthening in commodity prices. On the negative side are the costs of reconstruction, ongoing fiscal pressures in a handful of states, and the increasing negative consequences of an imploding Venezuela. Significant questions continue to exist as to U.S. policy in the region, spillover of Brexit, Chinese Caribbean policy, and a rising level of Russian engagement in some countries. In all of this, the Caribbean remains vulnerable to events external to the region and increasingly needs to focus on digital technology and how it can be applied to make local economies more competitive. During much of 2017, growth prospects were generally positive, helped along by a stronger expansion in the advanced economies, stabilization in commodity prices, and a higher level of remittances from the Caribbean diaspora. The Dominican Republic led the way, though at a slower pace than the year prior due to efforts to reduce the fiscal deficit. Better tourist numbers also lifted growth prospects in much of the Eastern Caribbean and Jamaica. The laggards were Puerto Rico (with a $72 billion debt crisis), the U.S. Virgin Islands (dealing with acute fiscal pressures), Barbados (struggling with deteriorating public finances and reduced capital market access), and commodity exporters Suriname and Trinidad and Tobago. While most Caribbean countries and dependencies were fortunate to avoid massive destruction during the 2017 hurricane season, storms Irma and Maria brought considerable disruption to Barbuda, Dominica, St. Martin (both the French and Dutch sides), the British Virgin Islands, and U.S. Virgins Islands. Category 5 Hurricane Maria in September was the worst natural disaster on record in Dominica and certainly ranks in the top 10 for Puerto Rico. Indeed, both Dominica and Puerto Rico were left effectively without economies.
Topic:
Oil, Natural Disasters, Tourism, Digital Economy, and Global Political Economy
Political Geography:
Caribbean, Dominican Republic, Jamaica, Barbados, and Puerto Rico

2. Russia’s National Oil Champion Goes Global

Author:
Edward C. Chow and Andrew J. Stanley
Publication Date:
02-2018
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
After the Soviet Union collapsed and Russia was roiled by political and economic chaos, many state-owned assets were privatized based on political connections and corrupt practices. The oil sector was a particularly attractive, but by no means the only, target for these privatizations. By the end of the 1990s, almost all of Russia’s oil production was privately owned. In spite of continued nontransparency, the oil sector began to resemble a competitive market with private investors introducing Western technology, financial accounting, and operating and management practices. It also started to attract major foreign investments. The remaining state oil assets were managed by a sleepy state enterprise named Rosneft that, in spite of its name (Russian Oil), produced less than 5 percent of Russia’s oil. Today, majority state-owned Rosneft produces almost half of Russia’s oil. Its daily oil production of 4.6 million barrels, according to its last reported quarterly results, is double that of the world’s largest oil company by market capitalization, ExxonMobil, which last reported daily liquids production of 2.3 million barrels. Rosneft’s rapid rise coincided with the rule of Vladimir Putin, who first became president of Russia in 2000. Its production increases were built largely on the backs of controversial acquisitions of assets previously held by private companies such as Yukos, TNK-BP, and Bashneft. Rosneft’s acquisition spree accelerated after Putin’s close associate and Russia’s then-deputy prime minister Igor Sechin became chairman of its board of directors in 2004. Sechin left government in 2012 to take over as Rosneft’s chief executive officer. Rosneft’s board of directors is now chaired by former German chancellor Gerhard Schroeder. Rosneft’s transformation as Russia’s national oil champion is consistent with Putin’s policy of regaining state control over the commanding heights of the Russian economy, which is more reliant on oil income today than the Soviet Union ever was. Rosneft is Russia’s largest taxpayer and contributed a quarter of government revenue in 2014. Until recently, Rosneft concentrated mainly on consolidating its dominance over the domestic oil patch. It is also Russia’s leading refiner and is increasing natural gas production for direct sales to domestic gas users, producing 67 billion cubic meters in 2016. In 2014, Russia was hit by the twin shocks of a global oil price collapse and Western economic sanctions enacted after its aggression against Ukraine in the Donbas region and annexation of Crimea. These developments affected Rosneft severely since it involved the value of the commodity it produces and sells and restricted Rosneft’s access to international financing when it was heavily indebted from the aforementioned acquisitions. A normal company might hunker down, repair its balance sheet, and wait for external conditions to improve. Instead Rosneft has done the exact opposite and expanded its international business aggressively. As part of the 2014 U.S.-led sanction efforts, Igor Sechin, as the leading figure of Russia’s largest petroleum company and his having “shown utter loyalty to Vladimir Putin,” was directly sanctioned. Further Russian sanctions enacted by Congress in 2017 called on the U.S. Department of the Treasury to submit a detailed report on senior political figures, oligarchs, and parastatal entities as determined by their “closeness to the Russian regime and their net worth.” While the unclassified version of the report released to Congress on January 29 included Igor Sechin, the report was poorly received and largely regarded as nothing more than a “rich list” by Russian experts. However, the report also contains classified annexes, including a list of parastatal entities and supporting analysis, which by definition would have included Rosneft. Although Rosneft’s rapid international expansion is too recent to assess definitely, this paper describes some of Rosneft’s overseas ventures and explores possible motivations, economic and political, behind them.
Topic:
Energy Policy, Oil, Foreign Direct Investment, Sanctions, Gas, Transparency, and Private Sector
Political Geography:
Russia, United States, Europe, and Eastern Europe

3. Pakistan’s Gwadar Port: A New Naval Base in China’s String of Pearls in the Indo-Pacific

Author:
Gurmeet Kanwai
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
The Issue The development of Gwadar Port is a key element of the greater China-Pakistan Economic Corridor (CPEC). It speaks to both the strength of the China-Pakistan relationship and the reach of China’s grand strategy. With Pakistan’s two other major ports operating near capacity with no room for expansion, projects in Gwadar promise to eventually handle one million tons of cargo annually, while also providing significant industrial, oil, and transportation infrastructure. Though a “monument of Pakistan-China friendship,” there are misgivings on both sides about CPEC, including the safety of Chinese workers, the resentment of Baloch nationalists, and the growing debt trap created by the project. The prospect of the PLA Navy in Gwadar poses greater security questions, as it forms another link in China’s efforts to expand its maritime presence in the Indo-Pacific region. The members of the Quadrilateral Security Dialogue, or “Quad,” comprised of India, Japan, Australia, and the United States, should counter China’s strategic outreach by networking with other like-minded countries on cooperative security frameworks to ensure a free, open, prosperous, and inclusive Indo-Pacific region.
Topic:
Security, Oil, Regional Cooperation, Global Political Economy, and Trade
Political Geography:
Pakistan, United States, Japan, China, Middle East, India, Asia, and Australia

4. Fuel Competition in the Expanding Power Market Renewable Energy in Southeast Asia

Author:
Stephen Naimoli and Jane Nakano
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
This report provides a summary of the discussion from a CSIS roundtable held on April 13, 2018, as part of the CSIS-Pertamina Energy Initiative. The discussion brought together government, industry, and policy experts to explore the outlook for the region’s energy mix out to 2040, the state of renewable energy in Southeast Asia, and its role in the region’s energy priorities. This was the first in a series of events that will be convened this year to examine the role of renewable energy in Southeast Asia and its security, economic, and political importance in the Indo-Pacific. Southeast Asia is one of the fastest-growing regions in the world. The region’s gross domestic product (GDP) grew 66 percent from 2006 to 2015, and if all 10 countries were one economy, it would be the seventh-largest in the world. This growth is projected to increase, averaging just over 5 percent annually from 2018 to 2022. With economic growth comes demand for energy. From 2000 to 2016, economic growth in Southeast Asia drove a 70 percent increase in primary energy demand. Governments in Southeast Asia have implemented a range of policies and incentives to ensure they meet their energy demand. Renewable energy (wind, solar, geothermal, and sometimes hydro and biomass) is capturing an increasing, although not dominant, amount of attention from policymakers, investors, and the private sector as an important part of meeting this demand. Renewable energy’s share of the electric power mix is driven by a range of factors—the economics of power generation, efforts to reduce greenhouse gas emissions, energy security concerns, and concerns over local air pollution. While renewable energy is set to grow as a share of the region’s energy mix, there are indications that its potential contribution is much higher than is currently on track to be realized. Renewable energy increasingly competes on an economic basis in many countries against all fuels except coal, but sometimes political and socioeconomic factors stand in the way of improving their competitiveness in specific markets. The region is also attracting a great deal of outside investor interest. Countries from around the region and ever farther afield are investing in Southeast Asia’s energy sector because of the rapid growth experienced over the last decade and half, and their investment priorities, along with economics, shape their investment decisions in Southeast Asia. Energy policy and investment decisions are also being driven by the shifting nature of supply-and-demand balances in each country and the shifting domestic realities that come from becoming a net importer of specific fuels, such as in Indonesia. Many Southeast Asian countries have integrated low- or zero-carbon renewable energy into their energy planning efforts, and this report examines the dynamics of the power sector in Southeast Asia and how renewable energy competes with fossil fuel sources of electricity.
Topic:
Security, Energy Policy, Oil, Governance, Gas, Electricity, Renewable Energy, and Industry
Political Geography:
Indonesia, Asia, Southeast Asia, and Indo-Pacific

5. Safety of Crude Oil by Rail

Author:
David Pumphrey, Lisa Hyland, and Michelle Melton
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
In the last several years, rail has come to play an important role in the transportation of growing U.S. crude oil production. Over the last seven months, a number of serious accidents have resulted in intense review of the safety of shipping large quantities of oil by rail. The focus has been on classification of the oil, the integrity of tank cars, and rail operations. Regulatory processes have been initiated to attempt to deal with these issues in a timely manner. This analysis provides facts that illuminate the players, concerns, current status of regulatory action, as well as the potential issues going forward.
Topic:
Climate Change, Energy Policy, International Trade and Finance, Markets, National Security, and Oil
Political Geography:
United States, Canada, and North America

6. The US and Iran: Sanctions, Energy, Arms Control, and Regime Change

Author:
Anthony H. Cordesman, Bryan Gold, and Chloe Coughlin-Schulte
Publication Date:
12-2013
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
US and Iranian strategic competition is heavily drive by four key factors–the success or failure of sanctions, the im0pact of that competition on the flow of Gulf energy exports, the success or failure of efforts to limit Iran's nuclear options and the broader prospect for arms control, and the prospects for accommodation of regime change. In recent years, the key variable has been ways in which sanctions on Iran have changed US and Iranian competition since the fall of 2011, and helped lead to a tentative set of Iranian agreements with the UN's P5+1--the five permanent members of the UN Security Council, namely United States, Russia, China, United Kingdom, and France, plus Germany--in November 2013.
Topic:
Security, Arms Control and Proliferation, Economics, Oil, Regime Change, and Sanctions
Political Geography:
Russia, United States, China, United Kingdom, Iran, Middle East, France, and Germany

7. THE GULF MILITARY BALANCE Volume III: The Gulf and the Arabian Peninsula

Author:
Anthony H. Cordesman and Robert M. Shelala II
Publication Date:
05-2013
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
The US faces major challenges in dealing with Iran, the threat of terrorism, and the tide of political instability in the Arabian Peninsula. The presence of some of the world's largest reserves of oil and natural gas, vital shipping lanes, and Shia populations throughout the region have made the peninsula the focal point of US and Iranian strategic competition. Moreover, large youth populations, high unemployment rates, and political systems with highly centralized power bases have posed other economic, political, and security challenges that the GCC states must address, and which the US must take into consideration when forming strategy and policy. An updated study by the CSIS Burke Chair explores US and Iranian interests in the region, Gulf state and GCC policies toward both the US and Iran, and potential flash-points and vulnerabilities in the Gulf to enhanced competition with Iran. This study examines the growing US security partnership with Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE – established as the Gulf Cooperation Council (GCC). It analyzes the steady growth in this partnership that has led to over $64 billion in new US arms transfer agreements during 2008-2011. It also examines the strengths and weaknesses of the security cooperation between the southern Gulf states, and their relative level of political, social, and economic stability. The study focuses on the need for enhanced unity and security cooperation between the individual Gulf states. It finds that such progress is critical if they are to provide effective deterrence and defense against Iran, improve their counterterrorism capabilities, and enhance other aspects of their internal security.
Topic:
Security, Islam, Oil, Terrorism, Natural Resources, and Counterinsurgency
Political Geography:
United States, Middle East, and Arabia

8. Restoring U.S. Leadership in Nuclear Energy

Author:
Michael Wallace and George David Banks
Publication Date:
06-2013
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
America's nuclear energy industry is in decline. Low natural gas prices, financing hurdles, failure to find a permanent repository for high-level nuclear waste, reactions to the Fukushima accident in Japan, and other factors are hastening the day when existing U.S. reactors become uneconomic, while making it increasingly difficult to build new ones. Two generations after the United States took this wholly new and highly sophisticated technology from laboratory experiment to successful commercialization, our nation is in danger of losing an industry of unique strategic importance and unique promise for addressing the environmental and energy security demands of the future.
Topic:
Energy Policy, Oil, Science and Technology, Natural Resources, and Nuclear Power
Political Geography:
United States

9. The Myth or Reality of US Energy Independence

Author:
Anthony H. Cordesman
Publication Date:
01-2013
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
US “independence” from energy imports has been a key source of political dispute ever since the October War in 1973 and the Arab oil embargo that followed. Much of this debate has ignored or misstated the nature of the data available on what the US options are, as well as the uncertainties involved in making any long range projections.
Topic:
Security, Foreign Policy, Energy Policy, International Trade and Finance, and Oil
Political Geography:
United States, Middle East, and Arabia

10. Sustainable Energy Futures in Southeast Asia

Author:
Murray Hiebert, Ernest Z. Bower, David Pumphrey, Gregory B. Poling, and Molly A. Walton
Publication Date:
12-2012
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
Southeast Asia will be the next big growth engine in Asia. Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, with a population of 525 million and a combined GDP of $2.8 trillion (when measured by purchasing power parity), are expected to grow almost 6 percent between now and 2030, according to the Asian Development Bank. For years, they have been eclipsed by China and India, but now their combined GDP is catching up with India and they could overtake Japan in less than two decades. For U.S. firms, these five members of the Association of South East Asian Nations—hereafter the ASEAN-5—are a trade, energy, and environment story.
Topic:
Development, Economics, Energy Policy, International Trade and Finance, and Oil
Political Geography:
Indonesia, Malaysia, Asia, Vietnam, Philippines, Thailand, and Southeast Asia