Speech delivered by Sec Defence at the 2013 GALLE DIALOGUE Emerging Maritime Trends in the Indian Ocean on 25th November 2013 at the Lighthouse Hotel in Galle

November 26, 2013

I am honoured to deliver this keynote address at the opening session of the fourth annual “Galle Dialogue”. On behalf of the Government, I take this opportunity to welcome to Sri Lanka the many distinguished foreign speakers and delegates at this conference. I also extend my best wishes to the many illustrious Sri Lankan participants at this event. The Galle Dialogue is fast becoming an important fixture in the calendar of international maritime conferences, as shown by the fact that speakers and delegates from 35 countries are taking part in this event. As with the recently concluded Commonwealth Heads of Government Meeting, this is a very positive indication of Sri Lanka’s increasing stature in international affairs since the dawn of peace four years ago. This is something about which all Sri Lankans are justly proud.

The very appropriate theme chosen for this year’s Galle Dialogue is “Emerging Maritime Trends in the Indian Ocean”. Throughout history, the Indian Ocean has been a major conduit of international exploration, migration and commerce. Many of the world’s first civilisations evolved around or in proximity to its shores. Trade along or through the Indian Ocean was an important feature from early in human history. Aided by the seasonal monsoons, merchant vessels travelled east and west across the Indian Ocean for many centuries dating back to antiquity. The ancient Greeks, Romans, Persians and Chinese all traversed the Indian Ocean, often stopping in this country, before the first modern Europeans led by Vasco de Gama in 1497 came to these seas. During the era of European colonialism, the Indian Ocean and its littoral nations became sought after possessions of many empires. The British emerged as the major power in the region in the early 19th century. With the rapid development over the last two centuries of Europe, the United States, and later Japan, the Indian Ocean receded temporarily from global prominence. During this period, the Atlantic and Pacific Oceans were the world’s most important oceans. In recent years, however, there has been a pronounced shift in focus back to the Indian Ocean. A few simple facts demonstrate why this is.

The Indian Ocean covers more than 73.5 million square kilometres, occupying approximately 20% of the Earth’s sea surface. Bounded by 36 nations and 2 island territories, the Indian Ocean region is populated by nearly 2.5 billion people, or just over 35% of the global population. A very high proportion of the world’s seaborne trade takes place across the Indian Ocean. This includes more than half of the world’s containerised trade, between half to two thirds of the global trade in hydrocarbon resources, and one third of the world’s bulk goods shipments. In addition to being the primary conduit of the oil and coal that fuel the engines of the global economy, the Indian Ocean is in itself an important source of oil and natural gas. Parts of it are increasingly viewed as being amongst the last untapped petroleum frontiers on the planet. As a warm water ocean, the Indian Ocean is also very conducive to the growth of fish stocks, and its vast wealth of biological resources accounts for nearly 20% of the world’s total fish production. Further, the Indian Ocean abounds in non-renewable resources such as industrially valuable minerals and precious metals.

From a geostrategic perspective, the Indian Ocean is becoming more and more important in the current era. The unipolar world that emerged after the end of the Cold War is changing to one where Asian nations such as China and India are gaining in prominence. The rise of these two nations, the rapid growth of intra-Asian and Euro-Asian trade, and the criticality of its sea lines of communication to the global economy have resulted in the Indian Ocean assuming a position of central importance in geopolitics. Major powers, including the United States of America, the European Union nations, Japan, China, and Russia have strategic connections to and interests in this region. The world’s two newest Nuclear Powers, India and Pakistan, are Indian Ocean countries. A high proportion of the world’s political and other conflicts are in countries within the greater Indian Ocean region, which is still impacted by the aftershocks of American intervention in Iraq and Afghanistan. As a result of these all factors, and in order to contain the piracy that affects the Indian Ocean’s shipping lanes, many world powers have had a significant naval presence in the Indian Ocean. These include extra-regional nations such as the United States of America, Britain, France, and China, as well as regional nations including India, Iran, Egypt, and Australia. Sri Lanka too is presently engaged in enhancing its naval and coast guard capabilities in the Indian Ocean, and plays its part in improving the safety of the region through other means as well.

Against this backdrop, there are several emerging trends in the Indian Ocean Region that command our attention. The most high profile of these is the piracy and armed robbery by Somali pirates in a region that includes the Arabian Sea, the Gulfs of Aden and Oman, and the southern Red Sea. This piracy has effectively taken the entire shipping community in the Indian Ocean Region under siege. With the withdrawal of foreign forces from Somalia in the mid 1990s, there was a significant escalation of piracy in the Indian Ocean. Incidence of Somali based pirates attacking passing ships and taking crews hostage became more and more common near the end of the last decade, seriously threatening one of the world’s busiest trade routes. The range of the pirates began to increase significantly with the use of mother ships that transported small skiffs to attack and capture commercial and fishing vessels. Ransoms paid for the release of such ships and their crew increased over time, as did the physical dangers posed by the pirates, which led to considerable pressure on the international shipping industry.

In response, several resolutions in the United Nations Security Council after 2008 enabled international action against this threat. Counter piracy coalition forces including the EU Naval Force, NATO’s Standing Naval Maritime Groups, and the Combined Task Force were set up. Regional powers increased naval operations. Despite the presence of these forces, however, incidence of piracy continued to increase between 2008 and 2011, until declining somewhat in the last two years. One of the primary causes for this recent decline has been the increasing presence of armed private security teams on-board merchant vessels. Ship owners as well as insurance underwriters have started to demand the presence of private security teams on board ships crossing the piracy-affected areas of the Indian Ocean. This has led to a change in the policies of many nations with regard to the presence of armed personnel aboard vessels in international waters, and has subsequently enabled a rise in the presence of on board private security teams.

I am pleased to note that Sri Lanka is one of the countries that has taken the lead in providing such security services. The Government created a Maritime Division in a fully state-owned security company to provide weapons and ammunition to private maritime security companies engaged in on board security duties. Later, through a Public Private Partnership with a local private security company, Sri Lanka started to provide vessels with on board teams. These teams include former Navy personnel with considerable experience in combating attacks on sea. The Liberation Tigers of Tamil Eelam or LTTE was the only terrorist group in the world to possess a sophisticated naval wing, known as the Sea Tiger Wing. During the three decades long war in Sri Lanka, which ended with the LTTE’s defeat in May 2009, the Sea Tigers used fast attack craft and even suicide vessels to pose a threat to maritime security in this region. The experience gained from combating such ruthless opponents is invaluable in countering the activities of pirates in international waters.

Apart from the provision of private security teams on board ships, Sri Lanka is also a major disembarkation point for security teams from other countries. The Government provides logistical support for the movement of weapons and ammunition, including the provision of bonded warehouses for their storage. More recently, Sri Lanka has begun operating stringently regulated and secure floating armouries to fulfil this requirement. Utmost precautions are taken to ensure complete accountability for the weapons and equipment provided. Furthermore, the provision of training facilities for Sea Marshals has begun in the very recent past. This is especially important because the International Maritime Organisation requires all Sea Marshals to be properly trained and certified. With the provision of all of these services, Sri Lanka is increasingly gaining recognition as an important contributor to the security of the Sea Lanes of Communication in the Indian Ocean. It is likely that the demand for these services will continue until counter-piracy action by international fleets and continued use of on-board private security combine to deter piracy in this region.

The illicit trafficking of narcotics, weapons and people is another serious issue in the Indian Ocean region. Although narcotics smuggling through land routes is at a higher scale than it is on sea, the volume of drugs that is trafficked through these seas is nevertheless considerable. Opiates from the Golden Crescent and the Golden Triangle are smuggled through the Indian Ocean, along with amphetamine-type substances and cannabis from these areas and other regional countries. Drug cartels use fishing boats, specially modified vessels and even exploit containerised cargo to transport drugs from their points of origin to their destinations all over the world. It should be noted that money generated from the drugs trade has also been linked to terrorism, For example, the LTTE used money it raised from its drug smuggling operations to fund weapons purchases for its terrorist activities in Sri Lanka.

The smuggling of weapons through the Indian Ocean is a serious issue that can have a very detrimental impact on the national security of nations in its littoral. From the mid 1980s until its defeat in 2009, the LTTE managed to smuggle thousands of items of heavy weapons, light weapons, small arms and sophisticated equipment through the sea for its terrorist activities in Sri Lanka. The items smuggled in included heavy artillery, anti aircraft guns, surface to air missiles, mortar, armoured vehicles, communication systems, and even light aircraft. These weapons were illegally procured by the LTTE’s international network and smuggled to Sri Lanka via international waters through more than twenty large vessels and a large number of trawlers registered under different flags. The LTTE’s large vessels lay at anchor in international waters more than a thousand nautical miles away from Sri Lanka, effectively functioning as floating warehouses. Smaller vessels were dispatched to smuggle these items to the coast. During the Humanitarian Operation to liberate the country from the LTTE’s terrorism, the Sri Lanka Navy ventured into distant high seas on five occasions and destroyed eight of these floating warehouses. That this organised and sophisticated weapons smuggling racket has been destroyed in this part of the Indian Ocean has considerably improved maritime security in this region, but the potential exists for similar activities to fuel armed insurgencies and terrorism in coastal nations.

Human smuggling in the Indian Ocean is another major illicit activity that warrants increased international attention. Primarily due to economic reasons but sometimes also due to conflict, large numbers of people from developing countries seek to migrate illegally into wealthier countries such as Australia, Canada and European nations, as well as the Gulf States. Victims of human traffickers will often find themselves in serious trouble, often with their lives at risk. Having sold their properties and given their entire wealth to the smugglers, they will find themselves trapped on board unsafe vessels in terrible conditions alongside hundreds of other illegal immigrants. Even if they survive transit, they are sometimes sold into servitude or more often find themselves stranded in temporary camps at their intended destinations or other countries until eventual repatriation. Despite the risks involved, people smuggling has become a lucrative business for certain criminal groups, some of which are linked to international terrorism and drug trafficking. During the last several years, we have seen vessels such as the MV Sun Sea which belonged to the LTTE have engaged in people smuggling, alongside many smaller operatives active in Sri Lanka, India, Thailand and other countries in the region.

The answer to the illicit trafficking of drugs, weapons, and persons is the increase in cooperation amongst the nations in the Indian Ocean region. Effective sharing of intelligence between countries, increased coordination between law enforcement agencies and Government departments, and establishing bilateral and multilateral mechanisms to combat these issues cooperatively is critical if trafficking is to be prevented. Countries cannot effectively address these issues on their own accord. For its part, Sri Lanka has worked together very closely with Australia on the issue of human smuggling in the recent past. This bilateral effort has been extremely successful. When the Australian Prime Minister visited Sri Lanka during the Commonwealth Heads of Government Meeting, he met me, the Navy Commander and other key officials involved in this effort to commend us on its success. The Sri Lankan Government has also worked with the Governments of India and the Maldives on establishing a trilateral agreement for cooperation in surveillance, anti piracy operations and curbing illegal activities. As with the recent increase in coordinated international action on the issue of Somali piracy, an increase in cooperation amongst nations within the Indian Ocean region will be very encouraging from the perspective of maritime security. This increase is a trend that should be further fostered.

Terrorist activity on sea is another potential threat facing the Indian Ocean region. As noted earlier, Sri Lanka has had considerable experience in facing this threat. During its heyday, the LTTE’s Sea Tiger wing posed a considerable danger through its capability to engage Security Forces using semi-conventional tactics, amphibious operations, and suicide attacks. It was also used to induct terrorist cadres to sensitive areas on land via sea, thereby enhancing the LTTE’s deep penetration capability. Although the comprehensive defeat of the LTTE in May 2009 neutralised the threat posed by the Sea Tigers, the possibility remains that groups such as Al-Qaeda, Al-Shabaab, Lashkar-e-Taiba, and smaller, emerging terrorist and criminal organisations in the region will follow a similar modus operandi to create danger at sea. The fact remains that despite various terrorist groups having differing ideologies and agendas, the experience, tactics and techniques developed by one group can easily spread to others. To some extent, this has already been the case. The LTTE was one of the pioneers of using Fast Attack Craft fitted with outboard motors to engage in sea piracy. The tactics it used were very similar to those adopted much later by Somali based pirates. Sea Tiger tactics could also easily have inspired Al-Qaeda’s suicide attack on the USS Cole in the year 2000. The strategy of infiltration via shore used in the 2008 Mumbai Attacks was also one employed by the LTTE in prior decades.

Although some countries that once proclaimed this ideal have become very selective in their position, the fight against terrorism is a global one against an enemy defined by its deliberate targeting of civilians to achieve its goals. Terrorism should be crushed wherever it emerges, and nations should support each other’s efforts to do so wholeheartedly. Genuine cooperation amongst nations at the highest level is needed for this to happen in a systematic and coordinated fashion. Intelligence sharing, fostering maritime domain awareness through joint operations and combined patrols, and enhancing interoperability amongst Navies is important. The world’s major naval powers should also provide assistance to improve the resources and capabilities of smaller nations in order enhance overall maritime security. For its part, Sri Lanka is proud to have neutralised the threat of maritime terrorism in its waters and remains committed to contributing to the security and safety of the Indian Ocean region. However, for surveillance operations and to carry out patrolling in blue waters, Sri Lanka must obtain naval assets that can operate further away from shore. The support of wealthier nations is sought for the procurement of such assets. In this context, I am particularly appreciative of the Australian Government’s decision to gift two large Bay Class patrol vessels to Sri Lanka next year. Such capacity augmentation will enable the Sri Lanka Navy, which is the best-suited force for this task, to combat illegal trafficking and contribute more to the stability and security of the Indian Ocean.

The maintenance of security is especially important in light of the increasing economic importance of this part of the world. The Indian Ocean influences the global economy in several ways. It is an ocean through which a considerable proportion of global trade takes place. It has been called the global energy superhighway by some commentators because of its role in transporting hydrocarbon fuels from the Middle East to the fast developing economies of China, India and other Asian nations. Much of the industrial production of these nations is in turn shipped to the rest of the world through the Indian Ocean. Therefore, as one of the world’s most important trade routes, the Indian Ocean is extremely critical to the world economy. Maintaining its safety is of paramount importance. This has resulted in the increasing presence of extra-regional naval task forces in the region. It has also led to increasing efforts by regional powers to enhance their blue water capability, and to greater efforts by smaller regional nations to upgrade their navies and coast guards.

The enormous intrinsic value of the Indian Ocean for the countries in the region also needs to be stressed. Fish stocks in its waters contribute significantly to the economies of littoral nations, and have an impact on the global economy by accounting for approximately one fifth of the world’s total fish production. There are a number of threats to these fish stocks that are a cause for international concern, including overexploitation, pirate fishing and marine pollution. There is emerging consensus amongst experts that many fish stocks throughout the world are dangerously close to the point of collapse due to prolonged overfishing over the past many decades. Although the Indian Ocean is still relatively robust in this regard, the danger exists that continued overexploitation would increase it vulnerability to this in future.

Illegal, unreported and unregulated fishing contributes significantly to this potential threat. Some of the methods frequently used in pirate fishing, such as bottom trawling, blast fishing, and even long-line fishing can harm the marine environment greatly, destroying coral reefs and the seabed ecosystem, and even endangering seabirds. Extra-territorial fishing by well-equipped large trawlers from other nations is also especially problematic for local fishing communities in developing nations. Marine pollution through agricultural run off, sewerage and dumping of toxic material including discharge from oceangoing vessels also threatens fish stocks and other organisms critical to sustaining the marine ecosystem. Increasing international attention to these problems in recent years is an encouraging trend. However, concrete action by regional nations to regulate fishing their exclusive economic zones and ensure respect by their fishing communities for other nations’ territorial waters is critical if these issues are to be mitigated in the future.

In addition to its biological resources, the Indian Ocean region has a considerable wealth of energy and non-renewable resources. Much attention has been paid in recent years to the exploration of offshore oil and gas reserves in the Indian Ocean region. As the price of oil rises, the extraction of these hydrocarbon reserves becomes commercially viable and it is likely that the Indian Ocean will feature as a significant source of oil in future. Exploration is already taking place in several parts of the Indian Ocean, notably in the Timor Sea, off the shores of East Africa, and in the Bay of Bengal. Production has also begun in a limited way in some of these areas. In addition to energy resources, the Indian Ocean seabed also has a vast wealth of mineral resources. As pressures on land resources increase, nations are increasingly looking at utilising the resources available to them in the maritime domain, even though there are concerns regarding the commercial viability of their extraction. A significant issue complicating the extraction of seabed resources is determining the extent of the continental shelf over which countries can claim exclusive rights. Increased attention to these issues is another significant emerging trend in the Indian Ocean Region.

More and more attention has been placed on the geopolitics of the Indian Ocean region in recent years. One of the key considerations is maintaining the Indian Ocean as a secure highway for international commerce. Ensuring freedom of navigation, securing its choke points, and reducing piracy are important drivers behind the presence of extra-regional fleets in the Indian Ocean. Given their rapid growth, the fact that China and India are in or are in close proximity to the region is another significant cause of this attention. There is much speculation in the international community about the ambitions of these nations with regard to the Indian Ocean. The intention of both China and India to increase instruments of maritime power is an interesting aspect of great power strategic competition. Much attention is given to the potential tension between Chinese security concerns regarding sea lines of communication in the Indian Ocean, which are critical to its economy, and India’s supposed attitude to this region as its backyard. There is also wariness about China’s relationships with India’s near neighbours, and Indian commentators in particular are concerned about ports funded by China in these countries, which they dub “the string of pearls”.

From Sri Lanka’s perspective, India is our largest neighbour and the most important country in the region. Notwithstanding occasional bilateral issues, our social, cultural, economic and political ties are both historic and robust. At the same time, it has to be noted that Sri Lanka’s relationship with China also dates back many centuries, into historic times. Sri Lanka recognised the People’s Republic of China in 1950 and formal diplomatic relations between the two nations were established in 1957. This bilateral relationship is multi-faceted and deep rooted. There is great mutual trust and friendship between the two nations. China has been one of Sri Lanka’s foremost development partners over the last few years, and Chinese support for many infrastructure projects in Sri Lanka is particularly noteworthy. Chinese support for construction of the Hambantota port was instrumental in fulfilling a longstanding need in Sri Lanka to cater to the shipping lines passing south of the island. However, China’s support for the Hambantota Port is commercial in nature, and should not be misconstrued as fitting the “String of Pearls” paradigm. Sri Lanka has always pursued a non-aligned foreign policy. It continues to provide logistical and other support to ships from all countries at our ports, including naval vessels and even warships that travel through the region. There is no reason for this state of affairs to change in future.

Sri Lanka today is a country in the midst of rapid economic development. After having suffered for three decades of war, there is a great pent up potential in this country that is only now being realised. Channelling this potential and ensuring rapid and equitable growth for all our people is one of the primary concerns of the Government in the present era. It is in this context that Sri Lanka has launched an ambitious “5-hub” growth strategy that aims to position the country as a Naval, Aviation, Commercial, Energy and Knowledge hub in this region. The Naval hub concept seeks to maximise the potential of Sri Lanka’s strategic position at the intersection of major international sea trading routes in the Indian Ocean. The world’s busiest East-West shipping lane lies 10 kilometres to the south of the island. The construction of the Magam Ruhunupura Mahinda Rajapaksa Port at Hambantota creates a facility that can provide services to ships traversing this sea line of communication with minimal delay. The port is being developed in three phases as a state of the art port, and once completed it will provide bunkering services, container handling and ship repair facilities, as well as industrial operations in a large free trade zone. The Colombo Port, which is the country’s principal commercial port, is being expanded. The South Harbour Development has created new container terminals and has enhanced the Colombo Port’s capability to cater to projected growth in volumes and handle the largest ships in the world.

Smaller ports around the country are also being developed. The Oluvil Harbour in the South East is being developed as a hub for fisheries and related industries. The Kankasanthurai Port is being rehabilitated to cater to shipping requirements in the North, including facilitating faster trade with India, Myanmar and Bangladesh. The Galle Port is being developed with new facilities including a yacht marina fully equipped with modern amenities, yacht repair and maintenance facilities, tourist information centre, hotels, floating restaurants, and duty free shops. This will cater to the growing interest of tourists arriving aboard cruise ships and private yachts to this historic and compact coastal city. The Trincomalee Port, which is the largest natural harbour in South Asia and fifth largest in the world, was critical to the operations of the Royal Navy of Britain and the Dutch Navy after the fall of Singapore during the Second World War. The development of Trincomalee was greatly hindered for three decades during the terrorist war in Sri Lanka, but the Government is now transforming it into a metropolitan growth centre for North Eastern Sri Lanka. New port infrastructure will be established, including shipbuilding & repair facilities and bunkering & ship services. As with Galle, more tourist facilities are also being developed in Trincomalee.

Sri Lanka has many advantages when it comes to tourism. The country is being increasingly featured in global travel magazines and websites as one of the best destinations in the world to visit. The sheer variety of the experiences it can offer is key to its rising popularity. Quite apart from its impressive historic sites, its many cultural features and its beautiful natural terrain, Sri Lanka offers a host of tourist attractions in the maritime domain. Whales and dolphins can be seen off the Western, Southern and Eastern coasts at various times of the year. Some of the sites available for surfing in the Eastern and Southern coasts are amongst the most attractive in the region. Sailing and parasailing are becoming more and more popular. Sri Lanka’s beaches are also amongst the most relaxed and laid-back in the world. There are beautiful coral reefs with great biodiversity off the coasts, and there are countless other natural features and shipwrecks that are fantastic locations for scuba diving. There is more to be done to further develop and protect these maritime and related attractions, but many tens of thousands of tourists already visit Sri Lanka because of them.

At this critical point in its history, Sri Lanka is keen to attract many more foreign visitors to this country for tourism as well as commercial purposes. There are countless opportunities for investment in a variety of areas, which are being further developed through the 5-hub centred growth strategy adopted by the Government. Sri Lanka emerged from the ravages of a brutal three decades long terrorist conflict less than five years ago. It has made tremendous progress in all areas, which has to be seen to be believed. As it builds on this success to develop further, Sri Lanka needs the support of its friends instead of the criticism and admonishment that seems to feature large on the agenda of certain nations that seek to dwell continually on the past. This is not constructive. Instead, meaningful economic cooperation and the strengthening of genuine diplomatic relationships with its allies is what Sri Lanka seeks. This is precisely what Sri Lanka’s closest allies today readily offer, which is something the entire country is greatly appreciative of.

It is in this context of genuine cooperation and strengthening relationships that events such as the Galle Dialogue are organised. The overall security and stability of the entire Indian Ocean region is critical for the global economy, and Sri Lanka is proud to play its part by fulfilling its responsibilities in its maritime domain. At the same time, fostering greater cooperation and partnership amongst the naval powers active in the region is necessary to support the future prosperity of the Indian Ocean region. I am certain that the presentations, panel discussions and informal interactions that will take place during the Galle Dialogue will be instrumental in this regard. In closing, I wish all participants a very productive and very pleasant time at this conference, and during your stay in Sri Lanka.

Thank you.