The pace of South Korea's economic recovery is unrivalled in the last six decades. From being a mostly unskilled manpower exporter a few decades ago, South Korea has transformed into a technology exporter. It is estimated that about 1.1 million Koreans worked in the Arab world between 1975 and 1985, a large chunk of them in the Gulf Cooperation Council (GCC) countries. Currently, only a fraction of them are part of the region's expatriate dynamic.

Another example of its transformation is that Seoul approached the International Monetary Fund (IMF) in late 1997 for assistance to avoid an external payments crisis. Just a decade later, it was ranked 13th in the world with a GDP of $1.3 trillion in 2009 and was 12th in 2019 with a GDP of $1.6 trillion.

South Korean companies are now playing a dominant role in the region. LG, Samsung, Hyundai, etc., have become household names. These and others are involved not just in the construction and automobile sectors, but also renewable energy, oiland gas-related industries, medium-sized businesses, healthcare, and information communication technology realms.

The Gulf countries too have transformed from being quiet backwaters to some of the Middle East's most important economic centres. The governments have channeled revenues from the energy sector to shape their economies and societies, and position their countries as trade, transit and tourism hubs, while encouraging the real estate and manufacturing sectors as well.

Their growth and expansion is reflected beyond the glitz and glamour of their skyscrapers and luxury hotels. They now have state-of-the-art facilities in healthcare, education and infrastructure sectors. To sustain this expansion and develop their indigenous human capital, the GCC countries are now in the process of encouraging the development of a knowledge economy.

Amid the din of discussion about the rise of Asian giants like China and India and how the balance of economic power has moved from West to East, South Korea's success and relevance to the Gulf has received less attention. The interface between the ‘Miracle in the Desert’ and the ‘Miracle on the Han River’ garnered international attention when the UAE chose South Korea (over France and the United States) in 2009 to build the world's largest nuclear project. Since then their intensifying engagement has moved well beyond the economic domain. The diversity of sectors and experienced players at the helm augurs well for the Gulf region's ‘new’ economic boom, which is based on economic diversification.

Invoking US former president Bill Clinton's 1992 campaign slogan – “It's the economy, stupid” – best explains the revival of Gulf-Asia ties.

Long before the United States announced its strategic rebalancing policy of ‘pivot’ to Asia, the Gulf Cooperation Council (GCC) countries had taken a view and recognised Asia as an ally of the future. Though these ties were rooted primarily in transactional economic activities, they have evolved into agents capable of impacting geopolitics. The defining developments of Gulf-Asia ties lie in the events that occurred, first, at the turn of the century due to Asia's economic miracle and the impact of 9/11, 2001; and second, the impact of these two events in the Gulf scenario, which were evident in the landmark reciprocal trips by Asian and Gulf leaders.

This chapter explores and highlights areas of economic complementarity, both in the oil and non-oil sectors, including trade and cross investments. In the process, it also compares various dynamics of Gulf-Asia ties in the context of the Gulf countries’ relations with the United States and the European Union.

A few equally-important non-economic factors that may have contributed to intensifying Gulf-Asia relations are also discussed. Finally, the chapter points out potential areas of future cooperation in an era driven by economic diversification and emphasis on the fourth industrial revolution in the Gulf. It ends by arguing that a robust Gulf-Asia relationship should find new ‘strategic’ political and security avenues to intensify collaboration in the decades ahead.

Economic Complementarity

The increasing significance of Asia as an ally of the GCC countries occurred at a time when: first, Asia's oil consumption was soaring amid an economic boom; and second, the economies of the GCC countries were robust following high oil prices and needed new avenues to diversify and invest.

According to the International Monetary Fund, 2013 was the first year in which emerging markets contributed to more than half of global GDP, based on purchasing power. While they accounted for less than a third in 1990, their share of world output grew over a percentage point annually between 2003 and 2011.

The discussion on Gulf-Asia relations rarely focuses beyond their expanding economic ties. Exploring the ‘what next’ dimension reveals attempts at ‘strategic’ cooperation that offer alternative possibilities for Gulf security. With the United States no longer dependent on the region's oil and the economic power centre shifting from the West to the East over the last two decades, the Gulf and Asian countries’ – called ‘free riders’ – long-term interests are unlikely to remain dependent only on the United States for the security of their energy supply chain.

The Barack Obama and Donald Trump administrations’ stress on ‘America First’ as a reaction to public opinion for an inward-looking policy, has also reduced Washington's political-military interest and influence abroad. As a result, some Gulf countries are thinking out of the box, recalibrating their strategies and developing ‘omni-balancing’ security partnerships with influential Asian countries, without shutting the door on the United States. This diversifying or hedging strategy could serve as a backup plan against the possibility of further reduction of US involvement in the region.

In a world that is increasingly shaping to be multipolar, this opens possibilities for other players, including China, India, Japan, and Russia, to engage in a broader security cooperation approach in the Gulf. The Russian proposal for ‘collective security’ in the region is one such recent idea that is waiting on the table to be further explored.

This chapter analyses these dynamics and points to the 2019 international vigil to protect oil shipping in the region's waters as a precursor to the envisaged ‘collective’ security. It also argues that a such a Gulf security architecture offers the Western countries, primarily the United States, a stage to remain relevant in the affairs of the region.

US-Iran Tension

The sharp US-Iran rhetoric and confrontation, which also involved attacks on some facilities in or near the Gulf Cooperation Council (GCC) countries, during 2019 and early 2020, underlined the fraying West-centric security architecture in the Gulf region. It also highlighted the need to hasten the process of exploring alternative mechanisms to ensure peace and security in a region that is vitally linked to global economic and political interests. This brings to the fore Asian countries, many of which have witnessed a major shift in their economic might in recent decades, bearing the potential to alter the global political-security landscape, including in the Gulf region.

Amid the 2008-2009 financial crisis, some reputed but sensational Western media reports stated that the layoffs of foreign workers in the Gulf countries were making some cities look like “ghost” towns.

The Gulf countries did not have to exorcise the ghosts because, in reality, they were too few to worry about. What it did, however, was expose the myths of the Western financial system being full-proof. This fed into another opportunity for Gulf- Asia relations.

The world may be at another inflection point following the Covid-19 pandemic. The Gulf has no doubt been impacted by the crisis, but a meltdown is unlikely, as demonstrated during the 2014-2016 oil price slump of nearly 70%. While subtle adjustments were required, there were not too many dramatic changes in the workings of the Gulf economies thereafter.

It is speculation time again. As Covid-19 put the global economy into a tailspin, a rather pessimistic post-Covid economic scenario is doing the rounds, which has also resulted in extreme geo-economic and geopolitical forecasts. There may be more truth to the concerns this time than the previous two occasions, but to predict anything drastically adverse is biting off more than one can chew.

From an economic dimension, this optimism is derived from the rationale that the ‘need’ and ‘greed’ for money, which groups a huge majority of the world's population, will help the global economy recover lost ground. In fact, innovations resulting from the crisis, especially in the fourth industrial revolution domain, may yield a greater net result for global prosperity over the next few decades. While we hear about geo-economics, geopolitics and geo-security, we often ignore geo-technology. It is increasingly being pointed out that the country that brings to the fore better technological or digital tools, not military tools, to improve global economic fortunes is likely to dominate the world in the future.

Beyond the need-and-greed factor, the logic of economic growth over the decades and centuries, aided by a growing population, suggests that harping on pessimism is ill-advised. How could a world that adds 100 million annually to its population (150 million births versus 50 million deaths) not march forward? Countries experiencing growth may slow down, but the old order always gives way to the new.

Both the Gulf and Asia, which have a demographic advantage and a comparative advantage in production and consumption, are thus in a comfortable position to tap the progress earmarked for the 21st century. Since they are now better integrated with Africa than the West, they will also be able to capitalise on the developments in the ‘Hopeless’ continent that is becoming more and more ‘Hopeful’.

In international relations, expanding institutionalised channels of consultation is seen as enhancing cooperation. Pursuing this, it is estimated that nearly 90 countries (and many more private enterprises) are presently using space, either on their own or in partnership with others, to further individual or collective interests.

The West used the Cold War to further diplomatic influence and create ‘satellite’ states based on geopolitical ideology. Asia has taken it a notch higher by using ‘satellites’ in space as a diplomatic tool to further socio-economic interests and, possibly, even broaden political sphere of influence. They are also being used to help developing countries overcome their local problems associated with land, water, forests and crops.

China, India and Japan are the most influential players in this domain (with South Korea slowly emerging as the fourth noteworthy actor). Each of them is increasingly using space diplomacy as an out-of-the box foreign policy tool.

While China is opening the doors to foreign astronauts, India is offering communication transponders to its neighbours. From a Gulf perspective, this newage cooperation has taken the form of KhalifaSat, the first Emirati satellite built with the help of South Korea and launched in October 2018 from Japan, and the Emirates Mars Mission's spacecraft that was launched in July 2020 by a Japanese rocket.

As balance of power equations get reconfigured, there is evidence that international political-security competition in space may supersede other considerations in the future. For now, however, there are ample notable space-related developments in Asia that fall within the realm of soft power, which this chapter explores.

Foreign Policy Tool

Technological capabilities in outer space have long been used as an effective foreign policy tool. In the earliest examples of space diplomacy, the United States and erstwhile Soviet Union focused their efforts on convincing other countries of their capabilities in space and their best intentions in utilising them. This meant goodwill tours of cosmonauts, astronauts and space hardware.

As part of this effort, Yuri Gagarin travelled the world after his flight to space; Soviet leader Nikita Khrushchev sent one of space dog Strelka's puppies, Pushinka, to first daughter Caroline Kennedy in 1961 as a goodwill gesture; and NASA and the US State Department teamed up in 1962 to send John Glenn's Friendship 7 spacecraft on a tour around the world.

Other prominent examples include: the United States using LandSat satellites for over four decades to deliver spectacular and scientific images of the Earth to most countries of the world; and the Soviet Union flying an Indian cosmonaut to space in 1984 aboard Soyuz T-11.

Though the United States and China signed a “phase one” trade agreement in January 2020 as a first step towards controlling a trade war that began in July 2018, the crux of the goings-on in US-China relations is less about the trade war and more about the two countries becoming strategic competitors. While China, under President Xi Jinping, will seek to challenge American dominance, Washington will resist and not cede place to Beijing.

The competition does not indicate the start of a new Cold War or a full reversal of globalisation. It is more an attempt at decoupling the economies of the United States and China. Both countries are seeking to reduce interdependence that is likely to result in a bifurcation of globalisation. This will not occur overnight. It is a process that will take many years to unfold. There will be twists and turns but the direction of that journey has been set.

The fundamental reasons behind this transformation are the US assumptions that China will not move towards democratisation and its economic success-driven foreign policy will encourage authoritarianism around the world. On the other hand, the United States believes it is committed to democracy. There is a bipartisan agreement in the United States that it must take a robust stance vis-à-vis China as the latter emerges as a serious strategic competitor that could surpass the United States in specific technologies.

On its part, China, under Xi, started to prepare for such an eventuality several years before US President Donald Trump began the formal process of decoupling. Xi departed from his predecessors in jettisoning former president Deng Xiaoping's policy of ‘hide and bide’. He also adopted a policy to reduce Chinese dependence on, and make China competitive with, the United States shortly after he assumed power in 2012.

Even though Trump formally started the process of decoupling before China was ready, Beijing will persevere. It is politically impossible for Xi, now the strongman of China, to appear weak under US pressure. His political future requires tough posturing by Beijing.

As the decoupling process intensifies, the US-China differences are likely to widen, gradually forcing other countries, including those in the Gulf, to increasingly choose sides. While there may be short-term opportunities in this process for third countries, the overall long-term effects could be negative for the world at large. The interest of third countries that are not directly involved in the contest of values (e.g. democracy versus authoritarianism) lies in remaining neutral.

The intensification of linkages between the different constituents of the Asian geopolitical space is a defining marker of the Asian century. The continent is experiencing a significant rise in intra-regional trade while witnessing the progressive integration of Asia-wide markets for services and capital, with correlated increases in the number of people moving across its different sub-regions.

The Gulf Cooperation Council (GCC) countries have played a central role in the advancement of these processes: the establishment of multifaceted relationships with East Asian partners, China and Japan in particular; the consolidation of strong linkages with South Asia, supported by large numbers of expatriates from the Indian subcontinent currently living in the Gulf; and the relatively slower progress experienced by the GCC countries’ presence in Southeast Asia.

There is one noticeable exception to this norm: the footprint of the GCC countries is limited when we direct our attention onto a further, yet by no means less important, Asian constituency, namely post-Soviet Central Asia.

This chapter explores the Gulf-Central Asia partnership, pursuing a two-fold analytical agenda: first, it will sketch out the factors that have impeded the development of these relations; and second, it will identify potential avenues for future cooperation. Structural economic incompatibility and political sensitivities may have trumped geographic proximity, setting apparently insurmountable obstacles to the establishment of functioning relationships between the two regions. It is the gap between these relationships’ potential and their actual progress that ultimately emerges as the central determinant for the series of recommendations outlined in the conclusion.

Central Asia's economic appeal is primarily, yet not exclusively, located in the extractive sector. The region hosts two of Eurasia's key hydrocarbon producers: Kazakhstan – with proven oil reserves that rank 11th in the world – and Turkmenistan – which is reported to be the fourth largest holder of natural gas reserves globally.

The possibility to collaborate in the exploration and development of such substantive reserves may represent a primary driver for GCC interests in the region.

The commercial sector is a further area of potential convergence for GCC-Central Asia collaboration. Here, the emphasis need not be exclusively on the development of individual trade links between the Gulf states and the Central Asian economies – which, at the end of 2018, featured a cumulative GDP of $285.64 billion, of which more than 60% is produced in Kazakhstan– but also on the development of trade infrastructure and legislation to facilitate commercial interaction between the two Asian sub-regions.

China's Belt and Road Initiative (BRI) invokes historic memories of the Silk Road, which facilitated communication, trade and exchanges between civilisations. In its current form, the BRI is designed to further China's economic and foreign policies. It is rooted in China enjoying economic success through infrastructure development.

The plan is to replicate this economic strategy abroad. By attempting to create land and maritime trade routes linking China with Europe, through Asia (including the Middle East) and Africa, Beijing intends to help its own growth, especially in central and western China, and that of other countries as well.

The BRI is an extension of former president Jiang Zemin's strategy of encouraging Chinese companies to invest abroad. As China takes on a more global role under President Xi Jinping, the BRI is being promoted as a tool aimed at building a “common human community with a shared future”.

Of the proposed six BRI corridors, none formally includes the Gulf Cooperation Council (GCC) countries. But the five BRI connectivity themes – infrastructure, policy implementation, trade facilitation, financial facilitation, and people-to-people communication – keep the doors open for participation by the GCC countries, including the United Arab Emirates.

The scope for the GCC countries’ involvement in the BRI can be linked to at least two factors: one, the region's financial liquidity, which is evident in the bloc being home to some of the largest sovereign wealth funds, and their related investment interests; and two, the region's infrastructure capabilities, especially their reputation as air and maritime hubs, which have made them major trade and financial centres.

While these two GCC strengths dovetail well with the BRI, there are a few obstacles too, from the GCC countries’ perspective. The foremost among them is Iran, a major partner in the project. This chapter analyses some of the GCC's prospects and difficulties associated with the BRI. It argues that despite the drawbacks, four factors make it imperative for the regional grouping to consider getting on board the BRI

India's ties with the countries of the Gulf go back several millennia, when their ancestors jointly traversed the waters of the Indian Ocean and set up commercial, religious, intellectual and philosophical interactions that shaped a common civilisational identity, which remains vibrant to this day.

One key factor in the resilience of these relations has been the fact that these ties have been constantly refreshed to meet contemporary needs. If India has been the traditional provider of foodstuffs, textiles and items of elegant living to the region, it also, after the oil boom of the 1970s, became a major source of human resource to facilitate the dramatic expansion of infrastructure, industrial and welfare facilities in the oil-producing countries of the Gulf. Indians, thus, are the largest expatriate community in the region.

In turn, as India's economic growth has risen to between 6-8% per year, it has become a major market for the energy resources of the Gulf, with the Gulf suppliers currently meeting nearly 80% of India's oil imports.

Now, after 20 years of the new century, with attendant changes in the world order, the powerful implications of technological innovation and globalisation, and the simultaneous expressions of national and sub-national identities and aspirations, there is a need to reshape Gulf-India relations. It is important that mutual interests are safeguarded and the region is better prepared to cope with the contradictory pulls of globalised connectivity and national assertions, amidst emerging conflictual scenarios, particularly in the Middle East.

These new challenges call for a fresh look at how the United Arab Emirates (UAE) and India can work together to define and pursue a new role for mutual advantage and regional interest. They have expanded their relationship beyond the traditional areas of energy, trade and community. They are tapping new opportunities in investments, infrastructure development, cooperation in space, nuclear and renewable energy technology, arid agriculture, and, above all, enhanced defence and security links.

The two countries have framed these new relations in a ‘Comprehensive Strategic Partnership’ agreement that was signed in New Delhi in January 2017. Going beyond the ‘bilateral’, the agreement envisages a wider engagement to address regional and global challenges.

This chapter examines three specific areas of collaboration envisaged in the agreement: food security; enhanced maritime security cooperation in the Indian Ocean; and the promotion of regional stability through confidence-building measures among contending parties and shaping, over time, of cooperative security arrangements in the Middle East.

The focus of the first five years (2013-2018) of China's Belt and Road Initiative (BRI) was on the economic dimensions, laced with a tinge of politics. It is likely that the next five years of this ambitious project – while making headway in the economic domain and acquiring a greater political flavour – will also attain a security dynamic that has the potential to become the basis of a future global security system, with ramifications for the Gulf.

This chapter focuses on two interconnected issues: one, the already-evident traces of the BRI's economic-political-security linkages; and two, how this security feature may or may not expand to fit into China's wider defence policy, which includes a naval plan extending into the Indian Ocean, comprising the Gulf countries.

The first part argues that since a large part of the BRI routes are vulnerable to multiple tensions, it is most likely that increasing Chinese investments would see a corresponding increase in Chinese security presence to protect its interests. This strategy is already evident through the expanding presence of private security firms, with retired personnel from the People's Liberation Army (PLA), along the Belt and Road routes. It also suggests that the establishment of a naval base in Djibouti in 2017 could be a forerunner to its probable and larger security role in the future.

The second part analyses how this economic-centric security outline could expand to acquire a much more political-centric security slant, offering potential alternatives to the existing US-centric architecture in the region.

While doing so, it also seeks to undercut the notion that the United States is a ‘diminishing’ security player in the Middle East and the Gulf. Concurrently, without ruling out that China could be an alternative force for the security of the region, it points out that the current ground realities of Chinese security expansion and capabilities are still no match for America's security capabilities in the region and the Indian Ocean.

It concludes that while it is important for the Gulf countries to strengthen security ties with the United States, it is equally important to explore alternative mechanisms, including collective security, that include a role not just for China, but for a host of other countries that have a stake in the region's stability.

While India has the second largest Muslim community in the world – numbering about 180 million – it has astonished observers that Indian Muslims have refused to join the cohorts of trans-national extremism that have attracted thousands of youth from different Muslim countries and communities across the world, including the Gulf, over the last few years.

This phenomenon is particularly impressive given that, while extremist violence in Kashmir has been ongoing for three decades, Indian Muslims in the rest of the country have consistently refused to join the insurgency there.

This chapter examines several possible reasons – doctrinal, cultural and political – to explain this aloofness from faith-based violence. It discusses the belief-systems and practices of ‘popular Islam’ in India, particularly the influence of Sufism, the veneration of saints, and the insistence that matters of faith remain part of personal conviction rather than agitated in the public domain.

The chapter then examines the shaping of India's contemporary political culture whose syncretic values and accommodativeness are enshrined in the constitution and are protected by strong watchdog institutions such as the independent judiciary, free media and a vibrant civil society. These have imbued the nation with a culture of pluralism, that, despite robust challenges, remains resilient and refuses to accept nontolerant and extremist assertions across the communal landscape.

Finally, the chapter provides some ‘lessons’ from the Indian experience that could be useful for other countries in the Gulf and the wider region that are shaping approaches to de-radicalisation and counter-radicalisation.

Unique Traditions

When the call went out for Muslims to join the ‘global jihad’ in Afghanistan in the 1980s, about 100,000 responded from around the world. None, however, was from India. Indian Muslims also kept aloof from the transnational jihad led by Al Qaeda in the 1990s and later, after 9/11, through local affiliates in West and South Asia. After the advent of Islamic State in Iraq and Syria (ISIS), about 200 Indians responded to its call. It was reported that 22 people went to Syria to fight, while another group of 25 (from the state of Kerala) migrated to ‘Khorasan’, the ISIS enclave in Afghanistan. The rest were engaged in online activity, either accessing ISIS material or disseminating it to facilitate further recruitment.

This aloofness of Indian Muslims from ISIS contrasts sharply with the latter's ability to attract about 30,000 militants from outside Iraq and Syria, with recruits joining its ranks from West Asia and North Africa, Central and Southeast Asia, and from Europe. Indian Muslims have rejected trans-national jihad despite concerns that communal polarisation has increased in the country from the 1980s, along with sporadic violence directed at them from sections of the majority community and a perceived sense of marginalisation from the mainstream of the nation's political and economic life.

Over the last two decades, the Gulf Cooperation Council (GCC) members and India have made concerted efforts to foster their relations beyond oil, trade and expatriates. In the search for new avenues to convert the countries’ decades-long buyer-seller relationship into a more meaningful one, the mantra is “strategic partnership.”

India and the GCC countries are exploring new opportunities in investments and infrastructure development that link energy security with food security, cooperation in space and artificial intelligence, nuclear and renewable energy technology, and, above all, enhanced defence and security relations. Going beyond the bilateral, the new engagement between GCC members and New Delhi addresses regional and global security challenges through anti-extremism and counterterrorism strategies, and pursues multilateral development projects in third countries.

This change has occurred amid two parallel developments. First, there has been a shift in the Gulf region's economic centre of gravity. Asia has surged ahead of Europe and the United States as the top investor in and trade partner of the Gulf region. This, along with perceptions of diminishing US influence and impact in the wider region, is creating a security vacuum that could lead to the creation of an alternative collective security architecture that includes India.

Second, like several other Asian countries, India has a healthy working relationship with Iran, which has adversarial relations with several members of the six-member GCC bloc. This has encouraged competition between and among the GCC countries, Iran and even the United States to extend favours to India to expand their influence. Simultaneously, the Gulf states have good relations with India's neighbour and rival, Pakistan, which adds another dynamic to the relations.

This chapter focuses on relations between and among India, the GCC countries, Pakistan, Iran, and the United States, which is the main security guarantor in the region. It summarises the multi-dimensional Gulf-India economic, diplomatic and security ties and what these connections and their likely policy implications could mean for the region and the United States too.

The period of introspection and reflection while compiling this book during the Covid-19 lockdown took me back to the start of my professional journey. When I first arrived in the United Arab Emirates from India in the summer of 2000 with a PhD on the political systems and international relations of the Gulf, an Arab- American joked, “It must have been a very short thesis!”

The world has transformed significantly over last 20 years and is likely to be very different over the next two decades.

From being the ‘window to the world’ for many centuries, Asia made way for the West after the discovery of oil in the region. Modernisation (rural to industrial) thereafter became synonymous with Westernisation (modern ideas and customs). But the success of Japan, China, South Korea, and India, among others, in the late 20th and early 21st centuries helped the process of Easternisation or Asianisation gain currency and encouraged a rediscovery of East-East camaraderie.

Japan, of course, was the poster child of transformation, but its growth model did not have a distinct Asian character. This changed with China's rise. When Chinese leader Deng Xiaoping launched the ‘Reform and Opening’ programme in 1978, China's GDP was merely $150 billion (against the US’ $2.5 trillion). Forty years later, it was an astounding $14 trillion (against the US’ nearly $20 trillion).

In the process of this transformation China has achieved several milestones: become the largest trading country worldwide, with about 130 countries being No.1 trade partners; lifted about 800 million citizens out of poverty; is referred to as the “world's factory”; and manages the largest social security system, with basic old-age pension covering more than 900 million.

South Korea followed suit. From approaching the International Monetary Fund in 1997 for assistance to avoid an external payments crisis, its GDP was ranked 12th in the world in 2019. From being a manpower exporter, it became a technology powerhouse and is among the main drivers of the fourth industrial revolution.

India too rose from an abysmal low. When the Indian prime minister attended the Davos Summit in 1997, India's GDP was $400 billion. In 2018, the prime minister announced in Davos that India's GDP was inching towards $3 trillion and aspiring to hit the $5 trillion mark by 2025.

The Gulf Cooperation Council (GCC) countries and Japan have been important economic partners for several decades, chiefly in the energy sector. While the oil and gas sectors are still very important, especially after the 2011 Fukushima nuclear disaster, Japan is diversifying its bilateral relationship keeping in mind two factors – first, reviving its own economy; and second, the economic diversification programmes in the Gulf countries.

Under the banner of economic diplomacy, this amicable economic relationship has diversified into the non-oil domain to include collaboration in a variety of traditional and non-traditional sectors, including investments, science and technology, education, tourism, and even security, among others. There are also attempts to bring new-age sectors like advanced robotics and artificial intelligence into the mix.

Though the share of non-oil trade in the overall trade volume is small at present, it not only occupies an important place, but is also expected to garner a bigger share in the future. While arguing that energy ties remain the bedrock of the GCC-Japan ties, this chapter highlights the recent developments and evolving opportunities in the non-oil sector. It does this by specifically focusing on Japan's expanding partnership with Saudi Arabia and the United Arab Emirates.

The chapter also identifies certain challenges that require attention to maintain the momentum and suggests ideas that could add teeth to Gulf-Japan economic interdependence beyond oil in the future. This includes the possibility of developing multilateral partnerships with Japan and other countries in the region and beyond.

Key Dynamics

After the Great East Japan Earthquake and the Fukushima nuclear disaster in 2011, energy policy in Japan changed remarkably, returning to fossil fuel, thus increasing its dependence on the oil-producing GCC countries. In 2015, Japan imported 34% of its crude oil from Saudi Arabia, 24% from the UAE, 11% from Qatar and 7% from Kuwait. The Gulf region – mostly Qatar, Oman and the UAE – is also an important supplier of liquefied natural gas to Japan.

The longstanding bilateral economic relationship through energy-related trade also laid a solid foundation for interchange in the non-oil economy. In 1997, Japan and Saudi Arabia promoted a ‘Comprehensive Partnership Towards 21st Century’ to improve political, economic and other new areas of cooperation. This was followed by the signing of the ‘Japan-Saudi Cooperation Agenda’ in 1998. The economic exchange between the two countries has advanced considerably since then.

In the coming years, the Indian Ocean will face a significant number of environmental security threats driven by climate change and other human activity. Moreover, they cannot be properly understood or addressed in isolation from each other. A range of threats – including natural disasters, rising sea levels, extreme weather events and deteriorating fish stocks – have the potential to combine and cascade into overwhelming geo-environmental challenges that can affect the entire region in ways far beyond their individual impacts. What might initially appear to be ‘merely’ environmental issues can often have significant strategic consequences.

Geo-environmental challenges also often go well beyond the ability of individual states to respond and generally demand a collective response. But while the Indian Ocean Region (IOR) may be an epicentre for many of these challenges, the region currently has few institutions that are well suited to the task of organising a response. As a first step, the region needs better mechanisms to build shared understandings among civil and military agencies and non-governmental groups about how to mitigate and contain environmental security threats.

As Chair of the Indian Ocean Rim Association (IORA) until end of 2021, the UAE will have an opportunity to demonstrate its regional leadership and set the agenda for regional cooperation. The UAE is already demonstrating leadership in renewable energy. This chapter explores how the UAE could also consider initiatives to bring together the region to address other geo-environmental challenges.

Growing Threats

Significant disruptions in the natural environment are likely to create a range of security threats in coming years. This section discusses existing natural hazards faced in the IOR, the potential impact of climate change and other human interactions on the environment, and how these might create environmental security threats.

The IOR has long been an epicentre for a range of natural hazards, including climatological (cyclones and droughts), geological and tectonic (earthquakes and tsunamis) and hydrological (such as floods and tidal surges).

Along with the Pacific, the Indian Ocean experiences the most serious natural hazards in the world, but it is also one of the regions with the least capacity to respond. The impact of many natural hazards, such as cyclones, floods and earthquakes, is magnified by the relatively high population density in parts of the region. This may be further exacerbated by the growth of huge, dense, urban areas, particularly in coastal areas.