Nine Scholars Offer Views on South China Sea Dispute

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Journal of Political Risk, Vol. 3, No. 5, May 2015.

Recent satellite imagery from the Centre national d'études spatiales (CNES) show that China is building an island on Fiery Cross Reef near the Spratly Islands in the South China Sea.

Recent satellite imagery from the Centre national d’études spatiales (CNES) show that China is building an island on Fiery Cross Reef near the Spratly Islands in the South China Sea.

Anders Corr, Ph.D.
Publisher of the Journal of Political Risk

Matthew Michaelides
Editor of the Journal of Political Risk

Today, 100 participants gathered at the Harvard Club of New York City for the Journal of Political Risk’s Conference on the South China Sea to discuss all aspects of the ongoing territorial dispute between China and the Southeast Asian states of the Philippines, Vietnam, Malaysia, Brunei, and Indonesia. Papers given at the presentation will be among those compiled and released in a forthcoming book on the South China Sea dispute.

The event opened with a discussion of some of the recent actions taken by China in the South China Sea. Bill Hayton, author of The South China Sea: The Struggle for Power in Asia (Yale University Press, 2014), spoke on China’s recent island-building operations on several disputed reefs and islands in the South China Sea, including Mischief Reef and Fiery Cross Reef. Mr. Hayton noted that China acts as it does because it genuinely, albeit wrongly, thinks of itself as the rightful owner of maritime territory within the 9-dash line. He noted that China did not claim new features in the recent island-building, rather it built on features occupied for 20 years or more. Lastly, Mr. Hayton predicted that China would continue to expand, provoking further conflict.

Speakers at the event proposed several constructive proposals for resolving the dispute presently facing the Southeast Asian region.

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Effect of South China Sea Air Strips on the Range of Chinese Surface-to-Air Missiles and the J-10 Fighter

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Journal of Political Risk, Vol. 3, No. 5, May 2015.

The authors publish, for the first time, a new map showing the effect of South China Sea Air Strips being built by the People’s Liberation Army, on the Effective Range of Chinese S-400 surface-to-air missiles and the J-10 multi-purpose fighter.

The authors publish, for the first time, a new map showing the effect of South China Sea Air Strips being built by the People’s Liberation Army, on the Effective Range of Chinese S-400 surface-to-air missiles and the J-10 multi-purpose fighter.

Anders Corr, Ph.D.
Publisher of the Journal of Political Risk

Matthew Michaelides
Editor of the Journal of Political Risk

In mid-April, China started building a military air strip in the South China Sea,[1] and to the extent that air strips are replicated on China’s other occupied South China Sea atolls and shoals, it will dramatically increase the effective range of its military aircraft and rocketry, including surveillance, search and rescue, helicopter, transport, bomber, and fighter aircraft, as well as its surface-to-air missile (SAM) and anti-submarine warfare (ASW) capabilities.

Chinese air assets advantaged by the South China Sea air strips include the Chengdu J-10[2] and J-11 fourth-generation multi-purpose fighter jets[3], the Soviet-made S-400 SAMs[4], the twin-propeller Y-12 Turbo Panda maritime patrol[5] and surveillance aircraft, ASW aircraft and helicopters, unmanned aerial vehicles such as the Pterodactyl Wing Loong[6], and cruise missiles such as the Chang Zian (Also spelled Chang Jian, or Long Sword)[7], with a range of up to 2,000 kilometers.[8]

With its weaponry closer than ever to the Philippines, Vietnam, Malaysia, Brunei, and Indonesia, not to mention potential refueling of bombers and tankers, the People’s Liberation Army Air Force (PLAAF)[9] will have improved air power projection capabilities towards Australia and India.  SAMs based on the new islands will significantly augment already-existing naval SAMs such as the HQ-9 (with an operating range of up to 100km).[10]

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Cuba’s Roller-Coaster Investment Climate — Not for the Faint-Hearted

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Journal of Political Risk, Vol. 3, No. 4, April 2015.

A white building with a red roof is photographed in a large, green field. Palm trees are visible in the background.

The Club House at Instituto Superior de Arte. The campus is built on the site of an old golf course that was “reclaimed” after the revolution, 2007. The Cuban government has taken increasingly large steps in recent years toward economic liberalization. Cuba issued a pair of surprising free-market decrees on Thursday Aug. 27, 2010, allowing foreign investors to lease government land for up to 99 years, potentially touching off a golf-course building boom, and loosening state controls on commerce to let islanders grow and sell their own fruit and vegetables. Source: Flickr.

Vito Echevarria 
Freelance Journalist

Attendees of the “Cuba Opportunity Summit” – held on April 1, 2015 by the Wharton School of the University of Pennsylvania at the NASDAQ Marketsite in New York City – consisted mainly of American companies and entrepreneurs, who are caught up with the gold rush-like fervor over the prospect of finally doing business with Cuba. That island, which has endured a harsh trade embargo imposed by Washington since its takeover by Fidel Castro and his Communist revolution, is perhaps the ultimate frontier market on the planet, since American companies have been forbidden from conducting any trade with that regime for decades.  The one glaring exception has been the opening of food trade, which Bill Clinton allowed before leaving office in 2000. Cuba has since become a multi-million-dollar market for various U.S. agricultural and food products.

President Obama’s December 2014 announcement to normalize U.S. relations with Cuba, which will presumably increase food export opportunities, travel, as well as openings in areas like banking, telecommunications and building supplies, is being viewed in many circles as a process that will ultimately end the ongoing U.S. trade embargo against Cuba. Speakers at the Wharton Cuba Summit, which was covered by CNBC (complete with on-site interviews by its Chief International Correspondent, Michelle Caruso-Cabrera), included top executives from Norwegian Cruise Line, Discovery Networks, Thomas Herzfeld Advisors, and NASDAQ, along with a stream of U.S. government officials (headed by Roberta Jacobson – Asst. Secretary, Bureau of Western Hemisphere Affairs – who’s been leading Washington’s negotiations with Cuban officials to normalize diplomatic relations between the two countries), as well as think tanks from the Brookings Institute to the Americas Society. In other words, Cuba has finally “arrived” – receiving long overdue “prime-time” attention in the United States. Even some of the Cuban government officials that showed up were overwhelmed by the attention they were getting from fellow attendees.

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Political Risk: Conceptualization, Definition, Categorization, and Methodologies

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Journal of Political Risk, Vol. 3, No. 4, April 2015.

Narendra Modi election poster with all the candidates' headshots visible against an orange background.

Narendra Modi election poster, 2014. Separatists called for a strike as authorities imposed a daytime curfew Monday across the disputed Himalayan region of Kashmir, barring residents from leaving their homes. Main roads leading into Srinagar were lined with razor wire to contain traffic, and police and paramilitary soldiers were patrolling on foot and in armored vehicles. These and other considerations contribute to high levels of political risk in Kashmir. Source: Wikimedia Commons.

Vishrut Kansal
W.B. National University of Juridical Sciences in Kolkata, India

Abstract

The paper is aimed at presenting a conceptual analysis of the political risk that impacts investors, project sponsors, creditors, and host government alike. First, an attempt to conceptualize and define political risk is made along with its subsequent categorization into its different types. Then, the methodologies of mitigating and managing political risk are elucidated upon. Lastly, political risk insurance as a mitigating factor of political risk is briefly dwelt upon. While presenting this overview, concerted attempt has been made to identify the practical techniques that investors and host governments may adopt while undertaking decisions involving political risk.

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Iran’s New Generation of Oil and Gas Contracts: Historical Mistrust and the Need for Foreign Investment

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Originally published in Journal of Political Risk, Vol. 3, No. 4, April 2015.
Revised version published in Journal of Political Risk, Vol. 4, No. 2, February 2016.

A large mount is photographed with a long, winding road leading up to it.

Homa gas field, Hava Mount, 2011. Iran’s President Hassan Rouhani said his country intends to increase production from a giant joint gas field shared with neighboring Qatar, state TV reported on Sunday, Dec. 1, 2013. The report quoted Rouhani as saying Iran that intends to match Qatar’s production by 2017. Source: Wikimedia Commons.

Reza Yeganehshakib, Ph.D.
Research Associate

Reza Yeganehshakib  holds a Ph.D. in history with a specialization in World and Middle Eastern history at the University of California, Irvine (UCI). He received a B.S. degree in Chemical Engineering from Iran Azad University, and an M.A. in history from UCI, where he serves as a Research Associate at the Samuel Jordan Center for Persian Studies. Dr. Yeganehshakib is a member of the Middle East Studies Association and the International Society for Iranian Studies. He is affiliated with the Persian Language Institute at California State University, Fullerton and was previously affiliated with the National Iranian Oil Company.

Abstract

After nationalizing the oil industry in Iran in 1951, the government passed protectionist laws that restrained foreign ownership of Iran’s oil fields and industries. Since the Islamic Revolution in 1979, these laws have been reinforced to further reflect the anti-Western ideological underpinnings of the revolution. Yet, after the Iran-Iraq War and the beginning of the era of so-called “reconstruction” in 1988, the Iranian government adopted several laws to encourage foreign investment, particularly in the country’s largest industry, oil and gas. These laws, chiefly the Foreign Investment Promotion and Protection Act (FIPPA), despite having been revised several times, have not been successful in encouraging foreign companies to invest in Iran’s oil and gas industries. As a result, the government of the Islamic Republic of Iran recently announced that it would issue a new generation of oil and gas contracts, Iran Petroleum Contracts (IPC) that are more attractive to foreign investors. This paper investigates possible challenges that Iran’s protectionist laws may pose for these contracts, especially in light of Iran’s prevailing political and religious anti-West/anti-imperialist ideology and Iran’s distrust towards the West after the fall of Mossadegh’s government in 1953. It also studies Iran’s political and legal realities and whether they might provide foreign investors with attractive incentives, such as partial or conditional ownership of the industries, for investment.

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