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U.S. relationships with Asia-Pacific region: A confluence of imperatives for Alaska

Posted: April 1, 2014 - 8:09am

“Luck is where preparation meets opportunity.”

— Randy Pausch

“Not all those who wander are lost.”

— J. R. Tolkien

The threads of connections between America and Asia cross and re-cross on the loom of life at various levels. Like immigrants from Europe during the nineteenth century, immigration from Asia (especially China) transformed America in multiple ways. At that time, no one could have previsioned America’s relationship with Asia as clearly as Cassandra previsioned the fall of Troy.

Most recently, nearly seventy years after the end of the Second World War, relations between Japan (the world’s 3rd largest economy) and China (the world’s 2nd largest economy) colored by old wounds, have seen deterioration over disputed islands in the East China Sea. This has put the United States (the world’s largest economy), because of its military alliances with Japan and South Korea, in an unwelcome situation. Last November, China’s unilateral declaration of an Air Defense Identification Zone over a part of the East China Sea that includes the disputed islands of Senkaku and Diaoyu drew American sharp criticism and warning. The Philippines is another American treaty ally. America’s Pacific destiny also includes an ambitious trade agreement (Trans-Pacific Partnership) involving America, Japan and ten other countries (but not China).

In 2012-13, of the 819,644 international students who came to U.S. universities, the majority (64%) came from Asia. The top three countries sending students to the U.S. are: China (235,597); India (96,754), South Korea (70,627). How true is the increasing inter-connectedness of the U.S. with Asia!

President Obama’s announcement in his first term of a major strategic re-orientation in the United States’ foreign policy—the so-called “pivot” or “rebalancing” to Asia—was a clear signal to America’s Asian allies that America is still an Asia- Pacific power and that it would fulfill its commitments to maintaining peace and stability in the Asia Pacific region. This appears to be a wise decision. Particularly worrisome are the tensions between the People’s Republic of China and its Asian neighbors. For instance, China and Japan are locked in a bitter and emotional territorial dispute over the Diaoyu/Senkaku Islands, and China has aggrieved several Southeast Asian nations, particularly the Philippines, over its claims to islands far beyond China’s borders in the South China Sea. In the so-called 2009-2010 “year of assertiveness,” China picked fights with and irritated relations with Australia, ASEAN countries, India, Japan, the Philippines, South Korea, and Vietnam.

This new foreign policy re-orientation is making Alaska’s strategic presence on the Pacific Rim increasingly important. Several reasons could be cited. First, Alaska’s role in America’s military force posture in Asia is being expanded. Although Alaska is covered under the U.S. Northern Command, its forces based there are part of the United States’ Pacific Command. A clear example of this expansion was Defense Secretary Hagel’s announcement that the U.S. will be deploying 14 new ground-based missile interceptors at Fort Greely by 2017. Shocked by Kim Jong Un’s bellicose threats to void the armistice that ended the Korean War in 1953 and to launch a nuclear attack on the U.S., all this within the context of North Korea’s rapid development of its nuclear weapons program and its intercontinental ballistic missiles to deliver them, prompted the United States to spend $1 billion to expand the nation’s ground-based missile interceptor system to counter this nuclear threat from the unpredictable regime.

In addition, the Joint Pacific Alaska Range Complex, through modernization and expansion, will become one of the few places in the world with adequate range space to provide training for large-scale full-spectrum joint and combined operations that also accommodate increasing the means of enhancing the military’s most advanced capabilities. It is a premier training locality like few others in the world, making it a critical national and allied training asset. In 2011, for instance, more than 6,000 service members from across all armed forces participated in exercise “Northern Edge,” receiving joint large scale training for quick response to crises throughout the Asia-Pacific region. What’s more, the Joint Pacific Alaska Range Complex, being strategically located within the national territorial boundaries of the United States, provides the United States with unfettered capability to train and test air, land, and sea forces for possible military operations in the Arctic.

Second, the worldwide interest in Alaska’s natural resources is rising. Mining metals is one of them. But mining nowadays is not like during the Klondike Gold Rush in the 1890s when prospectors searched for gold in creeks with pans, picks and shovels. Today gold is mined, deep in the ground with state-of-the-art high-tech equipment by Asian corporations such as Sumitomo Metal Mining Pogo LLC, and operated by managers flown-in from Asia. The mining industry is said to have spent $275 million on exploration in Alaska during 2012. Driving this exploration is the demand for metals by Asian countries such as China, Japan, and India. Japan imports more than $125 million in minerals from Alaska annually. In 2009, Sumitomo Metal Mining Co. and Sumitomo Corporation purchased full ownership of the Pogo gold mine. Japanese corporations have continued making significant investments in other mining projects across the state, and so have the Chinese. In 2013, the U.S. lured more than $14 billion of investment from China. Also, in 2013, China’s Shuanghui purchased U.S. pork giant Smithfield Food for $4.7 billion.

However, it is not gold mining that is now drawing the most rapt attention toward Alaska’s natural mineral resources. Rather, it is the strategic Rare Earth Elements, also known as specialty or technology metals, which have become essential for production of the modern technological advances arising out of high-tech industries. Political instability and growing national rivalries in East Asia are now behind much of the nascent push to mine and locally process Alaska’s Rare Earth Elements. In 2010, for example, the People’s Republic of China flexed its growing industrial power by blocking the export to Japan of crucial minerals used in high-tech manufacturing of hybrid cars, wind turbines, and guided missiles. Industry officials reported that China’s customs agency had notified Chinese corporations that they were not allowed to ship to Japan any rare earth oxides, rare earth salts or pure rare earth metals. This move, of course, sent Japan scrambling to end its reliance on China for rare earth elements, seeking alternative suppliers worldwide. But the ban on rare earth elements exports to Japan also directly affected the United States because American companies now rely mostly on Japan for magnets and other components using those same rare earth elements. The crux of the problem is that China has bought up a near world monopoly on the production and refining of rare earth elements mined for use in high-tech equipment.

One of these rare earth minerals is dysprosium, which goes in the production of many critical technologies, including in the manufacturing of smart bombs and drones. China currently dominates the global market of dysprosium, but the discovery of dysprosium on Alaska’s Prince of Wales Island could provide the opportunity to break the Chinese monopoly. In December 2011, the United States Department of Energy published a report saying dysprosium is of strategic national importance and an element for national security. Therefore, the United States Defense Department is desperately seeking to find production of quality domestic supply of dysprosium, and with it begin to revive the American rare earths industry. The U.S. military depends on rare earths for guided missile systems, satellites and unmanned aerial vehicles, and NASA uses powerful rare earth metal magnets in its spacecraft.

The key to China’s monopoly isn’t just about controlling an abundance of rare-earth deposits, but also its expertise in processing ore into oxides and pure metal. Ucore Rare Metals Inc., which focuses on production of heavy rare earth elements, is the company that owns the Bokan Mountain-Dotson Ridge property in Alaska. According to Ucore’s website, “the Bokan property is particularly enriched with heavy rare earth elements, including the critical elements dysprosium, terbium, and yttrium.” It also states that it is the highest grade heavy rare earth deposit in the United States. Accordingly, the Department of Defense funded Ucore’s ore extraction research with a contract in October 2012.

Third, Alaska’s strategic location as America’s only arctic state enables it to assume a unique role in America’s national security posture and America’s desire to maintain a global order it has committed to since the end of Second World War. As an arctic nation, the United States is a permanent member of the Arctic Council, the leading international organization for cooperation in the region, established by the eight Arctic states—United States, Russia, Canada, Finland, Iceland, Norway, Sweden, Denmark—in 1996, with wide participation from circumpolar indigenous peoples such as the Inuit. Headquartered in Tromsø, the largest city in Northern Norway, the organization sponsors major scientific research, focusing on environmental initiatives, sustainability, and development issues. The chairmanship of the council rotates among member states every two years, and it is the United States’ turn to assume this role in 2015.

Non-arctic States have expressed increased interest in the Arctic region. In 2013, twelve non-Arctic counties were granted observer status in the Arctic Council, five of which are Asian: the People’s Republic of China, Japan, the Republic of Korea, Singapore, and India. This is the first time Asian countries joined this once exclusive club, which is just one more indication of a global power shift toward Asia. Naturally, some permanent members have questioned certain new members’ motivations for joining the Arctic Council, wondering if this is just an attempt to expand their national influence into the governing structure of this critical territory.

It was only in May 2013 that the United States issued its “National Strategy for the Arctic Region” report. But with the Arctic Council chairmanship belonging next to the U.S., Alaska must be consulted throughout in order to work out a comprehensive circumpolar north policy, since it is the only U.S. Arctic state. The United States has been slow in the past recognizing the threat that China’s global monopoly over the mining and production of rare earth elements poses to its national security. Now we must not be slow to recognize security interests in the Arctic as we sit in the Council.

It is noteworthy that India is one of the Non-Arctic Asian states. While the Japanese and the Chinese have extensive trade relationships with Alaska, it might seem odd that India is involved. Interestingly, the Obama administration’s pivot to Asia includes an area that stretches in an arc all the way from the Indian Ocean— including India—to Northeast Asia. President Obama and Indian Prime Minister Manmohan Singh, in a bilateral summit held in late 2013, reflected on the transformation of United States-India relations during the past decade. Today United States-Indian relations are stronger than at any time since the birth of the Republic of India in 1947. India and the United States have much in common. Both nations are multi-ethnic and multi-racial secular democracies and have a common language ( English, along with Hindi, is an official language in India). Anchored in common democratic values, language, and strong people-to-people ties, it is not surprising that the United States and India have developed a comprehensive global strategic partnership. India’s intellectual power has a presence in Alaska’s higher education system, too. For instance, compared to peers there is an enviable presence of Indian faculty on the campus on the University of Alaska Fairbanks. In the College of Engineering & Mines, China-born faculty has a presence in the Department of Mechanical Engineering, while India-born faculty has a big presence in the Department of Petroleum Engineering and the Department of Mining & Geological Engineering. There is even an official sister-city connection between Fairbanks in Alaska and Pune in India.

In short, along with the North America region, Asia has become the most economically dynamic region in the globe and remains vital to U.S. national security as well as to Alaska’s prosperity. In an increasingly global world, it is imperative that our students, as future leaders in the state and nation, be cognizant of Asia’s experience in world history and its relevance in shaping the present. In this vein, the newly redirected Asian Studies Program on the campus of the University of Alaska Fairbanks is designed to provide Alaskans with a solid background in Asia-Pacific affairs, an awareness of contemporary issues affecting the region, and a robust analytical tool kit capable of helping forecast future developments in Asia.

Today, south Texas and North Dakota have become the largest sources of tight oil (i.e., shale oil gas). When oil prices rise, production can be ramped up quickly by drilling more holes, and when oil prices fall the producers can simply stop drilling. This flexibility is a huge advantage. This has huge long-term implications for Alaska which depends overwhelmingly for its revenues on North Slope oil production. History shows that an economy may be rich in resources but if it is not modern, adjustments become hard when external shocks hit (Argentina is a case in point). In the haze of a new Asian dawn over the global stage, a confluence of urgent imperatives become more distinct and should give all Alaskans more pause to consider the consequences of our role as an actor.

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