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Malacca Strait: Target for terror
By Ioannis Gatsiounis

KUALA LUMPUR - While it benefits some parties to talk up the threat of terror - whether to gain a contract or a foothold in a foreign land - the Singaporean, Malaysian and Indonesian governments, burdened with monitoring the world's busiest strait, would like nothing more than to prove to the world that everything's under control.

Indeed, with 600 vessels and 11 million barrels of oil passing through the Malacca Strait each day, everything has to be under control.

So it followed that on July 20, in conjunction with the three countries' launch of coordinated patrols of the Malacca Strait - which will allow each country to evaluate one another's strengths and weaknesses and coordinate their patrols while maintaining sovereignty - the Indonesian navy flexed a little muscle.

As flares pinkened the sky, soldiers parachuted into the sea and simulated a pirate chase in speed boats. If only it were for real, and a day earlier, when pirates toting automatic weapons boarded a liquefied petroleum gas (LPG) tanker off the coast of Indonesia and escaped with equipment.

If only. But what if? What if it wasn't pirates but terrorists who had attacked the ship? For terrorists, an LPG tanker would be a dream catch, just right for turning into a "floating bomb" to crash into a port or city.

The point is, according to Malaysian, Indonesian and Singaporean naval officials, the trilateral arrangement for coordinated patrols puts the three littoral states in a better position to prevent just such an occurrence.

"Our cooperation in coordinating the patrol activity will take place all year, every day, 24 hours a day," said Admiral Bernard Kent Sondakh, chief of the Indonesian navy. Three to four ships will patrol the 600-mile Strait at any one time. Intelligence will be shared; a 24-hour information center has been opened.

But will the coordinated patrols, as advertised, significantly reduce the possibility of a crippling terrorist attack taking place in the Strait?

It is ironic that the simulated pirate chase was a display of the same muscle that has been touted for years - the same muscle that has hardly made the Strait safer passing for vessels. Pirates have operated with virtual impunity here, with less than 1% being caught. And according to the International Maritime Bureau's (IMB) annual report, between January and June  piracy attacks in the Strait were up 33% from a year ago. The same report found that Indonesia had the highest incidence of piracy in the world, with around 100 actual and attempted attacks last year.

Indonesian navy Colonel Sulistyanto doesn't foresee the coordinated patrols - known officially as Melaka Strait Singapore Coordinated Patrol (MSSCP) - substantially reducing those figures. "Our three nations need more assets, personnel, intelligence building. The policy and budgeting must change," he said. Any funding increases are predicted to be minimal; they will be siphoned from preexisting military budgets, or collected from donor nations.

But even with adequate funding, said Sulistyanto, the MSSCP's policy falls short. Unlike "joint" patrols, "coordinated" patrols don't allow for hot pursuits. This means one country giving chase to pirates or terrorists cannot cross into the territorial waters of another country. Each country will still operate under separate commands and patrols, a potential cause for confusion, inefficiency and misallocation of resources.

Malaysian Defense Minister Najib Razak, who has long feared the intentions of those militaries Malaysia collaborates with, dismissed the possibility of joint naval patrols, insisting that territorial integrity must be respected. (In April the US military commander in the Asia Pacific region, Admiral Thomas Fargo, said his country was considering deploying marines and special forces on high-speed vessels along the Malacca Strait to thwart terrorists. In June, Fargo assured Najib he didn't mean what he said.)

But some wonder whether Najib's pride and paranoia are hindering the stated aims of the MSSCP. The Indonesian navy finds itself, in the words of Sulistyanto, "spread thin", unable to honor its share of the agreement. Indonesia is home to myriad other problems, from political to economic to sectarian in nature. The government hasn't been in a position to make fighting terror a priority. Indeed, only 30 of the Indonesia navy's 117 warships are currently operational, though it has announced a plan to procure 22 brand-new battleships.

Singapore, meanwhile, desperately wants a greater US presence in the Strait, as it perceives itself to be the primary terrorist target in the region: it is the only non-Muslim state of the three, a strong ally of the United States, and its port is the busiest in the world. It doesn't help that the tiny republic sits exposed like a sore thumb on the Strait.

Malaysia, on the other hand, has come across as calm and confident. As Malaysian Prime Minister Abdullah Badawi told reporters recently, "I wouldn't say that [Jemaah Islamiyah [JI - the suspected Southeast Asian wing of the al-Qaeda network] are destroyed, but if there are any more, we [Malaysia] are able to contain them." Malaysia is in the process of building its own coast guard, which would bring the marines, navy, fisheries and other maritime agencies under one umbrella.

The three states' differing attitudes will hardly enhance the coordinated patrols. But then, how vulnerable, really, is the Malacca Strait to a terrorist attack? Judging by the number of pirates working the Strait with impunity, the answer would seem to be: very.

One nightmare scenario involves pirates teaming up with terrorists. Brian Jenkins, an expert on terrorism and security, warns against conflating an increase in piracy with an increase in the terrorist threat. And so far, there is no indication that terrorists and pirates are in cahoots. Their aims are different. According to retired Malaysian Captain Mat Taib Yasin, "The pirate wants to enjoy his loot. The terrorist wants to destroy the enemy, get political mileage - and he's prepared to die."

But pirates have a proven track record hijacking oil tankers in the Strait. And navy officials wonder how far a little money might go in convincing pirates to assist terrorists. After all, money - loot - is the pirate's language, and the terrorists who may be eyeing the Strait are well funded.

Some analysts point out that hijacking a tanker and steering it through the narrow lanes of a port is a different matter entirely from a simple hijacking. Navigating a ship through a harbor requires the skills of a harbor pilot, and harbor pilots are often not part of a ship's crew but borrowed at the port entrance. And last month it became mandatory under International Maritime Organization rules for all ships over 500 gross tons to have alarm systems. In case of a pirate or terrorist attack, the pressing of a button will notify the nearest shore-based authority of a crisis. The system identifies the ship and its location, speed and bearing, and the alarm won't be heard on the ship itself, so the assailants will not be aware it has been sounded.

What, though, if a ship is hijacked long before it reaches the Strait? Indeed, the world's biggest crew supplier is the Philippines - home of the militant group Abu Sayyaf, no stranger to wreaking havoc on the high seas.

How navies of the MSSCP allocate their resources may well determine the fate of the Strait. J N Mak, a visiting fellow at the Institute for Southeast Asian Studies in Singapore and an expert on seafaring crime, said Singapore, Malaysia and Indonesia might be focusing too much attention on the sea itself. "Terrorists, like pirates, operate from land bases. They're beholden to land. They need fuel and petrol," he said. History, he added, shows that success in beating lawlessness at sea has involved targeting land bases.

No security system is foolproof, and even those that appear to be may not deter terrorists from trying their hand in the Malacca Strait, for the potential aftermath of an attack may be too great to pass up.

Oil and the economy
The West is the largest consuming bloc of oil, while the Middle East is the biggest producer. This means oil as a commodity is highly dependent on international trade. And most of this, two-thirds, is shipped by tanker (the rest moves by pipeline).

No doubt terrorists have long been fascinated with oil and shipping targets. In October 2002, al-Qaeda rammed a boat full of explosives into a French supertanker stationed off Yemen. That same year, a group of al-Qaeda operatives were arrested by the Moroccan government on suspicion of plotting to sink British and US tankers in the Strait of Gibraltar.

Terrorists have also plotted attacks on oil tankers in the Persian Gulf and off the Horn of Africa. These incidents, coupled with al-Qaeda plots to attack US warships, including those transiting the Malacca Strait, have fueled concerns of a major catastrophe in the making.

Under interrogation, an al-Qaeda specialist in maritime operations, Abd al-Rahim al-Nashri, told of the group's ability to attack shipping targets. The al-Qaeda network has shown video footage of Malaysian police patrols along the Malacca Strait, suggesting they may already be planning an attacking on the waterway.

Of all the shipping lanes in the world, the Malacca Strait may be the most attractive to terrorists. One-third of all world trade is said to pass through the Strait. Most trade to Asia passes through it - 80% of China's oil imports alone pass through the Strait. As its economy grows, China finds itself more dependent on the free flow of goods to and from other nations; and in turn those nations depend on an economically stable China. Oil supplies are crucial to that interdependence.

Global demand for oil this year is predicted to grow by 2 million barrels a day, the largest increase since 1998. The terrorist confronts a world addicted to oil. And of course the best way to bring an addict to his knees is to cut off his supply.

Would devastating the Malacca Strait have the intended effect? One scenario has a terrorist crashing a boat into an undocked oil tanker; it is believed that an oil spill, particularly at the Strait's narrowest point of 1.5 miles, could shut down the Strait for weeks. But with a global economy incessantly dependent on the free flow of maritime goods, environmental and safety concerns are likely to take a back seat - they can't afford not to.

History is inconclusive on the economic impact of impairment of the oil trade. The 1973 Arab oil embargo caused oil prices to triple and the world to dive into a recession. But an attack on a Western oil target in Khobar, Saudi Arabia, this year did little to disrupt the flow of Saudi oil. And though there have been 18 attacks on oil pipelines this year in Iraq, which has the fourth-largest reserves, this has hardly destabilized the global economy.

Oil is fungible, and made more so by fears of a terrorist attack on oil routes and supplies. The United States, for one, has been stocking up on petroleum reserves, which now surpass 700 million barrels. And US oil supplies are diversified.

While supply is not a huge issue, this by no means ensures that a terrorist hit on the Malacca Strait couldn't have a major impact on the oil price. Most well-informed analysts say that from a supply-demand standpoint, oil should be trading in the range of US$32 or so; the rest is risk premium and "taking out insurance" against the unknown. On Tuesday, world oil prices set fresh records, just short of $45 a barrel for US crude, as violence in Iraq disrupted exports.

Any significant terrorist event, even if it does not actually greatly cut down on supply, would kick this risk premium up further; markets are all about expectations. Closing the Strait even for a short period would likely have a large psychological price effect, and this is a great worry for China, Japan and South Korea.

In real terms, closure of the Strait would force a diversion through the Sunda or Lombok straits and add 1.5 sailing days. That, in turn, would immediately stretch tanker capacity - already stetched - to the limit. Moreover, it would take the Singapore refineries and refined products out of the picture, at least to some extent.

The coordinated patrols are a product of these fears. And their announcement puts all eyes back on the Strait as a potential terrorist target - but with that comes a reminder of just how vulnerable and attractive to terrorists the Strait is. And one's left to wonder whether the patrols will stoke or deter the enemy.

(Additional reporting by Bill Guerin)

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Aug 11, 2004

Malacca Straits security reflects hazy dividing line
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