5 territorial disputes to watch out for in 2017

For several places around the world, 2017 could be a watershed year, as various territorial disputes threaten to boil over amidst a climate of global uncertainty.

Much like fights over territory itself, the concept of territory has disputed roots. It is not uncommon to associate ‘territory’ with ‘terra’ as in terra firma (or terroir to wine connoisseurs). However, some scholars suggests an alternative root – ‘terror’. Here, territory belongs to those who are able to instill fear such that those living within its boundaries are obliged to respect the laws and norms of their respective rulers. This is the very core of the Hobbesian concept of sovereignty and gets to the heart of territorial disputes. At the moment, fear may be the more useful concept when evaluating contested territories – fear present in governments, policy makers, and businesses.

More acutely, potentially significant shifts in policy from the incoming Trump administration have created significant ambiguity in the role the United States may play in these disputes. Other challenges have also served to fan the flames in several specific hot spots. Any such shift, from recent elections or other sources, will likely have follow-on effects as states, NGOs, and other actors alter their own positions in response. Below are five territorial disputes that may be exacerbated over the next year.

South China Sea

China claims large portions of the South China Sea. To bolster its position, the Chinese government has built artificial islands to turn a dispute about the ocean into one about land. This was investigated by an international tribunal in the Hague during the summer of 2016. Since then, Washington has taken a relatively cautious approach. However, during a Senate hearing on January 12th, US Secretary of State nominee Rex Tillerson, made it clear that he believes the Chinese stance to be unacceptable. “You’re going to have to send China a clear signal that, first, the island-building stops, and second, your access to those islands is also not going to be allowed,” he told senators.

Although the official Chinese response was to downplay the significance of this statement, its state run media interpreted Tillerson’s comments more aggressively. An estimated $5 trillion in trade travels through the South China Sea, meaning even a slight disruption can have profound effects on economies and investors across the globe.

Israel and Palestine

The United States has long maintained that it acts as an honest broker in the Israeli – Palestinian conflict. While this was view has not always been shared by all parties, US policy has remained predictable and stable for nearly 30 years. The incoming Trump administration appears to be signaling a clear and vocal shift.

Since the early 1990’s, the US has generally viewed Israeli settlements as a barrier to furthering the peace process. Furthermore, US policy on retaining its embassy in Tel Aviv, rather than Jerusalem is nearly as old as Israel itself. This may change abruptly with the appointment of David Friedman as US ambassador to Israel. In the past he appears to have diverged from US policy on both issues. It is unclear if this signals a shift in actual policy or if there is simply a stronger voice in the incoming administration to do so. Either way, it is likely to increase uncertainty for Israeli and Palestinian governments, NGOs, and investors approaching key questions in their respective portfolios.

Crimea

Since Russia’s 2014 intervention in Ukraine, global reaction has been near universal condemnation: the EU, US, and others began sanctions soon thereafter. These may have contributed to both the decline in the value of the ruble and Russia’s poor financial performance over the last two years.

On January 15th, 2017 Donald Trump signaled a willingness to lift sanctions in exchange for a nuclear arms deal between the US and Russia. In recent years Russia has been among the three largest oil producing nations. However, sanctions have made it difficult for Moscow to benefit from oil exports; lifting sanctions would likely reverse this. Perhaps more importantly is the exchange of sanctions for a nuclear arms deal, which would further entrench Russia’s territorial claims in Crimea.

The Arctic seafloor

In August 2007, a Russian submarine descended nearly four kilometers (2.5 miles) under the Arctic to plant a flag on the seafloor. As many investors are no doubt aware, the claim is not only a way to gain access to the potentially vast natural resources under the ocean; rather it also has the potential to determine control of shipping lanes as Arctic ice melts.

Since 2015 Russia has attempted to legitimize this claim through UN recognition. However, it was not until August of 2016 that the UN Commission on the Limits of the Continental Shelf began its evaluation. It is important to note that US, Canada, Norway, and Denmark have also made claims in the region.

Russian claims, however, are larger and are more developed than those of other nations. While the UN Law of the Sea governs many of these disputes, the US is the only claimant that is not party to the treaty. Interestingly, the US Defence Department has urged the Senate to adopt the treaty, so that the US can gain at seat at the table on Arctic (and other) deliberations. With a nearly unprecedented number of former generals set to play civilian roles in the Trump administration, such a shift is perhaps more likely than in years past.

Kashmir

Contested since the inception of India and Pakistan, Kashmir has long been a disputed territory. This turbulent history saw the addition of another sorry chapter in 2016, as unrest increased during the past year. One reason was the death of Burhan Muzaffar Wani – the leader of the Hizbul Mujahideen militant group – during an encounter with Indian military forces: protests erupted in the aftermath of the incident in July. Successive skirmishes have since led to a cycle of protest and violence leaving the territory in an especially volatile position as 2017 begins.