This is the fourth entry in our series onunderstanding Asia-Pacific sea power.

As the third-largest body of water in the world, and containing vital sea lanes that help feed some of Asia’s largest economies, the importance of the Indian Ocean has long been clear.

However, the relative decline of US power in the region has left a void that is increasingly being filled by China and India, both eager to secure their position as major powerbrokers in global affairs. It’s this confluence of events and interests that’s starting to make strategic developments in the region particularly interesting right now.

The sea lanes in the Indian Ocean are considered among the most strategically important in the world—according to theJournal of the Indian Ocean Region, more than 80 percent of the world’s seaborne trade in oil transits through Indian Ocean choke points, with 40 percent passing through the Strait of Hormuz, 35 percent through the Strait of Malacca and 8 percent through the Bab el-Mandab Strait.

But it’s not just about sea lanes and trade. More than half the world’s armed conflicts are presently located in the Indian Ocean region, while the waters are also home to continually evolving strategic developments including the competing rises of China and India, potential nuclear confrontation between India and Pakistan, the US interventions in Iraq and Afghanistan, Islamist terrorism, growing incidence of piracy in and around the Horn of Africa,and management of diminishing fishery resources.

As a result of all this, almost all the world’s major powers have deployed substantial military forces in the Indian Ocean region. For example, in addition to maintaining expeditionary forces in Iraq and Afghanistan, the US 5^th Fleet is headquartered in Bahrain, and uses the island of Diego Garcia as a major air-naval base and logistics hub for its Indian Ocean operations. In addition, the United States has deployed several major naval task forces there, including Combined Task Force 152, which is aimed at safeguarding the flow of oil through the Persian Gulf,and Combined Task Force 150, which is tasked with countering piracy from the Gulf of Oman to Kenya.

France, meanwhile, is perhaps the last of the major European powers to maintaina significant presence in the north and southwest Indian Ocean quadrants, with naval bases in Djibouti, Reunion, and Abu Dhabi. And, of course, China and India both also have genuine aspirations of developing blue water naval capabilities through the development and acquisition of aircraft carriers and an aggressive modernization and expansion programme.

China’s aggressive soft power diplomacy has widely been seen as arguably the most important element in shaping the Indian Ocean strategic environment, transforming the entire region’s dynamics. By providing large loans on generous repayment terms, investing in major infrastructure projects such as the building of roads, dams, ports, power plants,and railways, and offering military assistance and political support in the UN Security Council through its veto powers, China has secured considerable goodwill and influence among countries in the Indian Ocean region.

And the list of countries that are coming within China’s strategic orbit appears to be growing. Sri Lanka, which has seen China replace Japan as its largest donor, is a case in point—China was no doubt instrumental in ensuring that Sri Lanka was granted dialogue partner status in the Shanghai Cooperation Organisation.

To the west, Kenya offers another example of how China has been bolstering its influence in the Indian Ocean. The shift was underscored in a leaked US diplomatic cable from February 2010 that was recently published by WikiLeaks. In it, US Ambassador to Kenya Michael Ranneberger highlighted the decline of US influence in East Africa’s economic hub, saying: ‘We expect China’s engagement in Kenya to continue growing given Kenya’s strategic location…If oil or gas is found in Kenya, this engagement will likely grow even faster. Kenya’s leadership may be tempted to move close to China in an effort to shield itself from Western, and principally US pressure to reform.’

But where China has led, India has certainly been following. India imports about 70 percent of its oil through the Indian Ocean Region to its various ports. As a consequence, it has been enhancing its strategic influence through the use of soft power, by becoming a major foreign investor in regional mining, oil, gas,and infrastructure projects. In addition, India has aggressively expanded its naval presence.reportedly to include the establishment of listening posts in the Seychelles, Madagascar.and Mauritius; in late 2009, it successfully co-opted the Maldives as part of its southern naval command. China is often accused of engaging in a String of Pearls strategy to surround India. Judging by India’s naval build-up, though, the truth could actually be quite the opposite.

All this said, the economic and military considerations traditionally associated with diplomacy shouldn’t overshadow another pressing and potentially inflammatory issue in the Indian Ocean—the largely unregulated overexploitation of its fishery resources.

The UN’s Food and Agriculture Organization has launched a number of initiatives to tackle the problem, including the Indian Ocean Tuna Commission, which was created in 1993 (and which includes among its 24 members a number of countries outside the region such as China, Japan, and the United Kingdom). Yet despite such efforts, in 2005, the FAO admitted that 75 percent of fishery resources in the south-western Indian Ocean had been fished to their limits, while the remaining 25 percent had been harvested beyond ecological sustainment. The consequences of over fishing, which is actually largely a result of activity by countries outside the region, could eventually have serious consequences for littoral states that depend heavily on maritime resources to feed their populations and also provide valuable export revenues.

The problems associated with resource and strategic issues are only likely to grow more pronounced over the coming decade, especially with the global economy’s continued reliance on energy reserves in the Middle East, Central Asia,and Africa. A rapidly growing China and India, who both entertain superpower aspirations, are becoming increasingly energy hungry, and there’s genuine potential for conflict as these two giants try to feed their economic growth and expand their influence.

‘Energy security,and resources are absolutely critical. The Indian Ocean Region is immensely rich in that, and therefore, all developing societies need access to the new material produced around the Indian Ocean littoral,’ said Kim Beazley, Australia’s ambassador to the United States, in an interview withAsia Pacific Defence Reporter. ‘In the long-term the Indian Ocean is going to be massively more significant in global politics than it has ever been before, and that is the function largely of the fact that the Asia-Pacific region is massively more significant.’

Right now, there’s no reason to think he isn’t right.

Sergei DeSilva-Ranasinghe is a Senior Analyst at Future Directions International, a strategic think tank based in Perth, Western Australia.