The Keys to the World: Geopolitical Risk and Maritime Chokepoints

Across the globe there are maritime chokepoints which hold valuable strategic value but also significant geopolitical risk. Below I look at both the history and geopolitics of the Suez Canal, Panama Canal, the Straits of Malacca and Hormuz and the Bosphorus Straits. Historically these places have been important thanks the huge amount of shipping that passes through them, as well as their military and naval value.

The Suez Canal

The Ancient Egyptians were the first to dig a canal from the Red Sea to the Mediterranean. Several different versions of the waterway were dug throughout antiquity but they eventually silted up and were forgotten.

When the modern version first opened in the 1860s the Suez Canal revolutionised international trade. By cutting the travelling distance from India and the Far East to Europe at a stroke. The new route also altered the world’s geopolitical landscape. Suddenly gifting Egypt a new military, geopolitical and economic significance. This was to prove both a blessing and a curse.

“A Key to World”

The Canal was originally conceived and financed by the French. However he British government soon realised its significance and took advantage of the Egyptian government’s weak financial position to buy a stake from them in the 1870s.

Over time shares in the company controlling the canal evolved into direct control over Egypt. The Canal soon became an essential part of British imperial thinking. At once a powerful “key” to control the world’s oceans and trade, but also a weak spot, vulnerable to enemy attack and something to be carefully guarded.

The Canal’s importance was cemented in the early part of the twentieth century as the region’s oil flowed through the narrow channel. Oil supplies became crucial for both industry and eventually the Royal Navy. The Navy switched from coal power to oil in the first decade of the 1900s.

Egypt Takes Control

Now the Canal lies firmly in the hands of the Egyptians thanks to President Nasser’s nationalisation in 1956. A bold move which resulted in a military intervention by the British and French who were set to lose their prize Middle Eastern asset.

“We shall defend [the Suez Canal] with our blood and strength, and we shall meet aggression with aggression and evil with evil”

Gamal Nasser 1956

But in turn these fading imperial powers were ruthlessly undermined by a lack of US support (who threatened to pull the plug on British debt). At once ending British illusions about its superpower status and pushing the French into a long term rapprochement with Germany.

 For the Egyptians it was a moment of national triumph. But a short-lived one, for the disastrous 1967 Arab-Israeli war saw the country defeated and Egypt closed the canal for 10 years.

Enter the USA

The Canal was eventually reopened and today ownership over the canal provides a good income from shipping fees and a useful diplomatic tool for Egypt. Cairo can opt to close the canal to traffic to countries (like Israel) it takes issue with. The Canal also helps bolster Egypt’s reputation as the geopolitical lynchpin of the Middle East. This despite a patchy record of political and economic management.

Egypt’s stewardship of the Suez Canal means strong US support in the form of military and diplomatic aid. Despite the uncertainty of recent years, Egypt is considered “to big to fail”. The geopolitical risk of an unstable Egypt is well recognised by the Washington establishment. It will come as no surprise that Egypt is the second largest recipient of US military aid.

China on the Horizon

The Egyptians also maintains strong links with China. Bilateral trade has blossomed between the two countries in recent years, as has Chinese direct investment in the country. Beijing’s increasing economic presence across the Middle East means it will get further drawn into the regions’ messy geopolitics.

While China presently has good relations with all the major economies of the region. It could one day be forced to choose allies and enemies. If that point arrives you can be sure Beijing will take into account the massive volume of Chinese goods passing through Suez to Europe before endangering relations with Cairo.

The Straits of Malacca

This narrow gap separating Indonesia and the tip of the Malay Peninsula was long recognised by the British as the fulcrum of trade and military power in East Asia and one of the “keys” along with Gibraltar and the Suez Canal that “locked up” the world through naval power.

Singapore lies to the north of the Strait and was the centre of Britain’s Far Eastern military command. The City’s position ensured the construction of huge sea facing fortifications (which in the event proved useless when the Japanese managed to attack by land in World War Two), to protect it and its loss was arguably Britain’s worst military defeat of the twentieth century.

Geography rules

Singapore’s strategic position and good governance has made it one of the world’s great hubs for shipping and commerce. It is by some measures the globe’s busiest port (vying with Shanghai for this particular honour). As well as watching over the immense flow of electronic and consumer goods leaving the factories of Asia to the shopping centres and malls of Europe and the Middle East.

In the other direction the Strait sees a hefty proportion of the world’s oil supplies en-route from the Gulf to China and the US. Overall a quarter of the globe’s merchandise pass through the Straits. This represents a huge geopolitical risk.

 Hostile Powers

Therefore the idea that the Strait could be closed or shipping stopped by a hostile power has long occupied the minds and plans of politicians and military chiefs among the world’s great trading powers. While the US does not have a permanent Naval presence in Singapore, it has a number of aircraft carriers in the region and retains strong relations with Singapore as well as its neighbours.

Beijing also retains good relations with the city-state which has a majority ethnically Chinese population. This undoubtedly helps cement business and social ties between the two nations. 

China is currently developing its naval capacity but remains a long way behind the US. Beijing views protecting its overseas trade as a major priority and lack of control over the Malacca Straits is of huge concern.

A String of Pearls starting at the Isthmus of Kra ?

There has been speculation that this will manifest itself in a “string of pearls” – a series of naval bases in Asia and the Indian Ocean to buttress Chinese power, but so far there is no sign of this materialising.

In the longer term China will want the US to accept it as more of an equal, something Washington may find very hard to accept, how this particular dynamic unfolds over the coming years is crucial for peace in the region.

Interestingly there were once rumours the Thai government would cut a canal through the Isthmus of Kra, (the narrow central section of Thailand) financed by the Chinese, reducing shipping times and the strategic importance of the Straits of Malacca at a stroke. This kind of bold move could strengthen China’s hand, but at the risk of angering the Americans than their allies.

The Panama Canal

In 2016 Panama Canal saw the conclusion of a huge expansion programme costing US$5.2 billion. This work allowed much larger vessels through the canal. This ushered in a new wave of Panamax class supertankers, which in turn will bring about even greater economies of scale in the shipping industry.

Geopolitical Risk

The troubled and lengthy construction of the Panama Canal helped to forge a new Central American nation. The Canal was also crucial in the USA’s journey to becoming a global power. The opening of the Canal helped reduce shipping times dramatically. With the Canal open ships could avoid the long and arduous Cape Horn route at the foot of South America.

It was the French under Ferdinand Lesseps, the same man who had successfully built the Suez Canal that pioneered the construction of a link between the Atlantic and Pacific. At the outset Lesseps was supremely confident thanks to his experience in Egypt. However, he severely underestimated the difficulties of the terrain. Mountains proved difficult to dig around and the tropical climate had thousands dying of disease.

Enter the USA

Eyeing the failing French effort the increasingly confident and out-going US government authorised the purchase of the project. However when negotiations with Colombia the host country at that point failed, it started a chain of events which led to the US supporting Panama’s independence.

Panamanian rebels were assisted by a US naval blockade and overt political support. All of which allowed the new territory to split away from Colombia and then sign over the rights of the canal to Washington in the Hay-Bunau-Varilla Treaty, part in gratitude for helping them win independence, part in ignorance of the treaty’s consequences. 

Complete Control

Once the Canal was finally complete in 1914 it gave the US control over the most important trade route in the Americas, but also helped to confirm Latin American suspicion over Washington’s motives in the region and it is often cited as a classic case of gun boat diplomacy.

The Canal rapidly became an increasingly significant international waterway, now seeing around 16% of US trade pass through it every year and one the country was willing to defend with arms. The US deposed the increasingly anti-American Panamanian President Noriega in 1989 with a swiftly executed military invasion.

While the US finally relinquished control of the Canal in 1999 – on the condition it became a demilitarised zone. As the preeminent military power in the region it is unthinkable that Washington would allow a potentially hostile power to take any kind of control over the route.

The Prospect of a Rival Canal

China is now the major trade partner with much of Latin America and sees a significant chunk of its imports and exports pass through the canal. From Brazilian iron ore destined for the factories and workshops of the world’s foremost manufacturing nation. In the opposite direction tools, toys and all manner of consumer goods bound for North American shops and malls.

Fear of this vital route being compromised or cut off to Chinese shipping has led to outlandish schemes springing up. These include a Chinese backed alternative waterway through Nicaragua. Another idea is a “land” canal – a new rail line for heavy cargo cutting across Colombia to connect Pacific and Atlantic ports.

China’s Plan?

So far these ideas have made no real progress and remain unlikely to be carried out.  But the confidence and ambition of China has been underestimated before, so nothing should be ruled it out.

In this scenario it would be interesting to observe the US reaction. The idea of a major foreign power de facto controlling a trade route which comparable to the Panama Canal in Central America would not be popular in Washington. The US has already seen China take the economic initiative in its backyard. A Chinese controlled canal would I suspect be a step too far.

At its narrowest point it is only 700 meters wide. But the Strait represents a border between Asia and Europe as well as access to global trade for the Black Sea States. The Straits represent a strategic chokepoint and represents a huge geopolitical risk.

The Geopolitics of The Bosphorus

Istanbul was once called Constantinople. Named after its founder the Roman Emperor Constantine it soon became the most powerful and wealthy city in Europe and the pinnacle of the Byzantine Empire. A position it claimed for nearly 1000 years until its decline along with the Byzantines.

The rise of the Ottoman Empire and its invasion of the Byzantine Empire, culminating in the siege and capture of Constantinople in 1453 marked the eclipse of that great power. For many scholars the event signaled end of the medieval era in Europe. The conquest also represented the rise of a new power that would dominate the Middle East and much of Eastern Europe for centuries.

The Rise and Fall of the Ottoman Empire

In particular control of the Bosporus gave the Ottomans control of the key trading routes in the region. It also cemented their ability to control the Silk Road trading routes to the Far East.

Militarily it gave the Ottoman’s leverage over their northern neighbours, bottling up Russian naval ambitions to the Black Sea. However control over the Silk Road gave others the impetus to find new routes East.

Over time the opening up of oceanic sea routes by the Spanish, Portuguese, Dutch and English diminished its importance as Western Europe states could ignore the Silk Road to trade with China and India. Instead they could look across the Atlantic and Pacific for trade.

All this time other powers eyed the straits jealously. In particular the rise of the Russian Empire to the north and its desire for free access to the Mediterranean and beyond was a major contributor to the numerous wars between the two great Empires. The Ottomans and Russians went to war

The Great War

On land the capture of the city gave the Ottomans the impetus to move West and seize much of Eastern Europe only being halted at the gates of Vienna. That was probably the high point, over time slow decline took hold of the empire. Its last stand was the First World War where despite its technological disadvantage it successfully threw back the British assault on the Bosporus focused on Gallipoli.

Churchill’s doomed plan was to seize the Ottoman capital and knock a major German ally out of the war, while at the same time provide a supply route to their Russian allies and further encircle the remaining Central Powers.

The Turks bravely repulsed the British Empire forces, famously many of them from Australia and New Zealand and attention in the war shifted elsewhere.

The Ottomans won the battle, but the result of the war eventually dissolved the Ottoman Empire and led to the birth of the new Turkish Republic. The new republic brought a desire to move away from what was seen as a capital soaked in the old fashioned corrupt ways of the Sultans and their court and instead make a fresh start in a new capital in centrally located Ankara.

Istanbul and Reinvention

For other cities this might have might have resulted in decline and obscurity. Istanbul’s geography ensured its continuing relevance and since losing its capital status it has grown into a powerhouse. The most populous city in Europe, the commercial hub of Turkey and indeed the Eastern Mediterranean.

The Geopolitics of the Straits

Now with many predicting a global shift of world trade and investment away from the Atlantic and towards Eurasia and one dominated by China rather than Western powers. Istanbul looks set to profit. The Bosphorus holds a pivotal position on the Eurasian landmass. 2.9 million barrels of oil pass through Istanbul every day.

A huge volume of trade also pass through Istanbul, grain and the rich agricultural produce of Ukraine. While in the other direction goods from the rest of world flow to the Black Sea states such as Romania, Bulgaria, Ukraine and Russia. All of this can be cut off in a stroke by the Turkish Government.

The option to block the Strait on one level provides Turkey a great deal of leverage over its northern neighbours. But cutting off access to the Bosphorus would provoke a massive international reaction and represent a huge geopolitical risk. Even the threat of military intervention. But the fact that Ankara is able to take this measure ensures that any move against them will have be weighed up against this possibility.

Russia’s Watchful Eye

The Russian invasion of Crimea gave it a new platform to project power in the Black Sea. This along side military engagement in Syria and the growth of Tartus naval facility in the country enhanced its role in the Middle East.

It has also made Russia naval traffic through the Bosporus route ever more important. But any expansion of Russian naval power is ultimately frustrated by the narrow strait, as its fleet and exports and imports can be bottled up.

Beyond the Bosphorus Turkey is a significant regional power player. Its long standing President Erdogan is keen to extend its influence further into Africa, the Balkans and Middle East. This “neo-Ottomanism” is perhaps the inevitable result of Turkey’s power and economic success. Others see a power with Imperial designs which needs to be checked. Whatever its current stance, the Bosphorus gives Turkey a permanent geopolitical trump card.

The Straits of Hormuz

The narrow Straits of Hormuz connects the Persian Gulf and Indian Ocean. To the North lies Iran, while to the South the United Arab Emirates and Oman. A quarter of the world’s oil and a third of all gas supplies pass through the narrow waterway. Cutting off the Strait or interfering with tankers can send oil prices through the roof in an instant.

The Strait has been the scene of frequent stand offs between US and Iranian Naval vessels. Iran has threaten to cut off the Strait in the past. This power gives it a certain amount of leverage. But actually cutting off the route would incur a US military response as well as heavy criticism from many other states.

A world faced by oil and gas supplies disruptions would not look kindly on Iran. So far Iran has not carried out any of its threats. If however conflict arose between Iran and its neighbour Saudi Arabia or the US, closing off the Strait could be an unconventional and vital tool.