1 00:00:02,720 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,400 --> 00:00:13,280 Speaker 2: Mauritius, an island in the Indian Ocean, is increasingly becoming 3 00:00:13,360 --> 00:00:15,280 Speaker 2: a popular travel destination. 4 00:00:16,000 --> 00:00:19,680 Speaker 1: It's the greenest green like I've ever seen. 5 00:00:20,079 --> 00:00:23,639 Speaker 2: Peter Martin is a Bloomberg correspondent covering Africa in the 6 00:00:23,640 --> 00:00:27,240 Speaker 2: Middle East. He's based in Nairobi, Kenya, in East Africa, 7 00:00:27,600 --> 00:00:30,040 Speaker 2: and last month he hopped on a four hour flight 8 00:00:30,160 --> 00:00:30,920 Speaker 2: to Mauritius. 9 00:00:31,360 --> 00:00:35,559 Speaker 1: I'm from the countryside in England and the plants growing 10 00:00:35,640 --> 00:00:39,640 Speaker 1: in this volcanic soil on the side of these dramatic 11 00:00:39,720 --> 00:00:43,720 Speaker 1: mountains and then surrounded by these perfect blue waters and 12 00:00:43,760 --> 00:00:46,760 Speaker 1: coral reefs. It's really a strikingly beautiful place. 13 00:00:48,440 --> 00:00:52,000 Speaker 2: But Peter wasn't in Mauritius to take a vacation. He 14 00:00:52,200 --> 00:00:55,080 Speaker 2: was there because the tiny island nation is now front 15 00:00:55,120 --> 00:00:59,680 Speaker 2: and center of an increasingly tense and vital global power play. 16 00:01:00,640 --> 00:01:02,480 Speaker 1: It's one of those parts of the world that after 17 00:01:02,520 --> 00:01:05,520 Speaker 1: the Cold War was a little bit forgotten, and it's 18 00:01:05,760 --> 00:01:10,319 Speaker 1: largely known for its perfect beaches and as a tax pavement, 19 00:01:10,560 --> 00:01:13,240 Speaker 1: but it's also the merged as a kind of crucial 20 00:01:13,280 --> 00:01:17,360 Speaker 1: theater for competition. This kind of interesting three way tussle 21 00:01:17,480 --> 00:01:20,360 Speaker 1: between China, India, and the United States. 22 00:01:21,040 --> 00:01:24,160 Speaker 2: Mauritius and its neighboring islands in the Indian Ocean are 23 00:01:24,200 --> 00:01:28,440 Speaker 2: strategically important for these global powers. They use the islands 24 00:01:28,480 --> 00:01:31,559 Speaker 2: as basis to protect shipping lanes in the Indian Ocean 25 00:01:32,080 --> 00:01:37,400 Speaker 2: and to project military power throughout the region, and China's 26 00:01:37,440 --> 00:01:41,120 Speaker 2: growing presence and influence in the Indian Ocean is raising 27 00:01:41,200 --> 00:01:42,560 Speaker 2: alarm in India. 28 00:01:43,200 --> 00:01:46,920 Speaker 1: India looks at the whole of the Indian Ocean region 29 00:01:47,240 --> 00:01:51,600 Speaker 1: as something akin to its backyard. Deli sees the region 30 00:01:51,960 --> 00:01:55,000 Speaker 1: as a place which is crucial to its ability to 31 00:01:55,040 --> 00:02:00,160 Speaker 1: do trade, to procure energy, and is non negotiable part 32 00:02:00,240 --> 00:02:03,880 Speaker 1: of its path to great power status. And so the 33 00:02:04,000 --> 00:02:08,640 Speaker 1: idea that any foreign power, but especially Beijing, could threaten 34 00:02:08,720 --> 00:02:12,600 Speaker 1: that is profoundly worrying for policymakers in Delhi. I think 35 00:02:12,600 --> 00:02:14,440 Speaker 1: it's fair to say that it keeps them up at night. 36 00:02:18,600 --> 00:02:22,160 Speaker 2: Welcome to The Big Take Asia from Bloomberg News. I'm Wanha. 37 00:02:22,800 --> 00:02:25,200 Speaker 2: Every week we take you inside some of the world's 38 00:02:25,240 --> 00:02:29,240 Speaker 2: biggest and most powerful economies and the markets, tycoons and 39 00:02:29,360 --> 00:02:33,440 Speaker 2: businesses that drive this ever shifting region. Today on the 40 00:02:33,440 --> 00:02:36,640 Speaker 2: show How Mauritius and its island neighbors got caught in 41 00:02:36,720 --> 00:02:40,840 Speaker 2: a power tussle between the world's biggest economies. And what 42 00:02:40,880 --> 00:02:44,200 Speaker 2: does China's growing cloud in the Indian Ocean mean for India, 43 00:02:44,600 --> 00:02:52,520 Speaker 2: the US and the rest of the world. Mauritius is 44 00:02:52,560 --> 00:02:55,799 Speaker 2: a tiny volcanic island about fifteen hundred miles from the 45 00:02:55,840 --> 00:02:59,160 Speaker 2: East African coast in the Indian Ocean. It has a 46 00:02:59,200 --> 00:03:02,800 Speaker 2: population of about one point three million people, and its 47 00:03:02,880 --> 00:03:06,680 Speaker 2: ties with one of its biggest neighbors, India, runs deep. 48 00:03:07,000 --> 00:03:12,200 Speaker 1: Mauritius had no indigenous population when Europeans showed up. The 49 00:03:12,200 --> 00:03:18,160 Speaker 1: island was primarily populated by Britain, taking ethnic Indians from 50 00:03:18,200 --> 00:03:22,400 Speaker 1: the subcontinent there as indentured laborers. About seventy percent of 51 00:03:22,440 --> 00:03:27,239 Speaker 1: the population are ethnic Indian and Mauritius doesn't have a 52 00:03:27,320 --> 00:03:31,919 Speaker 1: standing military, so it relies on India for that external security. 53 00:03:32,440 --> 00:03:35,040 Speaker 2: But in recent years the island has started to see 54 00:03:35,160 --> 00:03:39,800 Speaker 2: new influences emerge, especially in the island's capital, Port Louis. 55 00:03:40,120 --> 00:03:44,640 Speaker 1: China has poured infrastructure investment into the island. It's built 56 00:03:44,680 --> 00:03:48,800 Speaker 1: a substantial dam, invested in the Special Economic Zone. It's 57 00:03:48,840 --> 00:03:54,200 Speaker 1: built radio stations, shopping malls a long list of projects, 58 00:03:54,400 --> 00:03:57,800 Speaker 1: and you can see the way that the United States, 59 00:03:57,800 --> 00:04:00,800 Speaker 1: for example, has responded to it. The US embassy was 60 00:04:00,880 --> 00:04:03,720 Speaker 1: based or is still based in a kind of cramped 61 00:04:03,800 --> 00:04:07,280 Speaker 1: office building in downtown Port Louis, but Washington is pouring 62 00:04:07,320 --> 00:04:11,040 Speaker 1: three hundred million dollars into building a new mega embassy there. 63 00:04:12,040 --> 00:04:15,320 Speaker 2: The maneuvering by these global powers has put Port Louis 64 00:04:15,360 --> 00:04:19,520 Speaker 2: onto the map of global geopolitical hotspots. This week, Indian 65 00:04:19,560 --> 00:04:22,599 Speaker 2: Prime Minister Norendra Modi traveled to Mauritius for a two 66 00:04:22,640 --> 00:04:27,200 Speaker 2: day state visit to reinforce the island's importance to his country. 67 00:04:27,520 --> 00:04:31,520 Speaker 1: So the Modi administration, partly because of China's increased presence 68 00:04:31,520 --> 00:04:34,560 Speaker 1: in the region, has spoken for many years about a 69 00:04:34,600 --> 00:04:39,000 Speaker 1: neighborhood first policy. Delhi very much sees Mauritius as part 70 00:04:39,040 --> 00:04:42,760 Speaker 1: of its extended neighborhood and wants to show that it 71 00:04:42,839 --> 00:04:45,440 Speaker 1: is going to put in the work to show Mauritius 72 00:04:45,480 --> 00:04:48,159 Speaker 1: that it's valued in Delhi and to make sure that 73 00:04:48,200 --> 00:04:50,719 Speaker 1: its voice is being heard in the tolls of power 74 00:04:50,720 --> 00:04:51,479 Speaker 1: in Port Louis. 75 00:04:51,680 --> 00:04:54,720 Speaker 2: Peter spoke to the Foreign Minister of Mauritius for this story, 76 00:04:55,320 --> 00:04:59,039 Speaker 2: and he said, while the government welcomes the investment, politicians 77 00:04:59,040 --> 00:05:01,640 Speaker 2: are also very much much aware of the tight rope 78 00:05:01,720 --> 00:05:04,880 Speaker 2: it has to walk with all of these competing interests. 79 00:05:05,160 --> 00:05:08,919 Speaker 1: He was very frank that in the past, small nations 80 00:05:09,000 --> 00:05:12,200 Speaker 1: like Mauritius feel like they've been ignored by major powers, 81 00:05:12,240 --> 00:05:15,880 Speaker 1: and that's changing, and it's changing to the advantage of Mauritius. 82 00:05:15,880 --> 00:05:19,280 Speaker 1: He was very explicit about that. I think you see 83 00:05:19,320 --> 00:05:22,359 Speaker 1: like a strong recognition there that there's a lot to 84 00:05:22,400 --> 00:05:25,599 Speaker 1: be gained from engaging with China, but if you go 85 00:05:25,680 --> 00:05:28,080 Speaker 1: too far down that path, it creates problems for your 86 00:05:28,080 --> 00:05:30,960 Speaker 1: relationship with the US and India. So the country is 87 00:05:31,000 --> 00:05:33,720 Speaker 1: really trying to sort of balance itself there between these 88 00:05:34,400 --> 00:05:35,800 Speaker 1: three competing powers. 89 00:05:36,560 --> 00:05:40,120 Speaker 2: Peter says, what's happening on Mauritius with these three global 90 00:05:40,200 --> 00:05:43,920 Speaker 2: powers is playing out all across the Indian Ocean on 91 00:05:43,960 --> 00:05:48,479 Speaker 2: different islands and surrounding coastal countries. One big reason for 92 00:05:48,560 --> 00:05:52,560 Speaker 2: all this jockeying trade the Indian Ocean sits in the 93 00:05:52,560 --> 00:05:55,840 Speaker 2: middle of major shipping routes and key maritime choke points 94 00:05:56,080 --> 00:05:59,680 Speaker 2: that allow oil to move between Europe, Asia, Africa, and. 95 00:05:59,600 --> 00:06:04,240 Speaker 1: The Middle East. This region is essential to global trade. 96 00:06:04,360 --> 00:06:07,800 Speaker 1: It's essential to global energy flows. It's home to something 97 00:06:08,000 --> 00:06:14,560 Speaker 1: like forty percent the world's offshore petroleum, and historically India 98 00:06:14,600 --> 00:06:19,000 Speaker 1: is overwhelmingly dependent on maritime trade as a lifeline for 99 00:06:19,040 --> 00:06:23,320 Speaker 1: its economy. It's something like eighty percent of India's oil imports, 100 00:06:23,720 --> 00:06:26,400 Speaker 1: ninety five percent of its trade by volume come in 101 00:06:26,600 --> 00:06:30,479 Speaker 1: through the Indian Ocean, so it's really crucially significant. 102 00:06:31,520 --> 00:06:35,080 Speaker 2: But trade is only half the reason these global powers 103 00:06:35,120 --> 00:06:38,960 Speaker 2: have their eyes on the Indian Ocean. It's strategically vital 104 00:06:39,040 --> 00:06:42,800 Speaker 2: for India for maybe obvious reasons, but it's also become 105 00:06:42,880 --> 00:06:45,200 Speaker 2: strategically important to China. 106 00:06:45,320 --> 00:06:49,640 Speaker 1: China's first overseas military base was constructed in Djibouti on 107 00:06:49,720 --> 00:06:54,159 Speaker 1: the Horn of Africa, opened in twenty seventeen and gives 108 00:06:54,240 --> 00:06:58,279 Speaker 1: China potential to project power across the Middle East. And 109 00:06:58,360 --> 00:07:01,880 Speaker 1: if you look at the Pentagon's list of places where 110 00:07:01,920 --> 00:07:06,640 Speaker 1: the US believes that China is interested in establishing overseas bases, 111 00:07:07,160 --> 00:07:09,080 Speaker 1: they more or less draw a ring around the Indian 112 00:07:09,120 --> 00:07:11,440 Speaker 1: Ocean region. And if you're looking at this from Delhi, 113 00:07:11,480 --> 00:07:13,000 Speaker 1: it's profoundly threatening. 114 00:07:13,400 --> 00:07:16,880 Speaker 2: For decades, India focused on threats that would come by land. 115 00:07:16,960 --> 00:07:20,920 Speaker 2: When it came to security. India shares a border with China, 116 00:07:20,960 --> 00:07:24,000 Speaker 2: and thousands of troops from both sides have engaged in 117 00:07:24,080 --> 00:07:28,520 Speaker 2: ten standoffs along the disputed frontier since the nineteen sixties. 118 00:07:29,400 --> 00:07:33,640 Speaker 2: Peter says China's growing quest for influence on land and 119 00:07:33,760 --> 00:07:37,000 Speaker 2: sea has forced India to think of its namesake Ocean 120 00:07:37,320 --> 00:07:39,480 Speaker 2: as a second border with China. 121 00:07:39,600 --> 00:07:41,880 Speaker 1: When we were reporting this story, we talked to Indian 122 00:07:41,880 --> 00:07:44,560 Speaker 1: policymakers and one of the things that they said to 123 00:07:44,640 --> 00:07:49,080 Speaker 1: us was that India's attitude toward overseas basing has changed. 124 00:07:49,480 --> 00:07:51,840 Speaker 1: It now recognizes the fact that it's going to need 125 00:07:51,880 --> 00:07:55,480 Speaker 1: to project military power further overseas, and it's going to 126 00:07:55,480 --> 00:07:58,840 Speaker 1: need to contest China's influence in the region in a 127 00:07:58,920 --> 00:07:59,520 Speaker 1: much more. 128 00:08:02,640 --> 00:08:05,360 Speaker 2: It's not just China in India that have a horse 129 00:08:05,440 --> 00:08:08,680 Speaker 2: in this race. The US is a big player in 130 00:08:08,720 --> 00:08:24,760 Speaker 2: these waters too. That's after the break. India and China 131 00:08:24,880 --> 00:08:28,640 Speaker 2: are jockeying for control in the Indian Ocean, and Bloomberg 132 00:08:28,680 --> 00:08:32,600 Speaker 2: reporter Peter Martin says that tussle is being closely watched 133 00:08:32,760 --> 00:08:33,480 Speaker 2: by the US. 134 00:08:34,160 --> 00:08:38,080 Speaker 1: If you think about the issues and areas that matter 135 00:08:38,280 --> 00:08:41,240 Speaker 1: to the US most, what does it need to maintain 136 00:08:41,600 --> 00:08:45,320 Speaker 1: its future as a superpower. At the center of that 137 00:08:45,480 --> 00:08:48,080 Speaker 1: is its ability to continue to be a global trade 138 00:08:48,080 --> 00:08:52,400 Speaker 1: player and to have access to global international markets. So 139 00:08:52,480 --> 00:08:55,440 Speaker 1: if you're an American strategist looking at how do we 140 00:08:55,559 --> 00:08:59,719 Speaker 1: keep global trade flowing, then maintaining freedom of navigation in 141 00:08:59,760 --> 00:09:04,400 Speaker 1: the Indian Ocean region, ensuring that energy and goods can 142 00:09:04,440 --> 00:09:08,000 Speaker 1: continue to go back and forth, is crucial to America's 143 00:09:08,000 --> 00:09:10,520 Speaker 1: ability to continue to be a global trading partner. 144 00:09:11,400 --> 00:09:14,520 Speaker 2: One other major reason the US cares so much about 145 00:09:14,520 --> 00:09:19,120 Speaker 2: the region security. The US has a major military base 146 00:09:19,280 --> 00:09:21,720 Speaker 2: that it runs with the UK on a remote island 147 00:09:21,760 --> 00:09:25,400 Speaker 2: in the Indian Ocean called Diego Garcia, a British territory. 148 00:09:25,720 --> 00:09:27,760 Speaker 1: So if you look at a map of the Indian Ocean, 149 00:09:27,800 --> 00:09:31,440 Speaker 1: Diego Garcia is right in the center of it. Used 150 00:09:31,720 --> 00:09:39,160 Speaker 1: historically to monitor maritime communications, to monitor submarine activity, used 151 00:09:39,200 --> 00:09:41,600 Speaker 1: later in the War on terraf by the US to 152 00:09:42,000 --> 00:09:46,800 Speaker 1: launch bombing raids on Afghanistan and Iraq, and so really 153 00:09:46,840 --> 00:09:48,840 Speaker 1: important strategic location there. 154 00:09:49,640 --> 00:09:52,600 Speaker 2: Last year, the UK drafted a deal to hand back 155 00:09:52,640 --> 00:09:56,160 Speaker 2: Diego Garcia and some other islands to Mauritius in order 156 00:09:56,200 --> 00:09:59,640 Speaker 2: to comply with the UN Court ruling. There's some uncertainty 157 00:09:59,760 --> 00:10:02,440 Speaker 2: where their president Donald Trump will sign off on the deal, 158 00:10:02,679 --> 00:10:06,000 Speaker 2: which includes a provision to keep the military base on 159 00:10:06,080 --> 00:10:09,560 Speaker 2: the island for at least another ninety nine years. But 160 00:10:09,600 --> 00:10:12,120 Speaker 2: the US needs more than an island air base in 161 00:10:12,160 --> 00:10:15,960 Speaker 2: the Indian Ocean to counter China's growing influence in the region. 162 00:10:16,520 --> 00:10:19,960 Speaker 2: It needs other partners to help, with India at the 163 00:10:20,000 --> 00:10:20,880 Speaker 2: top of the list. 164 00:10:21,600 --> 00:10:25,319 Speaker 1: Washington is very much aware that it needs to support 165 00:10:25,480 --> 00:10:29,040 Speaker 1: India as a potential partner in that competition with China. 166 00:10:29,240 --> 00:10:32,000 Speaker 1: Washington would very much like India to beat the sheriff 167 00:10:32,040 --> 00:10:35,040 Speaker 1: in the region. I've heard Washington policymakers use that phrase 168 00:10:35,559 --> 00:10:38,800 Speaker 1: as it confronts the reality that it can't be everywhere 169 00:10:38,840 --> 00:10:41,040 Speaker 1: all the time with the same amount of resources. 170 00:10:41,440 --> 00:10:45,479 Speaker 2: So you've got China and India throwing money into development 171 00:10:45,520 --> 00:10:48,560 Speaker 2: and infrastructure projects in the region, in Mauritius and in 172 00:10:48,600 --> 00:10:52,440 Speaker 2: other places, while the US is pulling back on foreign aid. 173 00:10:52,640 --> 00:10:56,440 Speaker 2: I mean, USAAD has been gutted. Is the US at 174 00:10:56,480 --> 00:10:59,679 Speaker 2: a disadvantage because it's not funding projects the way Indian 175 00:10:59,679 --> 00:11:02,079 Speaker 2: and China are Is that part of the conversation. 176 00:11:02,640 --> 00:11:06,240 Speaker 1: It's definitely part of the conversation. Washington was the world's 177 00:11:06,320 --> 00:11:09,360 Speaker 1: largest aid spender, and lots of that aid went to 178 00:11:09,640 --> 00:11:14,079 Speaker 1: countries across the Indian Ocean region. There are commentators, especially 179 00:11:14,240 --> 00:11:17,000 Speaker 1: if you talk to former Biden officials, who say that 180 00:11:17,080 --> 00:11:20,560 Speaker 1: this opens a potential door for Beijing, but it's not 181 00:11:20,800 --> 00:11:22,160 Speaker 1: clear cut and. 182 00:11:22,200 --> 00:11:24,880 Speaker 2: Do we have a sense of how this jocking for 183 00:11:25,000 --> 00:11:27,600 Speaker 2: power in the Indian Ocean will play out? 184 00:11:27,720 --> 00:11:30,319 Speaker 1: I think when you look at the Indian Ocean from 185 00:11:30,360 --> 00:11:35,079 Speaker 1: the perspective of Beijing and New Delhi, China fears that 186 00:11:35,160 --> 00:11:37,840 Speaker 1: its access to Middle East oil could be cut off 187 00:11:38,120 --> 00:11:40,960 Speaker 1: and feels the need to position military assets in the 188 00:11:41,040 --> 00:11:45,280 Speaker 1: region and to gain diplomatic influence in the region. India 189 00:11:45,320 --> 00:11:49,680 Speaker 1: looks to the region as its backyard, as the first 190 00:11:49,720 --> 00:11:53,280 Speaker 1: place that it needs to assert itself as a rising power, 191 00:11:53,840 --> 00:11:57,120 Speaker 1: and it feels like Beijing is encroaching on its ability 192 00:11:57,160 --> 00:12:01,560 Speaker 1: to do that. Washington doesn't feel a threat in quite 193 00:12:01,640 --> 00:12:05,000 Speaker 1: the same direct way, but President Trump has been very 194 00:12:05,040 --> 00:12:09,760 Speaker 1: clear about his identification of China as a major economic threat. 195 00:12:09,880 --> 00:12:13,000 Speaker 1: So it's really about Washington looking to keep his own 196 00:12:13,040 --> 00:12:15,719 Speaker 1: voice in the conversation, but then looking at how can 197 00:12:15,720 --> 00:12:18,120 Speaker 1: it partner with other countries to make sure that China 198 00:12:18,160 --> 00:12:20,280 Speaker 1: doesn't become the dominant voice in the region. 199 00:12:23,960 --> 00:12:27,200 Speaker 2: This is The Big Take Asia from Bloomberg News. I'm wanh. 200 00:12:27,960 --> 00:12:32,120 Speaker 2: This episode was produced by Nameing Young Young and Jessica Beck. 201 00:12:32,360 --> 00:12:35,120 Speaker 2: It was edited by Patty Hirsh and Neil Munschi. It 202 00:12:35,160 --> 00:12:38,080 Speaker 2: was fact checked by Young and Naomi, mixed by Alex Sugira, 203 00:12:38,160 --> 00:12:41,960 Speaker 2: and sound designed by Jessica. Our senior producer is Naomi Shaven. 204 00:12:42,280 --> 00:12:46,120 Speaker 2: Our senior editor is Elizabeth Ponso. Our executive producer is 205 00:12:46,200 --> 00:12:50,040 Speaker 2: Nicole Beemster Bower. Save Bauman is Bloomberg's head of podcasts. 206 00:12:50,559 --> 00:12:53,320 Speaker 2: If you like this episode, make sure to subscribe and 207 00:12:53,360 --> 00:12:56,559 Speaker 2: review The Big Take Asia wherever you listen to podcasts. 208 00:12:56,600 --> 00:12:59,480 Speaker 2: It really helps people find the show. Thanks for listening. 209 00:12:59,640 --> 00:13:07,240 Speaker 2: See Next Time, MHM.