Lowy Institute

US-India relations are in good shape. The personal relationship between Modi and Obama appears excellent, there are big, ambitious ideas in the pipeline – like US assistance to Indian carrier development – and the strategic dialogue is getting deeper in several ways.

But things are falling short in some ways. Next week, the US and Indian navies will meet in the Bay of Bengal for the Malabar exercise, a series that began 23 years ago and represents a powerful signal of convergence in the Indo-Pacific. Japan will join them, just weeks after a ministerial trilateral between the three countries included pointed reference to the South China Sea and regional stability. Malabar is not India’s only joint naval exercise, of course. The biennial Milan series brings together over a dozen small and middle powers, and smaller exercises – including the first ever Australia-India bilateral – are routine. The Indian Navy visited 40 countries in the past year, including Iran, Israel, and Saudi Arabia within two weeks of one another.

But Malabar is uniquely important: the US remains the most important naval power in the Indo-Pacific, and military-to-military cooperation has buttressed and driven broader strategic cooperation. A strong working relationship with the US Navy will give India more options in addressing (among other challenges) what is becoming a more persistent and intrusive Chinese presence in the Indian Ocean without tying New Delhi's hands in any way.

Yet if we take a broader perspective, we see that Malabar has lost some of the momentum it built up in the mid-2000s. I've compiled data from a variety of sources showing the rise and fall in the overall size of the exercise. The first chart below shows the number of ships and submarines by country while the second shows aircraft carriers.

The rise

The exercises have their origins in the early 1990s when, with the Cold War over, the US and India began to feel one another out tentatively. In 1991, PACOM commander Lt General Claude Kicklighter visited New Delhi. The relationship developed quickly. As Sunanda Datta-Ray wrote in the New York Times at the time, 'what seemed like a mild flirtation..may have blossomed into a full-fledged affair'. Army, navy, and air force 'steering groups' were established in 1992.

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That same year, the US and Indian navies held exercises off the coast of Goa, on India's west coast. This was a modest affair. Two Indian ships, a destroyer and a frigate, each about half the displacement of one of India's modern Kolkata-class destroyers, practiced basic communications and manoeuvres with two American equivalents. Exercise Malabar, as it became known, was repeated twice more in the 1990s as the US-India relationship thawed further, despite tensions over issues like Indian missile testing. Although both sides avoided too much publicity, wary of Indian public opinion, by 1996 total ships participating in the exercise grew to six and the US even gave the Indians an opportunity to familiarise themselves with the P-3C maritime reconnaissance aircraft – to the chagrin of Pakistan, which took delivery of its own copies later that year, and then employed them during the Kargil War.

The peak

India's nuclear tests in 1998 cast a pall over this burgeoning defence engagement, and Malabar didn't resume until 2002. But in 2003, India brought a submarine for the first time, though not, as the US had hoped, the Kilo-class (also operated by Iran). In 2005, the year of major breakthroughs in the US-India relationship, each side bought carriers for the first time, and the exercises became more advanced, as former Indian naval officer Gurpreet Khurana sets out in an excellent paper

The real breakthrough, however, came in 2007, when Malabar was effectively held twice and – to China's great irritation – multilateralised, with the first part held off Okinawa with the participation of four Japanese ships (technically part of a separate exercise, but in practice enmeshed with the US-India effort), and the second part in the Bay of Bengal.

This latter phase included Japanese, Australian and Singaporean contributions, three carriers, US and Indian strike aircraft, and 26 ships in all, more than double those of any exercises in previous or subsequent years. This was part of a much broader deepening in the military-to-military relationship. 'More than half the military exercises the Indian Army has conducted since the US-led invasions of Iraq and Afghanistan,' noted one Indian publication in 2007, 'have been with the US Army'. A slew of major air force exercises had also taken place by then.

But 2007 also proved to be Malabar's high point, with the exercises dropping precipitously in size thereafter. 

In large part this was due to Indian concerns for Chinese sensitivities and a backlash by leftist parties in India. A 2009 cable from the US Embassy in New Delhi suggested that Defence Minister AK Antony had overruled the Indian Navy's preference for multilateral exercises. But the shift was also related to political changes in Tokyo and Canberra. 'After we stuck our neck out the Australians broke the contract', an Indian official is quoted as saying in Jeff Smith's book, Cold Peace. In February 2008, Australia announced it would be pulling out of the so-called Quadrilateral Security Dialogue (involving India, the US, and Japan), causing some concern about the direction of its foreign policy. 

The fall

Although US and Indian ships returned to the western Pacific in 2011, Japan was recovering from a devastating tsunami the previous month and so did not take part. It would not do so again until last year, when it sent just two ships, half the number that had participated seven years previously. Although the exercises have remained in many respects advanced, they have stagnated in size and scope.

In the eight years since 2007, India has not sent a single carrier, despite the US doing so four times. In the five exercises between 2002 and 2006, Malabar included an average total of eight ships; in the seven years between 2008 and 2014, it was just over nine – hardly a quantum leap, considering that US-India defence trade has been soaring. The average Indian contribution over those same periods actually fell. In 2013, the number of ships at Malabar fell to a paltry three – the lowest ever total, smaller even than the very first exercise over two decades earlier, when the US and India were basically estranged nations. And last year, Indian participation was even smaller than in 1996. The only good news was that Japan was allowed back in after a four-year absence, despite reported opposition from India's defence ministry.

These numbers only tell part of the story – the nature of ships and the sophistication of the exercises are more important – but they suggest a loss of momentum.

The future

There were hopes that all this might change. In September 2014, when Prime Minister Narendra Modi visited Washington, the joint statement noted that the two countries had 'agreed to upgrade their existing bilateral exercise Malabar', a promise reiterated during President Obama's visit to New Delhi in January 2015. This suggested that the Modi Government, clearly more positive about the US-India relationship as a whole and more comfortable with its military aspects than some of its predecessors, would be committed to restoring the exercises to their former strength. This hasn't quite happened.

The Indian Express' Sushant Singh reports that India had planned on sending the same number of ships to Malabar 2015 (three) as it did the previous year, prompting the US to complain, rightly, that India was 'trying to do the bare minimum'. India added a single vessel in response, hardly dispelling these concerns. Nor could India meet the US request to send a carrier because INS Vikramaditya is in maintenance and INS Viraat is on the cusp of being turned into a museum. Japan, too, is sending just one ship, its lowest-ever contribution.

On the plus side, as Singh notes, both the US and India will bring their long-range P-8 maritime surveillance aircraft (India bought eight in 2009, and plans to buy four more) which will bring a valuable new dimension to the exercise for all three countries, with the US increasingly rotating P-8s to the Seventh Fleet in Japan. But the P-8 is also a reminder of some of the remaining obstacles to US-India engagement. As Iskander Rehman explained last year, New Delhi's refusal to sign so-called 'foundational' agreements with Washington – including the Communications Interoperability and Security Memorandum of Agreement (CISMOA) and the Basic Exchange and Cooperation Agreement for Geospatial Cooperation (BECA) – means that the US stripped the P-8s of secure communications and navigation equipment, forcing India to rely on an inferior indigenous system and limiting inter-operability. These agreements are being debated in India and are regularly pushed by US officials, but there's no indication that India is about to take the plunge. 

Looking at the broad arc of the Malabar exercises – the steady rise to 2007, and the slump thereafter – one sees a missed opportunity. At a time when US officials are proposing to institutionalise a multilateral format for Malabar (former US Deputy Assistant Secretary of Defense for South and Southeast Asia Vikram Singh: 'Malabar is very frustrating because...we wanted to have Japan, Australia all the time') and Australia is keen to resume participation, India seems content to let things tick over.

Yet it would be a powerful boost for Modi's Act East policy if his Government were to take a series of bold steps: bring Canberra back into the fold, commit to sending INS Vikramaditya for next year's Malabar, raise the Indian contribution to at least five vessels and look seriously at a return to the Western Pacific within the next two years – all of which could be tempered by inviting China as an observer (to which the US has had no objection). This would be an excellent way to build on the ambitious language of September's inaugural US-India-Japan Trilateral Ministerial Dialogue.


Seventeen parcel bombs exploded in Guangxi Zhuang Autonomous Region last Wednesday, and there was a further explosion on Thursday. There were ten deaths, more than 50 casualties, and photos of a five storey building partly collapsed.

The story did make international news, but only just, and by the weekend it had faded, including from the homepage of China Daily Mandarin edition.

Global reporting was slim; clearly agencies do not have correspondents in South China or much background about Guangxi. The first reports gave the number of bombings, listed targets in Liucheng County (they including a government building, a residence at Liucheng Animal Husbandry Bureau, a hospital, a prison, markets, and a bus stop), and reported that one man, a quarry owner with the surname Wei, had been arrested. Then on Thursday came questions as to whether that arrest had indeed taken place. On Friday, South China Morning Post reported that Wei had been killed in one of the Wednesday blasts (taking the death toll to 11). An article in China Daily's online Mandarin edition reported that local police had confirmed Wei's death through DNA testing, leaving open the question of who perpetrated Thursday's bombing.

There was also the question of motive, with Chinese authorities initially saying that some people have personal grievances against government departments. Some doubted this was a lone perpetrator taking extreme action over an everyday grievance, and hinted at Uyghur militants. American geopolitical intelligence firm Stratfor, for example, published an article speculating about Uyghurs. Major news outlets in both English and Mandarin avoided this inflammatory line. 

Later, a journalist spoke to Wei's brother, who explained that, after locals marched on Wei's quarry in 2013, rendering its machines inoperable and ruining the business, Wei became upset because 'repeated requests to local government departments to resolve the dispute ended without success.' Luizhou City Police confirmed to journalists that Wei was involved in a quarry dispute with villagers.

Extremism can arise not only from big issues like ethnic conflict but from small ones like financial losses and bureaucratic disputes. Guangxi is certainly not immune from these problems. The region is known to have extremely high levels of government corruption compared to other Chinese provinces. That an abuse of government power could tip someone over the edge is therefore not incredible.

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Another factor might be frustration over unequal distribution of economic resources. This could contribute in two ways: either, because it has left government departments in Guangxi under-trained and under-resourced, perhaps causing inept rather than abusive government dealings; or because it provided the spark that ignited the tinderbox of anger of both Wei and the villagers.

Guangxi has long been poorer than its industrialised eastern neighbour, Guangdong Province. Around the turn of the century Guangxi was the region with the highest out-migration as China reorganised its labour force. In recent years, the Chinese Central Government's 'Open Up the West' campaign to spur growth in Western China has targeted Guangxi, and even more recently Guangxi has been promoted as a bridge in China-ASEAN integration, with the China-ASEAN Expo hosted in Guangxi's capital, Nanning, in May. But some areas of Guangxi, including Liucheng County, remain poor, and institutional measures to regulate economic development have not developed as quickly as economic activity.

So it is also credible that villagers would feel disenfranchised over what they see as unregulated business. Nor is it hard to imagine that a business owner, in debt after two years of no income, unable to start over due to government inaction, and who believes local authorities are corruptly picking which businesses to support, would become cynical about government claims that it is helping spread economic development.

While tough times don't assuage the moral or criminal culpability of the bomber, nor justify smashing up a quarry, recognising the extreme frustration, stress and social unrest that uneven economic and institutional development can provoke is important in understanding politics and security in China. Bombings don't happen every day in China, but there are commonplace civic and worker protests, and occasionally violence, borne of financial pressure and frustrations with government, not over issues that grab international interest such as democracy or human rights, but over mundane bureaucratic interactions that go wrong. The Guangxi attacks are best not glossed over as an isolated incident. Festering and obvious inequality is a cause of unrest similar in strength to ethnic conflict. (And ethnic conflict is often also about material disadvantage and government unresponsiveness.)

It seems the villagers, aggrieved by explosions at Wei's quarry and the alleged failure of the business to gain proper licenses, took matters into their own hands. Then Wei, angry about the destruction of his business and government failures to remedy what he saw as unfair losses, took matters into his own hands and targeted state institutions.

While bombings are an unhinged reaction, local, regional and central governments should nevertheless reflect on how his dispute was mishandled so as to provoke such desperate anger. How did it come to this?

The key questions are about the system: why villagers and the bomber didn't seek non-violent means of dispute resolution, and whether resolution mechanisms are inaccessible, untrustworthy, or simply non- existent. Higher security and high-profile condemnation of the bombings may go some way to prevent further such incidents, but if the violence stemmed from inadequate means to alleviate the burdens of economic development and social re-structuring, then civil institutions in Guangxi need to take note. 

The second half of this analysis will examine ethnic tensions in the Guangxi region.


The first part of this series explained the personal and domestic political motivations behind his Syria strategy. Here the author explains how Putin and his compatriots view the world, and their scant regard for Anglosphere views on power.

To speak of Russia's international isolation is an exaggeration, but Putin is in any case not concerned about the effect of his actions on Russia's standing in many countries: he has made plain his disdain for the EU and for Europe in general, famously describing the EU as a 'hamster'.

As for the US, Putin cares not a fig for its opinions. His recent UN address expressed his convictions trenchantly. The US belief that it has a right to support aspirations to democracy everywhere he finds particularly galling. As an authoritarian he identifies strongly with Saddam Hussein, Gaddafi and Assad. With his conspiratorial view of the world, he holds the US responsible for the collapse of the Soviet Union, which he views as a 'tragedy' and a 'catastrophe'. At this year's UN General Assembly speech (see video) he repeated his claim that the Maidan revolution in Kyiv was a CIA-orchestrated coup.

The US handling of Putin has sometimes been clumsy.

Washington seems repeatedly to have failed to treat him with the respect he expects as the ruler of Russia. Yet Obama's policy towards Russia cannot credibly be described as aggressive; rather, the contrary. When Obama's genuine attempt to 'reset' the relationship foundered on a Russian conviction that all concessions should be made by the US alone, and after he  endured a tirade from Putin at their first meeting, he apparently decided to have as little to do with Putin as possible. Obama has since resisted strong pressure to supply the Ukrainians with defensive weapons, and in effect left Angela Merkel to deal with the Russian challenge to the security order in Europe.

But recent US behaviour does not explain Putin's attitudes. Rather, they are a reflection of his psyche, his experience overall and the ethos of the KGB, the organisation to which he devoted his career.

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Australians, living in a bubble called the Anglosphere, are unaware of the toxicity of the treatment of the US in the Russian media, especially television, which is state-controlled and the main source of news and commentary for almost all Russians. A liberal Russian commentator recently noted the practice in some provincial cities of staging 'bash Obama days', in which citizens are encouraged to belabour cardboard cutouts of the US president. Racist jokes about Obama circulate in Russia. Most Russians would reject the charge of prejudice and point bitterly to what they see as stereotypes of Russians in the Anglophone media. It's true that much media commentary on Russia is poorly informed and superficial, but those media do not enact government directives (ask Tony Abbott or Kevin Rudd).

But if sharp diplomatic tensions do not concern Putin, sanctions imposed by the US, EU and others, including Canada and Australia, do. The Russian line is that sanctions have made matters worse by allowing Putin to sheet the blame for Russia's economic woes to its critics and by hurting only smaller Russian firms (because the Kremlin will always bail out the big ones, most of which it owns). That may be so — Russians commonly interpret the sanctions as further proof of an irrational hatred for them as a people. But some respected Russian economists have observed the sanctions are hurting and say Putin is determined to have them lifted as soon as possible.

Most importantly, the sanctions have stopped the flow of the advanced technology Russia needs to modernise its energy sector, which brings in 65% of export revenue and over half of all state income (the impact has been much magnified by the collapse in the price of oil and its effect on the gas price). The sanctions have also further lowered domestic and foreign confidence in the future of the economy, thereby deepening Russia's reliance on China as a source of capital, which worries some Russians. And China cannot supply the technologies Russia needs to tap its huge Arctic deposits of oil and gas.


By Hannah Wurf, a Research Associate in the G20 Studies Centre, and Marie-Alice McLean-Dreyfus, an intern with the Lowy Institute's East Asia Program.

Hillary Clinton sparked a debate about gender equality in China last week when she tweeted that Xi Jinping was 'shameless' for giving a speech about gender equality at the UN while imprisoning Chinese female activists. The Chinese media responded vigorously, while the Ministry of Foreign Affairs said 'only Chinese women have the right to comment on the situation and rights of Chinese women'.

To understand why China took such offense, it is worth looking at China's approach to gender equality. In China's eyes, Clinton has conflated gender equality with activism and law-breaking. China's actual record on gender equality is relatively good, while its human rights record remains problematic.

Female employment in China was 45% of the total population in 2013 and women contribute 41% to China's GDP. China also has the highest female labour participation in G20 countries. In China, it seems, women really do hold up half the sky.

But beyond economic measures, there is still a long way to go. China has released a white paper on gender equality and women's development, and is drafting legislation to address domestic violence. This is in addition to the international commitments Xi announced last week: US$10 million for UN Women (less than Italy and Switzerland, more than Spain) and a promise to build 100 schools for girls and 100 health clinics, and train 30,000 women from developing countries.

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Clinton's tweet reflects a desire to be seen as tough on China, and the Chinese media quickly picked up on this subtext. Some likened her to Donald Trump, while users on Weibo hit back at Clinton:

@Joycewei19: So Hillary is saying that Chairman Xi is shameless! Chinese people would prefer to die than to lose face, Chairman Xi has pledged much money and has given money to those in Africa eliminating their debt and never received any respect and he is still called shameless!

@燕呢xlwb: Hillary is a fanatic for opposing China, regardless of what the matter is she can turn it against you.

One explanation for the ferocity of the backlash is the Chinese 'worldview' and the belief in Chinese uniqueness, which is used to explain away foreign criticism. The tweet by Clinton is interpreted as another misunderstanding of China's intentions and yet more foreign interference in China's domestic affairs.

In China, the imprisonment of female activists is viewed within the context of a bigger crackdown on the activities of NGOs and is completely separate from gender equality. The Ministry of Foreign Affairs reiterated this when it announced that the activists 'were not arrested for advancing women's rights but because their actions violated China's laws and regulations'.

Clinton's comment could have been better articulated. She could have congratulated Xi on China's commitments while highlighting the abuse of human rights. Clinton is free to criticise (as is not the case in China), but she should also support China when it is acting in ways she condones.

In the lead-up to the US presidential elections, anti-China rhetoric is likely to heat up. But gender equality should not be in the firing line. Instead, there is reason to support China's commitment to gender equality. Increased female labour participation and better social and legal protections for women will deliver some of the prosperity and stability China seeks.

Photo by Flickr user badbrother.


The Indo-Pacific is a strategic system encompassing the Indian and Pacific oceans, reflecting the expanding interests and reach of China and India as well as the enduring role of the US. The Lowy Institute's International Security program presents a weekly selection of links illuminating the changing security picture in this increasingly connected super-region.


This is the first in a three-part series on Putin's Syria gambit and how it furthers his ambitions at home and abroad.

Eighteen months ago Russian President Vladimir Putin's conquest of Crimea earned him the appellation among sycophants of Putin Tavrichesky or 'the Tauridian Putin', Taurus being an ancient Greek name for Crimea. Only one other Russian bears that honorific: Prince Potemkin, who conquered the peninsula in the name of Catherine the Great in 1783. The Crimean triumph reversed an erosion in Putin's popular standing, taking his support to levels so high (close to 90%) that they raise doubts about how they were measured or tell us something about what matters most to Putin's compatriots.

Vladimir Putin in Moscow, December 2014.(Photo Dmitry Dukhanin/Getty Images)

After testing the will of the US and EU in Europe and finding it wanting, and having watched the refugee crisis in Europe swell while the US floundered in the Middle East and his ally Assad suffered significant military reverses, Putin has now embarked in Syria on his most ambitious gambit ever. For the fifth time in his 15 years as Russia's leader, he has resorted to military force to pursue a goal (the others were Chechnya from 1999 to about 2008, Georgia in 2008, seizing Crimea last year, and the continuing campaign to enforce his will on Kyiv by partitioning Ukraine). But this time he has also sent the Russian military out-of-area for the first time since Russia's invasion of Afghanistan in 1979. His expeditionary force is formidable and operates from a secure bridgehead in the Russian naval base at Tartus and the Latakia airfield.

Simultaneously, Putin is forging a Shia coalition with Syria, Iran and Iraq. He has also backed the military deployment with a Soviet-style public relations blitz on a broad front, including an address to the UN, his first interview in years with an American television network, and a proclaimed offer to the US and its allies for a united front against terrorism. That offer is framed in unacceptable terms — it defines as a terrorist anyone who opposes Assad — but it sounds statesman-like.

The worldwide Russian public relations network has also shifted into high gear. At home in Russia, Ukraine has vanished from the (state-controlled) television networks, to be replaced by stirring coverage of Russian soldiers in Syria. And in the self-proclaimed 'People's Republics' of Donetsk and Luhansk in eastern Ukraine, the bellicose rhetoric of Russian-backed leaders about fascists in Kyiv has given way to talk of the need for peace. 

The goals of Putin's Syrian gambit appear to be: to strengthen the wilting Assad regime against all its opponents, not just ISIS (indeed, so far, scarcely ISIS at all); to strengthen Russia's presence in the Mediterranean and the Middle East and protect its naval base and signals intelligence station on the Syrian coast; to demonstrate to Russia's allies that she is loyal and reliable, unlike the US vis a vis Egypt's Mubarak; and to strengthen Russia's de facto Shiite sphere of influence. Above all, Putin seeks to demonstrate that under him Russia has recovered its strength and strode back onto the global stage as a main player, indispensable in all solutions to international crises.

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But there are three other intertwined objectives that are probably paramount for Putin: to shore up his domestic standing as the glow of Crimea recedes and Russia's economic difficulties begin to bite; to deflect attention from Russia's re-absorption of Crimea and the messy imbroglio in eastern Ukraine; and to weaken the collective will in the EU to maintain economic sanctions (the sanctions are not the main reason for Russia's declining revenue, which is due most to the fall in oil prices, but they hurt in various ways). Finally, the Shia coalition Putin is trying to stitch together may also be about influencing the price of oil: the more clout Moscow has in the Middle East, the more leverage it might have in getting the price back to above US$100, a level that has been crucial to Putin's success as Russian leader.

Indeed, to understand Putin's policy on Syria we need to place it in the broader context of his goals generally, a truism that escapes many Australian media commentators. Importantly, these goals are his policies: Putin may invite the views of a few close confidants but he takes all the decisions that matter. Don't believe anyone who tells you he is merely the first among equals.

And to understand Putin's policies it helps to understand him.

It's clear he is a formidable opponent. He is disciplined, hard working and always a master of his brief. He stays in shape, and Botox adds sheen. Chess champion Garry Kasparov aptly describes Putin as a gambler with a talent for bluff (but not a chess player, because chess is a game with fixed rules and unpredictable outcomes; under Putin the opposite applies). He is a career Soviet KGB officer, with the outlook and values of a KGB officer who fought in the Cold War.

He is a highly trained and, by repute, gifted martial artist. He seeks weaknesses in his opponents and exploits them. He has probably read the 36 stratagems from The Art of War. He may also know the tale of Xiang Zhuang's sword dance, the most celebrated Chinese parable of diversionary tactics, which teaches that the real purpose of an act is not the act itself.

Putin has shown a gift for improvisation, especially as regards extracting advantage from setbacks. In 2004 he used the hideously botched attempt to rescue the hostages at School Number One in Beslan in the Caucasus (which left 385 dead, 186 of them children) to justify strengthening the presidency, gathering even more power into his hands. His response to that setback included another tactical hallmark: deflecting the blame for all difficulties onto foreign powers. Without naming the US, he implied it was somehow responsible for the massacre. A few years before, in 2000, his senior officials claimed the US was behind the sinking of the nuclear submarine Kursk, with a loss of 118 lives (two years later the official Russian report attributed the tragedy to 'shoddy, obsolete and poorly maintained equipment' on the vessel).

But self-disciplined and tactically adept as he may be, Putin is at times driven by his emotions, especially a visceral resentment over perceived personal slights and his intense dislike of the US and its current president.

These emotions may contribute to his miscalculations, such as the campaign in eastern Ukraine that produced the shooting down of flight MH17, which in turn strengthened the resolve of the EU to maintain and enhance sanctions against Russia. That campaign was presumably undertaken in the euphoria generated by his Crimea triumph. Putin has since pulled back from the goal of a Novorossiya stretching to the Romanian border but, having fueled the flames of neo-imperialist nationalism, he now has to contain them.

With a personality cult built around the image of a warrior chieftain who protects his people from their many enemies, he cannot afford to be seen conceding ground. According to some who know him well, he even avoids smiling (a show of weakness), and his humour is invariably sardonic. But he has reduced his room for manoeuvre and negotiation, ensured the long-term hostility of most of Ukraine, re-energised NATO (which was 'mouldering away to no particular purpose', in Bobo Lo's phrase) and caused major damage to the Russian economy.

Some say Putin's policies are in the main reactive and that he has no strategy. One can argue the meaning of strategy and we should distinguish between vision, goals and the tactics for achieving them. But the record suggests Putin does have clear goals and he has shown daring, patience and ingenuity in pursuing them. They include of course, and above all, staying in power.

That Putin's primacy in the feudal, authoritarian political system he has fashioned is unchallenged is a tribute to his skill in manipulating Russia's feuding elite factions. But a politician he is, so protecting and reinforcing his authority is what drives him above all else. History shows no Russian ruler can afford to be complacent, and Putin studies Russian history. The economic difficulties he faces have no doubt strengthened the perception he could again become vulnerable, as he seemed to be in 2011-12 when he badly mishandled his formal return to the presidency.

Putin will always assess foreign policy options in terms of his own interests, try to avoid whatever might threaten his position at home, and pursue foreign projects that he believes would strengthen it. And nothing has so enhanced that position as his re-conquest of Crimea. This was viewed by most Russians as revenge for the humiliating and what they saw as unjust loss of parts of the Russian empire with the collapse of the Soviet Union. Another triumph may not yet be an imperative for Putin but it would be timely.


With four arrests made this morning, the police investigation into the shooting of New South Wales Police employee Curtis Cheng is gathering pace. The debate about how such a tragedy could have occurred is also being revived, and this morning we published a piece by David Wells warning that it would be premature to immediately re-examine Australia's counter-terrorism laws in light of this tragedy.

For more background on the issues raised by last Friday's shooting, here are some extracts from earlier Interpreter pieces on the subject of 'lone wolf' attacks, radicalisation and counter-terrorism. 

Back in June, David Wells looked at the difficulty national security agencies have in balancing risk when investigating possible terrorism suspects, particularly when it requires them to 'prove a negative': 

Unfortunately, this is difficult in the current counter-terrorism context. The primary issue, given ISIS's calls for 'lone wolf' attacks against the West, is the ease with which a small-scale unsophisticated attack can be carried out. Assessing that an individual does not have the capability to conduct this type of attack is next to impossible. Even in the absence of identifiable extremist activity or behaviour indicating intent, how do you weigh that against intelligence of extremist beliefs? The absence of corroboratory intelligence doesn't necessarily mean it doesn't or won't exist. Should you stop looking, or look harder? And how long do you wait before you move on? Days? Weeks? Months?

This is where it is important to have a rigorous risk assessment process. Based on what we know, can we categorically rule out this person as posing a threat? How do you prove a negative?

A piece from Hassain Nadim from July caused discussion on social media because Nadim argued that ISIS's strategy in radicalising young Muslims in the West is to cause a backlash against Muslim communities, uniting them against a common enemy:

The major purpose of radicalising young Muslims in the West is to inspire attacks on Western soil. But the real target is not Western society or its people. Attacks in Western cities may on the surface appear to be targeted against Western culture and ideology, but in reality these attacks are directed at the Muslim communities living in the Western world. ISIS understands that such attacks will spur a backlash against Muslims, thus alienating and isolating them in Western societies. If Muslims living in the West are alienated by both Western governments and their people, radical anti-Western discourse will start making sense to them.

The ultimate goal of Islamist radicals has been to unify the Muslim world against a common enemy (the West). This goal is at the core of ISIS's strategy, which is camouflaged under the rhetoric of ruling Iraq and Syria, something ISIS knows it can't manage for more than a few months.

Nadim also argued that Australian counter-radicalisation methods were misplaced, with too much emphasis on religion and too little on family and culture:

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The fundamental flaw in the Government's counter-radicalisation policy is that it has relied heavily on Muslim community leaders to understand the roots of radicalisation. Not only are the Muslim community leaders no experts on the subject of radicalisation, but they are are also distant from the younger generation of Muslims who undergo an identity crisis triggered internally by Australian society (which functions contrary to their beliefs) and externally by sophisticated propaganda which they digest over social media.

The result is an obviously misdirected counter-radicalisation strategy focusing on sponsoring 'liberal' Islamic education, training for Imams, and the opening up of Islamic institutes at universities to promote research and dialogue.

Opening up new Islamic institutes and publishing liberal Islamic texts has absolutely no measurable impact on radicalism – thick intellectual texts are not read by majority of the Muslim youth. And there is little evidence that Imams have much to do with growing radicalisation, given that groups like al Qaeda and ISIS tend to bypass structures and hierarchy to reach directly to recruits.

But, countered Charles Miller from ANU, how do we even know when deradicalisation efforts are working?

Nadim has some good ideas about how we can improve on current deradicalisation efforts. But testing whether they work or not isn't easy. Let's say we try out a deradicalisation program on three young Pakistani men like the ones Nadim interviewed. Suppose they all turn away from terrorism after they complete the program. Great. But does that mean the program worked, or would they have turned away from terrorism anyway?


Perhaps we could compare them to three otherwise similar young men who were not exposed to the program. That's better, but we're still talking about just six people. Maybe the result has got something to do with their individual life stories and the apparent success of the program is just luck. OK, so let's look at a larger number of people. Now we're getting into the world of the randomised controlled trials, or RCTs.

RCTs are standard in medicine. If you've been sick in Australia at any time since 1998, chances are the treatment you got has been tested through an RCT under the oversight of the Medical Services Advisory Commission. Applying RCTs to public policy is a more novel proposition for many, but they are increasingly becoming standard in many areas of domestic politics.

At the beginning of the year Anthony Bubalo raised a debate on the need for liberal democracies to have a real and honest discussion about how they should be fighting terrorism:

I would like to see a debate in which the proponents of liberty acknowledge the threat, understand that it provokes genuine fear in much of our society (even if more people die falling off ladders or in car accidents) and then ask themselves which of our liberties we should compromise for the sake of security. As the Charlie Hebdo case underlined, we don't even seem to be clear about the liberties we are defending.

I would like to see a debate where the proponents of security recognise that the threat to our societies comes not just from terrorism but from the way in which we fight terrorism, and that we should be prepared to accept certain levels of risks for the sake of preserving our rights and principles.

Paul Buchanan responded and said terrorism should be treated as a crime, which would essentially depoliticise the act:

Although ideological extremists see themselves as being at war, this response on the part of democratic states, and the characterisation of the fight against terrorism as a 'war' marshaled along cultural or civilizational lines, is mistaken.

The proper response is to see terrorism not in ideological terms, with the focus on the motivation of the perpetrators, but in criminal terms, where the focus is on the nature of the crime. Those who practice terrorism can then be treated as part of a violent criminal conspiracy much like the Mafia or international drug smuggling syndicates. This places the counter-terrorism emphasis on the act rather than the motivation, thereby removing arguments about cause and justification from the equation.

There is no reason for Western democracies to go to war.

A second piece from Buchanan made the point that it is near impossible for liberal democracies to guard against 'lone wolf' attacks:

The focus of these autonomous, decentralised terrorists is 'everyday' targets: shopping malls, sports venues, transportation hubs, entertainment venues, non-military government offices, media outlets, houses of worship, schools and universities. All present soft targets with symbolic value where a relatively small act of criminal violence can generate waves of apprehension across the population, thereby prompting a government overreaction designed as much to calm public fears as to prevent further attacks.

The range and number of these targets makes guarding all of them difficult. and if the perpetrators plan in secret, they are impossible to stop regardless of the security measures in place. Short of adopting a garrison state or open-air prison approach to society as a whole, there is no absolute physical defence against determined and prepared low level operators, especially when they have access not only to weapons but common household or industrial products that can be used as weapons. This is as much true for psychopaths as it is for terrorists.


The north-eastern province of Kunduz in Afghanistan, and it's capital by the same name, have shot to international attention this past week for two major reasons.

First, because the Taliban proved that despite fragmentation and leadership battles it's still able to gain strategic military momentum, exposing the weakness of the Afghan National Security Forces by taking the city (the Afghan Government now claims to have retaken it). Secondly, because the worst possible scenario occurred for the US military. Responding to a request from Afghan Government forces, US warplanes managed to bomb a hospital run by the renowned international humanitarian organisation Médecins Sans Frontières‎/Doctors Without Borders (MSF), killing 22 people, patients and staff.

In many ways, it could not get much worse in Afghanistan. Or could it?

Let's start with the embarrassing mistake of targeting the one institution that is protected under Common Article 3 of the Geneva Convention – all medical facilities. Common Article 3 covers the most basic and fundamental rules of war 'from which no derogation is permitted' even in 'conflicts not of an international character'.

What happened in Kunduz unfortunately highlights the infringement on medical neutrality that has been happening in Afghanistan over the last few years, and which MSF highlighted in 2014 in various workshops and in a published report. Clinics have been raided and medical staff questioned numerous times by both national and international military (though the behaviour of the latter improved with time). It is a dangerous deterioration in a war where desperation prevails and any means seem justifiable or excusable.

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MSF has already called for an investigation into what it is calling a war crime. The US military has of course complied, after suggesting early on it was merely a case of collateral damage. The Afghan Government seems less remorseful and some Afghan Government agencies seem to want to justify the bombing based on the fact that Afghan National Security forces (more specifically the Afghan police in Kunduz) claimed that Taliban fighters were firing from the hospital. MSF denies this.

But even if this had been the case, it would still be no excuse to bomb the hospital.

First, if there was Taliban in the hospital, this would have been an been an unlawful use of a hospital by an armed group. Secondly, international humanitarian law 'requires that even if military forces misuse a hospital to deploy able-bodied combatants or weapons, the attacking force must issue a warning to cease this misuse, setting a reasonable time limit for it to end, and attacking only after such a warning has gone unheeded.' Nobody has said that such an attempt was made and MSF claims the bombing continued after they told US authorities it was happening. Lastly, as Human Rights Watch points out, 'given the hospital's protected status and the large numbers of civilians and medical personnel in the facility, attacking the hospital would still likely have been an unlawfully disproportionate attack, causing greater harm to civilians and civilian structures than any immediate military gain.'

This sort of tragedy has happened before. On 4 September 2009 in the very same province a 'German-ordered attack' carried out by US fighter pilots on two fuel tankers alleged to have been hijacked by the Taliban resulted 'in the deaths of up to 142 people, many of them civilians'.

There must be something about Kunduz, and not just as a scene for tragic military mishaps. Contrary to some claims that Kunduz 'was not considered of particular strategic importance in the war against the Taliban', it might be wise to remember that the Taliban tried to move on Kunduz in 2007 and possibly as early as 2006 in Chahar Dara district, but failed due to the intervention of local militia and the Afghan Local Police. One should never forget that Kunduz was a key Taliban stronghold in the past ('the Kandahar of the north'), important for its efforts to capture northern Afghanistan, which nearly succeeded by 2001.

But this story is not just about Kunduz. It is about how the Afghan Government is slowly losing its grip, as one could have predicted. The Afghan National Security Forces were never strong enough without NATO air support, which was needed once again for Afghan Government forces to gain the upper hand in the latest battle for Kunduz. Over the last year the lack of air support has been felt in the war. The Taliban has able to move in larger groups, there has been more ground combat and as a result more civilians have been killed and displaced.

What happened in Kunduz is also a reminder of what happens when a war goes urban. Most of the past battles have been fought in rural areas, with less opportunity for collateral damage.

All this projects an ugly future in Afghanistan. If a city like Kunduz can fall, others could follow. The 1992-4 civil war that destroyed Kabul is a horrific reminder of how bad such urban warfare can get, especially when scores of internally displaced people have already pushed into Afghanistan's major cities. Civilian casualties would be far higher today than then.

So who can blame an increasing number of Afghans for once again leaving their country? They're not doing it undetected but they are being drowned out by the war in Syria. I'd rather not be smug and say 'I told you so', because to have predicted another mass displacement fills me with nothing but sadness.

  • Excellent piece from Adam Morton with accompanying photos capturing the impacts of climate change on Taro Island in Solomon Islands, likely to be the world's first provincial capital abandoned as a result of global warming.
  • Concerns over judicial independence in PNG have been raised after two Australian lawyers involved in the ongoing corruption case against PNG Prime Minister Peter O'Neill were denied entry to PNG. Attempts to suspend the Chief Magistrate for alleged misconduct and incompetence were also revealed.   
  • New Zealand is planning to establish one of the world's largest ocean sanctuaries in its waters. The Kermadec Ocean Sanctuary is expected to attract significant tourism. 
  • Chile has agreed to a similar proposal from environmental groups on Easter Island to create a large marine reserve around the islands, with allowances for traditional fishing and conservation methods.   
  • Fiji Prime Minister Frank Bainimarama spoke at the UN in support of Fiji's bid for the Presidency of the General Assembly, stressing Fiji's democratic progress and position as a regional leader on climate change.  
  • The Australian Government is partnering with the Asian Development Bank to set up the Pacific Business Investment Facility to help businesses in the region to secure finance.  
  • Six months on from Cyclone Pam, the World Bank has produced this infographic on the situation in Vanuatu and the other countries hit by the storm. Vanuatu has been classified the world's most at-risk country for natural disasters.  
  • In an interview with ABC's Pacific Beat the Technical Centre for Agricultural and Rural Co-operation explains how social media has become an important tool for agricultural development for the Pacific.  
  • PNG's Dame Carol Kidu puts her support behind the Sustainable Development Goals.


G20 energy and resources ministers concluded the first-ever G20 Energy Ministerial in Istanbul over the weekend. Their communique is an initial response to the call from G20 leaders at last November's Brisbane summit to meet and progress nine agreed principles on energy collaboration.

With energy access one of the focal points of Turkey's efforts on inclusiveness during its 2015 G20 presidency (the Ministerial coincided with a one-day High-Level Conference on Energy Access in Sub Saharan Africa), the key advance is that energy ministers endorsed an Energy Access Action Plan. The energy access challenge remains imposing: 1.1 billion people globally live without access to electricity, with more than 600 million of these in sub-Saharan Africa. The action plan builds on existing initiatives by facilitating voluntary collaboration among G20 countries on sharing knowledge and best practices in technology, investment and finance, capacity building and regional integration.

Renewable energy, energy efficiency and fossil fuel subsidies were also prominent in the three page statement. A toolkit of voluntary options for renewable energy deployment aims to support a faster roll-out of renewable energy by G20 countries taking advantage of reducing technology costs and exchanging good practice on enabling policy and financing frameworks. Ministers also discussed implementation of the 2014 energy efficiency action plan and G20 actions to deliver greater energy efficiency, and welcomed progress made in the past 12 months (mainly by India and Indonesia) to phase out their fossil fuel subsidies.

Yet the communique is more notable for what has not been progressed.

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Two areas in particular are sources of frustration: a missed opportunity to make concrete progress on reforming global energy governance, and an unambitious approach on climate change that adds nothing to momentum in the lead up to the UN Climate Change Conference in Paris later this year. In both of these areas there is a strong disconnect between G20 rhetoric and action.

G20 leaders took a significant step when they expressed a shared purpose that the international energy architecture was not reflective of the global energy landscape. The aspiration, articulated by then parliamentary secretary and now Australian energy minister Josh Frydenburg, was that the agreement reached in Brisbane would lay the foundations for a new body that would govern the 'affordable and reliable' delivery of energy to the world. The move was praised for placing the G20 at the forefront of global energy governance reform.

Yet fast-forward a year and this ambition has not been advanced. While it is important to temper expectations for what could have been achieved in just 12 months, the stage was set to deliver a serious statement of intent in 2015 that marked the G20's ongoing constructive role. Ministers could have agreed on a first pragmatic step forward, such as by recommending the International Energy Agency consult on expanding its membership. This is not an easy conversation, but leaving it in the hands of the existing establishment is guaranteed to not result in the substantive change the G20 leaders agreed was necessary in November.

There are three ways the G20 can reinforce international efforts on climate change: support the work of the UNFCCC as principal body for global climate change negotiations, support investment and international coordination in research and development on clean technologies, and recognise that the Intended Nationally Determined Contributions are key to efforts to improve energy efficiency and investment in clean technologies. While the G20 may not be the appropriate body for negotiating climate pledges, there is much that energy ministers could have done to add to the momentum building towards Paris. They could, for instance, have explicitly recognised and praised the joint leadership that the US and China have displayed, welcomed the enhanced commitments of other G20 countries, urged greater ambition in the energy sector and boldly detailed the type of collective actions and international coordination that would lead to a substantive boost in clean energy research and development in G20 countries.

In all, the first Energy Ministerial has overseen some progress in discrete parts of the agenda. But it is hard to escape the feeling the G20 has still a long path to tread before it makes meaningful contributions to the energy sector.

In the future, action plans and toolkits will need to be supplemented by political drive to deliver substantive governance change and contribute to climate change solutions if the G20 is to justify the time of energy ministers and the associated machinery of government.

Photo by Flickr user DIVatUSAID


We still know very little about the circumstances that led to Friday's tragic shooting of NSW police employee Curtis Cheng in Parramatta. But there are already indications that the seductively simple narrative of a ‘lone wolf’ teenager radicalised through social media and acting alone is wide of the mark. As investigations progress, a more complex and nuanced picture is likely to emerge.

But while the age of the attacker is shocking (and when it comes to terrorist attacks in the West, unprecedented), there is nothing to indicate that the attack is indicative of a new problem.

Instead, the attack and attacker appear to be examples of a problem the Australian law enforcement and intelligence community has been responding to for the past two years: an increased likelihood of unsophisticated but high-profile terror attacks and an increasingly youthful extremist demographic.

Over that two year period, the Australian response has included more money for law enforcement and intelligence agencies, a raft of new legislation targeting Australians fighting overseas and increasing Government data retention powers, and most recently nascent (if clumsy) attempts to identify individuals on a pathway to extremism.

Electoral advantage may have been a factor in the nature and timing of some of these initiatives, but introducing counter-terrorism measures in advance of an imminent threat, rather than in response to a terror attack, may prove to be of long-term benefit to Australia.

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Because unsurprisingly, governments that introduce counter-terrorism legislation in the febrile aftermath of a terrorist attack do not have a track record of doing so in a measured, strategic way. We have seen this in the past 12-18 months as Canada, France, the UK and Tunisia have responded to terrorist attacks with an expansion of Government powers and an increased focus on security and law enforcement.

These responses were not necessarily inappropriate. But the speed with which reform has been pursued has tended to reduce scrutiny and debate, despite the long-term impact of the measures being introduced.

By contrast, and in distinction to the frenzy that followed the Sydney Siege last December, the immediate mainstream political response to the Parramatta attack has been measured and sensible. In part, this is due to the change in tone and language that the new political leadership in Canberra appears to have prompted. But the response has also been influenced by the nature of Friday's incident: brief, initially ambiguous, in a lower profile location, and with limited impact on the general public.

We should hope that as the facts emerge and the picture of the attacker, Farhad Jabar, becomes clearer, this tone scan be maintained. As we discover more, it may be that warning signs were missed or (surely) that more could have been done to prevent Jabar getting access to a firearm. If this is the case, then the priority should be to identify how we prevent this occurring in future, wherever possible within the current legislative framework.

That’s not to say the current system is perfect. Despite succeeding in disrupting attack plans and preventing Australians from travelling to the Middle East to join ISIS and al-Nusra, there have now been two tragic terrorist attacks. No security framework can offer a 100% guarantee of success. But we already have a framework that should be more than capable of identifying almost all individuals at risk of conducting a terrorist attack.

So despite speculation about ‘prayer groups’, Hizb ut-Tahrir, or social media, we should wait and see what role these elements played in the attack, and use existing powers to prosecute individuals if necessary. Given Jabar's age, there may be pressure to extend the role of schools in identifying radicalisation warning signs, as has been the case in the UK. Whether or not such an approach is correct, we need to ensure that the effects of any changes are debated properly.

There is, and should be, zero tolerance of risk when it comes to the terrorist threat. One attack is one too many. But in our response to Friday's tragedy, we must be clear about why it occurred and whether it could have been prevented. And when answering the latter question, we should balance the chance of sporadic and small-scale attacks under the current framework with the risk that a reflexive, heavy-handed Government response could make us less safe.


After marathon talks, the Trans Pacific Partnership has been sealed. The stage is now set for some fantastic battles to get this through national legislatures. I'll leave it to others to count the numbers.

I've written previously about my concerns regarding the TPP, and agreements like it. I won't re-hash those arguments here. I'll just look at what we have learned overnight.

Trade Minister Andrew Robb at a conference in Hong Kong, March 2015. (Minister for Trade.)

Andrew Robb has apparently secured agreement from the US not to increase the intellectual property protection for biologics, a type of drug. In the past, I've been critical of intellectual property provisions in these agreements, so does it placate me that the 'TPP will not require any changes to Australia's domestic intellectual property regime'? Not really.

First, it wouldn't be the first time we have been told that an agreement did not change our IP obligations, when it fact it did. The Department of Foreign Affairs and Trade said, before a Parliamentary Committee, that it was not aware of any changes necessitated by the Korean Free Trade Agreement, only to have to change its tune in a Question on Notice.

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Second, even if our law can remain unchanged (and we await the text to see), the TPP further entrenches our intellectual property regime in international treaty. This gives us less scope to amend our own laws. As Professor Kimberly Weatherall of the University of Sydney has pointed out, this has been a problem in the past — policy supported by both sides of parliament has been rejected because it conflicted with the US-Australia FTA.

By my reading of the commentary, tobacco companies are completely barred from using the TPP's Investor State Dispute Settlement (ISDS) mechanisms. These are the tribunals that allow a foreign company to sue a government on the basis of some discriminatory action. Again, a concern I and many others have is that these tribunals can stifle good government decisions, yet they have not been shown to have any positive impact on investment.

The exclusion of tobacco is a good thing. But why only tobacco? True, the tobacco companies have abused the system in the past. Phillip Morris moved its headquarters to Hong Kong so that it could use an ISDS mechanism to take legal action against Australia's plain packaging laws, after the tobacco industry lost a High Court action under Australian law. But bad behaviour is not confined to the tobacco industry. So if there is a reason to completely carve out tobacco, there is a reason to completely carve out other industries too. This carve-out betrays the flaws in the system.

In sum, there's not much here that has changed my view – the TPP has a small upside for an unknown amount of downside. The TPP is not worth the risks.


I'm only too ready to leave it up to strategic experts such as Rear Admiral Peter Briggs to sort out how many submarines we need. I'll stick to the economics. We shouldn't let the number be determined by a perceived need to provide work-continuity for ASC in South Australia. And we should acknowledge that this is a decision about 'guns or butter': spending more on submarines by building them at home means less of something else.

The Senate inquiry on the future of naval shipbuilding in Australia is a 'must read' for anyone interested in the decision-making process. It's an example of Australia's own version of Eisenhower's 'military-industrial complex' in operation. Even though this was the Senate Economics Reference Committee, the list of contributors is almost exclusively construction-industry representatives, regional lobbyist, trade-unionists and former services personnel. The taxpayers were under-represented. 

Reading the testimony, you might get the impression that the Collins saga had been a brilliant success and that building a new fleet of submarines in Australia would be no dearer than building overseas, an assertion consistently refuted by actual domestic ship-building experience (See ASPI's 'Four ships for the price of six').

Members of the Committee would have been courageous (in the 'Yes Minister' sense) to have been critical or sceptical, as all political parties covet those South Australian votes. Even so, the report was not, as Admiral Briggs stated, unanimous. There was in fact a substantial dissenting report issued by the Government members of the Committee, which (inter alia) specifically addressed the issues I raised in my initial post on this issue.

In response to the recommendation that Admiral Briggs quotes, the dissenting report says:

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Response to recommendation 3. The draft report calls for an Australian build at all costs. This could give rise to national security outcomes being compromised by a prioritisation of industry policy over defence policy and it could force the taxpayer to underwrite an economically uncompetitive project. While we want to see the Future Submarine contract awarded to Australian shipbuilders, it must also be the result of a competitive tender process and it must be awarded on merit. This will ensure that Navy receives a fit for purpose product of the highest standard while Australian tax payers receive the best possible value for money.

. . .Recommendation 3 effectively relegates national security policy to second place behind industry policy.

I couldn't have said it any better.

The substantive difference between Peter Briggs and me relates to the impact of spending on submarines on the economy. It is standard practice for consultants-for-hire to make their lobbying case on the basis that spending on the target industry will boost the economy, not just by the amount of the actual expenditure, but by a multiple of this because of successive rounds of spending. This is akin to the familiar textbook multiplier process. You can go one step further (as the 'eloquent' testimony of Professor Goran Roos does) and double-count the contribution of sub-contractors. If you want to get a good reception where 'jobs and growth' are the paramount political concern, this is the way to go.

It is only in rare circumstances, however, that this makes any economic sense. The multiplier logic relies on squeezing more than a pint out of a pint pot. The implicit assumption here is that there is unused capacity in the economy – capital, managerial talent and unemployed workers – all ready and waiting to respond to this extra demand to build submarines, adding to GDP in the process. Not only are these resources assumed to be unemployed now, the assumption is that they would have remained so over the life of the project.

Of course Australia has unemployment – currently 6.2% of the workforce. But this is close to the lowest level of unemployment Australia has had for the past quarter-century. It would be nice to get back to the lower level we had at the height of the resources investment boom, but this kind of fine tuning is not feasible.

The proper way to analyse how the submarines might affect GDP is to think in terms of opportunity cost: if these resources – capital, managerial talent and labour – were not building submarines, they would be doing something else which society also values. The productivity challenge is not to attempt to conjure productive capacity out of thin air, but to shift the economy's given resource endowment into uses which have a higher social value.

Government industry policy (subsidies, 'picking winners' and so on) may play a part in that process. Economists are not all free-market ideologues. Some of us accept that governments can sometimes use their considerable expenditure to steer resources into areas which will catalyse higher-value output and have longer-term benefits even when the expenditure ends. But economists also look back on the history of infant industries which never grew up, and on politically driven white elephants. Who wants another Darwin-Alice Springs railway? 

Where does domestic submarine construction fit in such a framework?

Will this foster a viable industry which suits our comparative advantage? Will it form the nucleus of a cluster of highly productive firms with a self-sustaining future when the submarine work is finished? Will it link into international supply chains, thus compensating for our lack of manufacturing scale? Will it be disciplined by international competition, or link us more firmly into the rising demands of East Asia?

The Collins-class experience suggests that constructing bespoke submarines is a dead end, a mendicant industry whose survival depends on government subsidies.

Does it make any difference that domestic construction avoids importing? In a globalised world with flexible exchange rates, this 'exports good, imports bad' argument, common though it is, has to be dismissed. The flexible exchange rate looks after the need to keep imports and exports in equilibrium with the available funding from capital flows.

The dissenting report of the Senate inquiry was a brave attempt to put some limits on the size of the hand-out, through giving the rival bidders some flexibility on the domestic content of construction. The competitive evaluation process seems the last opportunity to impose some economics on this politics-driven project.

Photo courtesy of Australian Defence Image Library.


It is fashionable to criticise Washington's approach to the Syrian civil war. In his memoir, former US Secretary of Defense Leon Panetta described President Obama's approach to Syria and Iraq as flawed. Obama has been roundly criticised for his 'tentative' approach to Syria. A piece on this site last week referred to the bankruptcy of US policy in the region. Even Australian pundits such as Greg Sheridan have said that 'for the last few years nothing has been all that Obama has offered.'

Now the Russians' apparent decisiveness in deploying a modest strike force to its decades-old ally Syria has led people to claim Obama has been outmanoeuvred by Putin. But this same argument was leveled against Obama more than two years ago. It also ignores the fact that the Syria problem has always been more straightforward for Moscow than for Washington. For Russia there is simply the Assad regime and those opposed to the Assad regime. Moscow's only real question has been the degree and timing of its support to Assad.

Critiques of Obama's Syria policy ignore two inconvenient facts. Firstly, the critics have offered no credible alternative policy. Indeed, Obama was recently moved to highlight the intellectual vacuity of many of his critics when he stated:

I hear people offering up half-baked ideas as if they are solutions or trying to downplay the challenges involved in the situation. What I'd like to see people ask is, specifically, precisely, what exactly would you do and how would you fund it and how would you sustain it? And typically, what you get is a bunch of mumbo jumbo.

Panetta offered the fact that Washington should have armed 'moderate' rebels, without going into any detail regarding what he meant by 'moderate' or how the use of these weapons would be accounted for once they crossed the border. Outgoing Speaker of the House John Boehner has even spoken of the need for US 'boots on the ground' without ever going into specifics.

For those who have cared to listen, the US Commander-in-Chief has highlighted the intractability of the situation in Syria before, along with the dearth of good options.

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In a long interview with President Obama published in 2014, David Remnick from The New Yorker asked him whether he was haunted by the situation in Syria, and his reply says all that one needs to know about how he sees Washington's role:

I am not haunted by my decision not to engage in another Middle Eastern war. It is very difficult to imagine a scenario in which our involvement in Syria would have led to a better outcome, short of us being willing to undertake an effort in size and scope similar to what we did in Iraq. And when I hear people suggesting that somehow if we had just financed and armed the opposition earlier, that somehow Assad would be gone by now and we'd have a peaceful transition, it's magical thinking. 

Added to that is the plethora of state and non-state actors with their fingers in the Syrian pie, and over whom Washington has little if any influence. And as for those who see arming the various opposition forces as some sort of panacea to Syria's troubles, Obama had this to say:

Very early in this process, I actually asked the C.I.A. to analyze examples of America financing and supplying arms to an insurgency in a country that actually worked out well. And they couldn't come up with much. We have looked at this from every angle. And the truth is that the challenge there has been, and continues to be, that you have an authoritarian, brutal government who is willing to do anything to hang on to power, and you have an opposition that is disorganized, ill-equipped, ill-trained, and is self-divided. All of that is on top of some of the sectarian divisions...And, in that environment, our best chance of seeing a decent outcome at this point is to work the state actors who have invested so much in keeping Assad in power—mainly the Iranians and the Russians—as well as working with those who have been financing the opposition to make sure that they're not creating the kind of extremist force that we saw emerge out of Afghanistan when we were financing the mujahideen.

This is not to say Obama has gotten everything right. Indeed, it's probably accurate to say that his strategy is correct but some of the tactical execution has been poor. The major error was his use of the term 'red line' in setting the trigger for (limited) US air strikes in response to the use of chemical weapons. Although the Russians came up with a diplomatic outcome that was a net gain for regional security, Washington's lack of follow-through on the threat eroded its credibility in the region. Israel has shown the effectiveness of limited air strikes in sending a message to Damascus without becoming decisively committed.

Another tactical error has been to dally in the rebel-arming business, even though Obama himself pointed out the futility of it. There is evidence that the US-supplied weapons and some training to rebel groups in Turkey, Qatar and Saudi Arabia, and there has been an ill-fated push by the US to create a secular anti-ISIS militia. Obama's misstep could be explained by his need to assuage the concerns of regional states and to dissuade them from creating their own proxies (to a greater extent than they already did). Unfortunately, Obama's concerns have been borne out by the results, as 'moderate' groups supplied by Washington have allegedly been overrun by Islamists and have had their weapons taken. The idea of creating a secular anti-ISIS rebel group has also proved to be a chimera; their small numbers barely survived first contact in Syria. 

Obama has been under enormous pressure to do something in Syria, however he rightly believes that it would take an enormous commitment of blood and treasure to even begin to restore order in that blighted country. Even then, there would be no guarantee that it could resolve the underlying causes of the civil war.

When you don't control all the levers you shouldn't expect to control the outcome. So, while Washington has made some tactical errors, Obama's strategy of avoiding a decisive commitment is the right one. While it may appear a modest strategy for a superpower, none of his critics have been able to come up with anything that resembles a coherent alternative. That says much of what you need to know about Syria.

Photo courtesy of Flickr user The White House.

  • A new FireEye report says Southeast Asian governments and companies are 45% more likely to be targeted by hackers than the global average.
  • Plans for Thailand’s 'great firewall' were slammed this week. The call for a government-managed 'single-gateway' for internet traffic was met with huge resistance online, with cyber activists organising  DDoS attacks on government websites.
  • Singapore says it has detained two men who were allegedly planning to join ISIS.
  • China’s ambassador to Malaysia snubbed diplomatic protocol this week, avoiding a summons by Malaysia’s Foreign Minister over interference in domestic politics. 
  • An excellent round-up by Saksith Saiyasombut of how Thai police squared the circle in the hunt for the Bangkok bomber.
  • Asia Society's Jackson Ewing explains why Southeast Asia’s haze problem is so difficult to resolve. RSIS will be running a new series on the issue.
  • 40,000 people have been infected this year as Vietnam is hit with an  outbreak of dengue fever
  • Influential Buddhist monk U Wirathu has thrown his support behind the Thein Sein government in Myanmar’s 8 November elections, adding that Aung San Suu Kyi's NLD party are 'full of themselves'.
  • The West is resigned to the Thai junta, says Thitinan Pongsudhirak.
  • Michael Vatikiotis on Indonesia's forgotten genocide.
  • Kavi Chongkittavorn spoke at CSIS's Thailand Speaker series: