Lowy Institute

The re-emergence of Sri Lanka's controversial former president, Mahinda Rajapaksa, as the leader of the main opposition alliance in the country's general elections in August, and as potential prime minister, appears to signal the end of the country's brief democratic honeymoon and a return to divisive politics as usual.

Former Sri Lankan president Mahindra Rajapaksa. (Flickr/Mahindra Rajapaksa.)

Six months after his stunning victory in Sri Lanka's presidential election, Maithripala Sirisena faces a renewed challenge from the man he ousted. Sirisena's triumph gave new life to Sri Lanka's battered democracy, which had suffered under Rajapaksa's authoritarian and nepotistic regime. Rajapaksa's likely return to parliament with a significant degree of support will put continued political reforms and chances for ethnic reconciliation under severe pressure.

Risking his career, Sirisena left his position as health minister and general secretary of the ruling Sri Lanka Freedom Party (SLFP) in November 2014 to head a combined opposition campaign led by the United National Party (UNP) to unseat Rajapaksa. Running on promises to root out corruption and re-establish the rule of law, Sirisena won a large portion of the Sinhala majority's vote, and overwhelming support from minority Tamils and Muslims. 

Since coming into power, he has moved away from Rajapaksa's narrative of Sinhala nationalism – which underpinned the government's brutal 2009 victory over the Tamil Tiger insurgency – and returned power to the office of the prime minister and parliament. He has also taken tentative steps to rebuild relations with minorities by addressing some of their long-standing grievances.

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Still, the political, ethnic and religious wounds that split the country remain largely unhealed, and the unfulfilled reform agenda is long. This includes not just accountability and the need for a negotiated settlement to ethnic divisions, but also a comprehensive plan for demilitarisation, a determined drive to bring the scores of major corruption investigations to completion, and further reforms to rebuild Sri Lanka's heavily politicised justice and policing system.

Even if Rajapaksa's alliance doesn't win enough seats to secure him the prime minister's office, his leadership of the Sinhala nationalist bloc in parliament will exacerbate communal divisions and pose a major challenge to further reform. 

In a 1 July speech announcing his candidacy, Rajapaksa called on 'patriotic forces' to protect 'the motherland'. He accused Sirisena's UNP-led Government of undermining national security, supporting terrorists and ruining the economy. These have been the themes of a series of large rallies throughout Sinhala-majority areas of the country since mid-February, which have called on Sirisena to bring back Rajapaksa as prime minister. Rajapaksa remains popular with large numbers of Sinhala voters, particularly in rural areas.

Within days of his victory in January, Sirisena took over leadership of the SLFP from Rajapaksa, and the former also gained leadership of the SLFP-led coalition, the United People's Freedom Alliance (UPFA). But despite substantial concessions, he never gained complete control over either group, most of whom see Rajapaksa as their only chance to prevent a landslide UNP victory in August. Sirisena has struggled to hold the party and alliance together, while blocking Rajapaksa from returning to parliament with either the SLFP or UPFA.

The announcement on 3 July that the UPFA had decided to nominate Rajapaksa as a candidate shocked and disappointed Sirisena's supporters, and appeared to signal Sirisena's capitulation in his battle with Rajapaksa. Behind-the-scenes attempts reportedly continue for the smaller pro-Sirisena wing of the SLFP to contest separately from the UPFA, or to run with the UNP, but with less than a week to finalise candidate lists and party nominations it will be hard to reconstitute anything like the January coalition that stood against Rajapaksa. 

The appeal of Sinhala nationalist ideas and the continued popularity of Rajapaksa has considerably limited Sirisena's boldness during his first six months in office. In the last parliament, which Sirisena dissolved on 26 June, UPFA legislators were able to block many of Sirisena's initiatives. UPFA resistance watered down what still became Sirisena's chief achievement to date, a constitutional amendment reducing the powers of the presidency. 

Fear of upsetting nationalist sentiments and giving Rajapaksa and his allies political ammunition has meant Sirisena's gestures on reconciliation with Tamils – returning land held by the military and reducing its role in Sri Lanka's north and east; releasing political detainees and investigating the thousands who disappeared during the course of the war – have been partial and ad hoc. 

To avoid inflaming Sinhalese opinion and angering the powerful military, Sirisena and his allies in the UNP have also held off announcing plans for the domestic accountability mechanism for alleged war crimes that they promised both voters and the UN. A report from a UN inquiry into the allegations, postponed by the UN Human Rights Council in February at the new government's request, is due to be released by early September. Rajapaksa and his allies flatly reject any suggestion of accountability or cooperation with the UN, and the subject is likely to feature as a key issue of the campaign.

The coming campaign is set to be close, and possibly violent. While the UNP is still favoured to win the largest number of seats and to form the next government, many fear that once back in parliament, Rajapaksa and his powerful family will be able to chip away at the UNP's numbers until he is able to form a majority. It remains unclear what, if any, role Sirisena will play in the campaign. But unless there is another surprising reversal, his credibility as the leader of the movement for democratic reforms and reconciliation has been badly damaged.

Sirisena's first six months in office have proven just how entrenched Sri Lanka's post-war challenges are. Hopes for January's democratic 'revolution', especially in the international community, were always overblown. But to preserve the possibility of slower, more incremental, progress, Sirisena will need a renewed commitment to his campaign principles, and some luck.

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Late last month, in conjunction with attacks at a beach resort in Tunisia and a 'lone wolf' attack in eastern France, a suicide bomber struck the Imam Al-Sadeq mosque in Kuwait City, killing 27 and injuring 222 people. In the days after the suicide attack, Government-sponsored billboards began appearing on the streets of Kuwait City. These large roadside posters show a fist wrapped in a Kuwaiti flag with the phrase, in Arabic, 'we stand as one'.

This unifying slogan has dominated social media since the bombing but, in the aftermath of the attack, the investigation has thrown up some information that illustrates why unity in Kuwait is increasingly difficult to achieve. At least two of those already arrested hail from the Bidun of Kuwait, the stateless population that has few rights yet resides within one of the wealthiest countries in the world.

While the suicide bomber was identified as a Saudi national, he worked with accomplices inside Kuwait. Within days, Kuwait's Ministry of the Interior moved swiftly to make the first arrests: 'We have referred five suspects accused of assisting the suicide bomber to the Public Prosecution...They include the driver who took the Saudi bomber to the mosque and the car's owner and his brother, all stateless people or Biduns'.

Bidun is the shortened version of the Arabic phrase bidun jinsiyya, which transliterates to 'without nationality'. It refers to residents of Gulf Arab countries who are stateless, or consider themselves to be.

This large group of disenfranchised people, who the Gulf states have failed to effectively recognise, is now seen as a potential security threat. The fear is that pent up hostilities, fueled by more than 50 years of statelessness and ongoing oppression, could make those at the margins of society willing or malleable accomplices for groups such as ISIS. A matter long relegated to the status of demographic problem and largely fueled by a need to restrict access to government services has now become a security issue.

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Exact numbers of Bidun in the Gulf are not known. While there are an estimated 10,000 to 100,000 Bidun in the United Arab Emirates, their numbers in Kuwait are proportionally larger than elsewhere. In Kuwait, the most reliable estimate is 105,000–110,000, which amounts to about 10% of the population of Kuwait.

While various schemes have been proposed and some implemented, the Bidun community remains a largely marginalised group. Reform of nationality laws has assigned the Bidun different categories of status within the state, delivering limited rights to some and full citizenship to a small number, while others have received no benefits at all. Perhaps the most controversial recent development was to offer the Bidun citizenship of the Comoros Islands, the beleaguered Arab League member which is said to have received millions from the deal.

The Bidun have been stateless for generations. They are not monolithic and have emerged from a variety of backgrounds dating back to Kuwait's independence from Britain in 1961. Some Bidun were entitled to citizenship at independence, but failed to register or did not have the required documents, as many were tribal nomads. Others are ancestors of foreign Arabs recruited into Kuwait's military and police force in the 1960s and 1970s and who subsequently settled in the country. The Kuwaiti Government argues that the majority of undocumented Bidun are concealing their true nationality and they or their forebears entered Kuwait illegally in order to gain access the prosperous oil-based economy and the extensive services that the state provides to its citizens.

There were few discernible differences in rights between Bidun and Kuwaiti citizens until the late 1980s when they were deemed to be 'illegal residents' and access to government services was curtailed. Over the years, Kuwait's Nationality Law has been amended many times to make access to Kuwaiti nationality more difficult. 

The Bidun have been locked out of the largesse of the state. Kuwaiti citizens can access generous benefits from cradle to grave, including free health care, free education, access to prized civil service employment and housing grants. While some registered categories of Bidun can access limited education and health services, they are unable to obtain a Kuwaiti passport and are forced to apply for restrictive travel permits. They have no access to Kuwaiti identity cards and are have to constantly renew short-term security cards that can be withdrawn without due process. They have no vote, have difficulty in obtaining driving licenses, are barred from recruitment to the public sector and are not allowed to purchase property.

The most notorious member of this marginalised group is Mohammed Emwazi or 'Jihadi John', the infamous black-clad ISIS executioner with the thick London accent. Emwazi's early years were spent in the Jahra neighbourhood, a semi-slum district on the outskirts of Kuwait City where many Bidun reside. Local media reports say his family applied for naturalisation as Kuwiati citizens but were rejected. His family later moved to Britain.

While its difficult to know how much this status influenced Emwazi's choices and subsequent radicalisation, we do know that Emwazi returned to Kuwait many times as a grown man and was engaged, at one point, to a Bidun woman. 

The Kuwait Government is once again tightening the restrictions on the Bidun community. Travel permits that are required for Bidun to leave the country have been suspended. Opposing hashtags both in support of the Bidun community and seeking their expulsion have been appearing on social media. While the Arab Spring protest movements of 2011 briefly raised the profile of the Bidun, with demonstrations held in Kuwait for equal citizenship rights, this movement has largely dissipated after a heavy-handed response by authorities. Advocacy groups remain active but the demands of the Bidun community remain largely unanswered.

The Kuwaiti Government's haphazard approach and lack of a long-term planning has added to the festering discontent of the Bidun. It's an issue that now has security implications for Gulf nations, but especially for Kuwait.

Photo courtesy of Flickr user Turki Al-Fassam.

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Last month on The Diplomat, Van Jackson made an important argument about South Korea's increasingly notable silence on freedom of navigation in the South China Sea (South China Sea).

Jackson, like many analysts, recognises growing Chinese misbehaviour there, most obviously the destabilising island-reclamation strategy and expansive sovereignty claims it fuels. Jackson would like to see greater South Korean engagement (actually, any at all). He rightfully notes that the more unified the Asian front regarding rules in the Western Pacific, the more likely China is to moderate its actions. 

Where is the ROK in the South China Sea?

South Korea is a US ally. As a trading state heavily dependent on open, safe sea lanes, it has a strong interest in freedom of navigation rules. As a proximate neighbour of China, it has a similarly strong interest in China's socialisation into a rules-bound regional community. Countries around China's periphery, from Japan to India, worry that if China is not rebuffed in the East and South China Seas, a sense of hegemonic dominance in the region may grow in Beijing. These minor conflicts are widely seen as the leading edge of the larger question of China's regional intentions as it grows ever stronger.

These concerns about China's integration or rejection of regional rules are, of course, well known. But Jackson helpfully fingers the growing unease in the US over South Korea's hedging on China. Besides silence on the South China Sea question – on which almost every other regional state has weighed in against China – the South Koreans also quickly signed up for the Chinese-led Asian Infrastructure Investment Bank, and they have dragged their feet for years on missile defence deployment.

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The corresponding American anxiety is predictable. In Washington, it seems obvious that South Korea should sign up with the US camp regarding China. The Republic of Korea (ROK) is a US ally which spends far less on defence than it otherwise would because of the US defence commitment. Why should the US provide world-class defence to the ROK without something in return?

Separating China from North Korea is vastly more valuable

The ROK's silence on China in the region, and the trust or at least credibility which that brings in Beijing, has a huge benefit not mentioned in Jackson's essay and elsewhere in this debate: gradually convincing China that it can safely give up it's North Korean 'buffer.' The current Chinese-North Korean relationship is the coldest it has ever been in the post-Cold War period due to vigorous diplomacy by the Park Geun-Hye Administration and its necessary (if unfortunate) reticence on Chinese regional behaviour. This Sino-North Korean drift is a fantastic turn of events which should not be jeopardised with minor South Korean gestures regarding the South China Sea.

North Korea is not even close to being economically self-sufficient (ironic, given its autarkic ideology). Specifically, North Korea has great trouble feeding its population on its own; the last time it had to, it suffered a famine that killed roughly 10% of its population. Nor can it power its machinery, vehicles, power-grids and so on without fuel imports. Nor can its decadent elites enjoy the fruits of tyranny – mansions, cars, top-shelf liquor, yachts and the rest – without a pipeline to the world and access to banks and credit. Permanent subsidisation is required.

During the Cold War, the USSR and China were maneuvered into competing for a North Korean 'tilt' by sponsoring its inefficient economy. After the Cold War, the US, South Korea and Japan also occasionally subsidised the DRPK as part of various deals (which would invariably collapse). North Korea also routinely asks the UN and any other country that will listen for aid of almost any sort.

But this decades-old 'aid hunt' is slowly exhausting itself. Last year's definitive UN report on North Korea's ghastly human rights record makes it harder for UN agencies to assist Pyongyang without crushing criticism in the democratic world. The regionally relevant democracies – Japan, the US and South Korea – have also been suckered once too often by the North to help again without serious concessions. The South Korean Sunshine Policy has been defeated twice at the polls, and the current US attitude of 'strategic patience' means in practice no aid without verifiable denuclearisation, which will not happen. The USSR is gone, and Russia today is too weak, economically stagnant and underpowered in Asia to play the supporting role it once did. Other rogues like Iran or Venezuela may sympathise with the North's aggressive anti-Americanism but can hardly muster the aid flows needed.

That leaves China.

China is the last lifeline. It provides the fuel that keeps the lights on and the cars on the road. It looks the other way on sanctions-busting luxury imports. Robust cross-border networks help meet basic needs for food, clothing and consumer goods for the general population. China provides a location for North Korean financial activities, which are often illicit. Beijing gives diplomatic cover in international organisations, including blocking a referral of Pyongyang to the International Criminal Court. In the language of game theory, China is the final hunter in the 'stag hunt' game needed to pin down the North.

To cut this lifeline would almost certainly produce a regime crisis. The population would once again be thrown into the penury of the famine years, while at the top, the cash, lifestyle and goodies for elites would dry up. Given that the Kim family has essentially bought off the army brass for decades to prevent a coup, the prospect of Pyongyang elites turning on each other over a diminishing budgetary and resource pie is arguably the greatest threat to Kimist rule. The Kim family almost certainly senses this vulnerability.

Prioritising North Korean collapse

The end of Chinese support is a necessary (if not sufficient) cause for North Korea's eventual collapse. South Korean President Park's robust efforts to woo Beijing have helped push China and North Korea apart in the last few years. This is a huge achievement – arguably the most important in her otherwise scandal-laden presidency. For South Korea to weigh in on the South China Sea would jeopardise this tenuous breakthrough. Beijing must believe South Korea is at least neutral regarding Chinese power before it will give up Pyongyang. Given that US forces are stationed in South Korea, Park must be flattering Xi Jingping quite a lot, and she has probably bit her tongue on other issues, like the South China Sea. But ultimately who cares? Cutting Pyongyang off from its last sponsor would be a sea-change and is well worth these costs.

Ideally, South Korea, as a fellow regional democracy and US ally with strong freedom of navigation interests, would support the regional pushback on China in the South China Sea. But the realities of Chinese growth force tough choices. As I have argued before, rigid democratic maximalism regarding China will openly provoke it; Asia does not need ideological neocons. The democracies need to find ways to work with the realities of Chinese power without betraying core values. Abandoning Taiwan, for example, is a bridge too far in such accommodation. But in the South China Sea (and AIIB), a bit of South Korean silence or free-riding is a tolerable swap for a much greater gain.

The US has many other allies and friends on the South China Sea issue. Laying the groundwork for the cessation of Chinese support for Pyongyang is of far greater strategic significance to the US, and just about everyone else, than the mild extra weight South Korea could bring on the South China Sea.

Photo courtesy of Flickr user U.S. Pacific Command.

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In his recent conversation with Sam Roggeveen, Lord Michael Williams made some insightful comments on Aung San Suu Kyi's recent visit to China, suggesting it showed that Beijing was prepared to publicly recognise the importance of other political figures and parties in Myanmar while also sending a message that it was willing to move away from the Myanmar Government.


Street scene from Sittwe, capital of Rakhine State, Myanmar. (Flickr/dany13.)

As others have pointed out, China is likely well aware that it needs to be prepared for when old political allies are replaced by new, unfamiliar faces. In fact, for some time now, Beijing has forged closer ties with Myanmar's smaller political parties. Of particular interest is China's growing engagement with political groups in Rakhine State. 

In 2014, a group of party delegates from Myanmar, including members of the Rakhine National Party (RNP), visited China at the invitation of the Chinese Communist Party (CCP). And in April this year, a delegation comprised solely of RNP members also traveled to China to discuss 'the development of Rakhine State and its people'. Subsequently, an RNP spokesperson claimed there would be further cooperation between the two parties, including a visit by a CCP delegation to Rakhine in May and then, later in the year, an RNP-organised visit to China comprising selected Rakhine youth leaders.

So why is China engaging with political parties like the RNP?

After the National League for Democracy (NLD) boycotted the 2010 elections, the Union Solidarity and Development Party (USDP) remained the dominant political party in Myanmar going into the current transition period. This provided some reassurance to Beijing that most of the older leadership (whom China had dealt with) would remain in the new government, albeit mainly as civilians. 

But the outcome of the 2015 elections is less predictable. 

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There are claims China's influence is waning, especially with major projects being suspended or creating bad publicity. There are also reports of growing anti-China sentiment and even official tensions rising from Myanmar's inadvertent bombing of Chinese territory during recent fighting in Kokang.

China has made considerable investments in Rakhine State, situated on Myanmar's west coast, including offshore oil and gas concessions and the development of the deep sea port in Kyaukpyu, which is also the start point for the Myanmar-China oil and gas pipelines. China has reasons to be concerned about its investments. These projects have been subject to increasing local and international pressure and criticism, including targeted protests, and there are calls for Rakhine State to receive a larger share of revenue from energy and extractive projects in the region.

In short, developing relationships beyond the ruling USDP allows Beijing to build influence on various levels and in different ethnic regions. Building close relations with the RNP is a logical starting point.

The RNP is the dominant ethnic political party in Rakhine State. It formed from the merger of two local (ethnic) political parties: the Rakhine Nationalities Development Party (RNDP) and the Arakan League for Democracy. In the 2010 elections, the RNDP won a majority of the electable seats in the Rakhine regional parliament as well as several seats in the Amothya and Pyithu Hluttaws (the upper and lower houses of parliament).

The RNP also has high hopes for the 2015 elections, aiming to win a majority in the state parliament as well as all available seats in the Amyotha and Pyithu Hluttaws. And there are reports that the RNP may form allegiances with other ethnic groups to ensure greater influence in parliament and developments in Rakhine State. While the RNDP was unable to influence the appointment of the regional chief minister, as this position is currently appointed by the president, the leader of the RNP, U Aye Maung, has said he wants to become the next chief minister of Rakhine State.

China's relationship with groups like the RNP will be particularly useful if (or when) the USDP becomes a much weaker player in Myanmar politics, or if the Union Government devolves more autonomy and power to regional governments. Such a move was proposed recently in a formal submission to change the constitution, but the actual amount of power that would be devolved is open to question.

If there were significant crises or threats to China's assets, it is highly likely that the Union Government would step in. But winning over local political groups such as the RNP could help to avoid this kind of disruption before it occurs. And as part of its strategy to keep those it sees as influential (or even a threat) onside, China has also avoided involvement in Myanmar's Rohingya issues, which many local Arakan are likely view as 'interference'. 

Beyond ensuring protection for its investments, such moves may also create favourable conditions for new ventures. In light of reports of China's strategic interest in the Indian Ocean, this may include using the ports in Kyaukpyu as logistical support for its naval fleet and Chinese maritime activities in this region in the years to come.

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By Melanesia Program Director Jenny Hayward-Jones and Research Associate Philippa Brant.

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The controversy over the naming rights to 'Islamic State' has been much ado about nothing from the start. The Prime Minister began to refer to Islamic State by its Arabic acronym 'Da'ish' from the beginning of the year, saying that he didn't like 'Islamic State' or 'ISIS' because it was a 'perversion of religion'. The French foreign minister has urged media outlets to do the same, while the British parliament debated the lexicon of Islamic terrorist groups last week. Also last week, the BBC quite sensibly resisted a push by some British MPs to change its use of the term Islamic State to Da'ish.

Those who advocate using Da'ish instead of Islamic State say the group is neither Islamic nor a state, and they argue that the name perverts the name of Islam. But these arguments open a can of nomenclature worms. If it is perverting religion to refer to Islamic State as Islamic, then what of the myriad other armed Islamist groups who hijack Islam and God to reinforce their religious credentials for power?

How should politicians refer to Hizbullah (Party of God), for instance? Isn't it also a perversion of religion to think that God would be happy for an Australian to blow up a tourist bus in Bulgaria in his name? Some Sunni Islamists in the region, including Turkey's justice minister, have demanded that Hizbullah change its name to Hizb al-Shaytan (Party of Satan), but we are yet to see the same demand from those who prefer Dai'sh over Islamic State.

And how to describe the recent execution of 18 Islamic State members by Jaysh al-Islam (Army of Islam)? Is a group calling itself the Army of Islam not perverting religion, just as Islamic State is?

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This must surely provide a conundrum for the Government's intelligence briefers – how do they inform the PM that Dai'sh members have been killed by a group calling itself the Army of Islam? Perhaps they could seek guidance from the PM's office as to whether they have a term for Jaysh al-Islam which neither connotes they are Islamic nor supports their claim to be an army?

And what about the Islamic Front, or any group that uses terms such as mujahideen (those engaged in jihad), muhajiroon (referring to those who followed Muhammad on his move from Mecca to medina) or ansar (referring to Mouhammad's earliest Medinan supporters). All of these have specific Islamic religious connotations that attempt to hijack religious terminology to justify killing others.

We can't stop groups calling themselves what they want to be called. Getting into detailed discussion about it is largely a waste of time.

I travel to the region frequently and the interlocutors I speak to variously refer to the group as ISIS, IS, Islamic State or Da'ish (ISIL appears to have lost currency for some unknown reason). If people in the region are relatively sanguine about the lexicon of Islamist terrorist groups, why are we in the West so concerned?

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A Greeek solidarity rally in Madrid yesterday. (Flickr/Adolfo Lujan.)

The Greek people have delivered a resounding ‘no’ in the referendum, but the tragedy is still unfolding. It will take some time for the implications to evolve, but it’s hard to see how the vote helps achieve a resolution. The Greek people want to stay in the euro but don’t want austerity. The European negotiators and the IMF have neither the inclination nor the wiggle-room to agree. With the Greek banks closed, time is pressing. Leaving the euro would be hugely disruptive. Staying in the euro means a continuation of the failed policy of austerity. Thus Greece is in for a hard time. But how important is this for the rest of us?

Disruption in Greece doesn't help Europe's lacklustre recovery, but it's not big enough to do substantial harm – Greece is less than 2% of Europe's GDP. Moreover, most of the damage has already been done, notably in 2010 when the unfolding Greek crisis diverted budget policies in the advanced economies from expansion to austerity, thus derailing the post-2008 recovery.

The peripheral countries (Spain, Italy, Ireland and Portugal) that seemed so vulnerable to contagion when the crisis began in 2010 may have their financial markets tested, and the drama queens of financial markets will do their best to turn this into another opportunity for profit-making market volatility. But there is not enough substance here to keep such disruption going for long. The European Central Bank has the ability and means to handle any financial fall-out.

Some see this as the beginning of the end for the euro experiment. With Greece staring at departure, will others follow and the euro disintegrate into national currencies? This outcome would be some kind of wish-fulfillment for the euro-sceptics who dominate the UK press. But for all its challenges (past and future), the core countries of the euro have built up massive synergies and benefited enormously, both economically and politically. The degree of integration now accomplished will not be abandoned lightly. Greece was always an outlier, a misfit in economic structure and maturity. The parting would be painful, but will not unravel the euro.

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Greek public debt is not insubstantial (the part owed to Europeans is conservatively estimated at 3.3% of the Eurosystem's GDP), but almost all is now owed to governments or international agencies, which can wear the losses without dramatic impact on their economies. The IMF has already asserted (rather boldly) that 'the IMF's shareholders will not suffer losses'. 

What are the economic lessons? Countries can run budget deficits, overly-generous pension schemes, and large external deficits for decades if foreigners provide the funding, but there is no free lunch. Unsustainable policies eventually stop and the longer countries have been off-track, the longer it will take to fix. Living standards can't rise if productivity remains low. Incompetent and sometimes corrupt governance might get by when the economic climate is benign, but can't cope when problems arise.

These are the old lessons. What are the new ones?

There is a melancholy message about the political-economy of decision-making: even when there is a better path for crisis resolution available, politics can sometimes push events down a worse path, which none of the participants wanted. When the current Greek Government was elected early this year, there was an opportunity for a fresh start based on mutually held objectives. There was unanimity among the negotiators that staying in the euro was desirable. There was a common recognition that Greece could not repay its government debt (even after the 2012 restructure), although the creditors were politically constrained from acknowledging this in public. Similarly, there was implicit understanding by all that the austerity package imposed in 2012 needed to be softened.

Skillful negotiators would have found a formula to put the debt to one side, thus opening up the opportunity to shift from the budget austerity required to repay the debt towards a more growth-oriented policy package, emphasising the medium-term nature of the reforms needed.

This would have created an outcome all parties could accept: the debt would not be written off but would be extended, with modest payments in the near-term. This would not only suit Greece, but would have allowed a continuation of the fiction in the creditors' balance sheets that the debt was worth its face value. Greece would have shifted from an austerity strategy to one which addressed structural problems, but at a pace which allowed growth. Greece's feet needed to be held to the fire, but reform takes time when structural problems are so entrenched.

Alas, the negotiators did not have these skills. Just who let down the side will be hotly debated, but it looks like all parties were to blame, with the possible exception of the European Central Bank.

We will learn more about the mistakes of the European Commission and Greece as each participant attempts to shift the blame over coming months. But one thing is clear already: the International Monetary Fund played its cards badly and has lost both prestige and credibility. The Fund should not have become involved in the first place. This was a matter for the Eurosystem to sort out, just as federated states such as the US or Australia would resolve state debt without calling in the Fund.

Dominique Strauss-Kahn, the Fund Managing Director at the time the crisis began, wanted to restore the waning influence of the Fund and perhaps burnish his own political ambitions in Europe. Instead, the outcome has been to demonstrate the Fund's weaknesses:

  • Its Euro-centric governance structure over-rode its own rules and precedents to achieve a support program which at the time suited Europe.
  • It was unable to orchestrate a timely bail-in of excessive private-sector debt in 2010 (thus allowing the private-sector creditors to get off too lightly), or arrange a subsequent realistic restructuring of sovereign debt.
  • Its forecast of Greek GDP in the face of budget austerity was, as usual with these support programs, hopelessly optimistic.
  • It forgot the lessons of the disastrous Indonesian 1997-98 support program. The Fund's detailed involvement in the politically sensitive Greek pension reform seems to be on a par with its insistence on Indonesian petrol-price increases during the fraught political circumstances of 1998. The prerequisite for competitiveness reforms is reminiscent of the Fund's requirement to dismantle the Indonesian clove monopoly two decades earlier.

So much for the economics. Much less has been said about the strategic politics of what is unfolding. Greece's small size keeps the global economic consequences manageable but the same can't be said within the strategic context, where small problems can have large ramifications: 'For want of a nail, the battle was lost'.

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This week the Greek debt crisis entered a new phase, with Athens defaulting on it's €1.5 billion loan repayment to the IMF. A referendum has been called by Tsipras Government for this Sunday, which will ask the Greek population whether they accept to reject bailout conditions set by Greece's creditors. Tristram Sainsbury commented on the bizarre referendum

The long term perspective is that we are witnessing an at-times painful series of negotiations that all contribute to the grand bargain of the European project. In this view, we are simply in a particularly dramatic stage of a complex negotiation path that has already delivered political, monetary and banking union and which will, at some point, result in fiscal union. The Greece case shows that the participation of countries in the project only works up until the point where their populations (and the parliaments they elect) are willing to tolerate the arrangements they are asked to bear. 

Here is Daniel Woker on how the crisis fits into the larger European project:

The Eurozone is not a monetary union such as we have seen before but an economic reaction to the fact that the EU some time ago become one large manufacturing and service-providing area made up of countless cross-border value chains. An area-wide currency provides for a level playing field for suppliers and assemblers regardless of national borders. Contrary to what is often claimed, the political decision to create a single currency (and with it a common banking, regulatory and eventually fiscal union) followed economic reality rather than leading it. As a result, national sovereignty was transferred for the greater good of all. (This is of course anathema to nationalists all over the EU, yet the idea that the UK prefers to opt out of full European integration continues to baffle observers on the continent. After all, Britain without Europe is just an island adrift.)

In other developments concerning the international economy, the AIIB's Articles of Agreement were announced. First, Philippa Brant had a great breakdown of all of the key provisions:

China was successful in getting its favourite language into the Agreement: 'The Bank, its President, officers and staff shall not interfere in the political affairs of any member, nor shall they be influenced in their decisions by the political character of the member concerned.' Interestingly, this was taken even further, by stating that 'only economic considerations shall be relevant to their decisions.' I suspect this latter point will in reality be relaxed, as it will be challenging to make sound investment decisions without taking the political economy of a country into account.

Mike Callaghan warned that China needs to hasten slowly on establishing the Bank:

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It will be important for the AIIB to have in place thorough processes and procedures before it starts lending. Among the steps necessary for the AIIB to be fully functional: the establishment of a treasury function so that the bank can access international capital markets; the recruitment of an international (and not predominantly Chinese) workforce with the appropriate expertise; and the development of rigorous procurement procedures and safeguards policies covering the environmental and social aspects of the bank's activities.

What appeared to be coordinated terrorist attacks occurred last week in Kuwait, Tunisia and France. ISIS, or ISIS-affiliated groups claimed responsibility for two of them, while the attack in France was likely a 'lone wolf' operation. Rodger Shanahan on the bombing in Kuwait:

Kuwaiti authorities have indicated that the mosque bomber was a Saudi national who flew into Kuwait on the morning of the bombing, which would indicate that there are some linkages between Saudis willing to blow themselves up and regional ISIS support cells who want to use them. There are already more than 3000 Saudis fighting with ISIS in Syria and Iraq, and one English-language Saudi newspapers reported that more than 1300 ISIS sympathisers have been arrested in the Kingdom in the last eight months. As with its al Qaeda problem a decade ago, Saudi Arabia's educational and social system makes it a rich hunting ground for would-be jihadists.

Here is former intelligence analyst David Wells on the broader 'attribution' strategy ISIS may be employing:

So preventing Australian citizens (dual or otherwise) from becoming ISIS cannon fodder in the Middle East is responsible governance. As is doing everything we can to prevent terrorist attacks occurring in Australia. But fundamentally, a much bigger problem is emerging across the Middle East and North Africa, one that could lead to more failed states, civil wars, and the continued forced migration of millions of innocent civilians from war zones.

International Security Program Director Euan Graham wrote on the upgraded strategic partnership between Australia and Singapore announced this week:

The upgrading of Australia-Singapore security relations should be appreciated in a broader strategic context that extends to the South China Sea, as well as in the political context of the currently under-performing relationship with Indonesia. Asked about the South China Sea at a joint press conference with Prime Minister Lee Hsien Loong, Tony Abbott was keen to stress that 'like Singapore', we 'deplore any unilateral alteration of the status quo' and 'uphold freedom of navigation on the sea and in the air'.

Has the IMF begun to rethink austerity? Stephen Grenville:

If a country pays down its debt, it has to do so by raising revenue or lowering spending, which will slow growth. On the other hand, once the debt is down, underlying growth will be faster because the cost of servicing debt will be a smaller burden on the economy. What's the trade-off here? The IMF authors argue that these two effects are equal, so there is no compelling reason to think that getting the debt down is a policy priority. As they say, 'When and only if countries have ample fiscal space, there is no need to obsess about paying down the debt. Living with the debt is likely to be the better policy.'

There are rumours circulating that Turkey is considering a military intervention into northern Syria. Lauren Williams doubts it will happen after the recent election:

It's highly unlikely that a large-scale military invasion of Syria could be made by an outgoing government. Sources close to the Government say talk of intervention is genuine, but one has to wonder whether the leak was aimed at denting the AK Party's standing as it courts potential partners to form a coalition. An invasion of Syria aimed at the Kurds would almost certainly end Turkey's peace process with the Kurds, a key achievement of Erdogan's leadership and a campaign platform.

Julian Snelder with a piece on the container trade:

A conflict in the South China Sea is just one threat to world trade. But there will be plenty of consequences of 'peak Box' in any case. For instance, the value of trade could continue to rise while the mix moves towards more information products and services (where Washington's trade interests are focused) and away from physical merchandise and bulk materials. China may have already passed its maximum steel and coal demand, years ahead of miners' expectations. The miners know there will never be another China. Its urbanisation and trade globalisation have been the two pillars of world economic growth.

China announced its climate change pledge ahead of the international climate change negotiations in Paris in November. Frank Jotzo believes it is a significant commitment:

China's target is a 60% to 65% reduction in the emissions-intensity of the economy by 2030 pegged at 2005 levels, with carbon dioxide emissions peaking around 2030, perhaps earlier. China has also pledged to increase the share of non-fossil fuels to 20% of total energy use and a large increase in forest carbon stocks…

The emissions-intensity target means reducing the ratio of carbon dioxide emissions to GDP by 60% to 65%, or conversely, increasing the amount of economic output per tonne of carbon by almost two-thirds. It's the only new commitment in addition to what China pledged at a joint announcement with the US at last year's APEC meeting. And it packs some punch.

Nick Bryant on New Zealand's efforts on the UN Security Council as it takes over the Presidency:

Benjamin Netanyahu, after meeting Murray McCully in Jerusalem earlier this month, sounded a warning to New Zealand and others pushing for a Middle East peace resolution. 'The main thing we have learned,' the Israeli Prime Minister said pointedly, 'is that peace is achieved, as we did with Jordan and with Egypt, through direct negotiations between parties, and not by fiat.' But the very fact that Israel is even paying attention to New Zealand is testament to the diplomatic clout that comes with membership of the Security Council. On the most nettlesome international issue of them all, Wellington* has become a significant player, if not a decisive or central one. 

Here is Dina Esfandiary with an update on the Iranian nuclear negotiations, which have been extended a week:

As part of a final agreement, Iran will sign up to the Additional Protocol (AP), the most intrusive legal verification regime to date. While the framework agreement didn't outline when and how long for, US Energy Secretary Ernest Moniz explained that AP ratification would be immediate and indefinite. Implementation of the AP (and Iran's commitments under the Non-proliferation Treaty, of course) will extend beyond its P5+1 agreement, which is why the 'sunset clause' criticism of the agreement is unfounded.

Finally, Bob Bowker reported on the deteriorating situation in Egypt:

Draconian measures from the Egyptian Government will barely impede the jihadists. The Sinai conflict will continue to grind along its deadly path, mainly at the expense of ill-prepared and poorly-led conscripts in the military and police. Unless the Government radically changes its tactical and strategic approaches, the result will be a growing number of impoverished and bereaved Egyptians disillusioned with the Government and opposition alike. 

Photo courtesy of Flickr user thierry ehrmann.

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The view from Jakarta

An Indonesian military aircraft crashed into a residential area in North Sumatra this week, killing 142 people at last count. In Jakarta, the tragedy gave President Jokowi the chance to again take sides in the simmering tension between the military and the police.

The Air Force C-130 Hercules aircraft was headed to the Riau Islands on Tuesday when it crashed only two minutes after take-off from an airbase in Medan. The transport plane was a US-made model from the 1960s, which had been in use by the Indonesian armed forces (TNI) since 1980. The high death toll was due not only to the crash happening in a residential neighbourhood, but because aside from the 12 TNI personnel onboard, the aircraft was carrying more than 100 civilians, a practice which the Air Force chief confirmed was strictly prohibited. Defence Minster Ryamizard Ryacudu and Vice President Jusuf Kalla defended the practice, saying it was commonplace and provided a valuable service to civilians in remote areas.

Jokowi did not condemn the transportation of civilians by the military either, instead taking the opportunity to call for greater resources to be allocated towards modernising the TNI. The President has already pledged to almost triple the defence budget during his term, from around $7.2 billion at the time of his election last year to $20 billion when his term ends in 2019. In the wake of this week's crash he stressed that Indonesia should aim to eventually produce and maintain its own weapons and equipment, rather than buying or accepting them from foreign suppliers.

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Incoming TNI commander Gatot Nurmantyo agreed, telling a closed session at the House of Representatives on Wednesday that the military should give priority to domestic suppliers, or at the very least ensure technology transfer when buying from foreign suppliers. Nurmantyo is Jokowi's pick for TNI chief, against the wishes of the President's party and the reform-era convention of rotating the position among the army, navy and air force. Nurmantyo, currently the army chief of staff, looks set to replace another army figure, General Moeldoko, as TNI commander as early as next month.

Meanwhile, Jokowi was far more critical of the National Police this week when attending a celebration of its 69th anniversary in Greater Jakarta on Wednesday. Speaking at the celebratory event, Jokowi gave a stern warning to the police to regain public confidence by cleaning up corruption and 'mafia' networks within the force. The President also reminded police of 11 priority programs that he had requested be carried out, in line with his theme of a 'mental revolution' for Indonesia. 

Allegations of corruption within the police force have been the bane of Jokowi's presidency. His nomination of Budi Gunawan for police chief earlier in the year sparked public outrage, since Budi was seen as the favoured pick of Megawati, Jokowi's party leader. Deferring the vetting of Budi as a candidate to the Corruption Eradication Commission (KPK) only triggered a mudslinging war that nearly brought down the well-trusted anti-corruption body. Despite all the drama, Budi was still inaugurated as deputy to the new police chief Badrodin Haiti in a closed-door ceremony in April.

As a leader struggling to find support within his own party, let alone from other political powers, Jokowi has developed a close relationship with the military, allowing what many observers have called an encroachment of the armed forces into civilian affairs. His supportive response to this week's tragedy involving unauthorised civilians in a TNI aircraft is another example of a trend which is ringing warning bells for critics who remember Suharto's repressive dwifungsi or 'dual-function' role for the military, which was responsible for both internal and external security during the New Order. It will be interesting to see how the relationship develops once Jokowi's own pick for TNI chief is in charge.

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Another seven days to reach an agreement; that's what the P5+1 decided this week when they weren't able to meet their 30 June deadline for a final deal on Iran's nuclear program. While some differences remain, both sides have come too far to walk away. The potential agreement achieves Western objectives: curbing Iran's program and closing the path to the bomb.

The April 2015 framework agreement was good. It was not a final agreement and it had flaws, but the announcement covered a wider range of areas than anticipated and provided the basis for the detailed negotiations since. Iran agreed to significant concessions on its nuclear program, many of which are irreversible.

The framework agreement, and the final agreement to come, will increase Iran's 'breakout time' from 2-3 months to over 12 months. According to a February report from the UN's nuclear watchdog, the IAEA, Iran had 19,500 basic IR-1 centrifuges, of which 10,200 were operating. An agreement will reduce centrifuge numbers to 6104, of which 5060 are enriching to less than 5%. In other words, Iran's centrifuges will be cut by approximately 68%. 

But the reductions don't stop there. Iran's stockpile of enriched uranium – the raw material for a nuclear weapon – stood at approximately 10,000kg. A final agreement will cut this to only 300kg, a reduction of 97%.

Iran also agreed to other compromises.

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It's R&D on advanced centrifuges will be curbed: Iran can only conduct limited, small-scale, in-lab testing of more advanced centrifuges for the next decade. Tehran faced significant difficulties with the operation of the basic IR-1 technology for large-scale enrichment. The type of testing allowed under the final agreement will not be sufficient to prepare Iran's advanced machines for use when the agreement expires.

The agreement will also close off Iran's second path to the bomb. Plutonium is another raw material that can be used in the production of a nuclear weapon. Iran's heavy water reactor at Arak could produce about 11kg of plutonium a year if completed. Today, the reactor is no longer a proliferation concern. The agreement specifies that it will be redesigned so that it cannot produce weapons-grade plutonium.

All these measures block Iran's existing program and known facilities. But, many rightly argue that if Iran goes for the bomb it is more likely to 'sneak out' rather than break out of its agreement. That is, it will use facilities the UN and the West don't know about. 

So how do you control what you don't know? Through monitoring and verification.

As part of a final agreement, Iran will sign up to the Additional Protocol (AP), the most intrusive legal verification regime to date. While the framework agreement didn't outline when and how long for, US Energy Secretary Ernest Moniz explained that AP ratification would be immediate and indefinite. Implementation of the AP (and Iran's commitments under the Non-proliferation Treaty, of course) will extend beyond its P5+1 agreement, which is why the 'sunset clause' criticism of the agreement is unfounded. 

As part of a final agreement, the  IAEA will have access to all Iranian nuclear facilities for the next 20 years. Importantly, the deal will limit enrichment to Natanz, meaning any diversion will be easier to detect. But there is still some debate over how much access will be granted to non-nuclear facilities.

In Vienna this week, it was clear that the past military dimensions (PMD) of Iran's nuclear program and access to military sites remain outstanding issues. Secretary Kerry's statement that negotiators were focused on the future, not the past, led to criticism that Iran would be off the hook for PMDs. This is a real catch-22 for Iran. For the Western powers, striving for an admission of guilt should not be a barrier to an agreement that curbs Iran's program in the future.  

The most significant unresolved issue for the Iranians is the timeline and scope of sanctions relief. Clarifying this issue is vital because sanctions relief is the incentive that will encourage Iran to comply with its commitments and make the deal durable. After calls for removing all sanctions up front, the P5+1 and Iran reportedly found common ground on lifting sanctions once Iran complies with its obligations. While Iran insists on this carrot, the P5+1 also devised a stick to ensure Iranian compliance: a sanctions 'snap-back' provision.

Both sides continue to claim that the other is asking for too much, but negotiators are closer than ever to a final agreement. It is no longer possible that there will be no deal. The question now is whether the implementation of the deal will be as rocky as the negotiations.

Photo courtesy of Flickr user US Department of State.

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In a lengthy piece published earlier this week, Vox media journalist Max Fisher details how a conflict between the US and Russia could spiral into a nuclear war. As with all Vox content, it has pop-art, like this 'choose your own adventure' World War III flow-chart.

Fisher does brush over a few things. He says Cold War leaders considered limited nuclear war, in which tactical nuclear warheads would be used on the battlefield rather than 'strategically' against population centers and cities, as 'unthinkable' and that they thought this type of conflict was not survivable or winnable. Not all Cold War leaders thought this, and there were significant debates throughout the period about escalation control and different theories about how each side would interpret the use of a nuclear weapon on the battlefield.

But incidents like the close call during the Cuban Missile Crisis, when a Soviet nuclear torpedo was almost fired at a US aircraft carrier, eventually proved to many the need for limits on tactical nuclear weapons. By the end of the Cold War, there was consensus that tactical weapons were inherently destabilising, and this led in part the Intermediate-Range Nuclear Forces (INF) Treaty in 1987.

But the INF Treaty did not cover all types of tactical nuclear warheads, merely their launchers. In fact, the 180 US nuclear weapons that are still deployed to bases in Belgium, Germany, Italy, the Netherlands and Turkey are hold-overs from this era of strategic thinking. These weapons are 'variable yield' models. Their destructive capacity can be changed for tactical and strategic purposes, depending on their intended use. These nukes, and their predecessors, were intended to be used against superior Soviet conventional forces in Europe by NATO in the event of a conventional war. Now, they act more or less as a physical guarantee of US extended nuclear deterrence to Europe.

What's really important about Fisher's article is his call for attention on the growing danger of Russian nuclear doctrine. Sometimes strategic thinking is more dangerous than the capabilities themselves, and in this case, the destabilising nuclear strategic thinking that characterised the early Cold War have returned to Putin's Russia (some strategists in Washington are also beginning to advocate for investment in more tactical nuclear weapons in the face of Russia's policy in Crimea and Ukraine).

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First, Fisher argues that the mood in Moscow has substantially changed. He cites Russian strategic analyst Fyodor Lukyanov:

'The perception is that somebody would try to undermine Russia as a country that opposes the United States, and then we will need to defend ourselves by military means,' he explained. Such fears, vague but existential, are everywhere in Moscow. Even liberal opposition leaders I met with, pro-Western types who oppose Putin, expressed fears that the US posed an imminent threat to Russia's security.

Essentially, to reinforce Russia's growing strategic interests and to compensate for its substantial asymmetric disadvantage in conventional military means vis-a-vis the West, Putin has begun to reinvest in short- and medium-range nuclear-capable missiles, as well as lowering the threshold for potential nuclear use. A good example is the Russian ambassador to Denmark's comments earlier this year that if Denmark were to integrate into NATO's missile defence shield, Danish warships would then be targeted by Russian nuclear weapons. Here's Fisher on Russia's nuclear compensation:

 To solve the problem of Russia's conventional military weakness, he has dramatically lowered the threshold for when he would use nuclear weapons, hoping to terrify the West such that it will bend to avoid conflict. In public speeches, over and over, he references those weapons and his willingness to use them. He has enshrined, in Russia's official nuclear doctrine, a dangerous idea no Soviet leader ever adopted: that a nuclear war could be winnable.

The real danger of this shift is the idea of a 'de-escalation' strike, which has now been incorporated into Russian nuclear doctrine:

That corollary is Russia's embrace of what it calls a "de-escalation" nuclear strike. Go back to the scenario spelled out in Russia's military doctrine: a conventional military conflict that poses an existential threat to the country. The doctrine calls for Russia to respond with a nuclear strike. But imagine you're a Russian leader: How do you drop a nuclear bomb on NATO's troops without forcing the US to respond with a nuclear strike in kind, setting off a tit-for-tat cycle of escalation that would end in total nuclear war and global devastation?...

...Russia's answer, in the case of such a conflict, is to drop a single nuclear weapon — one from the family of smaller, battlefield-use nukes known as "tactical" weapons, rather than from the larger, city-destroying "strategic" nuclear weapons. The idea is that such a strike would signal Russia's willingness to use nuclear weapons, and would force the enemy to immediately end the fight rather than risk further nuclear destruction...

..."Such a threat is envisioned as deterring the United States and its allies from involvement in conflicts in which Russia has an important stake, and in this sense is essentially defensive," Sokov wrote. "Yet, to be effective, such a threat also must be credible. To that end, all large-scale military exercises that Russia conducted beginning in 2000 featured simulations of limited nuclear strikes."

Tactical nuclear weapons, particularly when paired with a doctrine that calls for their use in a seemingly oxymornic 'de-escalatory' fashion, are dangerous. Since the end of the Cold War, this is something analysts have mostly worried about in the South Asian context. The fact that this thinking has re-entered the world's most important nuclear relationship, that between the US and Russia, is an alarming step backwards.

Photo courtesy of Flickr user Megan Eaves.

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On the first Friday of each month the Interpreter will publish Digital Diplomacy links instead of the weekly Digital Asia links. As Australian digital diplomacy strives to catch-up to the rest of the world, these links will highlight the most creative and effective ways in which countries are leveraging the Internet for foreign policy gain.

  • America's #LGBTI digital diplomacy blitz provides valuable lessons for how states – no matter their resources – should conduct coordinated digital campaigns.
  • Israel's Foreign Ministry takes a stab at the international media's coverage of Gaza in this animated video.
  • I argue it's time for Foreign Minister Bishop to champion a forward-looking strategy that commits resources and the right expertise in order to pull Australian digital diplomacy out of catch-up mode and into real-time.
  • The Pentagon's YouTube war with Russia is heating up.
  • It's this French Ambassador's (@gerardaraud) last posting and he's as senior as he can be so, as he explains to the New York Times, there's no better time to take risks.
  • How the British Embassy in Phnom Penh ran a campaign to boost awareness of the UK among youth and grew its Facebook fan base by 24,000% in one year (Australia's embassy in Cambodia isn't on Facebook).
  • Six rules for the use of smart power from UK's Ambassador to Lebanon Tom Fletcher, via his personal blog.
  • This research leverages big data to assess the state of Canadian digital diplomacy. The researchers mapped 467 official social media accounts and graphed the impact of major foreign aid campaigns.
  • Genius, a social site that allows users to comment on online content such as music and news, is attracting foreign policy actors. Current experimenters include Hillary Clinton and Turkey's Office of Public Diplomacy
  • US Secretary of Defence Ash Carter becomes the first Defence Secretary to join Facebook.
  • Australia's Ambassador to Israel Dave Sharma has posted a speech he gave recently on diplomacy in the digital age on his personal blog. It's a shame our own Department of Foreign Affairs and Trade hasn't created a blog so that insights such as these can be shared more widely.
  • This interview with Australia's Ambassador to the UN Gillian Bird is hard to find but worth reading, particularly her views on UN silos and fragmentation (more content for a DFAT blog).
  • The State Department's new Medium account, Foggy Bottom, encourages the public to post responses.
  • Is this Bollywood-inspired video by Germany's embassy in India a stroke of genius or totally ridiculous? Featuring the Ambassador and his partner, who have defended it, you be the judge. But with over 1 million views, there is no denying it is a triumph for German digital diplomacy (h/t Brendan):

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Islamist insurrection has returned to Egypt. There has been a significant growth in the sophistication of the targeting, conduct and lethality of terrorist acts, a crisis of political legitimacy for the Egyptian Government, and the virtual abandonment of any separation of executive and judicial authority on matters deemed security-related.

A new stage has been reached in the contest for the future of the country.

Terrorist attacks on targets beyond Sinai are not new – there have been nearly 200 attacks throughout Egypt in the past year, including a major attack on a poorly-defended police base in the Western Desert. However, recent days have witnessed a car bomb attack which assassinated the Egyptian chief prosecutor, Hisham Barakat, an event beyond anything seen in Egypt in recent decades. A large-scale assault overnight on military and police installations at Shaikh Zuweid, close to Gaza, had the hallmarks of an operation devised according to jihadist experience elsewhere in the region.

The Barakat assassination and the latest Sinai attack demonstrate proficiency in the use of vehicle-born explosive devices, multiple targeting with careful surveillance, and sophisticated planning including measures to impede a counter-attack. 

None of these capabilities are possessed by the Muslim Brotherhood, which has lacked an operational military wing for many decades. Despite its roots in Egyptian society, the Brotherhood is effectively and severely repressed by the current government. Nor is the challenge originating from Gaza, where Hamas is trying to contain its own Islamist problem. 

The challenge is coming from an altogether different and more worrying direction: jihadists antagonistic to the Egyptian Government and the Brotherhood alike, and which are linked to extremist groups across the region. These groups of jihadists have acquired the skills and material for sustaining violent, high-profile action against the political and social institutions which are the foundations of the Egyptian state.

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This generation of Egyptian jihadists has attained a degree of security in the depths of the Sinai Peninsula, especially amid the chaos which followed the fall of the Mubarak regime. They have ruthlessly exploited long-standing tensions in that area between tribal elements and the Egyptian security authorities. Their military capability has been enhanced by the acquisition of weapons, especially from Libya. They have learned from operations in Iraq, Syria and Libya, which have provided networks of experience-sharing and support that earlier jihadist groups in Egypt lacked.

These newly-emerged jihadist groups are now capable of holding their own, militarily, against an Egyptian security and military apparatus that is clearly lacking in counter-insurgency doctrine and skills.

Those skills can of course be acquired, over time and with competent leadership and support. But there are doubts about whether the Egyptian military leadership is capable of making a rapid adjustment in its approach. There are even greater doubts about the capacity of the Egyptian Government to bring about the balanced economic development of the Sinai region which would provide the basis for a durable counter-insurgency. 

In the meantime, in their anger and frustration, Egyptian authorities are seeking solutions that are more likely to add to the problem.

Of particular concern are calls for the expeditious implementation of executions arising from a deeply-flawed judicial system. The Egyptian judicial system has become deeply politicised, characterised by manifest incompetence, which gives military court judges the option of not hearing defence witnesses. 

There is a gadarene rush in the Egytian media to affirm the authoritarian values of the Nasser era. There have been attacks on civil society figures seeking to uphold values that were painfully negotiated to be included in the constitutions which emerged after Mubarak's fall. There is nothing positive being offered to capture the energy and imagination of the millennial generation of the Egyptian middle class. 

The killing  of nine Muslim Brotherhood figures in Cairo by state security forces following the Barakat assassination has produced a call from the Brotherhood for a revolt against the regime, a stance its older generation of leaders, now imprisoned and, in a majority of cases, facing execution, had sought to avoid. 

Draconian measures from the Egyptian Government will barely impede the jihadists. The Sinai conflict will continue to grind along its deadly path, mainly at the expense of ill-prepared and poorly-led conscripts in the military and police. Unless the Government radically changes its tactical and strategic approaches, the result will be a growing number of impoverished and bereaved Egyptians disillusioned with the Government and opposition alike. 

Although most Egyptians fear the extremists and will see the jihadists as responsible for the Government's failure to provide the security they demand, some will wind up lending support to those seen to be acting against the most despised figures in the regime. Should the insurgency increasingly target tourism, energy infrastructure and even conceivably the operation of the Suez Canal, it will pose serious challenges to the Egyptian Government and its leadership.

Photo courtesy of Flickr user Al Hussainy Mohamed.

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By Jackson Kwok, an intern with the Lowy Institute's East Asia Program. He holds a Bachelor of Arts (Honours) degree with specialisations in Chinese language, history, and foreign policy from the University of Sydney. 

Reading through the Chinese media coverage of last week's US-China Strategic and Economic Dialogue in Washington DC, Orwell's Nineteen Eighty-Four comes to mind. In Orwell's novel, Oceania regularly shifted alliances between Eurasia and Eastasia, first condemning one side in its propaganda and then quickly praising it when alliances shifted. In the same way, China's state-aligned media has shifted dramatically from heavily criticising the US to praising bilateral cooperation.

China's State Councilor Yang Jiechi and US Secretary of State John Kerry at the US-China Strategic and Economic Dialogue, 24 June, 2015

For the last month, China's media has constantly portrayed the US as an anxious world hegemon bent on containing China. On the eve of the Dialogue, the conservative tabloid the Global Times claimed the US had recently adopted a strategy of 'opposing China at every turn.' Yet the overwhelming praise for this year's Dialogue among China's media outlets marks a departure from the anti-US line. 

Xinhua published an article last Thursday which said the Dialogue had 'enhanced mutual trust' and 'consolidated consensus' between the two great powers. An article by the state-owned People's Daily argued that 'cooperation is the only viable option.' Xinhua produced another article on the same day which concluded that 'another solid step has been taken in the construction of Sino-US relations.'

Another article by Xinhua published last Monday hailed the event as a success, especially against the backdrop of bilateral tensions in recent months. The article argued that financial cooperation had become the 'new ballast of bilateral relations.' The sheer number of items agreed upon was also presented as evidence for the success of the Dialogue.

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Chinese media also emphasised the reportedly candid tone of the discussions. Articles celebrated the fact that disagreements on certain issues could be discussed openly. Both Xinhua and the Global Times said this was evidence that the relationship was maturing and praised each side's attempts to find common ground. China and the US diverged on maritime disputes and cyber security, but these were only vaguely mentioned. 

An article published by the People's Daily last Monday examined how the Dialogue has developed over its seven sessions. The author concluded that he had observed a positive shift towards cooperation. Conversation at this year's round of talks was more 'candid', the atmosphere was more 'peaceful' and there was more 'mutual understanding.' Even the often provocative Global Times was impressed by the frank tone of discussion.

A feature page on the English version of People's Daily proudly proclaimed that the talks achieved 'substantial results'.  Provincial news sources were similarly enthusiastic. There seemed to be little divergence from the official line.

As for online discussion, circulations on Weibo leading up to the Dialogue were cynical. Many Chinese netizens expected another round of political fallout between Washington and Beijing. After the Dialogue, many were genuinely surprised at how smoothly the event had proceeded, and praised the 'candid discussion'. Netizens welcomed what they saw as an attempt at engagement with China's position and a departure from Washington's hard-line tactics vis-à-vis the South China Sea.

There are two possible explanations for this shift in attitude. 

One is that the media is attempting to set a cooperative tone ahead of President Xi Jinping's visit to Washington in September. This involves setting up China as a fellow great power and as a responsible actor in the international system. In this way, Xi can approach President Obama as an equal and China will not appear to participate from a position of weakness. This framing also requires that China is presented as magnanimous and committed to sharing world leadership with the US. This message was particularly strong in the People's Daily. A piece on Monday claimed 'the whole world saw that the US and China have a strong desire to strengthen communication, control differences, and expand cooperation.'

The Tang Dynasty poem 'A View of Taishan' featured in a number of reports. The trials of US-China relations are likened to ascending a sacred mountain. Upon reaching the summit, maritime disputes and cyber security will seem insignificant: 'When shall I reach the top and hold / All mountains in a single glance?' Though supposedly 'insignificant', tensions over these issues could potentially derail Xi's US visit. The Chinese media is attempting to downplay them and present China as committed to big-picture goals.

It is also possible that China's media is entering a damage-control phase. Some might argue that China has pushed too hard in the South China Sea, and this softening of tone might be a reaction to Washington's hard-line response. In this sense, it could be a form of managing domestic opinion. Analysts argue that cycles of push and retreat have occurred in the past.

It's still uncertain why we've seen this shift in tone and attitude towards the US. While there is increased magnanimity about the US, there is increasing criticism of Japan and Prime Minister Abe in particular. In the last month, state-aligned media has continued to press the Japanese Government on its wartime legacy. It is possible that China needs to have an 'other' against which it can define itself. If the US is not playing that role, anti-Japan rhetoric is likely to increase temporarily.

It is worth watching how this shift develops in the lead-up to Xi's state visit in September, especially as tensions continue to bubble in the South China Sea.

Photo courtesy of Flickr user US Department of State.

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