Article 47 of Perkap 8 says that 'the use of firearms shall be allowed only if strictly necessary to preserve human life' and 'firearms may only be used by officers: a. when facing extraordinary circumstances; b. for self defense against threat of death and/or serious injury; c. for the defense of others against threat of death and/or serious injury.' This is Indonesian law, taken from the UN Code of Conduct for Law Enforcement Officials, and this is what should be used to assess police actions, wherever in the country they occur.

The fatal shooting on 14 June 2012 of Mako Tabuni, deputy head of the National Committee of West Papua (KNPB), in Jayapura, capital of Papua province, made Senate Estimates in 2012. The shooting of three protesters in Sorong on 30 April 2013, West Papua province, was mentioned in the testy 5 June 2013 exchanges between Senators Carr and Di Natale. You can watch it above.

In the first incident, detectives shot a suspect in the leg as he was running away and then left him to die in a hospital allegedly without making any effort to treat his wounds. In the second, police claim they were threatened by armed KNPB activists. Without more information it is difficult to judge if their response was disproportionate. Police always say they are shooting in self-defense, but it has become such a common excuse that it has started to lose its plausibility.

Cases outside Papua do not garner much attention in Australia, but lethal shootings happen all the time. On 1 September 2011 seven villagers were killed during a rowdy protest against police brutality in the Central Sulawesi district of Buol, a place so obscure even most Indonesians cannot find it on a map.

On 7 March 2013, soldiers burned down a police station in Baturaja, South Sumatra, after their off-duty comrade, First Private Heru Oktavianus, was shot dead by a police officer while speeding away from a traffic violation.

On 8 May 2013 police in Java killed six suspected terrorists in a series of raids. The police usually claim the suspects were armed and resisted arrest. But it is not always true, and many could have almost certainly been captured alive.

Ordinary criminals are shot with distressing frequency, as my daughter's visitor suggests, without any outcry at home or abroad.

Perkap 8 was signed by the then police chief Sutanto, a real reformer. It has not gotten very far. One foreign police officer working on a bilateral community policing program in a large metropolitan command told me he had once seen a copy of the Perkap on the chief's desk but suspected it had been disseminated no further.

Even when progressive regulations or orders are issued and disseminated, they are not always followed. In October 2012, the police chief of Papua, Tito Karnavian, former head of the anti-terrorism unit Detachment 88 (Densus 88), announced that he had banned police from using live ammunition when handling demonstrations in the region. This was progress and it was implemented for some demos, but the deaths in the Sorong case suggest live ammunition was used.

As Article 46 of Perkap 8 says, 'all officers must be trained in the use of power, equipment and firearms that can be used in applying force' and 'must be trained in non-violent techniques and methods.' Training almost 400,000 officers across 33 provinces is a logistical challenge, though it might be a good idea to start with elite units such as Densus 88 or personnel in the Papua provinces.

The new national head of the INP, about to be appointed, might breathe new life into two reforms already in place: implementation of Perkap 8 and Chief Sutanto's other landmark regulation on community policing, Perkap 7. The INP is a very hierarchical organisation that does follow firm orders from above. While its size makes complex reform difficult, its hierarchical nature makes implementing existing regulations with firm orders easier.

The first duty of the incoming INP chief, who reports directly to the president, will be to secure the 2014 elections. Making sure those deployed to safeguard this 'festival of democracy' are properly trained and equipped to use non-lethal force will be an important first step. After a new head of state is elected, he or she should consider issuing a directive that would see Perkap 8 properly implemented. The use of less deadly force could even be politically popular in some parts.

Outside help may also be needed, and this is where Australia comes in. A few decades back, the Victorian state police had a problem of using too much deadly force and created Project Beacon to try to rectify it. They changed the way they thought about the problem, overhauled training, and gave officers on the beat new tools, like pepper spray. Foreign assistance along these lines could help the INP improve performance and increase accountability. Crisis Group has long argued that the INP needs better orders, training, and equipment for the use of non-deadly force.

If the INP is to be more the service it aspires to be rather than the force it is, it needs to shed its military mindset, hold serious post-operation reviews after each fatal incident, and decrease reliance on shooting first and asking questions later, regardless of whether officers are following locally accepted standard procedure. When the time comes and the INP is ready to carry forward the reform of Perkap 8, Australia should be there to help.

Tellingly, the main story to come from APEC was the slapstick of the Chaser Boys gate-crashing the party. As for the domestic press corps, the drama unfolded behind the scenes, as senior cabinet figures met secretly to discuss a plan to oust John Howard. Still, APEC provided a portent of things to come. By then, Rudd was Labor leader, and hinted at Australia's, as well as the world's, diplomatic reorientation by showing off his fluency in Mandarin.

Shortly after my arrival, there was a G20 finance ministers meeting in Melbourne, but it came at a time when the focus was still on the G8. Why, George W Bush reportedly did not even know of the existence of the G20 until Kevin Rudd put him right in a late-night phone conversation from Kirribilli.

It was also a period when the BBC Australia's correspondent was never troubled by visits from British prime ministers or foreign secretaries. Tony Blair, who ventured here prior to becoming PM to meet Rupert Murdoch and his senior executives, never made a prime ministerial visit. Nor did his foreign secretaries, though Jack Straw planned to visit but had to cancel en route for family reasons.

Despite Britain's neglect, however, Australia could still make its favourite diplomatic boast: that it was punching way above its weight. And both leaders of the major parties, John Howard and Kim Beazley, had a strong, if Washington-centric, worldview.

Their passion for foreign affairs highlights one of the most noticeable changes between then and now. Neither Julia Gillard nor Tony Abbott has demonstrated anywhere near the same intellectual engagement with the world beyond these shores. Set-piece foreign policy speeches have the feel of a Box-ticking exercise, part of their job description. Many of their domestic priorities, from border protection to the 'small Australia' policy over the 'big', have a distinctly parochial air. Recently, ahead of her visit to China, Julia Gillard was gracious to appear before the Foreign Correspondents' Association in Sydney, becoming the first prime minister to do so since Bob Hawke. But in the Q&A session afterwards, she delivered what felt like stock, briefing-paper responses.

The irony, as I have noted before, is that the world has never shown so much interest in Australia, economically, politically, diplomatically and culturally. Still, there is a nagging sense that neither Ms Gillard nor Mr Abbott has fully returned the compliment.

Another paradox, given Canberra's insularity, is that the famed Aussie punch is stronger than ever before. That said, the challenges of balancing the security relationship with Washington and the commercial rapport with China now require gymnastic as well as pugilistic skills.

The most perceptible shift here is that Australia's growing 'middle power' strength has been institutionalised in the enhanced role of the G20, the heightened importance of APEC and through membership of the UN Security Council.

It has also been diarised. There is the new strategic dialogue with China, which has been put on an annual footing — Julia Gillard's most eye-catching foreign policy success. The AUKMIN talks with Britain are now a yearly affair, which reflects a newfound sense of diplomatic parity unrecognisable from the imperial condescension displayed by Whitehall in the not so distant past. As part of a wider geographic rethink, London has recognised that Australia is indeed in the right place at the right time. William Hague has referred to 'Facebook diplomacy' and the importance of global diplomatic networks. A great admirer of this country (after all, they say that an Australian is a Yorkshireman with a suntan) he has elevated Australia into being a much more important 'friend'.

Washington senses this, too. Indeed, who would have thought, when I came here in 2006, that a black US president would one day fly to Canberra to announce an 'Asian pivot'.

The consequentiality of Australia is now a given. It is reflected in the growing number of news organisations that have either boosted their presence or coverage here (the Wall Street Journal, The Financial Times, Bloomberg) or set up shop (Sky News UK, Al-Jazeera, Guardian Australia). The agenda has changed, too. Australia is central to the seismic geopolitical story of our age: the rise of China. Few countries offer a better vantage point from which to gauge the problems and prospects posed by China's inexorable rise, an advance that seemed somewhat abstract only six years ago when we still used the phrase 'emerging nation'.

Twitter had not been invented when I arrived here from India, so DFAT's enthusiastic, if sluggish, embrace of e-diplomacy marks another obvious shift. Like so many other technological developments, it has removed one of the traditional obstacles to Australian diplomacy: distance.

Australian diplomacy remains hampered by funding constraints. Nor can it speak with a clarion voice on human rights, given its handling of the boat people problem. Listening to Bob Carr deliver the British High Commission's Magna Carta lecture in Sydney recently, which was a paean to human rights, it was hard not to think of the detention centres on Manus Island and Nauru, not to mention Christmas Island.

Happily, my next posting, as the BBC's New York and UN correspondent, will keep me in close contact with Australia. In September, you will take the presidency of UN Security Council, and another chapter will be opened in your diplomatic and national rise.

Photo courtesy of Wikimedia Commons.

If markets had a clear understanding of how QE operates, they might anticipate the impact of its unwinding and soften the tipping point. Some (perhaps many) market participants have, however, misunderstood the nature of QE. They expected an automatic expansion of bank lending through the credit multiplier together with a boost to the money supply (QE was almost invariably referred to as 'printing money'), hence pushing up inflation. In fact, money just maintained its trend growth. Credit growth has been weak. Underlying inflation has actually fallen.

None of this should have come as a surprise. There was never going to be CPI inflation while unemployment was high and the slow cyclical recovery explains lethargic credit demand.

But when outcomes have been far from market expectations, participants are confused. In these disorderly circumstances, market responses have been based on expectations of policy changes rather than on fundamentals. Asset prices untethered to fundamentals will be volatile. If market participants don't understand how we got here, they will be ready to panic at the thought of how we will exit.

Unwinding QE doesn't have to be too traumatic. Central banks can shift short-term policy interest rates up when appropriate, while leaving the disposal of their abnormally large bond holdings to a later date. Even if central banks make capital losses in the process, they can absorb these without too much drama. Concerns about inflation from 'printing money' were always totally misplaced.

That said, some of the private sector capital losses discussed above will fall on vulnerable sectors, especially the banking system. The reversal of capital flows from emerging markets puts these shallow financial markets at risk, susceptible to price over-reaction.

QE was never going to be an answer to structural problems. At best, it bought time, which has been largely frittered away. Banks in the US and UK are over the crisis but far from robust and de-leveraging is incomplete. Budget deficits have been reduced, but this reduction has crimped the recovery and left unemployment high. Structural reform which might have underpinned recovery has been given a low priority.

We are witnessing the tug-of-war between financial markets that are pressuring the authorities to keep QE going and those who see it as having served its purpose, with continuation making the unwinding more problematic.

If the balance of these forces results in QE being wound down soon, this will occur in economies which are still far weaker than hoped. Policy makers might also have hoped for a better understanding in financial markets of how the unwinding will work and thus more ability to make the transition with composure. There is still time to achieve this better understanding, but the flightiness of markets since Bernanke's tentative attempt to prepare for the unwinding is a reminder of how difficult it is to have a sensible conversation with the financial sector.

Photo by Flickr user Gerald R Ford School of Public Policy.

Firstly, China's has demonstrated a distinct lack of diplomatic leadership in resolving the crisis in Syria. Perhaps China's new-found interest in the Palestinian issue is a means of diverting attention from this. China has conveniently overlooked the fact that the Golan Heights, a major source of Arab-Israeli tension, has recently become a factor in the Syrian crisis too. It is unclear whether China would be willing to abandon its reticence on Syria to pursue peace for Israel and Palestine.

Secondly, important contradictions between China's diplomatic theory and practice would inevitably limit the effectiveness of its approach to the conflict.

China promotes the 'harmonious world' concept which emphasises multilateral solutions to international problems, and it staunchly defends the principles of sovereignty and territorial integrity. But in its own maritime territorial disputes with its neighbours, China has repeatedly emphasised bilateral over multilateral negotiations in order to prevent the 'internationalisation' of these issues. And how would China promote a two-state solution for the extremely complex and sensitive Israel-Palestine conflict, in which both sides would be expected to make significant compromises on their respective concepts of territorial integrity, while simultaneously denying calls for clarity on its own territorial claims?

Thirdly, since Reform and Opening Up, particularly since the introduction of the 'Going Out' policy in the 1990s, China's main interest in the Middle East has been fueling its own economic growth with the region's abundant natural resources. Due to China's traditional practice of staying out of the diplomatic spotlight, it still lacks a firm political or cultural presence in the region. Therefore, it is doubtful whether Chinese diplomacy would have a widespread impact.

While China appears to have the intention of playing a greater role in the Middle East peace process, it still lacks the capacity. China will need to determine its own diplomatic role and identity, as well as strengthen its regional diplomatic mechanisms, before attempting to mediate international conflicts such as this. It will take more than a redundant 'four-point plan' for China to make a lasting contribution to Arab-Israeli peace.

Photo by Flickr user Prime Minister of Israel.

First, Afghanistan may be one of the few countries where kings and politicians have been made and undone by struggles relating to the status of women.

Historically, women's emancipation has been used as the most visible measure of development and change in Afghanistan, and for opponents of women's rights, the level of Western influence in the country. Certainly, since the US-led intervention twelve years ago the advancement of women's rights has been used by NATO as a yardstick and a symbol of progress (often reflected in pictures of smiling girls going to school used by development agencies). Not all this was to the liking of women's activists themselves, especially in rural areas, who often preferred slower, more grass-roots and less publicised change.

Secondly, what has happened to the EVAW law underlines that the Taliban are not the only opponents of women's rights in Afghanistan. In reality, many mujahideen who have come back to power (and into parliament) since 2001 are only marginally removed from the Taliban in their thinking on social and religious issues.

This needs to be kept in mind by those who advocate for bringing 'moderate' Taliban into the government. Afghan women in rural and urban areas, as well as other progressive elements in Afghan society, fear that a political settlement between Tailban and conservative elements in government will only see the patchy progress that has been achieved since 2002 sacrificed in the interest of political expediency and deal-making.

Third, the fact that the EVAW case was largely ignored by the international media bodes ill for the future, although to their credit, some international actors have continued to lobby for the law behind the scenes. What are the chances that anybody will notice or care that the 'moderate' Taliban returning to the political scene will once again demand that beards remain untrimmed and Afghans avoid the dangerous vices of music and smart-phones?

Is the international community now going to sacrifice the work of the last twelve years and billions of dollars spent dangling a more progressive future in front of Afghans only to wrench it away in the interests of a quick exit?

Finally, the EVAW law is less about religion than a struggle between the old and younger generations. Few Afghans, whether rural or urban, male or female, really want to go back to how things were. Often it seems that outside observers are far happier to believe that the West failed in Afghanistan because Afghans are too conservative, backward and fundamentalist and that it had less to do with how the international community actually managed the intervention.

But inconsistent messaging, too much top-down change introduced too quickly (especially without bringing the rural population along), too much political posturing and window dressing; all of these things worked against creating an enabling environment where Afghans could promote change themselves. This might be the ultimate lesson for us to take home from Afghanistan and consider for our engagement in the years to come.

Photo by Flickr user DVIDSHUB.

Moreover, so entrenched and opaque is the decision-making process on the really important foreign policy issues in Iran that nobody really understands what influence he will have on the Supreme Leader's calculations on issues such as the nuclear program. But the size of his electoral victory will give him some authority to ease social restrictions and could give him a freer hand to select his cabinet.

The Supreme Leader and his close circle will likely give Rouhani some latitude early on, however Rouhani's close relations with Rafsanjani and Khatami will mean that the Supreme Leader will want to circumscribe Rouhani's powers so that he doesn't present as an alternative seat of power to the Supreme Leader and his close backers such as the Revolutionary Guard.

Given the parlous state of the economy, the impact of a tightening sanctions regime and the limitations on his executive powers, Rouhani's presidency is likely to be more about a change in style and less about substance. He is also aware that half the Iranian population voted for conservative candidates, so he must be careful with any liberalising moves he makes.

But as Rouhani would be aware, at this juncture stylistic changes will send a welcome message to the regional and international community. While the international community will be looking at issues such as nuclear negotiations and the ongoing civil war in Syria to judge Rouhani's ability to make Iranian policy less confrontational, the reality is that, while he is well versed in both issues and he can make his feelings known to the Supreme Leader, they are not under the purview of the president. Domestically he will ultimately be judged on the economy and to a lesser extent any social liberalisation.

Rouhani has been elected with a large popular mandate, but he will work within a system in which his ability to initiate and manage change are quite circumscribed. Domestic and international expectations should thus be tempered. But if he is able to change the tone from Ahmadinejad's aggressive confrontational style, that will be an achievement in itself.

Photo courtesy of Wikipedia.

Still, one could argue that things have changed within Defence in the last 12 months. The stark contrast in how this incident has been dealt with compared to other transgressions is evidence of changing climate. LTGEN Morrison's recent speech to the UN is further clear evidence. If the old military adage that 'my commander's interest is of great interest to me' is to be trusted, Morrison's passion for an inclusive Army should motivate and unite those aspiring to higher office behind him.

Reform that enables career progression compatible with having a family (and being the primary carer for some of that time) is another clear indicator of changing climate. Valuing and promoting a career trajectory that doesn't see part-time as part-time-committed is another pivotal shift. This isn't just an issue just for women, but also for those in  categories of service seen as restricted, such as Reservists, who have historically been marginalised by the permanent force, both attitudinally and structurally.

Policy frameworks and the behaviour they dictate reflect the values of the organisation. They also reflect the level of understanding, or lack thereof, of particular issues such as the requirements for physical fitness standards post-childbirth, or maternity leave, or the complexity of issues around childcare beyond simply the availability of places.

The lack of knowledge about issues that affect women in particular is not just confined to the ADF. The Department of Veterans Affairs also has a policy framework that does not accommodate the needs of female veterans. Recent academic research funded by DVA shows that the current conditions for female veterans could lead to worsening health and wellbeing.

Clearly the Defence White Paper cannot tell the unvarnished truth. It would be politically difficult to state publicly that a central plank of our defence policy is that Australia free-rides on the US. And it is clever, in a way, to state a policy term like 'self-reliance', then dumb it down over many years without ever achieving even the dumbed down version. But the danger is that we start actually believing this version of 'self-reliance'. Self-delusion spreads confusion.

What chance of clarity in the defence debate when we have a drive-by offering on defence from the economics editor of The Australian, David Uren, in a long economics article, where almost as a one-liner, Uren writes: 'The next defence white paper, unlike the previous two, needs to reconcile a realistic assessment of strategic challenges with limited financial resources. Again, hard choices will be required.'

As a defence commentator, Uren might be a very good economist. But his words have a touch of the conveniently defined 'self-reliance' about them. And because they are self-delusional, they are just as dangerous. Uren accepts what anecdotally so much of Australia seems to accept: that we must spend less on defence regardless of the strategic challenge. In fact, he advocates redefining the strategic challenge down to meet what he calls our 'limited financial resources'. What if the real strategic environment does not limit itself to what Uren thinks we should spend?

Words have a real impact on thought and attitude, and conveniently defined terms such as 'self-reliance' are not just clever policy. Such duplicity has a real impact on how Australians think of defence. Uren is prepared to define down the strategic environment to reach a level of spending which he has decided is appropriate. But this same strategic environment finally has both sides of politics now admitting that they are spending about 20% less on defence than they should be (though without this resonating anywhere).

I desperately and naively grasp at a Charter of Defence Honesty as a means to impose some clarity on this debate, but if not a Charter, surely there is some mechanism that publicly links the strategic environment with the security and defence outcomes that are needed, and the risk of underfunding defence? Once that is established, then governments themselves, as well as economists, can decide how much they are prepared to spend on defence, and we the voters can assess the risks they are taking.

But perhaps if we were so honest in our use of words and concepts, voters would be far too self-reliant in their ability to assess government and ministers' performance in defence.

Photo by Flickr user tropical.pete.

The simple answer is that the converging common interests between the US and China are actually greater than the competing interests. Both Obama and Xi want to focus on economic growth and development as their legacies will be defined by the amount of economic growth that they deliver and not by the number of wars that they have won with each other. In short, there has been a fundamental change in the grain of human history.

Geopolitical competition will continue between the US and China in the coming decades. Each will take advantage of the mistakes made by the other. Yet, there will be no direct wars and indeed there will be rising collaboration in many areas. For example, they have agreed to work together on North Korea and on climate change. All this is part of the great convergence that the world is experiencing.

SR: So are you arguing that the world has outgrown traditional power politics? China and the US disagree on a number of issues, perhaps most important being that the US seems to want to retain its predominant military status in the Pacific, while China would presumably want a role in Asia Pacific affairs commensurate with its size and strategic weight. Will these status considerations be subsumed by converging economic interests?

Geopolitics has been around for over two thousand years. It will be around for a long time more, as long as we have great powers. The geopolitical games will continue but the nature of the games will change. I can predict with great certainty that no two great powers will go to direct war with each other. The Great Convergence explains why. However, while there will be no wars, there will be competition. Let me cite an obvious example. The US is pushing the TPP process. China is pushing the RCEP process. In theory, they are pushing trade agreements. In practice, they are competing for influence. Such competition will continue.

Nauruan politics has trod a capricious path since 1968, when the island gained independence from its 'trustees', Australia, the UK and New Zealand. Under the 1919 Nauru Island Agreement between these three Commonwealth countries (without any representation from Nauru itself), Australia controlled mining and exports, and paid New Zealand and the UK an agreed portion of the profits. For then-Prime Minister Billy Hughes, even this extraordinary power fell short of the exclusive mining rights he had bluntly demanded of the newly formed League of Nations in exchange for Australian lives lost fighting the Great War.

Australia approached its imperial duties with unrepentant self-interest, strip-mining Nauru without a thought for subsequent rehabilitation of the island, and paying back in royalties what amounted to little more than peppercorn rent. The Regional Processing Centre (RPC) for asylum seekers who attempted to reach Australia by boat is fittingly located on mined-out land.

As an independent republic, Nauru has experienced extremes of poverty and wealth, notoriety and obscurity, but some things have not changed. Nauruan pride, for one, and the complexity of Nauruan politics which, strongly rooted in local community, reflect the internecine wranglings of Nauru's land tenure system.

Land tenure is one of the vital organs of Nauruan political life. Land ownership traces the matrilineal clan system that has outlived Nauru's colonial period and continues to determine political affiliations. Landowners receive royalties for mining that takes place on their land (which, despite the precipitous drop in both exports and price of primary phosphate in the early 2000s, still comprises the bulk not only of state revenue but of household income). The landowners also had a say on the conditions of detention that were to apply to the reopening and redevelopment of the RPC. Whether Australia is honouring those conditions is an uneasy issue on Nauru, and is expected to be raised publicly early in the new parliamentary term.

It behoves the Australian Government to remember that although Nauru is financially broken and politically unstable, the Nauruan governments are neither undiscerning nor predictable in their choice of international allegiances, as demonstrated by the island's brazen moves in auditioning and then rejecting a diplomatic relationship with the People's Republic of China in favour of reinstating the temporarily closed embassy of Taiwan.

Nor are the Nauruan people unfeeling in the face of human suffering which seeps through the RPC fences and over their island. It is they who have to go to sleep knowing that their home is being used as a makeshift prison. Many do not understand why more Nauruans have not been hired to provide services for the RPC, as was seemingly promised to the landowners in exchange for use of their mined-out land. And, like many Australians, other Nauruans fail to understand why the Gillard Government has not allowed asylum seekers some freedom of movement and association, as was the case under Howard. Furthermore, it does not take an activist Australian legal team and the weight of common law to teach the Nauruan people what they already know through human experience: detention without trial is a basic injustice.

The 21st parliament is an unpredictable beast. In approaching the coming storm over detention conditions, the Australian Government should treat the Republic with the respect it pretends at in words and belies in behaviour.

Photo by Flickr user ARM Climate Research Facility.

It is important to underline that an FTA with Switzerland (a major European economy which ranks 19th globally), which is linked with the EU through a bilateral free trade agreement but not a customs union, will not allow for automatic entry of Chinese goods into the EU.

However, FTAs with two non-EU European countries, coupled with an aggressive recent move into ownership of Greek shipping terminals, will give China something of a bridgehead in view of the big prize, an FTA with the EU. Last year China exported goods worth US$377 billion to the EU, its number one economic partner ($20 billion of this total was solar panels).

Telecommunications are another area of contention. Here it is only partly a question of export dumping being claimed by the EU, but also the conduct telecoms giant Huawei, subcontracted by a number of European telecom companies for local work. Huawei is practically barred from doing business in the US due to fears for sensitive national security data.

The second reason for Li's visit to Switzerland was financial. As is well known, Beijing is working on the internationalisation of its currency. The very international Swiss market offers good prospects for the sale and trade of financial products issued in renminbi as first step to establishing it as an international reserve currency. The fact that all the bigwigs of the Swiss banking scene were present at a lavish Zurich reception for Li was not lost on observers.

Ironically, quite a number of these banks are in deep trouble these days. The hallowed Swiss banking secrecy is actually all but gone, mortally wounded by Washington's FACTA obligation for full information exchange on accounts of US citizens abroad and finished off by the subsequent request from EU countries to get no less for their respective fiscal authorities. Add to that the incredible imprudence of quite a number of these banks, which continued aggressively marketing their private wealth management services towards tax cheating clients abroad long after it became crystal clear that this would be treated as money laundering with stiff penalties for accomplices, too.

The world's largest private wealth manager, UBS, after having already paid stiff penalties in the US and in Germany, and with individual bankers facing prison sentences, is rumoured to be threatened by a similar indictment in France, with potentially more to follow.

The irony thus lies in Beijing coming to town at a point when the Swiss financial market appears to be on the way to slowly shrinking towards something more in line with the real economy of the country.

Photo by Flickr user FriendsofEurope.

At Waterford we were encouraged to believe that every person was born equal and that each of us should be given every chance, regardless of our colour, gender or religion.

Many years later, on 11 February 1990, I held my breath, along with so many others, as we awaited that first glimpse of Nelson Mandela emerging after 27 years in prison. Could one man really make a difference? The divisions were surely too deep and the prospect of reconciliation simply unimaginable. South Africa became a place of fear and rumour, with many white South Africans convinced that their servants were going to stab them in the middle of the night in an orchestrated act of revenge. Carving knives were removed from kitchen drawers and bedroom doors were locked at night. Many feared that the streets would run with blood.

As the election approached I had many unpleasant arguments with people who told me with absolute certainty that it was all going to end in civil war and that most whites would never accept a black president. It was simply unthinkable and anyone who suggested that it might actually work was a fool.

In 1994 Nelson Mandela was elected president of South Africa in what was to the doomsayers a disappointingly peaceful election. In 1995, he awarded the Webb Ellis Rugby World Cup to the Springbok captain in front of 60,000 adoring fans, many of whom had wanted to shoot him just a year before. In terms of political symbolism, can it get any better than that? It was an act of reconciliation and a significant step in the healing process for this young democratic nation.

There were of course many who made the ultimate sacrifice in their fight for freedom, and others who languished in prisons, one of whom in fact was a girlfriend of mine. Then there was Archbishop Desmond Tutu, whose daughters I grew up with in Lesotho and went to school with, who never gave up and could never be silenced. His extraordinary tenacity and audacity should also be recorded in the remarkable story of South Africa's long and painful march to freedom. It was an enormous honour to be introduced by the Archbishop at a conference I spoke at last year and I feel humbled today to be asked to write about a man whom I regard as one of the finest leaders in history.

In closing, it is appropriate to quote the following extract from Nelson Mandela's statement at the Rivonia Trial, at which he was sentenced to life imprisonment in 1964.

During my lifetime...I have cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities. It is an ideal which I hope to live for and to achieve. But if needs be, it is an ideal for which I am prepared to die.

You mean so much to so many of us, and your capacity for forgiveness and sense of humility is a shining example for all humanity. God bless you Nelson Mandela and God bless Africa.

Photo by Flickr user Articularnos.com.

Even in mature markets, exchange rates can depart substantially from fundamentals. It's hard to criticise China for moving cautiously to open its capital account and let the exchange rate float freely, especially in a world where abnormal monetary settings are distorting exchange rates.

Of course China still has plenty of economic challenges, but most of them are domestic. China still has a long way to go to achieve a sustainable internal balance, particularly between investment and consumption. This balance would have knock-on effects on the external position, but the main task on the way to achieving such balance is domestic income redistribution, not floating the exchange rate.

Looking back on China's economic interaction with the world over the past five years, there seems to be more to praise than to censure. China's growth accounts for perhaps 40% of total world growth over this period. Without it, we would have experienced a very glum world indeed. With its command economy, China was able to deliver a huge domestic stimulus in 2009 (around 10% of GDP; far more than any other country). China may yet pay a price for this credit stimulus, in terms of an over-extended financial sector. But in the meantime we have all had the benefit.

In past international discussions, China and its exchange rate have been the butt of trenchant criticism. Yet when we look back at the period leading up to the 2008 crisis and since, the mess many of the advanced countries got themselves into can hardly be blamed on China. The fatal external imbalance was not the one between China and the US, but rather between Germany and the peripheral euro states. The damaging capital flows were not those between China and the US but from Germany and France to the periphery of Europe.

When G20 countries next get together to discuss countries that are not acting as good international citizens, they might do better to turn their gaze elsewhere.

If the issue is large current account surpluses, huge foreign reserve holdings and heavily managed exchange rates, Singapore, Switzerland and a number of other countries transgress far more seriously than China. The country that could most help the world's excess saving problem is Germany. Berlin is running a current account surplus over 6% of GDP and has a near-balanced budget with room for expansion which would not only enliven Europe's stagnation, but might even provoke some beneficial inflation.

America and the UK could help by easing up on their austerity. Japan needs to do more with its 'third arrow' (structural reform), with less flaying around by monetary policy in an attempt to achieve the inconsistent aims of lowering interest rates while simultaneously hiking inflation. Its successful engineering of a sharp fall in the yen must be borderline acceptable in international terms. It is a feeble excuse to say that policy wasn't really aiming to get the yen down.

This alternative agenda ought to be enough to ensure a lively international discussion, without taking up Bergsten's indictment of Chinese exchange-rate policy. But for all the opportunity for rich international discussion, the main task of sorting out the current slow recovery lies with domestic policy, not with correcting some perceived international imbalance.

Photo by Flickr user cuellar.

We are the ones who supported and re-elected governments that took part in the invasion and occupation of two foreign countries in a disastrous bid to curb terrorism. We are the ones who elected and re-elected governments that vastly increased the size and reach of domestic intelligence agencies*. And we are the ones who have meekly acquiesced to the costly, time consuming, irritating and almost entirely pointless security theatre that makes our airports such a nightmare.

What signals have we, as a people, ever sent our governments that we think they are overdoing it? When have we ever told our politicians that it is politically safe to ratchet down their descriptions of the threat? What have we done to ensure that politicians won't be labeled 'soft on terrorism' if they propose to reverse some of the excesses of the last decade?

Photo courtesy of Wikipedia.

* Disclosure: ASIO is a corporate member of the Lowy Institute.