Lowy Institute

The Joint Standing Committee on Foreign Affairs and Defence recently tabled the report on its inquiry into Australia's Advocacy for the Abolition of the Death Penalty. In keeping with Australia’s policies and values, the report made a number of commendable recommendations for supporting and strengthening Australia’s international commitment to abolishing the death penalty. 

This continues a long trend of Australian foreign policy and Australian NGO advocacy for death penalty abolition. However, the report takes several steps further than existing policy in relation to international policing partnerships which the Australian Federal Police (AFP) has developed throughout the world.

Some of these recommendations would serve to strengthen or formalise existing practice. For example, articulating a clear commitment to prevent the exposure of individuals to the death penalty in jurisdictions where their suspected or alleged crimes are capital offences is entirely consistent with current practice and with Australia’s values.

However, further recommendations, which would see the AFP compelled to withhold information in cases where partner countries have not formally guaranteed that the death penalty will not be sought, are problematic in two senses. Firstly, we would need to negotiate a very real boundary between advocacy and moral universalism. Secondly, we would risk creating a system of rules which make both compliance and partnership difficult for the AFP.

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Although it is important to advocate Australia’s morals and values in the international community, seeking to making partnership with other nations contingent on those nations adhering to our value systems in their legal jurisdictions is problematic. We may agree in Australia that the specific case of the death penalty warrants special treatment in this regard, but an opposite example, where a partner country refused to honour its partnership agreements with us unless we applied their values in Australian legal cases might be instructive.

One such example is Interpol’s worldwide fight against child abuse material. In many Interpol partner countries the act of abuse and the creation of abuse material is an offence, but the possession of the same material is not. As abhorrent a counter example as this is, it serves to illustrate the differences in values which we must sometimes accept in order to work with our partners. If these countries refused to work with us to shut down international child abuse rings unless we agreed to refrain from prosecuting individuals who possessed but did not create abuse materials in our jurisdiction, we would be understandably resistant to continued partnership.

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This is not to equate the two issues as they are clearly very different in nature. However, it does highlight the reaction that countries may have to the strings we want to attach to our existing information sharing arrangements. Similarly, it underscores the pragmatic implications of creating broad caveats to our information sharing arrangements with partner nations.

For example, Indonesia feels strongly about its harsh penalties for drug offences and its right to apply its own values and laws within its jurisdiction. Australia’s criticism of Indonesian laws in the lead up to the execution of Australians Andrew Chan and Muyran Sukumaran temporarily soured relations between Australia and one of its most important regional partners.

In the US, Australia’s most vital alliance partner, many states retain the death penalty. The implications of creating a rule system which prevents the AFP from sharing security information with the US, based on our desire to limit the application of US law in a US jurisdiction,are concerning for two reasons: predictability and reciprocity.

The first obstacle to implementing a death penalty threshold for information sharing would be the capacity of the AFP or requesting authorities to accurately predict how information would be used in future cases. Information sharing often happens very early in the investigative process and it would be very difficult for partner countries to guarantee precisely how the information being sought would ultimately be used in a further prosecution, or even who or what such a prosecution may involve.

We would not just be requiring partner countries to abandon the death penalty in one investigation, we would be requiring them to forego their ability to prosecute other cases in the future if they relied on information shared by the AFP in some way. This could potentially open avenues for defence lawyers to challenge the admissibility of information that was shared under a formal caveat of not being used in a death penalty case. This could significantly alter the courses of action available to partners for many years of future investigations and prosecutions.

A second obstacle would be fostering partnerships where the AFP did not have reasonable discretionary powers to share information which it deemed to be in the public interest in Australia or abroad. Right now the AFP has some discretion to decide what information it wishes to disclose on a case-by-case basis. This allows the AFP to make an informed judgment, balancing Australia’s commitment to uphold its values in relation to abolition of the death penalty against the political and security impetus to share information in specific cases.

Overall, the right mix of advocacy and pragmatism almost certainly lies with enabling the AFP to leverage its knowledge and expertise to make these decisions without being tied to clear-cut restrictions on information sharing. It is also important to question the extent to which we want to risk compromising Australia’s security partnerships to avoid circumstances which, although devastating, are infrequent and subject to increasing scrutiny when they do arise.

Photo courtesy of Twitter user AFP National Media

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Most people will perhaps by now have an inkling that the war against Islamic terrorism will go on much longer than the wars in Syria or Iraq. The narrative is too compelling for some to give up, governance too poor to stop people being attracted to that narrative, and identities too complex to provide a counter-narrative that addresses everyone’s perceived injustices. Understanding the deep-seated nature of the problem, Washington has had to tread a fine line. It seeks to avoid becoming decisively engaged, so as not to exacerbate the situation and become the problem rather than part of the solution, while deploying sufficient military and diplomatic support to try to contain the situation and steer it in a desired direction. None of it is, or will be, neat.

Part of the problem has been finding partners that have a strategic aim that coincides sufficiently with that of the Obama Administration, and who share enough values with the US so that it can stomach working with them. It is often easier to find the the first than the second, given interests tend to be temporary while values somewhat more permanent. The difficult balancing act that Washington finds itself in the region is reflected in its piecemeal allocation of troops, all there for valid reasons, but all with their own unique operating environments and challenges.

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In Libya, the Chairman of the Joint Chiefs of Staff recently signalled an increase to the US military presence, over and above the two small teams already in Misrata and Benghazi who have been scoping possible ground partners since late last year.

In Yemen, the US reluctantly provided limited support to the Saudi-led air campaign from its inception, but largely as a means of inserting some form of adult supervision on an organisation that had never undertaken such a campaign before. More recently though, the US has also provided a small detachment of ground troops to assist the Saudi and Emirati forces dislodge AQAP (Al-Qa'ida in the Arabian Peninsula) from the coastal city of Mukalla.

And the recent visit by the new commander of Central Command, Joseph Votel into northern Syria to visit the small US military detachment there —  working with the umbrella Syrian Democratic Forces (SDF) —  highlighted its role in the most intractable of the multiple conflicts in the region. There are some indications that Votel's visit has drawn criticism from some within the opposition Free Syrian Army because of the dominance of the Kurdish YPG in the SDF, further highlighting how complex the opposition picture is in Syria. And in neighbouring Iraq, Votel visited some of the several thousand US military personnel working to support Iraqi forces against Islamic State.

The term 'boots on the ground' means many things to many people, including news media. The military (and most politicians) would consider the term to mean combat manoeuvre forces, implying one is decisively committed to the fight. The presence of advisers and enabling (or supporting) forces falls short of that measure, even though there are military personnel physically present in operational areas. The media struggle to understand the difference.

What we see in the Middle East currently is a US not becoming decisively committed to the ground fighting, but deploying small groups to assist local groups that Washington can work with to engage in the contact battles. Sounds complex ? You bet. But if it wasn't it wouldn't be the Middle East.

Photo: John Moore/Getty Images

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As the Australian federal election steam rolls onward, The Interpreter covered some other issues this week, including a very good and insightful breakdown by John Edwards of Saudi Arabia's plan to economically reinvent itself:  

Though he is yet to reveal the details of the plan, Saudi Arabia’s deputy crown prince Mohammed bin Salman has excited world attention with his Vision 2030 announcement for the oil-exporting giant. It is important for Saudi, and important for the rest of us. The oil giant is at the beginning of a vast economic change that must, if it is successful, also profoundly change Saudi society and politics. Even failure will bring changes, perhaps bigger ones. As Saudi changes over the next decade or so, it will change regional and then global political calculations.

This was apparent in the recent sweeping cabinet reorganisation in the Kingdom, explained as a necessary preliminary to executing the new plan under younger officials more closely aligned with Prince Mohammed. The cabinet changes are merely a portent of bigger changes to come.

In Part 2, John predicted that Saudi Arabia might be able to indeed pull off this incredible transformation: 

If it is united and resolved, the ruling family can mobilise the resources necessary to transform the economy. Unlike Bahrain, it can run large fiscal deficits for a very long time. There is a reasonable chance Saudi will be a very much bigger economy in a decade, with a much higher proportion of Saudis employed in reasonably good private sector jobs, with higher workforce participation by women and higher average levels of education and training. Unlike the UAE, Saudi has a substantial population of nationals.

The Interpreter also covered the Australian election however. Earlier in the week, Greens leader Senator Richard Di Natale outlined his party's foreign policy platform in a speech at the Lowy Institute. Malcolm Jorgensen pointed out some of its pitfalls: 

Di Natale repeatedly appealed to former Prime Minister Malcolm Fraser and his deep scepticism of the US as a 'dangerous ally'. Fraser's position had its limitations, but was at least internally coherent in accepting that a more independent strategic posture entails significantly increased defence expenditure – in the realm of '2.5 percent or 3 percent'. Di Natale, by contrast, called for a reduction of spending below current projections of 2%, in part because the response to Sino-US tensions is not yet 'clear'. In effect, the Greens choose to 'do nothing and hope for the best', and thereby relegate Australia to a mere observer of the most consequential foreign policy challenge of a generation.

Sam Roggeveen also touched on the speech, but pointed to a previous point he has made, the idea that the US-Australia alliance has almost become an ideology unto itself: 

The US-Australia alliance has always been more than a practical arrangement for common security; it is also based on deep cultural affinities and historical ties. But as I've argued previously, in Australia in recent years it seems to have evolved (or perhaps calcified) into an ideology, a political totem before which anyone with pretensions to being politically mainstream must genuflect.

Darshana Barauh wrote on India's policy in the Pacific:

At first blush, the fast-changing maritime domain in Asia — where an increase in geo-political competition is binding the Pacific Islands and Indian Ocean into a single theatre — is the obvious trigger for India’s relatively new interest in these islands. However, there are few pressing reasons for Delhi to engage with the Pacific Islands from a defence point of view. While India carries out training with and for Fiji’s defence staff and engages occasionally in  naval exercises, there is nothing that is institutionalised or regular about this defence cooperation.

Maria O’Sullivan looked the PNG Supreme Court's decision on Manus:

Although the court decision is not technically binding on Australia (as we were not named as a party to the litigation), it could be argued that it is important as a regional leadership issue for Australia to display respect for the jurisprudence of the PNG Supreme Court. This is particularly so given that successive Australian governments have been concerned about political instability, corruption and weak governance in PNG. 

Where does trade fit into the Australian election? Stephen Grenville gave us a bit of history:

One Labor Party insider attributes his party’s free-trade conversion to the power of ideas, overriding the vested interests which had dominated the debate. The Labor Party in this reform era was dominated by big-thinking internationalist politicians who envisaged a global role for Australia and saw that this was incompatible with inward-focused industry protection. Australia’s role in forming APEC (the high point being the tariff reduction pledges at Bogor in 1994), was not compatible with protectionist policies at home. Others were influenced by the example of Sweden, a small economy whose wealth relied on trading with the world.

A great piece from Marie-Alice McLean Dreyfus which looked at Hollywood in China:

This is evident in various ways. To begin with, China is keen to promote domestic films over international films and has recently announced cash bonuses for films that do well domestically and internationally. Films that gross more than ¥20 million can apply for a bonus of up to ¥$6 million. The release date of foreign films is also tightly managedto ensure only Chinese films are shown in the most profitable cinema-going weeks in China such as Lunar New Year and the summer months.

Also well-worth reading article from Aaron Connelly on American attitudes and assumptions about Australian views and policy:

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In several corner suites, moreover, there is a concern, not that the Chinese leadership might be undermining the rules-based order, but that the US is recklessly raising tensions with China in a contest for regional primacy. This view holds that Australia's closeness to the US could pull it into a conflict that is not in Australia's interests. Such arguments overrate the risk of conflict between the US and China, and underrate the importance of the rules–based order to Australian prosperity.  Some in the Australian defence community discourage their American counterparts from taking these arguments seriously, breezily declaring their proponents to be soft on China. But the Australians making them are not uninfluential.

Is Prime Minister David Cameron building his legacy with his recent corruption summit? Daniel Woker:

With his crusade against corruption Cameron has now also hit on a more immediate and visible target. Corruption is the main impediment on the road to economic well-being, democracy and the rule of law for most emerging and developing countries. It is a truly global problem: sustained and equitable economic growth in the South would mean fewer economic migrants to the North, more democracy, fewer political refugees and more personal and economic security for locals and foreign investors alike.

Bal Kama covered the ongoing student protests in Papua New Guinea:

The students are making personal sacrifices and even risking suspension from studies. As of this week, armed riot police including the feared ‘mobile squad’ units have been sent to UPNG at the invitation of the University Council. The police are not allowed to enter UPNG unless invited. The Police Commissioner has argued that the police are there to ‘restore normalcy’ on the campus. But how can ‘normalcy’ be restored against a peaceful legitimate protest? 

Is there a growing finacial campaign against Hizbullah? Rodger Shanahan:

As well as legislative lines of operation, law enforcement have also targted Hizbullah's income streams. In February this year a multinational law enforcement operation busted a drug operation that saw Hizbullah operatives, including a senior Hizbullah money launderer, working with South American drug cartels to raise profits for repatriation back to Lebanon for Hizbullah's use.

A lengthy and in-depth piece from Merriden Varrall on the place of the Cultural Revolution in modern China and its relevance to the Chinese Communist Party:

For a second Cultural Revolution in which people were to question and challenge authority, the Party–state would somehow need to be shown to be fallible. In Mao's time, Mao declared it to be fallible to pursue his own personal power. Xi is unlikely to do the same, as his commitment to the Party–state seems to be paramount (although conceivably as a vehicle for his own power). Cracks do exist that could develop into fissures allowing people to question the inevitability of the Party-state, such as the environment and the economy. However the leadership is supremely aware of these vulnerabilities, and will be managing them closely. Success is not guaranteed.

With Rodrigo Duterte's election in the Philippines last week, Lowell Bautista wrote on his South China Sea policy:

While Duterte has indulged the public with spur of the moment histrionics, including a pledge to plant a Philippine flag via jet ski on Chinese-occupied artificial islands, his position on China otherwise appears to have been conciliatory and amicable. Election pronouncements of Duterte on China and his views on the South China Sea disputes appear to be diametrically at odds with the current design and trajectory of Philippine foreign policy on these important issues.

Hannah Wurf with a brief breakdown of the latest G20 Monitor from the Lowy Institute:

In my own article in the Monitor, I argue that the G20 should to go back to basics and focus on cooperation and communication, even if there is no headline-stealing outcome. The G20 has already set three ambitious targets: an intention to lift global GDP by 2% by 2018, a goal to reduce the gap in labour participation between men and women in G20 countries by 25% by 2025 and a commitment to reduce the share of young people most at risk of being permanently left behind in the labour market by 15% by 2025. 

It's clear that One Belt, One Road is a geopolitical project, says Julian Snelder:

Within China, one million documents have been published referencing the initiative. OBOR is going to happen and official China is mobilising for this ambitious program. Words of warning are few, and muted. But in the private sector, there is scepticism. True, Chinese firms are going to win big. But one can sense a resignation that this is going to be a costly geopolitical project rather than a commercial one.

Finally, Amy Maguire wrote on a recent government report about how Australia can improve its advocacy against the death penalty. Part of this looked at the Bali Nine case: 

The Committee's view was that such changes would likely be sufficient to ensure that the AFP does not act in ways that privilege law enforcement agendas over the protection of human rights and human life. In support of this conclusion, the AFP noted that it has not been involved in information-sharing resulting in a death sentence for an Australian national since the Bali Nine case.

Photo courtesy of Flickr user Stephen Downes.

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The Brexit referendum

Next month, Britain will vote on whether to leave the European Union. How are both sides' campaigns affecting British politics? How would either outcome affect Britain's relationship with the EU? And if Britain votes to stay, what are the prospects for a similar referendum in the future?

Yesterday The Interpreter's Emma Connors spoke to Dr Robin Niblett, Director of the London-based Chatham House think tank. Niblett argues that balance of risks economically outweigh the opportunities of leaving, and that in particular the real cost of leaving isn't the prospect of tariffs but losing input into rule-making processes within the EU. However, Niblett also notes that British politicians have never really made a passionate case for Europe (instead historically choosing to tap into Britain's latent anti-Europe sentiment), leaving British Prime Minister David Cameron fighting uphill.

 Also yesterday, the Director of the Lowy Institute's International Economy Program, Leon Berkelmans, had a chat with Martin Wolf, chief economics commentator at the Financial Times. Like Niblett, Wolf is a 'remainer', arguing that Britain remaining is in the best interests of both the UK and EU. The best reason for remaining, says Wolf, is that there's no compelling reason to leave, and that most of the alternatives are clearly worse than the current situation.

Wolf also outlines some of the historical content as to how the rising threat of the UK Independence Party and the desire to placate Eurosceptics within his own Conservative Party prompted Cameron to promise the referendum during the last parliament.

Photo: Getty Images/Christopher Furlong

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Election Interpreter 2016

The Australian Greens have long staked their political credibility on being realists when it comes to the hard limits of the natural environment. An uncompromising defence of 'ecological sustainability' is the foundation for the party's broader agenda of establishing social and political justice.

In a major speech at the Lowy Institute earlier this week, Greens leader Senator Richard Di Natale sought to demonstrate the party's maturity in extending the same realistic appraisal to foreign affairs. Yet, in analysing the Senator's words, it appears the championing of evidence-based thinking on ecology has not yet extended to the geopolitical environment.

The Greens core principles of international relations do not proceed from standard conceptions of national or security interests, but rather from moral ideals: that 'Australia must act diplomatically to promote peace, democracy, ecological sustainability, equity and justice, and human rights.' Yet sound foreign affairs requires more than a desire for perfected outcomes and the avoidance of moral contradiction. Foreign policy making is more often a process of negotiating least-worst outcomes that preserve core Australian interests while accepting sometimes far-reaching compromise on others.

Much media attention has focused on Di Natale's disparagement of the US-Australia alliance for drawing Australia into the 'horrific consequences' of US foreign policy. The Senator is surely correct that the alliance has drawn Australia into fraught foreign policy situations, not least of which was the ill-conceived and catastrophic 2003 Iraq War. Conversely, the alliance has also underwritten the better part of a century of regional stability, with benefits that are both less conspicuous but more consequential. It is in the preservation of regional stability that the limitations of a Greens foreign policy are most clearly demonstrated.

It is notable that Di Natale’s office briefed the media in advance that he would articulate a view of growing tensions in the South China Sea as a 'proxy war between two of our largest trading partners' far from Australia’s shores, but that direct reference to this pressing issue was omitted entirely from the delivery of the speech.

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A follow-up question did prompt the Senator to argue that Australian policy had 'not pursued aggressively enough the option of arbitration and a diplomatic resolution to that specific conflict', and was instead 'largely focused on the military response' in line with US strategy.

These claims were made despite Australia endorsing the Philippines' ongoing challenge to Chinese territorial claims in a high profile case before The Permanent Court of Arbitration. Of equal prominence has been China's refusal to recognise the court's jurisdiction, and systematic attempts to undermine the legitimacy of any ruling. The case is a reminder that international law is no alternative to power, but rather a process that depends on power to make the international system more stable and predictable. This dynamic is nowhere more clear than in the Asia Pacific, where the American system of military alliances has thus far ensured substantial adherence to the 'rules-based international order'. 

Greens policy seeks guidance from 'the United Nations Charter and international law', yet is devoid of any conception of how or why such a legal order is to be established and maintained. Indeed the only official reference to security in the region is an 'ongoing commitment to the demilitarisation of the Asia-Pacific region and the development of a regional non-aggression pact.' Yet it is military capability that permits peaceful legal enforcement mechanisms, such as the freedom of navigation operations undertaken by the US to uphold the universal maritime rights that Australia so depends on.

Even on the Greens own terms, Di Natale's speech fails to indicate how environmental law will be upheld, including claims in the South China Sea arbitration that Chinese fishing activities have contravened the Convention on Biological Diversity with impunity. Foreign policy requires more than strong moral convictions. The failings of the 2003 Iraq War owe much to moral certainty combined with inadequate strategic insights about realistic means and ends.

Di Natale repeatedly appealed to former Prime Minister Malcolm Fraser and his deep scepticism of the US as a 'dangerous ally'. Fraser's position had its limitations, but was at least internally coherent in accepting that a more independent strategic posture entails significantly increased defence expenditure – in the realm of '2.5 percent or 3 percent'. Di Natale, by contrast, called for a reduction of spending below current projections of 2%, in part because the response to Sino-US tensions is not yet 'clear'. In effect, the Greens choose to 'do nothing and hope for the best', and thereby relegate Australia to a mere observer of the most consequential foreign policy challenge of a generation.

Understandably, the central theme of Di Natale's speech remained climate change as a 'threat multiplier', capable of exacerbating traditional global security concerns. This is almost certainly true, and yet by necessary implication, also an acknowledgment that longstanding challenges borne of power politics will remain at the heart of international relations. The Greens should revisit their own advice: the key to preserving Australia's environment is an evidence-based appreciation of history, and a realistic appraisal of the hard limits set by a changing regional climate.

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Earlier this month, the Joint Standing Committee on Foreign Affairs, Defence and Trade released 'A world without the death penalty: Australia's Advocacy for the Abolition of the Death Penalty'. The report was produced by the Human Rights Sub-Committee, which had been tasked by the Foreign Minister with:

  1. 'Reviewing how Australia currently engages internationally to promote abolition of the death penalty'.
  2. Investigating 'further steps Australia could take to advocate for worldwide abolition'.

The inquiry received 62 public submissions and conducted nine public hearings, and the ensuing report makes 13 detailed recommendations for 'invigorating Australia's advocacy'.

Australian Myuran Sukumaran was among eight executed by Indonesia in April 2015. (Getty Images/Jason Childs.)

The report is timely, marking the first anniversary of Indonesia's executions of eight people in April 2015, including Australians Andrew Chan and Myuran Sukumaran. Australia's strong and consistent advocacy in favour of clemency for Chan and Sukumaran failed, and their executions exposed a range of means by which Australia could do more to progress the global movement for abolition of capital punishment.

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Recommendations on international information-sharing between police forces

All those executed in Indonesia in 2015 had been convicted of drug offences, and sentenced to death for acts contrary to international standards on what constitute the 'most serious crimes'. In this context, 'A world without the death penalty' recommends the amendment of Australian Federal Police guidelines for information sharing in death penalty situations. The Committee specifically recommends that the AFP: 

  • Articulate a primary aim of preventing exposure of persons to the death penalty.
  • Apply this aim to everyone, not only Australians.
  • Seek assurances from partner countries that the death penalty will not be sought.
  • Seek ministerial oversight where there is a high risk of execution.
  • Withhold information in drug crimes cases where partner countries have not guaranteed that the death penalty will not be sought. 

Had the AFP been bound by this last guideline in 2005, Chan and Sukumaran may not have been exposed to the death penalty. 

The Committee's view was that such changes would likely be sufficient to ensure that the AFP does not act in ways that privilege law enforcement agendas over the protection of human rights and human life. In support of this conclusion, the AFP noted that it has not been involved in information-sharing resulting in a death sentence for an Australian national since the Bali Nine case. 

However, considering the gravity of the death sentence and the need to ensure consistency in Australia's advocacy, the Committee could have gone further to also recommend legislative change. Both the Extradition Act 1988 and the Mutual Assistance in Criminal Matters Act 1987 contain safeguards to protect against the imposition of the death penalty in partner countries. The Australian Federal Police Act 1979 could be amended to mirror these statutes, while – if regarded as necessary by parliament – retaining some limited exceptions to enable information-sharing in cases of grave risk to the Australian population (for example, certain terrorist threats). 

Centralising human rights principles in abolition advocacy

In the case of Chan and Sukumaran, the key argument put by Australian government officials was that capital punishment was not justified because of the men's rehabilitation in prison. Such a pragmatic position, and the lack of consistent advocacy against capital punishment regardless of who is subject to it, undermines the legitimacy of Australia's position. 

In my written submission and oral evidence before the inquiry, I argued that Australia must consistently ground its advocacy in human rights arguments. This requires the identification of the death penalty as a violation of the fundamental and inviolable right to life. Further, retentionist countries must be challenged to accept that drug offences cannot properly be categorised as among the 'most serious crimes' in order to meet the limited exception under Article 6(2) of the International Covenant on Civil and Political Rights. Finally, capital punishment must be decried as torture, which is strictly prohibited under international law. The death penalty is torturous because of the methods used in executions, the length of time convicted persons are kept on death row and the terror of awaiting one's own scheduled killing by the state. 

It is encouraging that the Committee has recommended that 'where appropriate and especially in relation to public messaging, Australian approaches to advocacy for abolition of the death penalty be based on human rights arguments'. This recommendation can inform the proposed whole-of-government Strategy for Abolition of the Death Penalty. Arguing against the death penalty in all cases, from the foundation of human rights law, reduces the risk that Australia will be accused of hypocrisy or privileging the lives of its nationals over others at risk of execution. 

Prospects for Australia's future efforts

It remains to be seen whether the conclusions of the Committee will translate into government action. Hopefully the Australian government can be persuaded, as the Committee was, that our alliances with death penalty retentionist countries are strong enough to permit a strengthening of our abolitionist advocacy. The Committee has wisely recommended that future efforts concentrate in our region, where we can best apply resources to promote change, and with our ally the US. 

Australia must craft a long-standing and fruitful response to the deaths of Chan, Sukumaran and all others who have suffered the ultimate punishment. The execution of human beings by the state should be opposed wherever it is carried out, and whoever is subject to it. Australia can enhance its ethical position by broadening its advocacy and range of argument, and by ensuring that its efforts to prevent transnational crime maintain a constant awareness of the obligation to preserve and protect human life.

Ed. note: Look out on Monday for a piece which argues that the 'A world without the death penalty' report's recommendations on AFP information-sharing are problematic for a number of reasons.

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This is the second in a two-part series examining Saudi Arabia's ambitious plan to transform its economy. Part 1 looked at the reach of the Vision 2030 plan and labour force implications; part 2 examines which industry bets are most likely to pay off.

Vision 2030's central and stunning call is to double Saudi GDP over the next 14 years. But what kind of economy will Saudi Arabia be? McKinsey's 2015 report, 'Moving Saudi Arabia's Economy Beyond Oil', which offers some clues as to what is likely to be in Saudi Arabia's detailed plan, specifies eight industries that it claims could create nearly two-thirds of the required output growth: mining and metals, petrochemicals, manufacturing, retail and wholesale trade, tourism and hospitality, health care, finance,
and construction.

If the goal is to create jobs for Saudi nationals, it is easier say what kind of economy it won't be. It won't be based on labour-intensive manufacturing, because low-wage economies in Asia already do that far more competitively than Saudi can even think of matching with a workforce of Saudi nationals. Saudi could not do it even with high tariff protection (which one would not expect to be part of a McKinsey plan) because its economy is too small. It is about half the size of the Australian economy, which discovered a while ago there is no future in labour-intensive manufacturing (ominously, McKinsey mentions vehicle assembly as a desirable industry for Saudi). Nor will Saudi's new economy be based on capital-intensive manufacturing, because the smarter the manufacturing process, the fewer the jobs.

Certainly, there are niches in between. In this respect Bahrain, Saudi's tiny neighbour and ally, offers valuable lessons. Bahrain has long successfully staffed its aluminium and oil refining industries with Bahraini nationals. That works with high-productivity, high-wage industries. It doesn't work with low-wage, labour-intensive industries like food manufacturing, and of course it doesn't work with manufacturing processes that can be performed by robots.

Lessons from Bahrain, but not from Dubai or Abu Dhabi

More broadly, Bahrain offers lessons worth examining. It, too, has a 2030 Vision, adopted more than a decade ago. It too has its designated development sectors (including logistics, education, manufacturing, tourism and finance), its designated authorities to oversee the plan, its key performance indicators for ministries and authorities, its own Crown Prince to drive the program, its eager consultants and its colourful PowerPoint presentations.

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Though often championed in discussion of the Saudi development plan, in my opinion the Dubai and Abu Dhabi models are not relevant. Most of their success is as transport hubs, which they have leveraged into short term tourism and long term real estate developments that are in large part second homes for wealthy Arabs — often Saudis. Their manufacturing activities, high tech theme parks, university campuses and so forth are almost always highly subsidised and have had very mixed results. The UAE states have very small populations of nationals, and very big low-cost expatriate workforces. This is not the direction Saudi should go. Despite its small size, Bahrain's successes and failures offer a better model for what is likely to be the Saudi experience.

Manufacturing, construction and agriculture

I doubt manufacturing will create a large number of new jobs for Saudis. Nor are non-oil mining industries or agriculture likely to be the basis of the new Saudi private economy. Mining is usually a high tech industry, pays good wages, and encourages skills, so in those respects is attractive. McKinsey claims that non-oil mining and processing can triple its current 3% contribution to GDP and employ an additional 500,000 Saudis. But, like manufacturing, the better mining is, the fewer the people it employs. Even in Australia, a big mining country, fewer than 4% of employees are in the business. Mining accounts for 8% of Australian GDP (which is roughly twice Saudi GDP) but in total employs less than half the number of workers McKinsey says could be added to the Saudi nationals workforce engaged in non-oil mining and processing. Even throwing in some additional jobs for processing, half a million additional jobs seems to me highly unlikely.

So too for agriculture. If agriculture is going to be globally competitive, it won't employ many people. Australia is a big producer of wheat, meat and other food and fibres for the world market, but less than 1% of Australians employees work in agriculture.

Construction? It is already a very big business and with a $US4 trillion investment program it will become much bigger. As McKinsey points out, nine tenths of the jobs are filled by expatriates. The consultancy firm thinks Saudi nationals could be persuaded to take on construction work. But this is hard, hot, sometimes dangerous work, and not well paid. It is unlikely Saudi nationals will be a significant part of the construction workforce.

Petrochemicals, defence and tourism

Petrochemicals is one business at which Saudi is already successful, which also means room for expansion is limited. McKinsey says it might employ 'thousands' more Saudis, which sounds about right. It won't make a dent in overall number of jobs needed.

Defence is to be one selected industry, according to accounts of Prince Mohammed's thinking. With Saudi's huge defence spend there are probably possibilities there. They are likely to be in servicing, repair and maintenance, or perhaps in the manufacture of some parts as an offset arrangement with major American defence suppliers.

Islamic tourism is another. Saudi of course has vast Islamic tourism already through the Hadj; probably more than it really wants. Non-Islamic tourism could grow quickly from a small base, but its scale is limited by the need for female tourists to cover up, the ban on alcohol, and the want of sufficient variety in its attractions to warrant repeat visits. Bahrain is much more liberal but even so, the overwhelming majority of its tourists are actually from Saudi. McKinsey specifies that a bigger tourism sector could employ an additional 1.3 million Saudi nationals. Perhaps it could, but if the experience of Bahrain in trying to employ Bahraini nationals in low wage tourism jobs is anything to go by, it won't.

Service industries should be the focus

So that leaves other services, which is where Prince Mohammed and his advisers ought to start. Service industries are the predominant form of output and employment in all advanced economies. They are usually the fastest growing sector in developing economies and China is now the most conspicuous example. They exist across a whole spectrum of skill requirements, from easy entry-level jobs in retail and fast food, fitness and training, through to highly skilled and rewarding jobs in IT services, health, education, finance, law, accounting, and so forth. Bahrain has successfully created a regional finance industry that now rivals oil processing in its contribution to GDP.

These are jobs and industries that depend more than most on human capital; that is, education and work skills. This will be Saudi's big problem and Prince Mohammed's most difficult political task. Again, Bahrain offers some good examples with its more liberal, modern and accessible education system, though the quality remains patchy. In Bahrain it was increasingly apparent that education and training was the key to ultimate success — and that takes time.

Finally and most importantly, it was evident in Bahrain that the success of a plan requires big changes in attitudes towards work and in social rules, in the relative balance between the foreign and local elites, and between commercial and political elites. But success also depends on political stability and the ability to execute a plan over a long period.

All that said, Saudi is a very wealthy economy with many advantages compared to Bahrain.

If it is united and resolved, the ruling family can mobilise the resources necessary to transform the economy. Unlike Bahrain, it can run large fiscal deficits for a very long time. There is a reasonable chance Saudi will be a very much bigger economy in a decade, with a much higher proportion of Saudis employed in reasonably good private sector jobs, with higher workforce participation by women and higher average levels of education and training. Unlike the UAE, Saudi has a substantial population of nationals.

Unlike Bahrain — unlike most countries, for that matter — the Saudi ruling family has at its disposal sufficient revenues for sufficiently long to pay for the additional education and training which will be needed, and to support a share of the investment in physical infrastructure that will be required. It has sufficient revenue to continue to provide for the retirement of older Saudis while accustoming younger Saudis to a more demanding working life. It has sufficient revenues to continue to support good health services and urban services, and it can probably do so for some years without needing to impose additional taxes.

The Vision 2030 plan's targets are probably way too ambitious, but even a partial achievement would take Saudi a long way down the path it must sooner or later take if it is remain a cohesive society with claims to regional leadership, able to fulfill the ambitions and potential of its people.

Photo: Jordan Pix/ Getty Images.

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Former president Suharto's party this week ended a bitter leadership struggle and pledged its support for Jokowi's government. Meanwhile, police and military figures lashed out at a perceived resurgence of communism in Indonesia, and the Jakarta governor considered the tourism potential of the Ciliwung River, known as one of the most polluted waterways in the world.


Donald Trump with Setya Novanto in 2015. (Getty.)

Setya Novanto became the new leader of the Golkar party on Tuesday at a national congress in Bali. The extraordinary congress was called to end a crippling rift in the party between supporters of Aburizal Bakrie and Agung Laksono, who both staged their own congresses late last year and were respectively elected as party chairman by their factions. But the new party leader is not without his own set of controversies. Setya in recent months has been implicated in a raft of cases involving US miner Freeport and Donald Trump, as well as other local corruption scandals.

Setya resigned as House Speaker last year after allegations emerged that he attempted to broker a US$4 billion deal with Freeport in exchange for assurance of the company's contract extension in Indonesia. President Jokowi and his coalition strongly condemned Setya's case at the time, which became known in the media by the name Jokowi jokingly gave it, as the papa minta saham ('papa wants shares') scandal. But one of Setya's first announcements as party leader was to pledge support for Jokowi's administration, moving Golkar away from the opposition Red-and-White Coalition led by Prabowo Subianto's Gerindra party. 

If the Freeport scandal didn't recommend Setya as a party leader, perhaps it was the glowing endorsement from Donald Trump, who introduced the Indonesian lawmaker at a rally in the US last year as 'one of the most powerful of men and a great man'.

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Golkar didn't seem too impressed by the endorsement at the time, and especially not by Setya's flattered response that Trump was also highly regarded in Indonesia. An apology for Setya's behaviour issued by Golkar revealed a very different impression of Trump as 'anti-Islam' and a 'racist'.

Away from the Bali congress, police and military this week continued a campaign against a so-called leftist resurgence. Defence Minister Ryamizard Ryacudu warned of a 'rise of communism' in Indonesia, calling it a 'sign of treason'. The military in recent weeks has seized books and detained citizens alleged to be spreading communist propaganda. The basis of detention in some cases has been for wearing T-shirts featuring the hammer and sickle — in one case on a memorabilia T-shirt for local metal band KREATOR, and in another case on a T-shirt for Pecinta Kopi Indonesia,the 'Indonesian Coffee Lovers' community, whose initials mirror that of the banned Indonesian Communist Party, PKI. President Jokowi and the National Police have warned against overreaction to the perceived threat.

Paranoia seems to have sprung up about the return of communism to Indonesia following the controversial National Symposium on the 1965 Tragedy in Jakarta last month. The symposium was the first of its kind to be hosted by the Indonesian government, giving much-needed state recognition to victims of the killings and their families. The symposium team this week announced that it was ready to submit recommendations to the government regarding a reconciliation process.

But some anti-communist mass organisations have rejected the state's move toward recognition of the tragedy, promising to hold their own rival symposium in Jakarta in June. Resistance to the government's handling of the historical issue has been stoked by the military, which has been blamed in reports for orchestrating the mass killings in 1965-66.

Elsewhere in the capital, governor Ahok has been floating various ideas for revitalising the Ciliwung River, Jakarta's largest waterway and one of the most heavily polluted in the world. Choked at various points by garbage and flanked by slum settlements on its banks, the Ciliwung River could be surrounded by green spaces, populated by boats and even become a tourist destination for Jakarta, Ahok says.

The governor is continuing contested efforts to clear Ciliwung's banks of informal settlements, moving residents into government flats in other parts of the city and reclaiming land for green space and flood reduction strategies. However, after surveying the river by boat this week, the governor conceded that on reflection, water transport could be an impractical goal.

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This two part series considers Saudi Arabia's ambitious plan to transform its economy. Part 1 looks at the reach of the Vision 2030 plan and labour force implications, Part 2 will examine which industry bets are most likely to pay off.

Though he is yet to reveal the details of the plan, Saudi Arabia’s deputy crown prince Mohammed bin Salman has excited world attention with his Vision 2030 announcement for the oil-exporting giant. It is important for Saudi, and important for the rest of us. The oil giant is at the beginning of a vast economic change that must, if it is successful, also profoundly change Saudi society and politics. Even failure will bring changes, perhaps bigger ones. As Saudi changes over the next decade or so, it will change regional and then global political calculations.

This was apparent in the recent sweeping cabinet reorganisation in the Kingdom, explained as a necessary preliminary to executing the new plan under younger officials more closely aligned with Prince Mohammed. The cabinet changes are merely a portent of bigger changes to come.

Vision 2030 is ostensibly for a Saudi Arabia no longer dependent on oil, which now accounts for four fifths of its government revenue, more than a third of Saudi’s economic output — and a large part of its influence in global and regional politics. Far more importantly, however, the plan is for a new private sector economy which provides good jobs for Saudi nationals.

To realise Vision 2030, Saudi would have to become a very different society, in quite a short time. Were the plan successfully implemented, Saudi would have one of the best educated and wealthiest workforce in the Arab world, an economy equivalent to those in Western Europe in its standard of living and industry mix, the freedom to pump or conserve its oil resources as it chose, and a secure state resting confidently on the willing consensus of its people.

It is very difficult to see any of those outcomes being attained even partially without big changes to Saudi’s cultural values, way of life and political organisation.

While Prince Mohammed has not revealed many details, a report published by the McKinsey Global Institute (with input from the McKinsey Riyadh office) last year titled 'Saudi Arabia Beyond Oil' offers some clues to what is likely to be in the detailed plan. As an economist moving around the Gulf rapidly becomes aware, McKinseyism is pervasive among the regions’ planning authorities.

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By the numbers

The McKinsey plan's  central and stunning call is to double GDP over the next 14 years through a $US4 trillion investment program. That eye-popping figure is about five times Saudi’s current GDP and also about five times its current net liquid reserves. Over the 14 years, investment alone would account for around one third of Saudi GDP by expenditure. Most of the investment is expected to come from private sources, but even so, McKinsey’s plan to double GDP calculates that Saudi’s liquid reserves are wiped out. Under the plan, net government debt in 14 years would be nearly as big as net liquid assets today.

As ambitious as it sounds, the McKinsey plan is not entirely daffy. The Kingdom already invests over a quarter of GDP, and has for some time. The new plan would increase investment by about a third over current levels. The targeted 4.5% rate of output growth sought in the plan is not far above the average rate over the last decade, excluding the downturn in the Global Financial Crisis. The centrepiece of what we know of the Saudi plan so far — the creation of the world’s biggest sovereign wealth fund — is entirely plausible. It can and will be achieved automatically simply by re-designating the Saudi oil producer, Aramco, to be the fund’s central asset. Depending on assumptions about the future oil price and future bond rates, it may be worth at least $US2.5 trillion; very much more than the combined total of the next two biggest sovereign wealth funds, those of Norway and Abu Dhabi.

Even so, it is still a big ask. As McKinsey points out, the investment required is about three times the investment in the Saudi economy in the ten years to 2013, which was three times investment in the previous ten years.

And even if the pace is not quite as quick as the McKinsey plan specifies, implementation on any large scale presents difficult issues for Riyadh to manage.

A new private sector economy

The goal of the plan is not just to double GDP. It is to double GDP by creating industries that employ Saudi nationals in the private sector. Today there are around eight million foreign workers in Saudi, mostly in the private sector. That is close to the size of the workforce of Saudi nationals, mostly employed in the public sector. To succeed, the plan must create a new private sector economy capable of employing most Saudis who want to work. Only a very small share of the jobs can be created by ‘Saudiisation’ of jobs now held by expatriates, because all but an insignificant fraction of those expatriates are low wage guest workers. Saudi’s don’t want and won’t work in those jobs.

The employment of millions of Saudi nationals requires a new economic structure. But first of all the physical infrastructure of that new economy has to be created. Paradoxically, the regional experience tells us this will require a huge increase in the expatriate labour force. Saudi needs to first construct the offices, warehouses, shopping malls, schools, hospitals and factories required to double output, and the telecommunications, railways, roads, water and energy utilities needed to service the new facilities. That is where a big chunk of the $US4 trillion in investment will be spent. Inevitably, much of it will find its way back to India, Pakistan and Bangladesh as employee remittances, and to the big contractors in the US, Europe, Japan and perhaps China.

Almost all of the required army of construction employees will be low-wage and largely unskilled migrant workers, as is true throughout the Gulf. This is sensible and appropriate because a construction boom is by definition temporary. Even so, the most evident and immediate result of a program to create jobs for Saudis will be to create them for non-Saudis. It is also highly likely that recorded labour productivity across the Kingdom will fall as find the labour intensive construction sector booms compared to other sectors. Saudi has got used to a large migrant labour force. In the next decade or so it will have to get used to a vastly bigger one.

Under the McKinsey proposal most of the investment would be private, and to a large extent foreign. Overall, foreign ownership would have to expand quite dramatically, bringing with many more European, Chinese, Japanese and American staff. Their presence, and that of their families, will strain the conservative rules of Saudi society.

The overall goal is to employ Saudis in the new economy. To be employable in a largely private sector economy, however, Saudis will have to be educated in ways useful to a modern economy, and they will have to be convinced that the public sector jobs their fathers' now have will not be theirs. The structure of income support will have to be change to encourage job-seeking. Women are increasingly joining the Saudi economy, and a many more will be needed in the modern, complex economy sought by the plan. At a minimum, they will need to drive cars. All these requirements will chafe against the existing social rules, the alliance between the Saud family and the clerics, and the existing community support for the ruling family.  

Photo by Jordan Pix/ Getty Images

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One Belt One Road (OBOR) is just getting started, but the superlatives are flowing. OBOR 'will benefit 4.4 billion people in 65 countries' and 'according to some estimates could be more than 12 times America's Marshall Plan to aid post-second-world-war Western Europe, in comparable money-of-the-day terms.' No wonder expectations in recipient states are high. 

Within China, one million documents have been published referencing the initiative. OBOR is going to happen and official China is mobilising for this ambitious program. Words of warning are few, and muted. But in the private sector, there is scepticism. True, Chinese firms are going to win big. But one can sense a resignation that this is going to be a costly geopolitical project rather than a commercial one.

Perhaps for this reason, the authorities strain to insist that OBOR will be 'market-based' and 'lean, clean and green.' Naturally the Chinese Communist Party's definition of 'market-based' may differ from others', but the general idea is clear: the projects are broadly meant to make financial sense. And indeed, a year ago, when yuan globalisation was still on the front burner, Chinese commercial banks were reminding clients that the US$1 trillion in potential export financing would be underwritten on international standards.

But today, such prospects have been wound back. Most OBOR lending will be issued not by commercial banks (which want to be repaid) or even multilateral institutions like AIIB (which are operationally cumbersome), but by Chinese bilateral policy banks like China Development Bank and China Exim Bank. These banks, especially CDB (aka 'China's superbank' or 'the bank that saved the world') are known for their heroic risk appetite. They have spearheaded the country's epic credit expansion since 2008, and its growing overseas role.

Still, they must be a little worried to hear from credible sources that 'Chinese officials privately admit they expect to lose 80 per cent of their investment in Pakistan, 50 per cent in Myanmar and 30 per cent in central Asia.' If true, that is extraordinarily generous of them. It means Chinese development lenders are knowingly prepared to lose tens of billions of dollars from their adventure abroad. Aid, in other words.

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Or maybe not. China's bruising negotiations with Thailand to build its bullet train have 'hit a speed bump' again. China Exim Bank demanded commercial land development rights along the railway line in order to defray its exorbitant cost. 'We are not the same as Laos', came the sniffy refusal from the Thais, who say they have plenty enough money to build lucrative real estate developments. The term of art here is 'bundling.' The Chinese want a bundled deal (common for financing railways); the Thais want to unbundle.

This reveals an expectations mismatch between donor and recipient countries. Beijing's mandarins naturally want a Chinese developmental project that pays for itself — 'geopolitics with a P&L', if you like — with an appropriate 'win-win' distribution of the collective benefits. Some Chinese analysts take umbrage at the Marshall Plan comparison and its Cold War connotations. OBOR is not a charity, they argue, because China is still an emerging country itself. Recipient countries may not see it this way. To them, China appears extravagantly well funded. So they expect concessionary financing and, apparently, don't even expect to pay all of it (or even most of it) back.

The anticipated loss rate in Pakistan is telling. The CPEC corridor is of high strategic importance to China. But, traversing bandit country as it does, CPEC promises to be a savagely uneconomic affair. The security arrangements alone will be challenging. CDB also made an all-in bet on Venezuela (which is not officially in the OBOR scheme), thinking its loans-for-oil deal would provide credit protection under Chavismo. As their client unravels, the CDB bankers are renegotiating and writing down their loans.

That is not to dismiss the impact of OBOR, nor its logic. It might just be another example of the 'infrastructure gap' paradox — why the world is awash with savers' money and yet perfectly good investment projects can't get funded (hint: because private investors don't trust the governments that regulate their deals). OBOR faces an exacerbated dilemma because costs and benefits aren't internalised with one country.

The fact that China can seemingly defy infrastructure financing constraints domestically simply underscores how challenging OBOR will be. At home, Beijing's policy banks can rely on 'markets' that are rigged in their favour. And anyway, they will get bailed out if things go bad. Overseas they will not be treated so kindly, and more astute Chinese lenders know it.

Photo Getty Images

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In light of the news that Chinese fighters conducted what the Pentagon calls an 'unsafe intercept' of one of its reconnaissance aircraft flying over the South China Sea on Tuesday (according to the US, the Chinese jets flew within 50 ft of the the American plane, forcing it to descend), it is worth revisiting an Interpreter piece by eminent American security analyst Bonnie Glaser from September last year on the then-newly agreed US-China accord on 'Rules of Behavior for Safety of Air-to-Air Encounters.'

It was an agreement which was supposed to put a stop to these kinds of incidents. Here's one interesting extract from Glaser's piece:

Especially noteworthy is the section that establishes responsibilities for aircraft when an intercept takes place. According to the agreement, the aircraft commander initiating the intercept should maintain safe separation while the operator of the aircraft being intercepted should avoid reckless maneuvers. The distance between aircraft that constitutes safe separation is not spelled out; rather it is dependent on circumstances. While this is sensible, it leaves split-second decisions up to the discretion of Chinese fighter pilots, who often lack experience.

It's important to note that we so far only have the American version of what occurred on this occasion. The Chinese statement will no doubt differ.

Speaking of aerial shows of strength, the Pentagon has just released more footage of Russian fighter-bombers and helicopters buzzing a US Navy destroyer in the Baltic Sea on 11 and 12 April. (H/t Alert 5.)

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China has its first big opportunity to demonstrate global economic leadership when it hosts this year’s G20 meetings. The G20 leaders’ summit will be held in Hangzhou on 4 and 5 September. So far, China looks to be taking the job seriously.

When I was in Beijing in March, I was assured that that the G20 is a top priority for China. Beijing is keen to build on the existing G20 agenda and keep a strong economic focus. Australian and US officials have commented that China’s meetings have been well organised, and Chinese officials are developing their soft power skills by seeking compromises. 

Global growth continues to be slow and the G20 has been talking a lot about structural reforms over the last few years. The problem is that each country has their own set of problems and structural reforms are difficult to sell at home

China has the chance to set an example by showing it has the willingness to undertake difficult (but necessary) economic reforms and encouraging other countries to do the same. In our G20 Monitor published today, 'New Considerations for China’s G20 Presidency', David Dollar makes the case for why reforming its service sector is the best thing that China can do for the global economy.

In my own article in the Monitor, I argue that the G20 should to go back to basics and focus on cooperation and communication, even if there is no headline-stealing outcome. The G20 has already set three ambitious targets: an intention to lift global GDP by 2% by 2018, a goal to reduce the gap in labour participation between men and women in G20 countries by 25% by 2025 and a commitment to reduce the share of young people most at risk of being permanently left behind in the labour market by 15% by 2025. 

China would do well to highlight these growth and employment targets, and put them back on track. This would reinforce the legacy of the Australian G20 presidency in 2014 and — more importantly — help to address the credibility problem of the G20’s ‘empty promises’. 

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Nicolas Véron also looks at an ongoing G20 issue in the Monitor: financial regulation. The G20's work on financial regulation after the Global Financial Crisis is accepted as one of the forum’s biggest successes. However, Véron points out that this agenda needs to continue to evolve. For example, he suggests the G20 could empower a global body with relevant membership and a clear mandate to issue standards for the global derivatives markets.

Despite China’s conventional approach to the G20, there have been a few curveballs in 2016. China has put innovation on the agenda, although there has been some kerfuffle about which Chinese ministries will be managing this work stream. Another new addition to the G20 agenda is the topic of green finance

In the Monitor, Tristram Sainsbury talks about the remarkable success of the People’s Bank of China, Bank of England and United Nations Environment Programme in getting a Green Finance Study Group established as part of the G20 Finance Track. However, he wonders about the future prospects of the Group and whether it will be upgraded to a more permanent G20 discussion.

It is only three months until the Hangzhou Summit where China will be judged for how it has handled the G20. So far, so good. Chinese officials will need to keep preparing the ground for the summit and building consensus around the commitments that will be made in September. 

The next step is for China to work on its narrative and communicate how it is progressing the G20 agenda. They could start by working on their unwieldy website.

Photo courtesy of Flickr user David Almeida.

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The victory of President-elect Rodrigo Duterte in the recently concluded Philippine election is nothing short of astonishing. The election itself, a far cry from others in recent memory, is worth celebrating.

It had the highest voter turnout recorded, and has been widely acclaimed as the most credible and peaceful presidential election in the country's history. After an incendiary campaign laced with profanity and foul–mouthed, controversial rants, the firebrand figure who captured the votes of the masses with his anti–establishment battle cry to eradicate crime, drugs and corruption, will soon be sworn in as the 16th President of the Republic of the Philippines.

The Duterte phenomenon

The rise of the brusque Duterte, the 71–year–old lawyer who was for more than two decades mayor of Davao in southern Mindanao, was not anticipated, almost unbelievable, in a country where the political system is dominated by rich, powerful dynastic families.

The Philippine electorate, afflicted with grievance politics and thirsty for change, overwhelmingly supported Duterte whose appeal crossed age groups, social class and demographics. On election day, he enjoyed a massive lead of over five million votes compared to the administration-supported candidate Manuel Roxas.  Duterte won despite having no coherent or practical national economic plan. His campaign platform offered no solid, long-term foreign policy plans. In contrast, he boasted he had two wives and several girlfriends, made a necrophiliac joke about a murdered Australian missionary, and vowed to extra-judicially kill criminals. Not suprisingly, the prospect of a Duterte presidency elicited anxiety in the business community and sent shock waves overseas. 

The Duterte presidency 

The election fever in Manila now seems to be dying down and life will soon go back to normal across the archipelago. Even Duterte's electoral victory has been magnanimously received and largely uncontested by his rivals; a rare occurence in Philippine electoral contests.

But we are yet to see if the President–elect has what it takes to run the country. What is Duterte's position on the various challenging diplomatic and foreign policy issues that confront the Philippines? Where does he stand on the issue of the South China Sea?

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The plethora of issues that await the President–elect as chief architect of Philippine foreign policy could be daunting. The series of diplomatic faux pas that peppered the Duterte campaign trail made it obvious that he is not a foreign policy maestro. His innocuous blustering statements provoked gasps — if not outrage — in various capitals across the globe.

Duterte's position on the South China Sea

The issue of the South China Sea is definitely among the most intricate foreign policy challenges facing the incoming President. Of course, his position on this issue will be predicated on his views about China. Restoring the Philippine's currently precarious bilateral relationship with China while maintaining robust security and defense relations with the US will require a delicate balancing act.

The outgoing Aquino Administration has consistently maintained a hard–line policy towards Beijing over the South China Sea dispute, and warm relations and deepening security ties with Washington and Tokyo. In the Southeast Asia, if not the whole of Asia, Manila has emerged as the most outspoken opponent of China's provocative actions, including a tense standoff over Scarborough Shoal in 2012 and the more recent occupation and development of features in the South China Sea. The former incident brought the bilateral relationship between the two countries to its lowest level since the 1995 Mischief Reef incident, prompting Manila to file an international legal case in 2013 against Beijing over its controversial nine-dash line. The highly anticipated ruling of the tribunal is expected very soon, and most analysts expect it will be unfavourable to China. 

While Duterte has indulged the public with spur of the moment histrionics, including a pledge to plant a Philippine flag via jet ski on Chinese-occupied artificial islands, his position on China otherwise appears to have been conciliatory and amicable. Election pronouncements of Duterte on China and his views on the South China Sea disputes appear to be diametrically at odds with the current design and trajectory of Philippine foreign policy on these important issues.

Duterte favours directly negotiating with China and is willing to shelve the contentious issue of sovereignty in exchange for Chinese economic concessions. He is opposed to the idea of going to war with China and does not advocate the use of legal avenues to enforce the Philippine claim. Rather, he prefers a multilateral approach that will bring rival claimants and even extra-regional powers to the negotiating table. These views, albeit not necessarily novel, do seem to signal a radical shift in Philippine-China relations. 

A pivot in Philippine-China relations

The paucity of any solid, long-term and categorical statement from the president-elect on the South China Sea — or on foreign policy in general — under his administration makes gazing at the crystal ball particularly difficult.

At best, Duterte's rhetoric suggests a more amicable and conciliatory diplomatic stance between Manila and Beijing. This could be a good thing. The two countries could focus their energy and resources on infrastructure and economic activities that are mutually beneficial. On the other hand, the softening of Manila's stance against an increasingly aggressive and expansionist China could expose cracks in the unstable regional security architecture, and further weaken concerted efforts of extra-regional powers such as the US and Japan to counterbalance China's provocative military posturing. Manila's actions could also subvert ASEAN initiatives to rally behind a unified position. A rapid shift in regional defence postures could also increase the risk of miscalculations and provocations on the ground, and undermine longstanding efforts to reinforce a rules-based approach to resolving South China Sea disputes.

It is always difficult to predict how incoming leaders will act. The unpredictable and volatile nature of this Pesident–elect makes it even harder to calculate such positions.

The tribunal is expected to make a ruling before Duterte is inaugurated on June 30. This is likely to provide the first litmus test of where the populist strongman stands on this matter. The Chinese Government has repeatedly confirmed that it will disregard the tribunal ruling. 

Next year the Philippines assumes chairmanship of ASEAN, providing another occasion on the not–too–distant horizon to test Duterte's position on the South China Sea.

The competing claims on the South China Sea have made its waters rather turbulent in recent times. But hope always remains buoyant. And the man of the hour is incoming Philippine President Rodrigo Duterte.

Photo by Dondi Tawatao/Getty Images

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By Alastair Davis, an intern in the Lowy Institute's Melanesia Program.

  • Police are patrolling the two main campuses of the University of Papua New Guinea in Port Moresby following a two week protest by students calling for the resignation of Prime Minister Peter O’Neill.
  • The Lowy Institute is hosting our first GE Papua New Guinea Emerging Leaders Dialogue Fellow, Jessica Siriosi, who will be writing for The Interpreter on Bougainville in the coming week. 
  • Devpolicy ran an analysis of the Australian Senate inquiry into Australia’s bilateral aid program in Papua New Guinea, which can be found in full here.
  • The Fiji Times has launched a legal challenge against the decision by the Fijian Government to award an exclusive contract for the publishing of government notices to the other major Fijian newspaper, the Fiji Sun.
  • Biman Prasad, the leader of the National Federation Party, the smaller of the Fijian opposition parties, has been removed as the chair of the Public Accounts Committee and replaced by government whip Ashneel Sudhakar.
  • The postponed Melanesian Spearhead Group Leaders Summit will take place in Papua New Guinea next month, not Vanuatu as was originally planned. Filling the vacant role of director general of the secretariat is likely to be addressed at the summit.
  • The first group of countries to ratify the Paris Climate Agreement are all small island nations. The Pacific Islands Forum Secretariat is developing a regional strategy to manage climate change and human mobility in the Pacific.
  • This piece from Devpolicy explores the growth of temporary labour migration from the Pacific to New Zealand.
  • Bal Kama also wrote for The Interpreter on the student protests in PNG protests, explaining the context of student activism in Papua New Guinea and the potential outcomes of the current situation. A news report from NBC PNG also provides an excellent overview below:

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Election Interpreter 2016

Fairfax's Daniel Flitton today identifies four important areas of foreign policy difference between Labor and the Coalition: the East Timor boundary dispute, nuclear abolition, freedom-of-navigation exercises in the South China Sea, and Israel-Palestine.

I  wonder if we saw a fifth factor open up yesterday with Opposition Leader Bill Shorten's criticisms of Donald Trump: 'I have to say that if I was in America I'd be voting for Hillary Clinton...Whoever America elects we'll deal with, but there is no doubt in my mind that Trump would be very difficult, I think, to deal with.'

Foreign Minister Julie Bishop responded in what struck me as rather unwise terms, by putting herself in the position of seeming to defend Trump: 'Mr Shorten should explain the precise areas of difficulty that he believes would arise from a Trump presidency.'

I suppose Shorten could start with Trump's comments on Japanese nuclear weapons. But really, the point is not so much policy as it is character, temperament and basic suitability for high office. Australians have made it clear through Lowy Institute polling that they share these doubts about Trump, with 45% saying 'Australia should distance itself from the United States if it elects a president like Donald Trump', so Shorten is on pretty solid ground (unlike John Howard, who was pulling against the prevailing mood when he criticised then-Senator Obama in 2007).

The US-Australia alliance has always been more than a practical arrangement for common security; it is also based on deep cultural affinities and historical ties. But as I've argued previously, in Australia in recent years it seems to have evolved (or perhaps calcified) into an ideology, a political totem before which anyone with pretensions to being politically mainstream must genuflect.

Yesterday we hosted Greens leader Richard Di Natale, who made made some stinging criticisms of the alliance. I have a number of reservations about the Greens' foreign policy ideas (I mentioned one in my question to Di Natale yesterday; listen from listen from 37:23), but the unhinged reaction to Di Natale's remarks from sections of the media, and Bishop's response to Bill Shorten's comments, reinforce the point about the totemic status of the alliance.

If there is a silver lining to the Trump phenomenon for Australia, it may be that this ideology will be subjected to some overdue scrutiny.

Photo by Ricky Carioti/The Washington Post via Getty Images

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