Lowy Institute

President Barack Obama finally has authority from the US Congress for advancing the Trans-Pacific Partnership (TPP), a signature foreign policy of his final term in office. The TPP aims to establish a free trade zone around the Pacific Rim covering 40% of the global economy, while excluding China.

The future of the agreement had been left in doubt after the President's own party initially voted against granting him trade promotion authority, with some members now vowing to defeat the TPP itself. For Australia, the episode is thus not a story of success, but of the ongoing obstacles Congress poses to coherent American leadership in the Asia Pacific.

US officials focusing on the region repeatedly proclaim a 'rules-based order' as the necessary bulwark against China's rising power. For Obama, 'strong and sustained American leadership is essential to a rules-based international order.' Australia has followed suit, with Defence Minister Kevin Andrews declaring that: 'Notwithstanding China's growth, the United States will remain the single most important country in enforcing a rules-based order.'

In his 2015 State of the Union address Obama directly linked passage of the TPP with halting China's desire 'to write the rules for the world's fastest-growing region.' His recognition that 'we should write those rules' is nevertheless being frustrated by Congress, which has proven itself either unconvinced of the importance of the task, or unable to recognise that US-centred rules are founded on a half-century of American primacy in the Asia Pacific that is now being challenged by China.

The precarious future of the TPP follows the creation of the Chinese-led Asian Infrastructure Investment Bank (AIIB), in the face of US opposition. The AIIB was established in part as a response to Congressional refusal to grant China more representative rights in global financial institutions. Likewise, the US Senate continues to obstruct the UN Convention on the Law of the Sea (UNCLOS), even as America now seeks to enforce freedom of navigation rules in the South China Sea.

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China's construction of artificial islands in the South China Sea is perhaps the most prominent example of the way power is being contested at the level of international legal rules. Under UNCLOS, artificial islands do not attract the same rights as a natural land feature, which would include the right to control sea and airspace out to 12 nautical miles. China has nevertheless attempted to enforce these rights against American 'freedom of navigation' operations in which US aircraft deliberately challenge purported Chinese airspace.

The American claim to be acting in defence of impartial maritime rules is weakened as long as the US itself refuses to ratify UNCLOS. For Obama it is clear that 'ongoing failure to ratify this Treaty undermines our national interest in a rules-based international order.' Defenders of US policy claim that the US already accepts rules pertinent to the South China Sea as established customary international law, while the treaty improperly creates additional obligations in relation to resource exploitation. Yet the legitimacy of taking action under a rules-based order derives from the clear acceptance of legal constraints, rather than the selective application of rules that constrain others.

Responsibility lies with Congress, with every president from George HW Bush onward supporting ratification as consistent with American global interests. Likewise, the most recent Chicago Council on Global Affairs' survey of American leaders confirmed not only universal support among Democrats but solid majority support among Republican leaders. As such, the incoherence in US regional leadership can be traced back to failings specific to the US Senate.

China's artificial islands have been described as 'unsinkable aircraft carriers' that allow the projection of military power far from China's mainland. It is therefore telling that US Defense Secretary Ashton Carter has argued that 'passing TPP is as important to me as another aircraft carrier.' Carter's phrasing was a reminder that the TPP remains necessary in geo-strategic terms if the US is to 'promote a global order that reflects both our interests and our values.'

The US Congress remains an unreliable partner in this strategy, beholden to competing ideological and institutional concerns. Some reservations about the TPP may well have a legitimate domestic basis, while resistance to UNCLOS probably owes more to populist fears about guarding US sovereignty. In either case the alternative is increasingly conspicuous reliance on brute force to sustain the status quo. Conversely the Chinese are steadily increasing their capacity to promote interests through rules.

A future US Congress may ratify UNCLOS, but possibly not until the motivation of containing China is so transparent as to destroy the benefits of doing so. Likewise, faltering on the TPP has increased incentives for China to establish its own financial order – Australia formally joined the AIIB this week.

The objective of establishing a rules-based regional order is a worthy one capable of delivering greater security and prosperity to all. But American allies can take nothing for granted while Congress acts as if setting regional rules is divorced from the underlying contest for regional power.

Photo courtesy of Flickr user Speaker John Boehner.

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Yesterday's announcement of an Australia-Singapore Comprehensive Strategic Partnership (CSP), on the cusp of Singapore's 50th anniversary celebrations, has significance beyond the bilateral relationship. The bundling together of several new economic, law enforcement and security memoranda during Prime Minister Tony Abbott's visit to Singapore amounts to a surprisingly broad agenda, passing the 'comprehensive' test. In what sense might it also be worthy of the over-used 'strategic' tag?

By pursuing closer security relations with Singapore, Canberra is displaying good strategic sense. Reliable partnerships are increasingly hard to come by in Southeast Asia, given a region-wide malaise of domestic introspection and distracted political leadership. So the CSP should be recognised as steadying the tiller of Singapore-Australia bilateral ties, which have had their ups and downs over the years.

The signing of a memorandum of understanding (MoU) on counter-terrorism is an easy win, drawing on the symmetry between the two governments' upfront emphasis on the ISIS threat, and largely compatible approaches towards de-radicalisation. Separate agreements to deepen bilateral cooperation against money-laundering and transnational crime could have multiplier effects, given Singapore's importance as a financial hub and as host to Interpol's Global Complex for Innovation.

Of more strategic significance, the CSP will see an expansion of defence engagement under a new cooperation agreement to be fleshed out by July next year.

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Bilateral engagement with Singapore, arguably already Canberra's deepest defence link in Southeast Asia ( according to Benjamin Schreer), is set for a further expansion of the Singapore Armed Forces (SAF) army and air force training in Australia. This is likely to fall in synch with the release of Australia's 2015 defence white paper in the coming months and the anticipated commitment of additional resources to defence engagement in Southeast Asia.

Singapore and Australia already exercise together regularly through the Five Power Defence Arrangements. However, one clear advantage that marks Singapore apart as an Australian defence partner in Southeast Asia is its comparably advanced military capability. Without the need for any capacity-building element, the SAF and the ADF have many more options for exercising and operating together at the higher end, and for pursuing defence industrial cooperation. For the army this includes amphibious force development, as suggested by the pattern of recent exercises. Singapore will, almost certainly, become the only Southeast Asian country to operate the Joint Strike Fighter, opening up opportunities for advanced air force cooperation as well as potential economies of scale in the maintenance and upgrade of this exorbitantly expensive platform, which will be essential to managing its life-cycle costs.

The bilateral defence relationship certainly has room for growth. Despite the impressive scale of Singapore's military activity within Australia through the annual Wallaby exercise, which involves 5000 Singaporean personnel and 300 SAF platforms, Singapore's defence engagement with Australia is thinner than these numbers suggest. Its priority has been to maintain access to Australia's Shoalwater Bay training area, where the SAF has a rare opportunity to practice large-scale combined operations and live firing. But often the SAF is effectively exercising with itself. As part of a general trend towards cross-bracing Australia's defence relations across the Indo-Pacific, the ADF should be aiming to leverage more joint engagement with Singapore from the enhanced defence cooperation agreement, including trilateral opportunities with the US. Australia also benefits from continued access to Singapore's military ports and airfields.

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

Although he was also asked if 'Indonesia has pushed both Singapore and Australia into a closer relationship', it would be wrong to paint the CSP in such a reactive light. In his speech, Lee went out of his way to give Abbott credit for taking a personal lead in developing the CSP initiative since 2012. Nevertheless, the subsequent deterioration in Canberra's ties with Jakarta has made Singapore all the more important for Canberra, not as a counterweight but as much-needed diplomatic ballast to compensate for Australia's over-dependence on Indonesia's goodwill. Jakarta will remain Canberra's most important relationship in Southeast Asia, but the perils of placing too many eggs in one basket over recent years have become apparent.

If there is a downside to the CSP, it is that liberal-democratic credentials could be inferred as a diminished consideration in Australia's choice of strategic partners in Southeast Asia, notwithstanding Tony Abbott's appeal to 'common values and instincts' with Singapore. That, unfortunately, is as much a sad reflection on the state of the region as on pragmatism determining Canberra's preferences.

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With the signing of the AIIB's Articles of Agreement in Beijing yesterday, how is the Bank shaping up? Here are some key things that struck me reading the Agreement:

Membership

The Bank's members are split into two groups: regional and non-regional. Regional members include those countries classified by the UN as being in Asia or Oceania. So that extends to Central Asia and the Middle East, as well as Pacific Island countries, if they were to join later.

Regional members contribute 75% of the capital. The largest contributors are China, India, Russia, South Korea, Australia, Indonesia and Brazil. Of the non-regional members, Germany, France and the UK will contribute significant capital.

Voting shares are calculated through a complex formula. The Articles of Agreement don't state the breakdown of voting rights, although Chinese media has said Beijing will have 26.06%. This will give it effective veto power, as the Bank's high-level decisions (eg. on capital, membership, operations) will require the support of at least 75% of the votes. According to the SCMP, China will be followed by India (7.5%), Russia (5.92%), Germany (4.15%), Korea (3.5%) and Australia (3.46%).

Capital subscriptions are to be paid in 20% installments over five years. These can be paid in US dollars or other convertible currency (which the Bank can convert into US$ at any time). Special provisions are made for 'less-developed countries', including the option to pay up to ten installments, or to pay up to 50% of the subscription in their own currency.

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Operations

The Bank can provide financing to its members (governments, agencies or enterprises) or to international and regional agencies operating in member countries. (There are also special circumstances in which the Bank may provide assistance to non-members.)

Assistance will primarily be in the form of direct loans, investment in equity capital and technical assistance. Terms and conditions of financing, including interest rates and length of repayment, will be determined in each case, and will of course depend upon the AIIB's credit rating. Financing can be provided in the currency of the country receiving the loan, if necessary. This may be well-received by some countries who struggle with the currency fluctuations associated with paying back China Eximbank loans in RMB.

There will be an open procurement policy, meaning goods and services (and companies) from non-member states can be engaged in AIIB-funded projects. This is different to the Asian Development Bank. (It also means that those countries that jumped on board at the last minute in order to make sure their companies didn't miss out on opportunities could have gained that advantage without joining.)

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

There is also a stress on collaborating with existing multilateral and bilateral development institutions. The European Bank for Reconstruction and Development has already put its hand up, with its president ready to propose joint projects to get underway next year. 

Governance

The Bank will have one president, and one or more vice-presidents. (I'm assuming these positions will actually be open to men and women, even though the English version uses the male pronoun.)

Each of the members will have a representative on the Board of Governors. The governors will elect the Board of Directors: nine representing regional members and three representing non-regional members. Directors will represent all members who voted for them, and will serve for two years. They will be responsible for the general operations of the Bank.

Importantly, neither the governors nor the Board of Directors will be paid, and do not need to be resident at the Bank's headquarters (in Beijing). This is part of China's aim to make the Bank more efficient than its counterparts.

Next steps

The Articles of Agreement will enter into force (and the AIIB will become operational) once at least 10 signatories whose capital subscription comprises at least 50% of the total have deposited their 'instruments of ratification, acceptance or approval' to the Government of China. And then, the eyes of the world will be watching China to see how it manages this new leadership role. It won't be easy.

Photo by Flickr user Steve Webel.

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There is heightened speculation in Turkey about a long-debated military intervention in northern Syria, where Kurdish forces are battling militants from ISIS.

Both pro- and anti-government newspapers are reporting that Turkey is mulling sending up to 18,000 ground troops into Syria. The two countries share a 500km border, where fighting has come within a stone's throw.

Late Monday, Prime Minister Ahmet Davutoglu said Turkey would consider 'all necessary measures' to secure its borders. But the Government is yet to comment publicly on reports that ground troops would be sent in. Sources close to the Government say the idea is being seriously considered at a national security conference held on Monday and Tuesday this week, and that an announcement is expected in coming days. 

Any intervention on the part of the Turks would likely be aimed at frustrating efforts by the Kurds to establish their own statelet in Syria. Turkey and Kurdish forces from the PKK have been locked in a decades-long conflict, and Kurds in Syria hope to establish an autonomous zone in the north-eastern part of the country, potentially galvanising separatist sentiments among their counterparts in Turkey. 

In a fiery address on Friday, Turkey's President, Recep Tayyip Erdogan, accused Syrian Kurds of ethnic cleansing and said: 'We will never allow the establishment of a state on our southern border in the north of Syria.'

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Turkey has long pushed for the creation of a 'buffer zone' along its southern border with Syria, but has failed to secure international approval, partly due to its stance against the Kurds who, with the help of US air cover, have proven the only force capable of pushing back the advance of ISIS. The Kurds engaged in intense fighting against ISIS to secure the border city of Kobani, and have advanced east towards Tel Abyad, potentially giving them a 300km stronghold on Turkey's doorstep. 

But such a bold and unilateral move by Turkey could complicate an already crowded battlefield. While a large scale-state intervention could serve as a much needed 'strong hand' in Syria, Turkey risks direct confrontation with the Kurds as well as the Assad-led Syrian military. It could even face retributive attacks by ISIS itself.

There are political risks at play as well.

The ruling AK Party sought to renew its parliamentary majority earlier this month in Turkey's general elections, but instead the Party suffered damaging losses, losing its majority and resulting in a hung parliament. The biggest winner in the election was the pro-Kurdish left-wing Peoples' Democracy Party, which secured about 80 seats in the 550-seat chamber. The Government will have to negotiate a coalition, probably with extreme nationalists, or call a fresh election.

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

Photo courtesy of Wikipedia Commons.

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Photo courtesy of Lee Hsien Loong's Facebook page.

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By exploiting the lonely, that's how. The video below is from the New York Times, with accompanying story here.

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For those who missed the press coverage over the weekend, the Greek Government has scheduled a referendum for Sunday (5 July), with the Greek population being asked a bizarre question: will they accept the latest creditor proposal, of 25 June, which details the terms of an extension of the Greek bailout package?

Why bizarre? Greece needs to repay a €1.6 billion loan to the International Monetary Fund by Tuesday (30 June), and the bailout package Greece is meant to receive from the Eurogroup will expire on 30 June. So by referendum day, the conditions underpinning the terms the Eurogroup extended for its package will have fundamentally changed. In short, the referendum will be based on a meaningless and out-of-date question.

If Greece does miss its payment, the IMF board will probably enact its normal process for dealing with payments in arrears. This does not necessarily represent a technical default in the eyes of credit agencies, but Greece will find it harder to negotiate with creditors.

In the face of an intensifying bank run, the Greek Government has had to close its stock market, declare a bank holiday and impose severe capital controls (a maximum of €60 can be withdrawn from an account in one day and overseas transfers of cash are prohibited, aside from vital pre-approved commercial transactions). These developments will likely result in economic conditions in Greece deteriorating quickly in the coming week.

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The broader international effects of these developments remain unclear.

The risk of contagion certainly looks lower than in the European crisis of 2010, not least due to the creation of European rescue facilities, the presence of quantitative easing, statements from the ECB, and the fact that Greek money is owed primarily to official creditors rather than the private sector. However, the question of whether the international community is able to escape all of the short-term pain, and whether it has identified all of the channels of risk, is likely to be tested in the coming days.

It also remains unclear what the next steps will be in the event of either a 'yes' or a 'no' vote. The best that can be surmised is that a 'no' makes the case for a Grexit that much stronger. In contrast, a 'yes' vote would suggest that a new negotiating team would be needed, given the ruling Syriza Party is actively opposing a 'yes' vote and does not want to return to the European negotiating table.

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

Granted, the Greek Government has not handled the negotiations well. But the Eurogroup's truly remarkable list of conditions cover the entire economic policymaking gamut from VAT reform, fiscal structural amendments, pension reform, tax reform, the financial sector, labour markets and competition reforms. The tough-love approach by the troika (the European Commission, IMF and ECB) invites comparisons with the disastrous programs such as the German reparation payments after World War I and the 1998 IMF program for Indonesia, and raises questions about whether the international community is learning from past mistakes.

As the former British cabinet minister Alan Milburn said at the end of the ABC's powerful The Killing Season, 'No one can escape blame for this'.

Photo by Flickr user Duncan Hull.

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When we get enough perspective to write a balanced history of the 2008 global financial crisis and the subsequent feeble recovery, fiscal policy mistakes will surely feature largely in the narrative. In the form of a new IMF paper, we are beginning to see that history taking shape, and with it a clearer idea of what fiscal policy should have done.

After a bold start with the G20-coordinated fiscal stimulus of 2009, the Greek crisis at the end of that year (and the knock-on crises in Ireland, Spain, Italy and Portugal) shifted the focus onto excessive public debt. Instead of making a distinction between these grossly over-indebted countries and others in which the debt was easily sustainable, there was a universal shift to budget tightening in the advanced economies, urged on by all the international economic agencies – the IMF, the OECD and the Bank of International Settlements. The result of this fiscal austerity has been a pathetically weak recovery which has left per capita GDP in quite a few advanced countries not much higher than it was before the crisis, seven years ago.

Some of the IMF's most heterodox thinkers have now begun to make this distinction, which was missing in the rush to austerity in 2010. The full paper is here, but a more accessible version is here

To make sense of the complexity involved in fiscal policy, the authors separate the debt analysis from the heated debate about Keynesian stimulus versus fiscal austerity (whether budget deficits boost the economy through the usual Keynesian stimulatory effects, or alternatively whether a round of fiscal austerity would work better by boosting private sector confidence). Instead, they focus just on the debt.

Should countries that find themselves, post-crisis, with a substantial increase in debt make it a matter of priority to get this debt down?

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

They offer the graph below, which identifies the countries with 'fiscal space'.  It's worth noting that in an international comparison, Australia's public debt level is modest and its fiscal space large. You might wonder why the political-economy narrative here is centred on getting the budget into surplus.

Not that this Fund paper is in itself a sufficient basis for policy. To start with, its analytical simplifications need to be taken into account. And there are many other aspects of fiscal policy that need to be considered.

Why not, for example, use the opportunity of low interest rates and spare productive capacity to issue more debt to fund socially profitable infrastructure? Such debt liabilities would then be balanced by the infrastructure assets. If the latter are well chosen, the government's net debt position is stronger, not weaker.

The fiscal rethink at the Fund is also exploring how to make automatic fiscal stabilisers work better so that governments don't simply spend the extra revenue that accrues to them in the cyclical upswing (or, more typically, offer vote-winning tax cuts), but instead put it aside to cover the fall in revenue and extra social expenditure that accompany the downturn of the cycle. The ABC's just-screened The Killing Season touched on the lamentable story of how we fumbled the opportunity to put in place the key element of strong automatic stabilisation in the form of a counter-cyclical super-tax on our minerals industry.

The influence of the Fund's analysis is strengthened because this rethink comes from such a fiscally conservative institution (it's often said that IMF really stands for 'it's mainly fiscal'). Better late than never.

Photo courtesy of Flickr user International Monetary Fund.

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  • Africa's moment to lead on climate change: a Washington Post op-ed from Kofi Annan and Robert Rubin.
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Three terrorist attacks carried out by within hours of each other in Kuwait, Tunisia and France over the weekend raise questions about the degree of coordination between them and whether these attacks have broader implications. At the moment, ISIS has claimed responsibility for the Tunisian and Kuwaiti attacks but has remained silent on the apparent 'lone wolf' attack in France. The timing of the attack reflects the fact that ISIS has called for attacks during Ramadan; the first anniversary of the declaration of the caliphate this week may also have influenced the timing.

Although a full analysis of these attacks can be better made once more details become available, there are some early observations we can make:

1. The attack plans were still pretty simple

A single person with an AK-47 at a tourist beach is going to kill a lot of people before he gets killed. A suicide bomber in a packed mosque during Friday prayers is also going to kill a lot of people. These attacks require a small support team to decide on the target and timing, to source the weapon and the explosives, and to transport the attacker to the target, but the logistic support requirements are pretty minimal for the carnage they facilitate. If the French attack was ISIS-inspired then virtually no planning is required, although the limited damage it inflicted reflects this.

2. The target selection is interesting

The Tunisian target (a tourist beach) has a double advantage of not only targeting Westerners but also of dealing a significant economic blow to the Tunisian state. Tourism accounts for approximately 15% of Tunisia's GDP and thousands of European vacationers have now left the country, which goes to show you that even a single gunman with a rifle can have strategic effects.

The mosque in Kuwait is a Shaykhiyya mosque (a somewhat peripheral, more esoteric sub-group of Shi'a believers), frequented by a largely Hasawiyya group; they  are ethnically Gulf Arab, but more particularly they trace their roots back to al-Ahsa in Saudi's Eastern province. It raises the question of whether the attackers sought out the target because of these peculiarities, whether they even knew or whether they didn't care.

Relations between Kuwait's Shi'a and the Emir of Kuwait are good, so such an attack is unlikely to foment local unrest (more so now the attacker is allegedly a Saudi). So an argument can be made that the attack either simply shows ISIS's religious bigotry or that it is designed with an Iraqi audience in mind. The more ISIS targets the region's Shi'a, the less conciliatory the Shi'a government in Iraq will feel towards their Sunni countrymen and the less able it is to achieve the national unity that is the key to defeating ISIS.

3. Saudi Arabia has problems

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

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The suicide bombing of a Shia mosque in Kuwait, shooting of Western tourists in Tunisia, and a beheading and attempt to blow up a chemical factory in France.

Three continents, three different attack methodologies and three different targets, but ultimately the same result. The death of innocent civilians in a brutal, horrific manner that dominates the news agenda. But aside from each attack being linked to ISIS and that they occurred (in all likelihood coincidentally) on the same day, the attacks appear to have had very little in common in terms of strategic aim.

A man reacts next to coffins of victims of Friday's bombing at the Imam Sadeq mosque in Kuwait City (Reuters/Alaa Al-Marjani)

In Kuwait, the attack marks the expansion of attempts by ISIS to undermine the domestic policies and sectarian unity of Sunni regimes across the Middle East.

Although Western tourists were ostensibly the target in Tunisia, the attack appears to be another attempt to degrade the ability of Tunisia's secular government to maintain security, specifically for the valuable but vulnerable tourist economy.

And at this stage, the French attack appears to have been the latest in a series of ISIS-inspired, 'crowd-sourced' attacks, unsophisticated in nature, easy to achieve and difficult to prevent. 

But  the attacks do demonstrate the complexity of the threat posed by ISIS. If the violence associated with ISIS could be described as 'barbaric' or 'stone age', its use of these tactics to achieve strategic aims is anything but. And as pressure on ISIS in Iraq and Syria increases, further attacks outside of the region are likely.

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ISIS have now claimed that it or its affiliates were responsible for the attacks in Tunisia and Kuwait. But I would argue, particularly for attacks similar to the one in France, that the issue of 'responsibility' is becoming less relevant from a counter-terrorism investigative perspective. Al Qaeda's centralised command and control meant that identifying and removing attack planners or bomb makers could also remove the future threat. But the minimal planning and sophistication required for both the Tunisian and French attack makes this more difficult.

Where ISIS responsibility is important is in the media coverage of, and the social media response to, an attack or attack disruption. ISIS is a savvy organisation that uses its propaganda to construct a narrative of continued and inevitable success. In a week where ISIS has suffered significant losses in Iraq/Syria, these attacks allow it to continue this narrative, while encouraging copycat attacks elsewhere.

Which is why we should be careful when attributing attacks or attack plans to ISIS. It is undoubtedly true that ISIS, as AQAP before them, have legitimised the concept of localised and unsophisticated jihad. 

But self-declared links to ISIS or ISIS propaganda, or social media interactions with low-level ISIS foreign fighters and keyboard warriors do not make these attackers 'apart of ISIS' or a plan an 'ISIS plot'. Nor are they relevant to discussions concerning the threat posed by returning foreign fighters. 

That is not to say that such attacks are at odds with the strategic aims of ISIS. But by attributing responsibility, we help to build the ISIS brand and the perception that they are 'coming after us'. 

And most importantly, by viewing ISIS solely through a 'threat to the West' prism, there is a danger of becoming distracted from its true aims and focus. ISIS did publicly call for an escalation in attacks during Ramadan, and the French attack may have occurred in response to that. But we should remember that ISIS has focused on maintaining and building a Caliphate in the Middle East. 

If violence against the West or Western hostages will help achieve this aim, then they may well use it. But its primary tool for achieving this aim is through the carrying out and incitement of sectarian violence within the region, predominantly against Muslims. The bombing in Kuwait represents just the latest terrorist attack against the Shia Muslim minorities in predominantly Sunni countries such as Kuwait and Saudi Arabia.

And by attacking Western tourists in secular and democratic Tunisia, ISIS aims to undermine the Tunisian Government and economy. This is terrorism to encourage regime change in a direction more favourable to ISIS, not mindless violence. Or in other words, ISIS foreign policy.

With ISIS-affiliated groups also emerging in unstable and violence-ridden countries such as Yemen and Libya, ISIS is not predominantly a terrorist threat to Australia and the West, or just a problem to be addressed by military operations in Iraq. It poses a foreign policy challenge with implications across North Africa, the Middle East and perhaps South Asia.

And given the differing motivations and levels of participation in the alliance combatting ISIS, helping to combat it will require a nuanced and sophisticated Australian Government strategy.

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

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This week, The Interpreter concluded former Fairfax Indonesia correspondent Michael Bachelard's seven-part series on the Indonesian provinces of Papua and West Papua. Here is the introductionpart 1 and part 2 from last week. Below are extracts from the rest of this outstanding series. First, on Papua's 'education malaise':

The problem is not just with the administrators. Ob Anggen is funded not by government but by fees and donations, and the school is fighting an uphill battle against some parents, and the culturally important uncles, who can't understand why children need to spend so much time in classrooms to attain certificates which, at other schools, can simply be bought or cheated.

In part 4, Michael concentrated on health care in the provinces:

Poor education in Papua means there are few locally trained doctors. But not many from outside Papua want to stay in these hard postings with their thorny health problems. 

One young physician arrived for his two-year stint in a taxi via the bumpy road from Wamena. He got out and looked around, then climbed back into the same taxi, returned to town and was never seen again.

Dr Poby, by contrast, finds the work satisfying. On the desk in the consulting room are testing kits for patients diagnosed that day with tuberculosis which, along with HIV/AIDS, is in epidemic proportions here. In the eleven months to November 2014, he diagnosed 26 new cases of HIV and three of AIDS.

Michael interviewed several journalists in Papua and West Papua:

Oktavianus Pogau is another journalist, the chief editor of newspaper Suara Papua. After the presidential election last year, he tried to draw attention to the massive irregularities and ballot box stuffing that delivered counts in some places of 100% for Joko Widodo. In most Papuan districts, there was no ballot box at all, but every man and woman miraculously managed to vote. He accuses politicised electoral commission officials, not Joko's party, of wrongdoing.

In the remote village of Lolat the fact that a ballot box never appeared for the election makes people feel they have no stake in the outcome. Asked about the promises of Joko Widodo, a young woman in Lolat says: 'We didn't actually elect him so why should he listen to what we say?'

The reasons why Papuans want independence are often misunderstood in the West, as Michael discovered:

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The men in this darkened room know that their cause is supported by many Western activists, as well as a broader Papuan diaspora. But Balingga is frustrated that these people too often focus on human rights issues to drive their cause. 'The main picture that gets out internationally is that people get killed and that is why we should have freedom. But that is not the true reason in our hearts,' Balingga insists. 'It's much bigger than just killing people. We want our own country because we're different.'

In the conclusion to the series, Bachelard examined Papua's relationship with the central government in Jakarta, what has happened since the election of Jokowi and what local activists believe needs to be done:

In his conversations with Jokowi's ministers, Harsono had three suggestions to make to improve the situation in Papua. Firstly, open it up to international monitors, including the Western media; secondly, release the political prisoners; and thirdly, throw some kind of bone to the military — perhaps a grace period to wind up their financial affairs and improve their performance.

Stephen Grenville wrote on investor-state dispute settlement and the TPP:

Where is the Government's substantive response? What is the case, in the Australian context, for giving foreigners more favoured treatment than domestic players? Negotiating tactics should not be an excuse for lack of transparency here: an open debate is just part of good governance. The Government should make the case why ISDS benefits Australia. ISDS is not something to be bargained away in exchange for some (probably ephemeral) export advantage.

The 200th anniversary of the Battle of Waterloo was last week. Matthew Dal Santo makes a connection between the peace that was achieved afterward and the end of the Cold War in 1991:

The restoration of a European balance after Waterloo was a testament not just to Waterloo or Britain's wealth and geographic invulnerability, but to Castlereagh's vision as a statesman and his skill as a diplomat. The problem in 1991 was that America combined in itself the role of both victors in 1815: that of the offshore balancer (Britain) and that of the dominant military power on the continent (Russia). Castlereagh's vision for peace was available, but the US effectively chose Alexander's.

In another anniversary, it was the 50th year since Japan and South Korea established formal relations. Robert Kelly took the opportunity to argue that now is the time for Shinzo Abe to end the region's history wars:

Usually these sorts of articles end with arguments that both Japan and Korea need to compromise in order to get along and deal with the really serious issues of their neighborhood – North Korea, China, etc. And so they should. In my previous writings on this topic, I have often suggested that Koreans might take steps to ease the tension, such as dropping the needlessly provocative Sea of Japan re-naming campaign that only stiffens Japan's spine rather than encouraging reconciliation.

But it must be said that Abe has veered so widely from accepted fact on Japanese 20th century imperialism that he must now make the first move, not just to the Koreans but to much of the Asia Pacific, including the Americans. 

In an excellent piece, former intelligence analyst David Wells talks risk assessment in counter-terrorism:

We want our intelligence agencies to be risk averse, given the potential consequences of things going wrong. My concern is that the (justified) scrutiny of the Monis case, the desire to apportion blame and political commentary in the aftermath of the attack, could push the intelligence agencies towards risk avoidance. In future, will intelligence agencies make a similar assessment based on similar information as they did with the Monis case? How comfortable will they feel ruling out an individual as an ongoing target? 

The consequences of increased risk aversion are easy to imagine. Intelligence agency target lists will grow and resources will be stretched. Perversely, risk aversion could thus increase the chances of an attack. In practical terms, the coverage needed to 100% prevent these types of attacks is incredibly resource intensive. Monitoring every individual posing a possible threat is simply not feasible nor desirable.

What are the possible outcomes from the dissolution of the opposition alliance in Malaysia? Anneliese Mcauliffe:

But another real possibility is the further fracturing of the opposition, plunging Malaysia into a political realm in which nationalists and religious hardliners unite in one opposition alliance while political moderates form a separate opposition group. Not only would it be far less likely that either of these groups could pose a real threat to the ruling coalition, such political organisation around ethnic and religious lines could pose serious problems for the future of social cohesion and inclusive political life of Malaysia

Responding to a recent debate on The Strategist, Raoul Heinrichs says that by preserving Australia's strategic independence we can protect ourselves from alliance failure:

In practice, that means building powerful, genuinely self-reliant military forces. To achieve their purpose, these would need to be optimised strictly for the limited task of defending Australia – not the regional order; not Japan, Taiwan or Korea; and not the countries contesting Chinese claims in the South China Sea. It would mean prioritising independent operational capability over interoperability (when the two goals conflict), and air and maritime forces over land power. It would also mean taking full advantage of Australia's fortuitous strategic geography, using asymmetric military technologies and doctrines in ways that impose intolerable costs and risks on an adversary seeking to surmount it.

Why does Southeast Asia have a strange obsession with Hitler and Nazi iconography?  Elliot Brennan argues it's a lack of awareness of European history among the region's youth:

The love affair with Nazi imagery seems to be gathering strength among Southeast Asia's youth. Outside the region, this will feed comparisons between, say, Nazi Germany and Myanmar's persecution of the Rohingya. Some commentators argue that this stubborn love affair has taken on new significance under Thailand's repressive military-led government. Since seizing power last year, the junta has used all means to win over Thai youth and when it has failed it has detained activists for what it has termed 'attitude adjustment'.

Visiting scholar to the Lowy Institute Ye Yu wrote on the New Development Bank:

Within China, the NDB is seen as one package with the AIIB, and both banks are still at the preparatory stage. The Shanghai municipal government has given strong support to the NDB as the first international organisation headquartered in Shanghai and the first international financial organisation headquartered in China. The NDB is expected to help strengthen efforts to build up Shanghai as an international financial centre. What the Chinese and Shanghainese governments should provide is more entrepreneurship and intellectual leadership in defining the mandate of the bank. The fact that all the BRICS countries are now founding members of the AIIB could also help the NDB develop a consistent and complementary relationship with that organisation.

Finally, Leon Berkelmans with five points on the Greek debt crisis. Here's one:

If the ECB does cut off Greek banks, and the banks are headed towards bankruptcy, this is the point at which Grexit becomes more likely. If Greece leaves the euro, the Greek central bank can lend money to the banks unencumbered by the ECB's permission. But Grexit will be messy. I have no idea what it would look like. I don't think anybody does.

(Photo: Michael Bachelard/November 2014)

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Lord Michael Williams is the Lowy Institute's guest today as part of the Australia-UK Asia Dialogue. He is a Distinguished Visiting Fellow at Chatham House and a former senior British diplomat with vast experience in Asia.

We talked this morning about China's land reclamation and its ultimate intentions in the South China Sea, and about whether Beijing is really in control of all this activity (that got an emphatic 'yes' from Lord Williams). At the end of the interview we shifted to Burma and Aung San Suu Kyi's little noticed recent visit to Beijing. 'This visit is one of the most important things that's happened in the region in 2015' says Lord Williams matter-of-factly.

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Fear of ISIS, faltering economies and resentment over rising immigration from war-torn Iraq and Syria has resulted in a surge in right-wing populism in Europe and the UK. 

Here in the UK, following the departure of three sisters with their nine children to join ISIS, and the emergence of the first British suicide bomber in Iraq, newly re-elected conservative Prime Minister David Cameron stirred controversy when, in an address to a security conference in Slovakia and coinciding with the beginning of the Islamic Holy month of Ramadan, said that parts of the Muslim community are 'quietly condoning' ISIS ideology.

National Front leader Marine Le Pen. (Flickr/Ernest Morales.)

Echoing the wording of Australian Prime Minister Tony Abbott, Cameron issued a message to Muslim families and leaders that they must do more to combat the lure of ISIS ideology among young people. 'The cause is ideological. It is an Islamist extremist ideology, one that says the West is bad, that democracy is wrong, that women are inferior, that homosexuality is evil, ' he told the conference.

In Australia, debate continues over controversial moves to suspend the citizenship of those involved in terror, however broadly that may be defined. Abbott has consistently called on Muslim leaders to do more to counter extremism and called on Muslims to get on board with Australian values. In February, Abbott outraged Muslim leaders when he told journalists: 'I've often heard western leaders describe Islam as a "religion of peace". I wish more Muslim leaders would say that more often, and mean it.'

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France, with Western Europe's largest Muslim population of around 7 million, is still reeling from the attack in January by radical Islamists against the satirical cartoon Charlie Hebdo. Marine Le Pen's far right National Front is making gains campaigning on a platform emphasising the threat Islam poses to French secular nationhood.

When times get tough, it's not surprising that we blame 'the other'. But as more radical right wing parties with an anti-immigration and anti-multicultural agendas gain momentum in Europe and the West, so do dangerous levels of Islamaphobia. It's no coincidence that alongside this increase in anti-Muslim rhetoric we have seen a surge in the number of radical Islam-inspired terror attacks and plots in the West. Minority Islamic populations in Europe, already feeling marginalised and economically and socially disadvantaged, will feel increasingly alienated, leading to greater levels of anger and more polarised communities.

Research on radicalisation has shown that those who choose to join the fight in Syria and Iraq present a varied profile. Some are highly religiously and ideologically driven, others have a violent predisposition or criminal history, but by far the most easily identifiable signal is a sense of alienation and disenfranchisement with their current environment and a lack of a sense of belonging. 

If we really want to stop the radicalisation of young Muslim men and women, we need to stop goading them.

ISIS recruiters thrive on the vulnerabilities created by divisive rhetoric coming from the far right. The narrative pushed by ISIS recruiters is of a functioning alternative state that welcomes those feeling alienated and unwelcome in their Western homes. By reinforcing a perception of 'Islam versus the West', right-wing politicians create exactly the right conditions for the appeal of reactionary and violent rejectionist groups to grow. We are playing right into their hands. 

In countless interviews with Muslims in Australia, France and the UK, I have heard the same dismay over the perception of negative stereotyping and demonisation, fueled by a media frenzy over their apparent guilt by association with a radical group whose numbers are minuscule in comparison to the millions of Muslims practising a peaceful version of the religion. Australia is not a comfortable place for Muslims right now. Nor is France, and nor is the UK. 

These are dangerous times. Our terror threat levels are set to severe, yet our rhetoric continues to feed the beast. The best way to get tough on terror would be to tone down the rhetoric and embrace policies that promote social cohesion and remain steadfast in the face of extremism on both sides of this growing political divide.

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The view from Papua

This is the final part of former Fairfax Media Indonesia correspondent Michael Bachelard's series on Papua. Here is the introductionpart 1part 2part 3part 4part 5 and part 6.

After new Indonesian president Joko Widodo appointed his self-consciously titled 'working cabinet' late last year, activist Andreas Harsono from Human Rights Watch took calls from no fewer than nine of Jokowi's ministers or their staff. All of them had listened to Jokowi's promises during the election campaign to pay more attention to Papua and West Papua, and wanted to learn more.

Harsono was just one of what he says was a number of sources for these ministers, yet the level of ignorance they displayed in these conversations was acute.

Only weeks later, they proved it in spades. In late October, the Minister for Development of Disadvantaged Regions Marwan Jafar blundered into one of the most sensitive issues in Papua — the influx of non-Papuans — by announcing there was 'still a lot of land in Papua' and that he wanted to encourage many more Javanese people to migrate there as happy 'homesteaders'.

Home Affairs Minister Tjahjo Kumolo followed the next day, saying his 'priority' was to split the half-island into even smaller administrative units. Tjahjo is a loyalist of Jokowi's patron, Megawati Sukarnoputri, and it was her decision as president in 2003 to split the province into three (later revised to two, Papua and West Papua). Her military intelligence gurus had told her it would weaken the independence movement and make it more difficult for foreign invaders to occupy. 

Tjahjo said his proposed split would also be for security reasons, to guard this 'huge area' against 'foreign intervention'. 

The influence of Megawati's dead hand was also quickly evident in Jokowi's appointment of former general Ryamizard Ryacudu, Megawati's ally, as defence minister. Ryamizard in 2001 had praised the killing of a key ethnic Papuan politician Theys Eluay, saying the Indonesian soldiers who murdered him were 'heroes because the person they killed was a rebel leader'.

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In December, Jokowi himself also stumbled when he failed to comment, or to order an independent inquiry, into the killing of four young highland protesters by soldiers. It took three weeks, and a threat by churches to boycott his Christmas trip to the province, before he spoke up.

To the extent that Indonesians think of Papua at all, they think of a huge, rich, empty land mass that's vulnerable to exploitation and interference from foreign powers. The blame, they believe, rests with 'ABDA': Americans, British, Dutch and Australians. Australia, thanks to perceptions of its role in East Timor's independence, and the noisy pro-Papua activist movement it hosts, is especially suspicious.

How do Indonesians regard Papuans? They are broadly thought of as greedy, corrupt drunkards who need a good dose of Javanese sophistication. Racism is rife. Many sincerely believe that Papuans remain cannibals. Jakarta-based newspapers, even the English language ones, use the words 'stone-age' and 'backward' when referring to them. At soccer matches, according to jailed independence activist Filep Karma, Indonesian crowds make noises like monkeys in the direction of the Papuan team and throw bananas onto the field.

Australian lawyer and Aboriginal activist Noel Pearson said 'Only those who have known discrimination truly know its evil'. At all levels, discrimination is what Papuans face.

Two questions confront Indonesia when it comes to its easternmost provinces: economic rights and political rights.

Successive Indonesian presidents including Jokowi have emphasised economic empowerment, but the brief Abdurrahman Wahid-era experiment at more political empowerment (the so-called 'Papuan Spring') was quickly squashed by Megawati and her advisers. Papua now has 'special autonomy' status in Indonesia under which its local political elite (Papuans, to a man) are funded richly by Jakarta to govern it as part of the Indonesian system. The money is routinely rorted. But the other symbols and attributes of an independent state — the right to tax, to display flags or to sing anthems of independence — are denied. 

Papua also has Indonesia's largest and most uneasy Indonesian military and police presence, edgy young men living far from home in a place they fear. Institutionally, the police and military are desperate to maintain their outsized presence because their control of the fuel- and timber-smuggling trades, as well as the trade in drugs and prostitutes, is so lucrative.

In his conversations with Jokowi's ministers, Harsono had three suggestions to make to improve the situation in Papua. Firstly, open it up to international monitors, including the Western media; secondly, release the political prisoners; and thirdly, throw some kind of bone to the military — perhaps a grace period to wind up their financial affairs and improve their performance.

In May, 2015, Jokowi, visiting the province for the second time in six months, made a start. He announced the release of five prisoners and said Western journalists would be allowed free transit to and within Papua. Both measures, however, were immediately watered down. The fate of dozens of other political prisoners, including the iconic Filep Karma, who has grown old in prison after serving 10 years of a 15-year sentence for raising the banned Morning Star flag, was left unclear. Karma has refused to be released unless he is fully exonerated and declared innocent. And the head of the Indonesian armed forces, General Moeldoko, also began immediately placing conditions on journalists' access. Officials have since confirmed that the old media registration and permission process will remain, more or less intact.

I told Andreas Harsono what journalist Victor Mambor had told me: that whatever Jokowi's heart said about developing Papua, he would fail because the old guard that surrounds him would not allow him to succeed.

'I'm afraid I agree,' Harsono said. 'He's got the right intentions, but he's just surrounded by hardliners.'

Photo by Michael Bachelard, November 2014.

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