Lowy Institute

With this year's summit season coming to an end, Turkey will officially hand over the G20 hosting baton to China on 1 December 2015. The Hangzhou Leaders' Summit has already been announced for 4 and 5 September 2016, slightly earlier than previous years to avoid clashing with the US presidential election in November.

Although we are still waiting for China to release the official priorities document that will set out its goals in detail, President Xi Jinping did take the opportunity at the Antalya Summit to sketch an outline of what China's G20 year will look like.

G20 host countries have a habit of reconfiguring the same fundamental issues to suit their narrative. As the 2015 host, Turkey focused the G20 agenda around three 'i's: inclusiveness, investment, and implementation.

China, not to be outdone, has linked its presidency with four 'i's. Xi stated in Antalya that China wants to see a global economy that is 'innovative, invigorated, inter-connected and inclusive'. The sequence is important, as innovation is a new focus for both China and the G20.

Each of these 'i's can be linked to the acronym of GOOD that has been unofficially associated with China's G20 presidency; innovative Growth, Organizational reform, Open trade and investment, and sustainable Development. Chinese officials have used the GOOD acronym in meetings and, even though it's not to be found in official communications, it remains a useful guide to the priorities framing China's thinking.

China believes there is too much emphasis on weak demand as the cause of sluggish growth. Therefore, it wants to use its G20 host year to focus on the supply side, concentratating on innovation and technology as a means of creating growth. This also fits with China's domestic strategy of moving up the value chain and improving the quality of exports.

As for organisational reform or 'invigorating' governance, this reflects the preoccupation of China and other emerging economies with their exclusion from existing governance bodies. Long-stalled IMF reform is a particular sore point.

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There is speculation the IMF is about to add the yuan to its basket of reserve currencies, but it will take more than such symbolic reform to satisfy China beyond the short term. Similarly, China remains disappointed with the World Bank shift in voting share in 2010. Despite some changes, the Bank still has a US-appointed president and emerging markets are underrepresented.

Wang Xiaolong, the newly appointed G20 special envoy from the Chinese Ministry of Foreign Affairs, emphasised that we need a more 'inter-connected' regime because the 'two engines' of the global economy, trade and investment, are not working as they should. It is well-known that world trade is slowing more than global GDP.

He confirmed that G20 trade ministers would meet in China next year (as they did in Turkey and Australia). However, if China wants to progress trade, it will need to convene a leader-level discussion on fixing the World Trade Organisation.

We might also assume China's G20 agenda will continue the focus on infrastructure investment, a feature of both the Australian and Turkish presidencies.

Turkey's inclusiveness priority did emphasise development, but China seems to be taking this further with sustainable development as a fourth priority. In the Chinese narrative, development is another key engine of growth, particularly 'shared development'. However, we do not know yet what this means for the G20 Development Working Group and whether development will become part of the core agenda.

Turkey struggled with its three 'i's and was unable to focus the agenda, eventually producing a disappointing communiqué.

China, with four 'i's and a 'GOOD', will have to be clearly communicate what it wants to achieve, and be careful its messages do not get lost in translation. We will have to wait to see if the priorities document contains yet another slogan or acronym.

It is unrealistic for any host to progress every item on the G20 agenda. Given the breadth of issues Turkey is bequeathing to China, the new G20 taskforce will have to be disciplined.

The best thing for the Australian G20 legacy would be if China revives a narrative on growth and runs a tight ship. Although Australia has departed the governing G20 troika, we should not go quietly back to the sidelines. We have a responsibility to encourage China to strengthen the forum and deliver real outcomes.

Photo: ChinaFotoPress via Getty Images


On Thursday, the Institute is hosting a panel on free trade agreements with me, Jessica Irvine from Fairfax and Luke Nottage, law professor from the University of Sydney. Steve Grenville, former deputy governor of the Reserve Bank of Australia will be chairing. There’s a divergence of views on the panel, so it should be a great event.

For those that can’t make it, I can at least easily summarise my views.

I’m very sceptical of the direction of Australian trade policy. As I have said before, I do not think the upsides are worth the potential downsides.

Let’s first cover the upsides. The upsides of the preferential approach we take are small. For example, the Department of Foreign Affairs and Trade released modelling by the Centre for International Economics in June which showed that the marquee bilateral free trade agreements of the last couple of years (the agreements with Japan, Korea and China) would boost Australian GDP by 0.05% to 0.1%.

Modelling of the final text of the TPP has not been done, although modelling of what the agreement may look like was done by the Peterson Institute. Their first effort at modelling suggested an impact on Australia of 0.2% of GDP. With some changes to the model, this was later increased to 0.6% of GDP, which is chunkier, but let me go through the downsides of current policy and why there is a better path.

Let’s start with what really distresses me: intellectual property. As part of these trade agreements, we sign up to stringent intellectual property protections.

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Why is this bad? Two reasons. One, Australia is an intellectual property importer. Any extensions to intellectual property protections result in larger payments overseas to those who own the intellectual property. But the second reason is the real kicker for me. I think a fair reading of the economic literature suggests that more intellectual property protection does not increase innovation, and in fact likely reduces it, as companies divert attention away from creation toward protecting entrenched monopoly privileges. A great summary of that literature can be found in a book by Michele Boldrin and David K. Levine, Against Intellectual Monopoly. Although, for a shorter synopsis, you might want to consider the articles The Economist ran in August

The only reason to have intellectual property protection is to encourage innovation. If it reduces innovation, then we should run from agreements that increase our obligations. Why? Well, innovation is the most important source of sustained growth in the economy. If increased intellectual protection reduces innovation and growth, it will likely overwhelm the one-shot bumps to GDP that the aforementioned modelling suggests is the upside.

The other part of free trade agreements that makes me uncomfortable is the investor-state dispute settlement (ISDS) procedures. Most of the agreements we have signed lately include provisions that allow foreign companies to take us to a tribunal if they feel aggrieved by government action. Giving rights to foreign companies that domestic ones do not have, the very opposite of levelling the playing field, gives most economists the heebie-jeebies.

However, perhaps these types of agreements can allow countries to attract more investment, and allow governments to commit to behaving themselves. My reading of the, admittedly imperfect, evidence is these provisions do not do that. Rather they can, and have, led to legitimate government decisions to be challenged, and led others to postpone reforms. Exhibit A here is cigarette packaging.

Luke Nottage, on the panel with me, is a supporter of ISDS, and has argued that reforms to the system can deal with these concerns. He is yet to convince me, but he has a terrific knowledge of the topic. The thing I just can’t shake is that these things do not seem to increase investment flows, their raison d'être. I’m sure this will be one of the things we discuss tomorrow.

But I promised a 'better path'. The better path is unilateral liberalisation. The Productivity Commission, in 2010, suggested unilateral tariff liberalisation would increase GDP by around 0.6%, around the same effect as the TPP according to the Peterson modelling. But the model used by the Productivity Commission was closer in spirit to the initial Peterson modelling, which suggested a 0.2% boost. So unilateral liberalisation seems to offer much larger benefits than the preferential approach we have taken, without the bad bits, especially the damaging intellectual property provisions.

Photo courtesy of trademinister.go.au.

  • A former AFP officer posted in PNG has made a number of allegations about the conduct of local police and the AFP presence in PNG, claiming the AFP's actions are constrained by the imperative to maintain the Manus Island Refugee Processing Centre. The AFP has responded to this report here.
  • Last week I linked to a story criticising an Australian-funded aid project in Vanuatu that has attracted a lot of attention on social media. Two senior ni-Vanuatu public servants, Mike Waiwai and Jeff Malmangrou, published a rebuttal of the arguments in that article in the Vanuatu Daily Post and expressed their support for the aid project in question.  
  • Vanuatu's President Baldwin Lonsdale has dissolved Parliament and called a snap election following the incarceration of 14 MPs on bribery charges.
  • The Pacific Regional Conference on Strengthening Women's Participation in Parliaments is wrapping up today in Port Moresby. The Pacific has the lowest rates of women's representation in parliament in the world. 
  • In this interview with Radio Australia's Pacific Beat, UNDP team leader and former Labour MP in New Zealand, Charles Chauvel, explains some of the new initiatives being explored to help increase women's political participation in the Pacific.
  • This new research from International IDEA looks at political instability in the Pacific and analyses attempts to address the issue through constitutional reform.  
  • Devpolicy's Stephen Howes and Ashlee Betteridge show the persistently high cost of remittances in the Pacific, with the Australia-PNG corridor proving to be one of the most expensive in the world.  
  • Today is White Ribbon Day and violence against women is a major problem in Australia and throughout the Pacific. This Human Rights Watch report delves into the issue of family violence in Papua New Guinea.
  • Papua New Guinean songwriter Oala Moi on the fight for copyright in his country. It has been over 12 years since PNG introduced a copyright law, but there is still no collective management system that would allow musicians to exercise those rights and receive proper payment when their work is used.
  • The Lowy Institute's 2015 GE Australia-Papua New Guinea Emerging Leaders Dialogue will be taking place in Sydney next week. Check out some of the other great work GE is doing in PNG with its portable ultrasound project:


News that a Russian strike aircraft has been shot down by Turkey has again focused attention on Russia's air campaign in Syria, which began in late September. The Russians deployed a small but decisive air and naval force to side with Syrian President Bashar al-Assad to protect his regime and, specifically, the city of Damascus.

A Russian Su-24, the type shot down by Turkey.  (Wikipedia.)

While the Russian Air Force deployment to Syria has undoubtedly complicated the air operations of the US-led coalition, the coalition's significant advantage in intelligence, surveillance and reconnaissance (ISR), and its ability to use extensive air-to-air refueling assets, mean that its air forces can easily 'deconflict' (that is, reduce the risk of the collision by co-ordinating movements) their operations from those of the Russians.

The ability of assets like the RAAF Wedgetail, the US Air Force E-3, and other ISR aircraft to identify and classify Russian aircraft activity from the time they launch from their Syrian bases means they can be identified and tracked throughout their entire mission. If crews on board an  aircraft like Wedgetail see a potential for imminent confliction, coalition aircraft can be moved out of the way until the Russians complete their operations.

However, deconfliction is far more of a concern for the Russians than the coalition. While the Russians have deployed very capable Su-30 fighters to protect and enhance the situational awareness of their strike aircraft,  the Russians do not have the ability to put together an integrated view of their operating battlespace, as the overnight downing of a Russian Su-24 strike aircraft likely demonstrates. They have little or no idea where coalition aircraft and UAVs are operating, and have little ability to put together a coherent picture of US-led air operations.

On all missions, the level of Russian situational awareness would be significantly lower than their coalition counterparts. As well as Turkish air power, the US Air Force's F-22s would be a significant concern to the Russian Air Force in any confrontation with the coalition.

Russia's air campaign has been effective and decisive

Nevertheless, Russia has waged an effective air campaign against forces opposed to the Assad regime. In fact, it could be argued that the Russians have shown a better overall strategy for the employment of air power than the US-led coalition.

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In contrast to coalition air forces, Russia has been unconstrained by the legacy of 10 years of counter-insurgency operations in Afghanistan. The tactical micromanagement of each strike sortie, and a total lack of freedom of action given to coalition aircrew, have made it impossible for coalition air planners to put together a coherent air campaign to defeat ISIS.

The coalition's formidable capability is being significantly underused because of self-imposed constraints. Contrast this to the Russian experience; in less than seven days, the Russians were flying more than 60 sorties per day, a very high rate given the modest force Russia deployed. And in the execution of its air campaign in northern Syria against militant groups opposed to the Assad regime, the Russians have used air power decisively in a way the US-led coalition has not.

Russia's quiet military revolution

While the use of warships and, more recently, strategic bombers to launch cruise missiles to hit targets in Syria is largely symbolic, with the intention to demonstrate Russian capability to the world, the October air strikes were Russia's first operational use of precision-guided munitions, and thus underscore Russia's quiet military revolution. This  transformation has been a result of far-reaching military reforms to create more professional and combat ready armed forces that can swiftly deploy abroad.

In the past, the Russian armed forces needed months to gear up for a military confrontation. They have now shown the ability to react quickly and strike without warning.

The first serious round of Russian reform started in late 2008 after the Georgian campaign, and concentrated on increasing the overall level of professionalism in the Russian forces. There has been reform of the education and training of Russian armed forces personnel and a significant reduction in the number of conscripts.

After the education reforms were put in place, the Russians concentrated on increasing the combat readiness of the force by streamlining the command structure and increasing the number and complexity of training exercises.

The third phase of the reform was to rearm and update equipment. Many Western analysts have concentrated on this phase and have been dismissive of Russian capability because it still remains a work in progress. In doing that, we have ignored the success of the first two stages, which have already given the Russians a far more effective and combat-ready military.

So while the Russians lack modern air-to-air refueling and ISR assets, they have shown a good grasp of how to use modern air power effectively to achieve strategic results. In many respects, Western analysts have dangerously underestimated Russia's reformed military capacity.


As Paris prepares for the arrival of delegates from 196 countries who will take part in international climate negotiations next week, Lowy Institute Polling suggests the majority of adult Australians (62%) have given the Turnbull Government the green light to strengthen its commitment on emission reductions, if that's what it takes to reach a global agreement.

Only 36% of the 1002 people who took part in the latest Lowy Institute Poll were of the the view the government should 'stick to its target regardless of what other countries do'. The national telephone poll took place between 25 October and 4 November.

Lowy Institute Executive Director Dr Michael Fullilove said: 'It’s very clear that Australians want our government to contribute to a global agreement on climate change in Paris, if necessary by committing to stronger emissions reduction targets'.

The poll result comes after Prime Minister Malcolm Turnbull made a little noticed move on the sidelines of the G20 Leaders Summit  that appeared to open up some ground between his government's stance on climate change negotiations, and that of his predecessor.

A joint statement issued by Turnbull with European Commission President Jean-Claude Juncker and European Council President Donald Tusk, included a commitment to secure an agreement in Paris with a long-term goal. 

The Climate Institute's Erwin Jackson told the Fairfax Press this was the first time the Government has explicitly supported a long term carbonisation signal as a clear objective for Paris.                                           

As Jackson wrote in 'Paris Climate Talks: The World has changed since Copenhagen', the Paris negotiations seek to establish an agreement for a new common international framework that will drive domestic action.

However the Lowy Institute Poll suggested that while the majority of Australians are hoping for a decisive outcome from Paris, they are divided on the best policy solution at home.

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When asked to choose between two alternatives, the current Direct Action scheme that pays business for emissions reductions projects, and the introduction of a price on carbon or an emissions trading scheme, 51%  of Australians favoured Direct Action while 43% opted for an ETS or price on carbon.

The Lowy Institute Poll also found concern about climate change continues to grow. Just over half of Australians (52%) indicated they believe global warming is a a 'serious and pressing problem' and we should take steps now, 'even if this involves a significant cost'.

The shift in opinion on climate change has been one of the most dramatic trends recorded over the course of the Lowy Institute Poll. It began asking Australians about climate change in 2006, asking survey participants to select the response which most closely mirrors their point of view: 

  • Global warming is a serious and pressing problem. We should begin taking steps now even if this involves significant costs.
  • The problem of global warming should be addressed, but its effects will be gradual, so we can deal with the problem gradually by taking steps that are low in cost.
  • Until we are sure that global warming is really a problem, we should not take any steps that would have economic costs.

As demonstrated in the table below, concern about global warming was highest in 2006, a year of severe drought in Australia. Over the next few years, the sense of urgency abated but then opinion turned again. The Lowy Institute has recorded an upward trend in successive polls since 2012.


Here's our weekly selection of commentary from the fair-minded, the partisan and the light-hearted as the action progresses in one of the world's most enduring (and lengthy) democratic processes.

Last Friday Iowa experienced its first major snow storm of the season but that didn't get in the way of The Presidential Family Forum; a midwest special in which seven of those vying for the Republican nomination came to be quizzed on behalf of the Family Leader Foundation. This conservative Christian group described the event as a final exam before it decides which candidate it will endorse next month.

The seven presidential hopefuls were placed at a table designed to evoke Thanskgiving. Which it would have done, except all seated were looking out, creating a tableau with a discomforting resemblance to Leonardo Da Vinci's Last Supper, albeit down a a few disciples. Donald Trump and Jed Bush skipped the event. Both pleaded prior engagements but as NPR's Sarah McCammon noted, 'the format for the dinner — a soul searching discussion with a heavy focus on faith — isn't Trump's strong suit'.

Verdicts on the collective performance were mixed.

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NBCNews ruled the seven 'showed unexpected warmth as they courted evangelical Christian voters with stories of their personal faith and struggles'. The network clearly keeps a tear-o-meter count, noting both Rick Santorum and Carly Fiorina 'teared up' at points; this was especially noteworthy for Fiorina who, NBC reminded us, has 'been seen by some critics as too cold in past debates'.

The Gospel Herald said the candidates shared 'personal, emotionally charged stories regarding praying for God's help, asking for forgiveness for a mistake, or questioning God for the suffering they were experiencing'.

But when discussion shifted from matters of the heart and soul to national security the dinner, in the eyes of of Esquire's Charles P Pierce at least, got ugly.

...the real meat on the Thanksgiving table got served up when [host Frank] Luntz wrenched the discussion away from sacred platitudes and into the realm of national security and foreign affairs. The clouds of incense were dispersed. The preacher masks all dropped. To a person, the seven Republican candidates came right up to the edge of accusing the president of the United States of treason and of being in sympathy with the murderers in France and in Mali. Right up to the edge, they all walked. Then they winked and took baby steps back, but everybody in the hall, all of the good Christians who'd come out in the snow, got the message.

Some 1100 Iowans turned up for the event which is incredible since it must be getting difficult for those who live in the State to get through their daily business without tripping over a presidential hopeful somewhere down the line. The enormously helpful Iowa Caucus Candidate Tracker on The Des Moine Register website helps voters keep track of who will be where and when. A bit like checking the bus timetable before you head out the door. Rick Santorum has attended 180 events in the State in the last three years (yep, that's how long some of these folk have been campaigning). He showed how it was done last Wednesday when he shook hands with voters at seven different locations. All of the GOP candidates are out in force, as are the Democrats but at least there are only three of them.

The snow kept falling after Friday, so much so authorities advised residents of Iowa's capital, Des Moines, to hold off travelling. Such warnings are unlikely to slow those campaigning though; all are acutely aware there are only nine weeks to the Iowa Republican caucus.

Photo: Scott Olson/Getty Images


There have long been fears that terrorist groups – of all stripes and creeds – could gain access to weapons of mass destruction and use them against vulnerable population centres in the West. After the attacks on Paris last week, this fear was raised yet again with the French Prime Minister, Manuel Valls, saying that 'we must not rule anything out, there is also the risk from chemical or biological weapons.'

While the remarks were not specific, and they were also made just before a parliamentary vote to extend France's state of emergency following the attacks in Paris, there are reports that precautions are being taken with Sarin gas antidotes being distributed to French medical personal for the first time.

The history of terrorists and their efforts to acquire WMDs, whether nuclear or other, is somewhat unclear. This article in The Guardian by Jason Burke is a good short history of the failed efforts of Al Qaeda and its affiliates to acquire chemical and biological weapons. There is often little public evidence to back up many of the claims about the plots themselves. But there is little doubt that these groups have tried in the past, and that smugglers have some access to the necessary material. Indeed, ISIS may have its own 'department' of former Iraqi scientists working on chemical weapons and the US has claimed to have targeted ISIS chemical weapon experts in its airstrikes in Iraq and Syria.

That's what makes a recent long-form piece in The New York Times Magazine a pretty fascinating read. The article is about 'red mercury', a fake substance that has gained almost mythological status among smugglers, arms traffickers and some terrorists:

Red mercury — precious and rare, exceptionally dangerous and exorbitantly expensive, its properties unmatched by any compound known to science — was the stuff of doomsday daydreams. According to well-traveled tales of its potency, when detonated in combination with conventional high explosives, red mercury could create the city-flattening blast of a nuclear bomb. In another application, a famous nuclear scientist once suggested it could be used as a component in a neutron bomb small enough to fit in a sandwich-size paper bag.

Also to be completely honest, when I read this, the first thing that entered my mind was the end scene of the 2009 movie Star Trek, directed by J.J. Abrams. In the scene, the crew of the Enterprise uses 'red matter' to destroy the ship of the villain Nero. The second thing that occurred to me was the story of red mercury, and the rumors of its existence and capabilities, is almost like reading about the fake cancer curing herb Essiac (the spelling of Essiac is the backwards spelling of Caisse, the surname of the Canadian nurse who peddled it). I think it's fascinating that the same sort of rumor, belief and mythology that exists around fake herbs or drugs that 'enhance performance' or miracle medical cures can extend to weapons of mass destruction. As C.J. Chivers, the author of the NYT Magazine piece, says:

To approach the subject of red mercury is to journey into a comic-book universe, a zone where the stubborn facts of science give way to unverifiable claims, fantasy and outright magic, and where villains pursuing the dark promise of a mysterious weapon could be rushing headlong to the end of the world. This is all the more remarkable given the broad agreement among nonproliferation specialists that red mercury, at least as a chemical compound with explosive pop, does not exist...

...Aided by credulous news reports, it became an arms trafficker's marvelous elixir, a substance that could do almost anything a shady client might need: guide missiles, shield objects from radar, equip a rogue underdog state or terrorist group with weapons rivaling those of a superpower. It was priced accordingly, at hundreds of thousands of dollars a kilogram. With time, the asking price would soar.

And as Chivers found, there are apparently many types of mercury that can be used for a variety of purposes:

Safi al-Safi, an unaffiliated rebel and small-time smuggler specializing in weapons, antiquities and forged documents, sat in an open-air cafe beside the Syrian-Turkish border. He was smoking scented tobacco from a water pipe while discussing the cross-border mercury trade. ''Red mercury has a red color, and there is mercury that has the color of dark blood,'' he said. ''And there is green mercury, which is used for sexual enhancement, and silver mercury is used for medical purposes. The most expensive type is called Blood of the Slaves, which is the darkest type. Magicians use it to summon jinni.''

The article is worth a read, if not to just have a glimpse into how rumors and smuggling work in war. Of course as typical of my generation I searched for red mercury on Youtube. The second video to appear was titled 'Very secret - red mercury', which automatically made me question its secrecy and reminded me of another famous scam.


This is the second in a two part series by Fergus Green, climate policy consultant and researcher, London School of Economics and Political Science and Richard Denniss, chief economist, The Australia Institute. Part one examined trends in coal demand; now the authors turn their attention to supply.

Like a good joke, the end of the coal age is all about timing. Even boosters of the coal industry now agree its demise is inevitable, but that concession relates only to the end result, not the speed with which it is pursued. The battle is about how long the endgame takes to play out, and the amount of coal that gets mined and burned in the process. This post explains the economic and political dynamics that complicate the coal endgame and sets out one key policy response that those fighting to preserve a liveable climate would be wise to promote.

In the simple version of economics, small climate policy steps, like carbon pricing, all other things being equal, take us gradually closer to the desired level of emissions reduction; higher carbon prices cause consumers to use a bit less energy and producers to invest a bit less in fossil fuels.

But other things don't always stay equal. The simple economic models used to shape climate policies are not nearly subtle enough to anticipate the likely response of the corporations and countries affected by those policies. What if, for example, the owners of billions of tonnes of coal, when they realised their 'resource' might be worthless in 20 years’ time, decided to dig it up and sell it faster than originally planned?

Since world leaders agreed to reduce emissions in 1992, world coal production has risen 50 per cent. Today, with the industry’s demise looking ever more likely, the pace of coal expansion is quickening. Australia and Indonesia, the two largest exporters, both plan to double coal exports in coming decades. Just one of the new mines, the Adani/Carmichael mine in Queensland's Galilee basin, is expected to produce more than 2 billion tonnes of thermal coal. The annual emissions from burning Carmichael’s coal will be greater than the annual emissions of Bangladesh’s 160 million residents.

This extraordinary expansion, in a market where demand for coal is now falling (see our last post) will, of course, further lower the (already low) price of coal.

This might, superficially, seem crazy — and, viewed collectively, it is. But at an individual level, it is entirely rational for the owners of coal to sell coal cheaply, flooding the world market, in anticipation of future carbon prices or regulations. Such behaviour is consistent with what economists call the 'green paradox'.

Luckily, an economically rational and politically expedient solution presents itself: in addition to regulating demand for fossil fuels (through carbon prices for example) we must also regulate the supply of coal.

One important supply-side policy has recently been called for by the President of Kiribati, Anote Tong: a global moratorium on the construction of new coal mines and mine extensions (not, as Malcolm Turnbull implied, a cessation of all coal mining). President Tong's call has already been supported by 11 other Pacific countries and voices as diverse as Lord Nicholas Stern, Naomi Klein, David Pocock, and Nobel Prize winning scientists.

President Tong recently wrote to all world leaders asking for their support. And this is where the proposal gets politically interesting. While small island states calling for deep climate action is not new, this particular measure creates new political and diplomatic alliances and fissures.

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Whereas demand-side proposals to reduce emissions, such as emission reduction targets and carbon prices, unite coal industry participants in political opposition, a moratorium divides them according to their current market share and their enthusiasm for building new supply, within and across national borders.

The logic is straightforward. In the absence of a moratorium, the falling price of coal (as expanding suppliers flood the market) will impose significant costs on those who own, lend money to, work in, and receive tax revenue from existing mines. For example, controversial new mines in Australia’s Galilee basin and Liverpool plains will lead to job losses and mine closures not just in other parts of Australia, but in the US and other coal exporting countries such as Colombia and South Africa. These existing producers and their stakeholders would therefore benefit in the short term from the proposed moratorium.

The same economic logic explains why Glencore, for example, has spent two years calling on its rivals to reduce their output and why there are few, if any, US coal miners looking to expand.

Ultimately, the political economy of a moratorium means that it should be more likely to be adopted than big demand side measures that have been stalled for the last two decades.

While it is true that some developing countries — China and India, for example — may strongly oppose such a moratorium, it could be phased in, applying to developed countries first, or limited initially to new export coal mines. Moreover, international mechanisms could be developed that provide incentives for countries to lock away their fossil fuels early, for example, along the lines proposed recently by two Oxford economics professors, or by explicitly recognising commitments to keep fossil fuels underground as contributions to global mitigation efforts.

While simple moratoria are never as popular among economists as the creation of complicated new markets, they have a history of political and policy success. For example in Australia, asbestos is banned, some states ban uranium mining, and certain ozone-depleting gases are being phased out according to a legislated schedule. In 1989 the Australian Government was also instrumental in obtaining an international treaty-based moratorium on mining in Antarctica.

A moratorium on new coal mines is not the only thing that the world needs to tackle climate change. But there is no plausible scenario in which a world that is reducing greenhouse gas emissions needs more mines and lower coal prices.

It doesn't take a lot of economic modelling to explain that when you are in a hole, it makes sense to stop digging.

Richard Denniss’ recent lecture at the London School of Economics and Political Science, 'Export coal in a changing economic climate: The economics and politics of a moratorium on new coal mines', is available here.

Image courtesy of Flickr user Leeds Tidal 


Treasurer Scott Morrison has rejected the proposed sale of the Kidman cattle properties to foreign interests:

Given the size and significance of the total portfolio of Kidman properties along with the national security issues around access to the WPA (Woomera Protected Area), I have determined, after taking advice from FIRB (Foreign Investment Review Board), that it would be contrary to Australia's national interest for a foreign person to acquire S. Kidman and Co. in its current form.

There are some special, perhaps unique, factors in this case. The cattle properties involved are certainly exceptional, not only in sheer geographic mass (100,000 square kilometres, or 1.3% of Australia’s total land area and 2.5% of agricultural land), but in terms of their iconic historical status. In addition, one of the properties overlaps the WPA where sensitive weapons-testing takes place.

There are also some not-so-unique factors involved. Selling agricultural land to foreigners has become an emotional issue, especially for the government’s coalition partner, which represents rural interests. The prospect of selling to a Chinese firm (even privately owned) adds another layer of resistance.

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Nevertheless, in principle Australia actively encourages foreign investment. The public generally accepts net benefits have been positive. Foreign investment funds a good part of our substantial current account deficit, which for more than 200 years has allowed us to invest more than we saved, and to grow faster than otherwise.

It's not as if much foreign investment has been blocked. Outside of agriculture, much of the family silver has already been sold: 80% of our mining resources are foreign owned. In agriculture, it's just 12%, and even there we don’t have an 'in principle' objection to Chinese investment and we have accepted a rapid growth of Chinese ownership in this sector.

If we are concerned about foreigners using transfer pricing to avoiding paying a fair share of taxes, then our concerns should focus on the large-scale chronic tax avoidance practised by many multinationals operating here. The national security argument might be relevant in the Kidman property case because of the special location, but it can’t have widespread application, unless we accept the spurious argument that all Chinese investment is a 'projection of power' and that if Chinese own the electricity grid, they might turn off the lights

Past rejections don’t provide much in the way of precedents to establish clear principles. We knocked back Shell’s attempt to buy Woodside, Singapore’s bid to take over the stock exchange (ASX) and the attempted purchase of grain-handler GrainCorp. The approval process also scuppered Chinalco’s attempt to increase its stake in Rio Tinto.

It’s not as if Australia is the only country that vets foreign investors, nor are we the only country  wary of Chinese investment. The US rejected Chinese investment and the US president ticked off our prime minister for not consulting America before leasing Darwin harbour to a Chinese company. Farmland stirs patriotic fervour everywhere. New Zealand recently rejected Chinese investment in a dairy property. China itself is also very restrictive of foreign investment.

Thus just about all countries show a mix of paranoia and parochialism, perhaps with a touch of racial prejudice, in their attitude to foreign investment. But in the end Australia lets almost all of it happen. When purchases have been blocked, the public intuitively understands and largely agrees (this was the case with Woodside, Chinalco and ASX).

This ambiguity isn’t surprising; politics represents community values, which are ambivalent, even inconsistent. Governments have to dissemble, ducking and weaving to maintain sensible balanced policies, and in this case that means considering current account funding and providing a global element to investment.

It is, however, important for Australia, as a substantial capital importer, to either articulate a clear policy on foreign investment or learn to live with a smaller external deficit. It is also possible to squeeze more benefit out of the foreign investment that is coming in.

The starting point is to look ahead a few decades at what our world will look like. Asia (and particularly China) will be a substantially bigger economy. If we are to succeed, our economy will have to be much more integrated with the region. Resources (iron ore, LNG and coal) will still dominate our exports. China (and other Asian markets) will have established the stable supply relationships needed for food and resource security. Australia could provide a significant component of both.

The central policy issue is this: what is the commercial and regulatory framework that will maximise the benefit to us as a nation?

It will require specific skills, knowledge and guanxi to tap the Chinese market successfully. For agriculture, it will require scale well beyond the traditional Australian family farm (just as it does in resources). A high level of Chinese involvement in the Australian supply-source seems inevitable, even desirable. But how to ensure that the disparity of scale (they are huge and we are relatively tiny) doesn’t mean that the value add (the very considerable difference between the farm-gate price and the retail price) doesn’t all go overseas, and the choice jobs along with it?

This needs more concerted policy thinking than just tweaking the FIRB rules in isolation. For a start, our competition authorities need to recognise that scale is often needed to compete globally. Some of the elements of a more comprehensive process are underway. The Productivity Commission is looking at the agriculture sector. DFAT has examined the trade aspects, and the China-Australia Free Trade Agreement (ChAFTA) has helped to define some of the relevant issues.

But if we don't want to run the risk of becoming 'hewers of wood and drawers of water', we will need to do more.

This might include the development of an Investors’ Code of Conduct to provide a template for a broader FIRB application process, putting specific content into the nebulous 'national interest' criterion. This could cover tax and transfer pricing. There might be a presumption there would be a substantive Australian partner. Where it makes economic sense to carry out value-add processing in Australia, this might be mandatory. There would be opportunity, too, for the foreigners to refute the more fanciful of the security concerns.

We should be able to put out the welcome mat for foreign investors while at the same time demonstrating to domestic sceptics they are not on the way to becoming mere share-croppers in their own country.

Photo courtesy of Flickr user Alex Prolmos


A fascinating column from Paul Kelly over the weekend, which describes how former PM Tony Abbott sees his future role:

The Paris attacks have seen two competing Australian voices in response — Malcolm Turnbull and Tony Abbott. The crisis has revealed Abbott’s long-run strategy — positioning himself on the global and domestic stage as a champion of the conservative forces in the current international security crisis.

Abbott believes the threat from Islamist violence is the defining issue of the age. It occupied much of his prime ministership and he intends to become a rallying point in the war of ideas and ideology at its heart. Abbott as a politician can only exist and operate with a mission. It has always been thus — and the deposed prime minister has found his new mission.

While Abbott has taken no decision on his political future, the omens seem clear: he is currently heading towards contesting the next election and carrying a banner for the conservatives, in parliament, the Liberal Party and the public.

Abbott clearly still has allies within the parliamentary Liberal Party,  including former defence minister Kevin Andrews, who has now called for Australia to send ground troops to Syria in the war against ISIS. Andrews was mocked by some in the media for his poor showing in the ballot for the Liberal Party deputy leadership on 14 September, but he got 30 votes to Julie Bishop's 70, which demonstrated that there is a sizeable rump in the Liberal Party with misgivings about the more progressive turn of the Turnbull-Bishop leadership team.

But to see this purely as a right-left ideological debate inside the Liberal Party is incomplete. There is also a fundamental difference in threat perception driving this debate. Kelly is correct to say that Abbott and his allies see Islamist terrorism as 'the defining issue of the day'. To get a sense of how deeply this is felt, check out Greg Sheridan's weekend column, in which he describes a morally corrupt and vulgarised West (apparently Ronda Rousey is to blame somehow for the collapse of our civilisation) which is in danger of being overwhelmed by the ISIS threat. Niall Ferguson made a similar argument in a recent op-ed.

As Sheridan correctly identifies in his column, some people simply judge the threat differently. Sheridan defends the claims made by Julie Bishop and George Brandis (both considered ideological moderates within the Liberal Party) that the ISIS threat is 'existential'. Turnbull, of course, argued directly against Bishop when she claimed ISIS was the biggest threat to world order in 70 years, responding that 'Daesh is not Hitler's Germany, Tojo's Japan or Stalin's Russia'. Since taking over as PM, Turnbull has resisted calls to increase Australia's military role in Iraq and Syria, and used more inclusive language about Australia's Muslim community, reinforcing the sense that he sees the threat as serious but not as an existential threat to Australia's multicultural compact.

After outrages such as the recent events in Paris, Beirut, Bamako and in the skies over Egypt, it can be hard to sustain this perspective. Yet Turnbull's case doesn't need to be purely defensive. Australians are clearly unnerved by the ISIS threat, so it's not enough to simply say that the threat is less serious than they might believe. In fact, that course would be politically disastrous. But nor does Turnbull need to embrace the right's rhetoric in order to sound like he takes ISIS seriously. There is a third alternative.

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At the heart of the right-wing critique is the sense that Western civilisation is decadent and depraved, and thus vulnerable to a well-disciplined extremist threat. According to Paul Kelly, Abbott's mantra is that 'the West, like Australia, must possess the self-confidence to defend its interests and its universal values.' This fear, that Western civilisation is feeble and on the brink of collapse, has been a right-wing talking point for years now, though the evidence for it is weak.

More to the point, though, this line of argument actually plays right into Turnbull's key message since becoming PM: one of optimism and confidence, a sense that right now is a great time to be alive and be an Australian. Where the hard-right sees only threat and fragility, Turnbull sees a strong country with a hopeful future. Turnbull can play this card against his ideological opponents. Why are they so pessimistic about Western civilisation at a historical moment when it has never been so dominant? Why, when faced only by a small army of poorly equipped extremists, do they have such little faith in a system which has seen off Nazism and communism, and which is a magnet for every persecuted minority in the world, including Muslims?

The right's case is drenched in nostalgia for an Australian society that has disappeared and a distrust of what has replaced it. Starting with his National Security Statement today, Turnbull can counter this with a determined and resolute optimism, one which uses the strengths of modern Australia to fight extremism, and one which refuses to be spooked by a threat that Australia and its allies can contain with sustained, proportional effort.


The sixth '2+2' consultation between Australia and Japan's foreign and defence ministers took place in Sydney yesterday. For Japan, the timing was fortuitous, coming a little over two months after Malcolm Turnbull wrestled the prime-ministerial helm from Tony Abbott, whose personal commitment and investment of political capital into beefing up the bilateral security partnership is well known.

Speculation that Turnbull would visit Tokyo as his first Asian destination has proved wide of the mark. But he has already brushed past Shinzo Abe twice on the multilateral summitry circuit, as Defence Minister Marise Payne has met her counterpart, Gen Nakatani. Yet the suspicion has lingered that under new management, with a fresh national security line-up (Julie Bishop excepted), Canberra might aim to navigate a more neutral path in its key Northeast Asian relationships. So, yesterday's 2+2 provided Japan with an early opportunity to re-embed the 'special strategic partnership', and to probe any changes of tone, or heart, Down Under. 

Anyone looking to argue that the Turnbull Administration intends to peg back the relationship with Tokyo is unlikely to find much evidence to support that thesis from the public dynamics around the 2+2 meeting or the accompanying Joint Communiqué.

None of the four principals described each other's country as an 'ally', as Abbott famously said of Japan. But there were plenty of mutually reinforcing codewords on display in yesterday's interactions, from Marise Payne's description of Japan as 'our key partner' in the region and one of Australia's highest priorities for defence engagement, to Japanese Foreign Minister Kishida's depiction of the bilateral bond as a linchpin of security in the Asia-Pacific.

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The military symbolism behind the ministers touring the amphibious assault ship (cum HADR response vessel) HMAS Canberra at its Sydney base was also clear. It was enough to signal, from both parties, that this remains a security and defence partnership ranked highly after their military alliance with the US; one with strategic overtones. 

The language of the joint communiqué itself is somewhat restrained, but no fewer than seven repetitions of the word 'strong' seem designed to convey the image of a Canberra-Tokyo ministerial quartet singing volubly in unison from the same strategic hymn sheet.

So who is the target audience, apart from the Japanese and Australian publics? The simple answer to that, of course, is China, despite the two governments' efforts to cast the 2+2 cooperative agenda widely, in terms of global terrorism, North Korea, peacekeeping and peace-building. 

One of only two direct references to China in the Joint Communiqué highlights the importance of building 'a constructive and mutually beneficial relationship… through dialogue, cooperation and engagement.' But strategic concern about China is the unmistakable refrain that runs through the Joint Communiqué's opposition to 'coercive or unilateral actions' in the East and South China Seas, and its expressions of mutual support for the rule of law at sea, freedom of navigation and freedom of overflight. 

In yesterday's opening exchanges, Nakatani boldly underlined Japan's opposition to 'self-righteous assertions which are incompatible with international law and order' and could drastically change the region's strategic environment. He asked for Australia's support to 'send a clear message' that such attempts will not be condoned.

Lengthy interrogation at the press conference about the prospects and modalities for Japanese and Australian security and defence cooperation in the South China Sea, and on the submarine acquisition essentially boils down to same thing: what are Japan and Australia prepared to do in the face of China's seemingly relentless strategic push? On freedom of navigation, bar strong support reiterated at the 2+2 for the US decision to undertake operational assertions, it appears that neither ally has yet committed to undertaking their own naval or air activities in support.

On submarines, my takeaway from yesterday's press conference was that the post-Abbott penny has well and truly dropped in Japan; they know now they are in a commercial dogfight with the more export-savvy German and French bidders. Hence Nakatani's visit to Sydney was preceded by a trip to Adelaide (and that of a Japanese industry delegation several weeks ago). In the press conference he played the two trump cards in Japan's hand: unrivalled experience in the design and construction of long-range conventionally powered submarines and a strategic relationship that is not only bilateral, but trilateral, when the US-made combat system for the Collins' replacement is taken into account.

Minister Payne had the presence of mind to welcome the submission of this torpedo-like pitch without appearing to endorse the Japanese bid. That, it seems, is another defence decision the Government is content to put off to a more convenient date. With $50 billion at stake, it's worth the wait.

Photo courtesy of Australian Defence Image Library.


Jakarta has reacted to the Paris attacks with condolences, assurances that everything is under control, and scepticism from all sides that there could be any fallout at home. From senior officials to hardline Islamists, the message is that it can’t happen here. But it’s not that simple. It’s true that a coordinated attack on the scale of Paris is not going to happen in Jakarta or Bali or anywhere else in Indonesia. We could, however, see a change in tactics on the part of pro-ISIS groups here, including a decision to target foreigners.

Those who say there’s nothing to worry about are correct on their key points. Indonesia is not a member of the Western coalition bombing Syria; there’s no reason for it to be a target like France or the US. There’s no chatter that any Indonesian agency has picked up about plans for violence. The jihadi groups still active in Indonesia are focused more on getting to Syria than on undertaking any action and anyway, they are poorly trained, poorly led and largely incompetent.

But there are other signs that suggest that this is no time for complacency. More and more Indonesians are getting killed in Syria. Earlier in the year, those deaths came in battles against the Kurds, but the most recent deaths have been airstrikes – and revenge is a powerful motive. If Indonesian police have been the main victims of homegrown terrorism since 2010, we could now see a shift back toward Westerners and soft targets.

The Paris attacks drew praise from Indonesians with ISIS in Syria, among them Bahrun Naim, an ex-prisoner and jihadi intellectual who was involved in trying to organise an attack in Central Java from Syria last August. In a blog posting entitled 'Lessons from the Paris Attacks' (Pelajaran dari Serangan Paris), he urged his Indonesian audience to study the planning, targeting, timing, coordination, security and courage of the Paris teams. His readers aren’t fellow fighters in Syria, they’re too busy. He's writing for the terrorist wannabes on Java.

One of the saving graces for Indonesia over the last five years is that local terrorists have thought small. Bahrun Naim and some of his friends think bigger.

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The fact that Indonesian agencies are not picking up chatter may be partly because many of the committed ISIS supporters from Indonesia are using encrypted communications over WhatsApp and Telegram, not ordinary mobile phone communications that the Indonesian police can tap. Even if Telegram has decided now to close down pro-IS channels, it is still going to be difficult to track private groups. The jihadis are also faster to adapt to new technologies than law enforcement agencies.

Indonesian women extremists have been eager for a more direct role in jihad than ISIS has allowed thus far. Unlike al Qaeda, the ISIS leadership never sanctioned women suicide bombers, for example. But the Frenchwoman who was initially reported to have detonated her explosive vest in St Denis on Wednesday has captured the imagination of some Indonesian 'lionesses', and if policies change in Syria toward more active participation of women, that could have ramifications for Indonesia.

A power struggle between two Syria-based Indonesian ISIS commanders, Bahrum Syah and Abu Jandal, could also lead the contenders to urge their respective followers in Indonesia to undertake attacks, in a kind of lethal one-upmanship. (Bahrun Naim is with Abu Jandal.) In the absence of new leadership, there is not too much to worry about, but it could be of serious concern if anyone with combat experience or training came back from Syra to add some planning and organisational capacity to cells here.

There is as yet no ISIS structure for Indonesia, and pressure from some pro-ISIS quarters to form a unified organisation has not yet succeeded. Fortunately for us, the groups are divided along multiple lines, ideological as well as personal, and fears that a united Jamaah Anshorud Daulah or Anshorud Daulah Islamiyah could emerge, or a Wilayat Nusantara be declared, are still unrealised. If a structure does come into being, it could be more responsive to calls from the ISIS leadership for attacks on Westerners than we have seen thus far.

The Indonesian authorities are right that the risk of a Paris-like spectacular in Jakarta is low. But while the police and army have been focused on going after Indonesia’s most wanted terrorist, Santoso, in the hills of Central Sulawesi, ISIS has succeeded in building a network of supporters in the suburbs of Jakarta.

Bahrun Naim in his 'Lessons' article notes approvingly that the Paris attackers well understood the oath of loyalty they had taken toward ISIS and its consequences. None of the hundreds, maybe more than 1000 Indonesians who have sworn allegiance to ISIS since June 2014 have been asked to demonstrate their obedience to their leader. That could still come.

The essence of terrorism is unpredictability. If we assume that because it’s quiet now in Jakarta, it is going to stay that way, we could be in for an unpleasant surprise.

Image courtesy of Flickr user Global Panorama

  • Terence Wood analyses new polling data to get to the bottom of who actually supports Australian aid. (Hint: it helps to be young, educated, female and from the left end of the political spectrum).
  • David Cameron has announced that at least half of the UK's £9 billion aid program will be directed towards fragile states, up from 43% today.
  • Adam Davidson, founder of one of my favourite podcasts, takes to The New York Times to argue that the venture-capital philosophy of investing (basically, investing small amounts in many projects/ideas and then scaling up what works) can be a useful model for foreign aid.
  • Speaking of podcasts, the Innovations for Poverty Action team have released their development podcast playlist for the summer.
  • To mark World Toilet Day last week, WaterAid released a report ranking countries with the worst access to toilets in 2015:

  • David McKenzie and Anna Luisa Paffhausen from the World Bank take a look at what is being taught in more than 200 development economics courses from 54 developing countries. 
  • The Centre for Global Development's founding President, Nancy Birdsall, is stepping down after a stellar 15 year run. She will stay on until a successor is in place.
  • The Guardian takes a look at the best and worst aid videos of 2015. Here's the best: 


As the world slowly absorbs the full implications of the terrorist attacks in Paris, thoughts inevitably turn to whether events will be repeated elsewhere.

That ISIS or ISIS-affiliated groups and networks would seek to emulate the impact of the Paris attacks is almost certain. If an opportunity arises to attempt an attack on a similar scale, it is unlikely that ISIS would reject it. Its intent will persist.

The media has understandably highlighted repeated references to Australia and Australian fighters in ISIS propaganda, including in the most recent edition of Dabiq, its online magazine. But we should be clear about the role of ISIS propaganda. It aims to radicalise, recruit and inspire attacks in the West, not communicate ISIS operational priorities. 

We don’t know where Australia features in the thoughts and strategies of ISIS senior leadership. Or if responsibility for external attack planning lies with ISIS senior leadership or local networks. But it is reasonable to think that ISIS might have greater opportunity to attack the UK, Germany or Saudi Arabia for example, and that this would have a bigger impact on events in the Middle East.

Is ISIS capable of carrying out a similar attack in Australia? One way of answering this is to look at elements critical to the scale and success of the Paris attacks: the expertise of returning foreign fighters; access to weaponry; the ability to transport both across international borders; and the inability of intelligence and security agencies to monitor the individuals involved.

Around 30 foreign fighters have returned to Australia, with a further 110 Australians known to be located with terrorist groups in Syria and Iraq. Given the size of this group and what they will have learned, it is reasonable to assume that some will have the expertise and intent to conduct a similar attack here.

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When returning foreign fighters are involved in a terrorist attack, it is proportionately deadlier. Their battlefield experience and expertise makes them a force-multiplier and a focal point for an otherwise inexperienced network. A home-grown network might attempt to replicate the attack, but its chances of success and impact are likely to be reduced.

Could Australian foreign fighters return undetected, as appears to have been the case in Paris? There are certainly no guarantees, as Khaled Sharrouf’s travel to Syria demonstrated. But a key difference for foreign fighters who left from Australia,  in comparison to France, Belgium, and the other 24 signatories of the Schengen Agreement, is they cannot travel home without providing identification by slipping from Syria into Turkey.

A lack of land borders gives Australia significantly more control over the flow of individuals in and (just as importantly in this context) out, and makes it more difficult for networks planning attacks to source weaponry and explosives from outside of Australia.

This control means that while Australia has contributed a significant number of foreign fighters relative to population size, numbers have remained relatively stable over the past 12 months. Unfortunately, this means that the number of radicalised individuals unable to leave Australia and turning their thoughts to domestic attacks has got larger.

If we’re still uncertain how the Paris attack network slipped under the radar, the emerging picture is not a positive one for European authorities. A key issue appears to be a lack of coordination between authorities internally in France and across Europe, alongside a growing list of radicalised individuals.

Successfully countering the threat, assuming that intent exists, will require Australian authorities to continue and expand their efforts in a number of areas.

The 30 returned foreign fighters will continue to be assessed and monitored. Existing measures to monitor known foreign fighters and prevent them unexpectedly returning will also continue and may soon be combined with the ability to strip the citizenship of dual citizens. Identifying any previously unknown Australian foreign fighters is also critical.

Links between terrorism and organised crime, which is a likely source of weaponry and explosives, will also be a significant focus. As will the need to encourage intelligence and information sharing across state, federal and international partner agencies. Most important will be the ability to prioritise available resources in efficiently and effectively, given existing workloads.

Authorities will also focus on minimising the impact that such an attack could have. NSW Police have announced a new 'shoot on sight' policy for terrorist situations. Training for multiple shooter attacks will be stepped up, and detailed response plans developed. These types of activities don’t prevent attacks, but can make a huge difference to the death toll.

The Paris attacks may inspire copy-cat attempts in an Australian city. We’ll hear reports about 'terrorist chatter'. But there is no inevitability that it will progress beyond that, or that it will succeed. Panic, fear and a sense of inevitably is precisely what ISIS hopes to instill.

There are a number of factors working in Australia’s favour, particularly in comparison to France. Planning these types of attack takes time, expertise and people. Mistakes are likely. Australian authorities and their international partners will need to ensure they are ready.

Photo courtesy of Flickr user Jordi Bolzareu


This week the attacks in Paris, and the subsequent manhunt for its perpetrators, has held the attention of the West. One thing that has struck me is the multiplicity of debates the attacks have touched and in some cases sparked anew, including on the role of the media and social networking sites, the Syrian civil war, refugee policy, European integration, intelligence failures and the future of terrorism. Daniel Woker, a regular contributor to The Interpreter, was in Paris on the night of the attacks:

Suddenly, a loud noise from the Boulevard. My wife says 'shots' and I reply 'I think not', as it sounds different to the dimly remembered live ammo exercises in my long gone army days. But a young woman runs by, gripping my arm and shouting with fear, 'viens, viens, they are shooting from cars at all of us'. We all race into the opposite direction. I distinctly remember thinking at that second how absurd that was, though of course it wasn't, as it turned out later.

Is this a new type of terrorism? Lydia Khalil suggested that the attacks displayed a mix of trends:

'Mumbai-style' attacks — multiple coordinated ambushes with small arms and suicide bombs — were certainly possible but appeared to be the purview of other capitals in the Middle East and South Asia. Sophisticated, audacious attacks a la 9/11, directed and organised by an international terrorist organisation, were a distinct but fading possibility. The consensus was that ISIS was a potent, but regional, threat and its focus was on state-building, consolidating territory in the Levant and building legitimacy for its caliphate.

What makes the Paris attacks particularly troubling is that it appears to be a confounding mix of all three trends. These were homegrown violent extremists, directed by a well funded international organisation that controls vast resources and territory, hitting purely civilian, soft targets in a sophisticated manner

Former intelligence analyst David Wells wrote on the role of Western security agencies in the attacks, and what they will view as an intelligence failure:

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The first thing to point out is there a difference between specific, actionable threat intelligence, and intelligence indicating intent. Yes, ISIS rhetoric pointed towards attacks in the West. And ISIS clearly had the capability and manpower to attempt these type of attacks. But without specific intelligence, the threat remains latent.

So does the attack constitute an intelligence failure? In the most general sense, yes. France and her partner intelligence agencies, including in the UK and US, are specifically looking for this type of intelligence. Internally, they will all regard their inability to prevent the attack as a failure.

Vanessa Newby related some personal stories about spending time in the Beirut neighbourhood that was bombed last week:

ISIS is believed to have launched this attack to punish Hizbullaah for its military involvement in Syria. I was surprised it picked Burj because this is not just  a 'Shi'a dominated or Hizbullaah stronghold', as has been reported. In fact, it is a very diverse area where if you launched an attack you would be just as likely to kill some of your own people as you would the other side. The level of support for Hizbullaah in Burj is unclear for two main reasons. First, the area is populated by a great many Syrians, who fled the Assad regime, and by Palestinians. Secondly, in the Shi'a community political support is divided between Amal and Hizbullaah.

What did these attacks have to do with the war in Syria? Rodger Shanahan suggested that ISIS may be trying to distract from the fact that it is losing territory:

In the space of 36 hours we saw suicide bombings in Baghdad and Beirut and the attack in Paris. This is unlikely to be coincidental, and more likely to be the result of explicit direction from ISIS central or implicit guidance understood by its affiliates.

In the last week and a half, the news regarding ISIS showed Kurdish forces re-taking Sinjar in Iraq, Iraq government forces closing in on Ramadi, Syrian government forces breaking a two-year siege by ISIS of the Syrian airfield at Kwereis and the likely killing of the ISIS Western poster-boy 'Jihadi John'. With the entry of Russian forces into Syria, and the bolstering of Assad’s ground forces by Iran and its militia allies, the ISIS main forces are under increasing military pressure on multiple fronts in the Middle East.

Anthony Bubalo on the growing sense of 'pragmatism' and dealing with Assad:

Assad is no more capable of returning stability to Syria with Western backing than he is without it. Any political process built upon Assad playing a transitional role in his country will soon collapse once it becomes clear that his role is becoming permanent. Any deal that unintentionally or otherwise helped Assad survive will also entrench Russian and Iranian strategic gains in Syria. No one in Syria owes more to the Russians and Iranians than he does. In fact, the West would be complicit in increasing the security threat that Iran and Hizballah pose to Israel as they expand their presence in Syria. 

Prime Minister Malcolm Turnbull continued with his world tour this week. Binoy Kampmark on Turnbull's bilateral meeting with Germany's Chancellor Merkel and the difference with former Prime Minister Tony Abbott:

Certainly the meeting in Berlin provided an interesting counterpoint between the old and the new. After Australia's rapid turnover of leaders, it's fair to say Australia's politics and politicians have featured more frequently and in more detail than usual in German media this year.  In its coverage of the the party coup that unseated Mr Abbott as leader, for example, the popular German newspaper, Der Spiegel, went so far as to note various designations, including the title of the 'Mad Monk'.  

With the UN Paris climate change negotiations just a week away, Erwin Jackson examined what has changed since 2009 and Copenhagen:

Throughout 2015, a number of Australian businesses have released statements showing their willingness to take action on climate. The Australian Climate Roundtable brought business, investor, union, research, environment and welfare groups together. A statement was released encouraging Australia to do its bit on climate change. In September, leaders from AGL, BHP Billiton, GE, Mirvac, Santos, Unilever, Wesfarmers and Westpac Group published a statement that supports an effective Paris agreement outcome

Fergus Green from LSE and Richard Denniss from The Australia Institute have a two-part series on the end of coal. The first piece looked at the global trends in the commodity, both in terms of energy consumption and the private sector:

Moreover, coal companies are becoming increasingly isolated politically. As the corporate world perceives increasing risks of binding carbon budgets, the oil and gas industries have begun to split the fossil fuel camp and stake their greater claim to the remaining budget. Coal, after all, is the highest-emitting and lowest-value of the three fossil fuels. (The motivations of the oil and gas executives in criticising coal are no doubt self-serving, but their political-economic heft could be helpful to the fight against coal.) In a sign of the industry’s growing desperation, coal companies have even started fighting publicly amongst themselves. 

Both Adam Henschke and Albert Palazzo continued our debate on drones this week. First, Adam on whether the falling costs of autonomous vehicles is worrying:

The overall point is that, as far as the ethics of remote weapons is concerned, we have largely left the initial concerns about the remoteness behind. In some senses we are moving into a new phase of assessment, where contrasting ideas of cheapness and complexity highlight a new set of areas that require further consideration and reflection.

Albert Palazzo had a short but interesting piece questioning whether armed drones can actually affect the outcome of war:

The contribution to success in war (to victory) is an important aspect of any evaluation of the ethical utility of a weapon. I would argue that a weapon that doesn't meet ethical standards is unlikely to make a positive contribution to forcing your enemy to accept your will. Rather, it is likely to have the opposite effect.

Armed drones have dazzled many military and political minds with their ruthless efficiency. But efficiency and effectiveness in war are not the same thing. Efficiency in killing won't translate into effectiveness in war unless the ethics are right.

Fergus Hanson continued his series on the internet and power by looking at the influence of social media conglomerates like Facebook:

What does this mean for policy makers? For a start, there is a need to look seriously at options for maintaining competition online. This isn’t easy, but the Europeans have begun. We also need to consider the implications and obligations companies with global monopolies might have when it comes to issues like censorship: if a company like Facebook is where most people get their news, should it be able to apply a stricter censorship regime than that allowed in your country of origin.

Leon Berkelmans took a closer look at the make-up of services in trade:

OK. Point taken. But when we are talking about dismantling barriers to trade, it is what crosses the border that counts. You can make all the changes to accountancy regulations you want, but if the cheese can’t get across the border, it doesn’t matter.

An interesting post from Stephen Grenville on capital flows, and the links between academic and practitioner economists:

They say that the challenge for academic economists is to prove that what happens in the real world could also happen in theory. Blanchard and his colleagues have taken a useful step in this direction, reconciling theory with inconvenient reality. This might be seen as progress, if only the political-economy of international economics were not still in the hands of Keynes' 'madmen in authority … distilling their frenzy from some academic scribbler of a few years back'.

Finally, how do observers, policymakers, academics, students and journalists see North Korea? Robert Kelly:

In short, North Korea is post-ideological and akin to The Godfather: a massive racket to shake down anyone, inside North Korea and out, to fund the self-indulgent lifestyle of a narrow elite. North Korea is what happens when Don Corleone takes over an entire country and can enforce his clan rule with a secret police rather than just capo henchman. Actually, North Korea is barely a country at all; it's an Orwellian gangster fiefdom.

Photo courtesy of Flickr user mafate69.