Lowy Institute

Well, today's been a shocker. In what will be my last Weekend Catch-up for The Interpreter, the news that the UK has voted to leave the EU has been demoralising. I can't help but think that a liberal project, perhaps the most significant since the UN was established after World War Two, has been torn apart. Already calls from other nationalist forces across Europe have been strengthened. Maybe the financial shocks that are sure to resonate this weekend will dampen any further enthusiasm for further isolationism in other parts of Europe. Maybe they will have the opposite effect. Nobody really knows. This piece in the Financial Times by Philip Stevens captures much of my mood, particularly this passage:

Across advanced democracies politics has been soured by resentment against wealthy elites. Look across Europe, or across the Atlantic to Donald Trump’s Republican presidential campaign, and you see the same seething discontent about globalisation, migration and cuts in welfare. The postwar political order, dominated as it has been by parties of the centre-right and centre-left, is under unprecedented strain. Rising populism of the extreme left and right has begun to sound echoes of the 1930s.

The Interpreter has covered the lead-up to the Brexit referendum extensively this past week. I'll lead off with Shashank Joshi on the strategic consquences:  

If Britain votes to leave the EU on 23 June, it may well represent the greatest strategic shock to the continent since the breakup of the Soviet Union and consequent reunification of Germany a quarter century ago. The balance of power and influence between Britain, France and Germany – a crucial variable in European geopolitics for hundreds of years – would shift, while the European project as a whole could be gravely weakened just as its eastern and southern flanks come under unprecedented strain. Britain itself, having found the role that Dean Acheson famously proclaimed lost, would be in danger of losing it once more, eroding its value as a transatlantic bridge, and grasping for chimerical substitutes in the Middle East and Asia.

Matthew Dal Santo also wrote an excellent and perceptive piece in relation to the vote: 

The intellectual case for Brexit is essentially a 'no' in answer to those questions, making the case for Brexit not only historically, but also philosophically coherent in a British setting: the supremacy of parliament in all areas of public policy is the sine qua non of the nation's civic and political continuity. In Benn's words, not only has parliamentary democracy 'defended our basic liberties' and 'offered us the prospect of peaceful change', it has 'bound us together by creating a national framework of consent for all the laws under which we were governed.'

Christine Gallagher outlined a 'word on the street' take that seems quite on the money now: 

These figures may explain why migration and labour issues are resonating in Brexit debates. A lady I met at Manchester train station said her son is long-term unemployed despite his job hunting efforts. He's had factory work in the past and labouring jobs but he's been unemployed for 18 months and she blames EU migration. A tradie in a pub in Peckham in south London told me that most of the workers on his construction site are from eastern Europe. His view is that people coming from poorer countries get jobs because they are more motivated to change their circumstances and are willing to wake early and work hard. This is anecdotal, keep in mind, and not empirical evidence, and yet it is a reflection of local perspectives about how migration is impacting labour.  

Brett Hogan and John Roskam put forth the idea that Brexit would be good for the UK and good for Europe:

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Democracy is, at its heart, the process by which personal freedom of expression finds its voice. A nation's executive and legislative system, its courts, its police and armed services, and the laws they pass, interpret and enforce, form a framework that governs how its citizens live and interact with each other. A properly functioning nation-state and democracy must have the ability to perform these functions. Unfortunately it is clear that the citizens of the UK no longer enjoy these privileges.

In a similar vein, Richard Johnson said Remain's arguments were unconvincing and did not tackle the issue of globalisation properly: 

The Remain side seems incapable of distinguishing between internationalism and globalisation. Yet we can surely be internationalist while not succumbing to unfettered globalisation. We can support national reciprocity and co-operation without ceding democratic institutions. We can support immigration without giving up our ability to regulate it.

Moving on to the Australian election, Andrew Carr noted that Australian politicians are more willing to talk about defence and foreign policy issues:

On a range of fronts, the last few years have suggested Australia's politicians are increasingly willing to highlight their disagreements on foreign and defence policy. This was clearer under the combative Tony Abbott, but even Turnbull's more refined style can't hide growing differences in how the major parties talk about and think about issues such as terrorism, China, defence spending, climate change (as a security concern), foreign aid, and until Abbott succumbed to the political pressure, submarines. 

In a very important piece, Jenny Hayward-Jones tackled the overlooked issue of Manus in the election:

The major parties in Australia should also be canvassing other options. If the Manus 'deterrent' can no longer be a key plank of Australia's immigration policy, how much symbolic value is there in 'never' permitting refugees currently detained in Manus access to Australia or to New Zealand, while we continue to risk our bilateral relationship with Papua New Guinea? Australian voters have accepted policy backflips before and no doubt will again. Our politicians might even persuade us to do so this time if they do us the courtesy of involving us in an informed debate.

The Lowy Institute launched its annual poll this week. Alex Oliver with an overview of the most important results:

While we are divided between China and the US and many of us are anxious about China's intentions, we also appear to be quite concerned about what's going on in US politics at the moment. Nearly half (45%) of us say Australia should distance itself from the US if Donald Trump becomes president. Around half (51%) say we should remain close regardless of who is elected president; not a decisive vote of confidence and a result which suggests that the Trump factor may be having an impact on Australian support for the alliance.

North Korea launched yet another IRBM earlier this week. Morris Jones:

Ironically, this impatience has probably contributed to the failure of these test launches, much like the fairy tale of the goose that laid golden eggs. Exactly what happens next is unclear, but certain political intermediaries who have oversight of the program could face a bleak future. North Korea would presumably judge that executing or imprisoning key technical personnel would derail their missile development. Then again, politics has already grossly interfered with engineering. Nobody knows what else is happening beyond our view.

With a difficult and messy ASEAN summit that failed to reach a consensus on the South China Sea, Nick Bisley wrote on how it reflects the contest for primacy between the US and China:

The meeting also reminds us that the South China Sea dispute is testing the efficacy of the old ways of managing Asia's international order. Indeed, in many respects it shows that the old order, centred around US primacy and consensus among Asia's states about the basic rules and purpose of that order, is dying — if it is not already dead. Asia has returned to a period of contestation, not only about who owns which features in the South China Sea, but about the underlying structure and purpose of region's international order.

Rodger Shanahan with a take on a recent dissent memo within the US Department of State over the Obama Administration's Syria policy:

As an aside, I must admit that I never knew about 2 FAM 70, the US document that outlines the way US State Department or USAID personnel can express alternate views to US government policy. It beggars belief that an Australian government of either hue would ever allow such freedom of expression within a key government agency.

Jiyoung Song continues her series on the migration-security nexus in Asia:

Human trafficking in the fishing and seafood industry in Southeast Asia is another example of modern-day slavery. Fishermen are especially vulnerable to exploitation as their movements are restricted in boats at sea. Physical abuse, inadequate working and living conditions, unpaid salaries, and the lack of any avenue for complaint are widespread. Australia is connected to a degree to these exploitative practices in seafood industries as it is the fourth largest consumer of seafood from Thailand where forced labour by trafficked persons takes place.

And Marie McAuliffe wrote on migration and the regulation-expectation paradox:

The more states regulate aspects of social and economic life, the more they strengthen the perception that things can be regulated and controlled, even phenomena occurring transnationally and far beyond the direct control of national or regional regulators, like irregular migration. The pressure can then translate into more ‘innovative’ and extreme attempts at exerting greater control, such as the EU-Turkey deal, which can come at a very high price, financially, bilaterally and in humanitarian terms.

Finally, Shyam Saran wrote on India's economic reform agenda and he departure of India's central bank governor, Raghuram Rajan:

In any event, Rajan's departure is not good news at a time when the global economy seems destined to be buffeted by another bout of volatility thanks to uncertainties related to Brexit, China's economic slow-down and continuing economic stagnation in the US and Europe. In dealing with such volatility and unexpected macro-economic instability, Rajan's continuing and tested stewardship would have inspired confidence and projected an air of predictability. As we have seen, perceptions count.

Photo courtesy of Flickr user Theophilos Papadopoulos.

The Brexit referendum

In just over 90 hours after the UK's excruciating referendum vote to leave the EU, the politically shattered British Prime Minister, David Cameron, was due to go to Brussels to attend a long-planned EU leaders summit.

Instead of celebratory champagne, he and his fellow EU confreres will be bracing themselves to face the dangerous forces unleashed by the British outcome.

The instability from Brexit was already underway as the results began trending to the official Leave result. The markets spoke first, sending the pound to a low not seen since the mid-1980s, and spreading turmoil through global bourses.

Then the victorious Leave campaigner and UKIP leader, Nigel Farrage, told the BBC: 'I hope this victory brings down this failed project and brings us to a Europe of sovereign nation states trading together. Let June the 23rd go down in our history as our independence day.' Earlier, even before the result was clear, Mr Farrage said 'the Eurosceptic genie is out of the bottle and will not be put back'.

He was quickly backed up by the extremist Dutch Freedom Party leader, Geert Wilders who tweeted, 'Hurrah for the British! Now it's our turn. Time for a Dutch referendum.' 

Other European far right forces began to rejoice over the result with the National Front in France tweeting via its Vice President, Florian Philippot: 'The freedom of the people always ends up winning. Bravo United Kingdom. Now it's our turn'.

Gerard Aruad, France's ambassador to Washington gave a hint of what might occupy the EU leaders summit in Brussels next week when he tweeted, 'Now to the other Member states to save the EU from unraveling which excludes business as usual, especially in Brussels. Reform or die.'

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Many have speculated a British exit would leave Germany little challenged as the master of the EU, but so far the reaction from Berlin has been what might be expected. Germany's Vice-Chancellor, Sigmar Gabriel tweeted: 'Damn! What a bad day for Europe."

Scotland's First Minister, Nicola Sturgeon hinted at a future break up of the UK over Brexit, saying that the EU vote 'makes it clear that the people of Scotland see their future as part of the European Union. After all, all 32 local authority areas (in Scotland) returned majorities for Remain.'

Another looming problem for the UK is that Northern Ireland also voted to Remain, if not as emphatically as Scotland. This will raise thoughts of a reunification with the Republic of Ireland. 'The British government...has forfeited any mandate to represent the interest of people in the north of Ireland in circumstances where the north is dragged out of Europe,' said Sinn Fein chairman, Declan Kearney .

The now hapless Cameron must decide when to use Article 50 of the Lisbon Treaty that allows the UK two years to negotiate its withdrawal. He said he would do so as soon as possible, but Boris Johnston and British cabinet minister, Michael Gove, who led the official Leave campaign (which excluded Nigel Farrage), say Cameron should not rush it.

At the same time, however, they say they want quick changes before the UK leaves the EU, including limiting the power of EU judges and restricting the free movement of workers.

This advice not to rush on one hand but to speed up on the other could be in breach of EU regulations. But that won't worry the Leavers.

Another Tory Leaver, former defence secretary Liam Fox, urged Cameron to stay on as prime minister to see Britain through the 'turbulence' the vote would  bring. He said:

There is clearly going to be some short-term turbulence. . . As the prime minister that gave us the referendum he is best placed to see us through. . . It would be quite wrong and against his character to say 'I lost the referendum therefore I'm going.'

Elsewhere, in the Remain camp, emotions were running high. Labour's former Europe Minister, Keith Vaz told the BBC the vote would be 'catastrophic for our country, for the rest of Europe, and for the rest of the world.'

Three weeks ago on The Interpreter  Daniel Woker wrote Europe faced three related challenges: Libya and Turkey as key migrant transfer countries; Putinism in the East; and the need to stay globally relevant in the Asian century. Woker said:

Prime Minister Cameron or a like-minded pro-European successor will feel free to work with the UK's newly affirmed European partners to start tackling real problems such as those three challenges.

Now Cameron won't.

Photo by Michael Tubi/Corbis via Getty Images


If you are not already, it's worth following the work of Steven Levy, a long-time technology journalist that has been covering Silicon Valley and the American technology sector for over 20 years (his work and criticism of Apple are particularly noteworthy). He now writes for Medium on its Backchannel site and recently published a long-form piece on Google and its attempts to integrate 'machine learning' throughout all aspects of the company. The progress on artificial intelligence has been getting more attention recently, primarily because of comments from figures like Elon Musk and Stephen Hawking (some other great pieces on this broad area can be found here and here). But a lot of the work is taking place in massive companies like Google. Below are a few extracts from Levy's recent piece.

First, what exactly is 'machine learning'?:

The example Giannandrea cites to demonstrate machine learning power is Google Photos, a product whose definitive feature is an uncanny — maybe even disturbing — ability to locate an image of something specified by the user. Show me pictures of border collies. “When people see that for the first time they think something different is happening because the computer is not just computing a preference for you or suggesting a video for you to watch,” says Giannandrea. “It’s actually understanding what’s in the picture.” He explains that through the learning process, the computer “knows” what a border collie looks like, and it will find pictures of it when it’s a puppy, when its old, when it’s long-haired, and when it’s been shorn. A person could do that, of course. But no human could sort through a million examples and simultaneously identify ten thousand dog breeds. But a machine learning system can. If it learns one breed, it can use the same technique to identify the other 9999 using the same technique. “That’s really what’s new here,” says Giannandrea. “For those narrow domains, you’re seeing what some people call super human performance in these learned systems.”

Google seems to be championing a sort-of 'democratisation' of machine-learning skills among its engineers, as well as throughout the wider tech community:

For many years, machine learning was considered a specialty, limited to an elite few. That era is over, as recent results indicate that machine learning, powered by “neural nets” that emulate the way a biological brain operates, is the true path towards imbuing computers with the powers of humans, and in some cases, super humans. Google is committed to expanding that elite within its walls, with the hope of making it the norm...

...“The more people who think about solving problems in this way, the better we’ll be,” says a leader in the firm’s ML effort, Jeff Dean, who is to software at Google as Tom Brady is to quarterbacking in the NFL. Today, he estimates that of Google’s 25,000 engineers, only a “few thousand” are proficient in machine learning. Maybe ten percent. He’d like that to be closer to a hundred percent. “It would be great to have every engineer have at least some amount of knowledge of machine learning,” he says.

Also, it seems that machine learning responses follow human nature more closely than first thought:

When the team began testing Smart Reply, though, users noted a weird quirk: it would often suggest inappropriate romantic responses. “One of the failure modes was this really hysterical tendency for it to say, ‘I love you’ whenever it got confused,” says Corrado. “It wasn’t a software bug — it was an error in what we asked it to do.” The program had somehow learned a subtle aspect of human behavior: “If you’re cornered, saying, ‘I love you’ is a good defensive strategy.” Corrado was able to help the team tamp down the ardor.

Lastly, this takeaway likely foreshadows what will be written in terms of the history of the evolution of coding:

“It was significant to the company that we were successful in making search better with machine learning,” says Giannandrea. “That caused a lot of people to pay attention.” Pedro Domingos, the University of Washington professor who wrote The Master Algorithm, puts it a different way: “There was always this battle between the retrievers and the machine learning people,” he says. “The machine learners have finally won the battle.”


By Jonathan Pryke, Research Fellow and Director of the Aus-PNG Network in the Lowy Institute's Melanesia Program, and Kath Taplin, Senior Development Manager for Femili PNG

Rates of gender-based violence in Papua New Guinea (and in the Pacific Islands region more broadly) are among the highest in the world. Estimates from Médecins Sans Frontières (MSF) suggest that 70% of women in PNG experience some degree of physical or sexual assault in their lifetime. The issue hit international headlines again this year with MSF delivering a major report on the crisis as it wrapped up its engagement in PNG after almost 25 years of operations. Even more hard-hitting than these statistics are the images in Vlad Sokhin's photography book Crying Meri.

However, less is heard about the important work being done in all sectors of Papua New Guinea toward addressing this pervasive issue. Solutions are desperately required throughout the Pacific Islands region, but there are new approaches warranting broader attention both within and outside of Papua New Guinea.

The Lowy Institute, in partnership with the Development Policy Centre, recently hosted events in Canberra and Sydney to hear from exceptional Papua New Guinean leaders in government, civil society and the private sector. This article attempts to summarise some of the work being done, making specific reference to the guests from our events.

Violence against women is underpinned by a complex interplay of individual, relationship, community and societal factors, not all of which are easy to pinpoint, but at its core it is an exertion of power and control that maintains women's inequality. A sustained and coordinated national response is required, and this starts with the PNG government.

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The Department for Community Development and Religion takes a lead role in this regard, and is developing the first national strategy to address gender-based violence in PNG. Anna Solomon, the Secretary of the Department, assured audience members at the events that this strategy (which will help focus and guide government) is in its final stages of development after a lengthy consultation process.

PNG's Family Protection Act and child protection laws were also discussed, as they form part of the developing legal framework necessary to start effectively addressing violence. Unfortunately, PNG's ongoing fiscal challenges raise the question of whether the resources the government will allocate to new initiatives and to bolster existing work will be sufficient. Comprehensive strategy and laws, however, are critical to demonstrate national commitment on an issue challenging national development, help concentrate domestic efforts and coordinate international assistance. The government also has the luxury of being the largest employer in PNG's formal economy, and where it can't lead with cash it can certainly lead by example (such as through implementing and enforcing stringent employment and recruitment standards). 

Momentum in the private sector is starting to build as employers grasp that there is not only a moral justification for serious action, but also an economic one. At our events we heard from Oil Search Foundation CEO Kymberley Kepore (Oil Search recently committed over US$50 million to the Foundation for the years 2016-2020) on why gender has become a cornerstone of the Foundation's work and how investing in this space is more than just corporate social responsibility for Oil Search.

We also heard from Kevin Byrne, Deputy Chair of the PNG Business Coalition for Women (BCFW), a recently established group of companies and corporate leaders, on his work to promote business and employment opportunities for women. BCFW is also actively trying to address violence in the workplace (such through developing model family and sexual violence policies being taken up by companies who want to support their employees who are suffering violence). The BCFW is an example of how the private sector is starting to coalesce and unify around this critical issue. 

Another instance of business recognising the importance of both empowering women and addressing the barriers and violence they face was the recent Aus-PNG Business Forum in Cairns. There was an address from KTF Archer Leadership Scholar Stephannie Kirriwom, an awe-inspiring Henry Kila Memorial Address from Dr Barry Kirby on the topic of addressing maternal health challenges and breakout sessions on addressing violence against women in the workplace. The leadership and resources PNG's private sector wields will be critical in developing much more concerted and integrated private sector, government and NGO responses over time. 

While leadership, raised awareness, resources and coordination are all parts of the puzzle, delivering services and support to survivors of sexual and family violence is particularly vital. With limited resources and an already stretched health budget, front line workers do a valiant job of providing treatment to adult and child survivors. However, there are insufficient examples of integrated services for survivors in PNG, which is where Femili PNG (which operates in PNG's second-largest city of Lae) comes in. Operations Manager Denga Ilave discussed how the organisation (supported by DFAT, along with Oxfam and private sector and philanthropic donations), works with provincial government, police, courts, hospitals and the private sector to provide daily assistance to adults and children affected by family and sexual violence. Femili PNG staff provide access to services for hundreds of women and children, including medical treatment, counselling, legal assistance, safe houses and (when necessary) relocation assistance, including business start-up kits and other support to assist women's economic independence. You can read more Denga and Femili PNG's work at ABC

Another area discussed at our panel events, and which repeatedly came up in conversation, is how to address these challenges in rural communities, where the majority of PNG's nearly eight million people live. This is where existing networks (critically wantok groups and churches) need to be supported, involved and utilised to help this pressure for action reach the grassroots level. 

There is some cause for optimism in seeing every sector take action, but it will take a redoubling of efforts to stitch together these pockets of momentum into a movement that can cause real change in the lives of many. And that change certainly won't happen without men's involvement. Ultimately violence against women isn't just a women's issue; it is the action of men, and gender inequality, we must address. But when looking around the room at both events, something was missing: sufficient men. In both crowds only around 20% of attendees were male.

For a country where, according to the 2016 Lowy Institute Poll, 79% of Australians feel that domestic violence is a very important issue facing Australia (more so than the economy or terrorism), this turnout was embarrassing. But it is also an important reminder that we need to intensify our efforts both at home and in our region to bring men to the table, because just as it will take all sectors working together to see change, it will also take all people. 

Photo: Getty Images/Hadi Zaher

  • 'Have you been to Tibet bro?' This signalled the beginning of a recent slang-filled Twitter outburst from China's State Information Office. 
  • Russia recently cracked into the top-30 rankings of this soft power index (Australia came 6th). But how real is Russia's soft power clout?
  • The Queen is a slow, but steadyconvert to the Twittersphere.
  • New Zealand Story is the NZ Government's interesting new initiative designed to better communicate the country's value to the world. Involving extensive consultation and international market testing, the initiative can be followed via #NZStory
  • This is what it looked like when Iran's all-male delegation met an all-female EU team in Norway.
  • India's Foreign Minister, Sushma Swaraj, has developed a reputation for her hands-on approach to using Twitter to help resolve consular crises, but that doesn't mean she has time to fix your fridge.
  • A Canadian political advisor argues cyber communities should be used to help solve diplomatic problems.
  •  #KosovoUNESCO was disrupted by social media users in Serbia who drove #NoKosovoUNESCO
  • A British diplomat on why you should be tweeting about what's happening in Afghanistan.
  • Helen Clark has added Snapchat and Instagram to her UN Secretary-General campaign toolkit.
  • A Twitter spat erupted between the US Embassy in Jamaica and the country's attorney-general after a rainbow flag was flown by the embassy following the Orlando shootings.
  • Canada's intelligence agency has an academic outreach program and this foresight report (pdf), which looks at the drivers influencing security risks to 2018, is one of its major projects.
  • Tips from Australian Ambassador Dave Sharma on how diplomats should and shouldn't use social media.
  • On 4 June, the Canadian Government turned to Facebook to commemorate the 27th anniversary of Tiananmen Square.
  • The Indian Government has published an online book promoting its path-breaking diplomacy.
  • This slick new video from China urges citizens to pray for smooth sailing in the South China Sea if they want continued access to the newest fashions and electronics. Buoyed by the popularity of Weibo, it's a very smart strategy and only the latest addition in this ongoing propaganda battle:


Raghuram Rajan, the well respected governor of the Reserve Bank of India, has decided to return to academic life at Chicago University when his three year tenure comes to an end in September this year.

In announcing this well before the due date, Rajan has pre-empted what would have been a controversial government exercise on deciding whether he should be extended for another two years, as has been the case with most of his predecessors; or whether a successor should be selected instead.

Rajan has been acknowledged as one of the most professionally qualified persons to head the central bank in recent years and his management of India's financial and banking sectors has drawn praise both at home and abroad. From being billed as part of the 'Fragile Five' in 2013, when Rajan took charge, to being one of the few bright spots in an otherwise dismal global economic landscape, India owes much to Rajan's efficient and confident stewardship. The fact that Rajan came to this assignment as a highly respected and acclaimed economist gave him a high degree of credibility in international business and financial circles.

This proved to be an important, though intangible, asset to an Indian government seeking to convince an often sceptical international audience that India was embarked on a serious and substantial reform path. Rajan's mere presence at the helm of the central bank, seemed to suggest that India could for once be a good bet for investors.

Rajan's international reputation shone brighter than his domestic image. Business leaders constantly complained about him persisting with a relatively high interest rate regime as part of his anti-inflation strategy. His insistence that public sector banks own up on their expanding non-performing assets  and clean up their balance-sheets struck at the roots of a crony culture where banks and big business together undermined an efficient market based economy.

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But what may have lost him support in the present Modi Government may have been his outspokenness on issues unrelated to economic management. His strong defence of India's plural and democratic values and his implicit criticism of some of the manifestations of sectarianism and intolerance may have angered some of the more ideologically motivated elements in the ruling party. The open and unseemly personal attacks made on Rajan by the BJP Member of Parliament, Subramaniam Swamy, seemed to suggest as much. Some critics of Rajan have suggested, perhaps with some justification, that as a central bank governor he should have maintained a low public profile and concentrated on matters relating to his own mandate, rather than venture into a contested public space.

In any event, Rajan's departure is not good news at a time when the global economy seems destined to be buffeted by another bout of volatility thanks to uncertainties related to Brexit, China's economic slow-down and continuing economic stagnation in the US and Europe. In dealing with such volatility and unexpected macro-economic instability, Rajan's continuing and tested stewardship would have inspired confidence and projected an air of predictability. As we have seen, perceptions count. 

Rajan's announcement of his imminent departure was followed almost immediately by the government announcing of a slew of economic reforms, some potentially quite significant. It is tempting to think that the latter was timed to counteract or neutralise the possible negative impact of the former, at least on international audiences. In fact, these reforms were being deliberated upon for quite some time and decision on them preceded Rajan's announcement. The latest reforms have expanded the scope of foreign direct investment in defence, civil aviation, broadcasting services, the pharmaceutical sector and processing and retail in agricultural products . They have been justified in terms of job creation and technology infusion.

However, social and labour organisations associated with the ruling party have attacked these reforms as a 'betrayal'. There is a strong and deeply ingrained suspicion of foreign investment within sections of the BJP, which espouse self-reliance instead. It remains to be seen whether intra-party dissension sidetracks the reform process. This is what happened in the last years of the previous government, despite it being headed by a prime minister with impeccable reform credentials.

Whatever the reasons why these reforms were announced at this juncture they should be welcomed. India's economy can only benefit from greater openness and market friendly policies. Rajan may be leaving soon, but India will hopefully continue with his legacy of prudent macro-economic management by appointing a professional with a reputation for credibility and competence. This will be critical to the government's aim of pressing ahead with its reform agenda, in particular in the crucial banking and financial sectors.

Photo courtesy of Flickr user International Monetary Fund.


By Brittany Betteridge, an intern with the Lowy Institute's East Asia program.

When Jakarta Governor Jokowi was elected president of Indonesia in 2014, his vice governor, Ahok, succeeded him. Jokowi and Ahok had been running mates in the Jakarta gubernatorial election in 2012, with millions of Jakartans casting ballots in a closely watched race.

Upon taking office, Ahok decided to tackle one of Jakarta’s most vexing challenges; the floods that regularly inundate much of the city. He ordered bullozers to remove the homes of long-term residents of riverbank shanties. While these dwellings clogged the city’s drainage canals, the residents had previously received permission to stay but Ahok offered them neither appropriate re-housing or compensation. The governor’s actions to tackle flooding thus had a disproportionate effect on marginal communities, illustrating the problems populist governance can cause in the absence of due process.

In past decades, reformers in Indonesia argued passionately that direct local elections of mayors and district heads, like that which saw Jokowi and Ahok triumph in Jakarta, would lead to greater accountability and better governance. It was a persuasive argument and, since 2005, all local government leaders in Indonesia have been directly elected by popular vote, rather than through deals between political parties in the local legislature. Direct elections have produced leaders who are not party hacks but individuals the parties believe will be acceptable to the broader population

This process has begun to transform Indonesian politics. According to a recent ISEAS report by Diego Fossati, only 5.6% of voters in a local election based their decision on support for a particular political party, with most voters prioritising qualities of individuals and indicating they thought their favoured candidate was the best person for the job, the cleanest candidate, or had the best policies. President Jokowi, for example, vaulted to prominence as the reformist mayor of the mid-sized city of Solo before he had any strong links to his political party, PDI-P.

However, this enthusiasm for direct elections and the independent leaders they produce masks a mixed record of local governance.

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Some local leaders’ reputations for clean governance or flashy reform have allowed them to consolidate popular support; examples include Tri Rismaharini of Surabaya, Ridwan Kamil of Bandung, and Jokowi during his time as mayor of Solo. Risma, as the no-nonsense Surabaya mayor is known, initiated pro-poor policies on access to healthcare and education. Her focus on developing more green spaces helped Surabaya win several environmental awards, including the 2012 ASEAN Environmentally Sustainable City Award. Kamil focused on technology, green spaces and waste management to secure his strong support base in Bandung. Jokowi also advanced pro-poor policies, reducing bureaucratic red tape and introducing protection for smaller local markets in his time as mayor of Solo. All three candidates placed an emphasis on transparent government, and adopted an authentic, everyman style in their campaigns.

But the same populist pressures that led to reform in Solo, Surabaya and Bandung have failed other communities. Religious divisions have long plagued Bogor, with a former mayor infamously defying a Supreme Court ruling to restore a construction permit for a Christian church. His Australian-educated successor, Bima Arya was expected to be a cosmopolitan reformer and to be pro-active on minority rights. He promised in his election campaign to root out corruption, promote law and order, and resolve the conflict over the church. 

But, as Lies Marcoes has noted, Bima Arya has been anything but pluralist. The church remains closed, and the city has now banned Shi’a Muslims attending celebrations of the Asyura feast in Bogor. More recently, Bima Arya inaugurated the new Bogor office of Hizbut Tahrir Indonesia (HTI), an Islamic group that rejects the concepts of the nation state and elections, and classifies them as Western imports. Marcoes speculates that frustration among Bima Arya’s original supporters with a lack of progress on his reformist agenda may have prompted him to try and bolster support by turning to Islamist populism.

Bogor is not the only place where campaign promises of clean and corruption-free government have not yet translated into practice. In 2014, it was estimated that more than half of Indonesia’s local leaders were under investigation for corruption. Local direct elections are expensive to contest, and those without strong links to political party machinery must find a way to fund an election effort. Financial support is often obtained from local businesses which can reinforce money politics and compromise future reform. In the Sumatran province of Lampung, Ridho Ficardo was elected after receiving millions of dollars in donations and advertising from Sugar Group Companies. The company has often funded candidates in areas with sugar plantations to ensure the election of a district head sympathetic to its land lease requirements. In this way, those not beholden to the party machinery may become beholden to strong local business interests that aided their election. 

Despite the relative independence of some directly elected local leaders, many are still subject to party politics and pressures of patronage. Even the most popular figures must contend with pressure from party leaders: last year, PDI-P chair Megawati Sukarnoputri scolded President Jokowi for not following party directions. Presently, PDI-P is considering naming Risma its gubernatorial candidate in Jakarta, despite her stated intention to remain in Surabaya. If such a popular local leader can be made to step down from her position by her party, it would set a new and troubling precedent for party control over directly-elected local officials.

Many analysts assumed Jokowi’s meteoric rise to power represented a replicable process that would build national reform from the local level, but there are limits to what even the most successful reformers can achieve. Individuals, even those who derive their power from a popular mandate rather than the party machinery, cannot sustainably will transparency, accountability, and a focus on development into being. Successful reform is dependent on institutions: the judiciary, political institutions and news media that rigorously holds politicians to account.

Photo: Bregas Dewanto/Anadolu Agency/Getty Images


The notion that tackling investment and infrastructure shortfalls is essential to lifting growth, job creation and productivity is now familiar rhetoric.

It's a point made regularly by the heads of international organisations like the IMF, World Bank and OECD and also often found in G20 communiques. Australia has even seen an 'infrastructure prime minister' come and go. 

A recent report by the McKinsey Global Institute, 'Bridging global infrastructure gaps', explains why economic policymakers have needed to make investment such a central issue in recent years. Public investment across the majority of G20 economies, and most advanced economies, declined as a share of GDP following the global financial crisis. Read More


Source: OECD and McKinsey Global Institute Analysis

A key takeaway from the report is that the world has an infrastructure funding challenge that governments aren't addressing by themselves. Ambition needs to be lifted to fill infrastructure funding gaps. 

To provide a sense of scale, McKinsey estimates the world needs to add the princely sum of $350 billion to the annual $2.5 trillion invested in transportation, power, water and telecom systems if it is to address infrastructure deficits and meet needs by 2030. Even more would be needed if governments are serious about delivering on the UN Sustainable Development Goals. 

The good news is that there are a range of suggestions for ramping up funding from the public sector and institutional investors, making better use of funds, and making better use of existing projects.

So policymakers should just get to ploughing more money into projects, right? Not so fast.

As the Grattan Institute's Marion Terrill and Brendan Coates have argued, the conventional wisdom about infrastructure deficits may not be so wise.

One big problem is determining what an 'infrastructure deficit' actually is. McKinsey uses a very rough rule of thumb to underpin its analysis. The report notes the value of infrastructure capital stock in 20 countries between 1992 and 2012 averaged around 70% of GDP. It then assumes that the optimal value of infrastructure capital stock across all countries, including Australia, will be 70% of GDP. 

It would be highly unfair to single out McKinsey's methods here. As Terrill and Coates point out, other top-down assessments are plagued by similar problems, and the range of estimates for Australia alone varies by hundreds of billions of dollars. What is more, the alternative, 'bottom-up' approaches (which add up the value of identified projects to reach an aggregate national number) need to make simplifying assumptions too, such as thinking all projects in a given list of potential projects should be funded irrespective of economic or social feasibility.

Source: Grattan Institute

But the flaws in methods for calculating aggregate infrastructure deficits, combined with IMF and World Bank research in recent years that questions the merits of simply increasing spending on infrastructure, suggests that policymakers shouldn't be driven by headlines about supposed infrastructure deficits. The focus should instead be on prioritising the 'right' investment. Picking the right projects is a tricky beast and raises a complex array of questions. Fundamentally, investment is only economically desirable if the benefits of extra projects outweigh the costs they impose on the community, including all social and environmental costs. 

What's more, countries must also work out the best additions to existing infrastructure networks. For example, the Australian Infrastructure Plan acknowledges the majority of infrastructure Australians will use in the next 15 years has already been built, but concludes this infrastructure will require substantial additional funding for maintenance, renewal and upgrade in line with population growth.

Part of the story then is about improving the quality of the cost-benefit analyses underpinning projects. Oxford's Bent Flyvbjerg and Harvard's Cass Sunstein have found that conventional cost-benefit techniques tend to overestimate benefit-cost ratios by typically between 50% and 200%, depending on the type of project. These errors cost billions.

Other questions need to be asked about whether broader macroeconomic, financial and taxation policies impede projects, as well as of the nature of institutions governing the project selection process. 

As Mike Callaghan has argued though, what matters most is that all significant factors influencing a decision are accounted for, fully disclosed and available for public scrutiny. 

If governments are looking for new actions on investment, they should consider a commitment to make the selection of infrastructure projects fully transparent. As the McKinsey report points out, there are also significant gains to be made by making a public priority of maintaining existing infrastructure. Perhaps it is also time to revist an old policy chestnut of improving price signals, such as through road user charging.

Photo: Getty Images/Cameron Spencer


Media attention is back on Tunisia following recent startling declarations by Rached Ghannouchi and his political party, Ennahda, which was in power from late 2011 to early 2014.

On 19 May, the eve of Ennahda's 10th Congress, Ghannouchi outlined to Le Monde the ideological changes taking place in his party. Ghannouchi said that Ennahda would 'leave Political Islam' and enter 'Democratic Islam'; an expression that draws an analogy with the Christian democratic parties of Western Europe.

Ghannouchi told Le Monde: 'We are Muslim democrats who no longer claim to represent political Islam'. He said there was no point in referring to the term 'Political Islam' in post-revolution Tunisia. Further, he explained that 'Tunisia is now a democracy. The 2014 constitution has imposed limits on extreme secularism as well as extreme religion'. He described Ennahda as a 'political, democratic and civil party whose point of reference is rooted in the values of Islam and modernity'.

Ennahda's 10th Congress on 20-22 May ratified the movement's separation of its political activities from its religious and social activities. The reform, backed by the party's leadership, was approved by 93.5% of the party delegates. Ennahda has thus divided itself into a civil political party and a separate religious movement. Religious and social activities are to be carried out by independent civil society associations. Ennahda leaders will therefore have to choose between holding leadership positions in the party or in civil society associations and they will no longer be allowed to preach in mosques.

The reform announced by Ennahda seems to fit with the views of the majority of Tunisians, with a recent survey suggesting 73% of Tunisians were 'in favour of a separation between religion and politics'.

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However, Tunisia's other political parties and the media have expressed doubts about the scope and political impact of this evolution within Ennahda. It has been noted the party is still claiming Islamist roots which suggests relations between the party and religious associations may not disappear, even if there are no longer organisational links between them. The separation between political and religious activities is therefore perceived to be technical; not ideological.

These doubts seem to have been validated by a text published online by Jamil Mansour, head of Mauritania's Tawasol party which is affiliated with the Muslim Brotherhood. Mansour, who is well acquainted with Ennahda and its leaders, said Ennahda has renounced its Islamist ideology and the distinction between political activities and preaching does not mean the movement has divided into two independent entities. He view was the changes were an evolution towards specialising in two different fields (political and social activities) in conformity with the law. He added that while the reform announced by Ennahda has been given much media coverage, it is not a novelty within Islamist movements. The distinction between political activities and preaching is an idea that has already been put forward at the Justice and Development Party and its senior members, such as Saadeddine El Othmani, in a book titled Religion and Politics: Distinction not Separation. He noted that Islamists in Algeria and Mauritania are also carrying out similar reforms.

Several Tunisian observers say the reform announced by Ennahda should be viewed in the context of other actions the party has taken as it prepares to return to power.

After it won the largest number of Constituent Assembly seats in the October 2011 election, Ennahda led a governing coalition for two years before handing over power to a caretaker government in January 2014 after public pressure. The Ennahda-led movement was then accused of having a soft stance towards jihadi salafist groups that carried out two political assassinations in 2013 (leftist leader Chokri Belaid and Constituent Assembly member Mohamed Brahmi).

In the October 2014 legislative elections, Ennahda won 69 seats but was defeated by the secular Nidaa Tounes party which gained 86 seats. The latter formed a coalition government in which there was one minister only from Ennahda.

Today, however, the situation has changed. Following the resignation of several MPs of the Nidaa Tounes party, Ennahda has became the largest party in parliament. In a media interview on 11 June, Ghannouchi said that Ennahda's representation in government should be in proportion to its electoral weight.

The doubts about the real scope of Ennahda's renouncing of political Islam do not seem to take into account past decisions by the party that confirm ideological changes have been underway. Ennahda has mainly approved the country's 2014 constitution recognising the Tunisian state as a civil state and making no mention of Sharia (Islamic law) as the basis of law. This renouncing of Sharia has so far been exceptional within Islamist groups in the region, in the Maghreb as well as the Mashreq.

We must now wait and see how the entities announced by Ennahda will evolve and how they will approach contentious issues, such as keeping mosques away from politics. It also remains to be seen whether the Tunisian people will accept a potential return to power by Ennahda. The October 2014 elections were not so long ago and they showed a majority of Tunisians wanted the country to remain secular and revealed most were not satisfied with Ennahda's performance in government.

Photo courtesy of Flickr user Cernavoda.


The large irregular migration flows to Europe last year brought with them more than one million migrants, thousands of tragically avoidable deaths, and a truckload of analysis. It was a significant year and much has been written about the negatives; about the failures, about what should have been done and about what could have been done better. This is in some respects understandable for much of what we saw, heard and read left us all feeling various degrees of unease, frustration and, at times, shame.

There is room, however, for us to examine some of the positives. If Lebanon can acknowledge the benefits of mass displacement of 1.5 million Syrians into its country, then it behoves us to reflect on the positives out of the European crisis. Likewise, we must also critically examine aspects of the response within broader paradigms.

One of the most positive aspects of the response last year — and continuing this year — has been the groundswell of support of citizens spurred into action to assist in the humanitarian response.

Tremendous goodwill has been expressed in a multitude of ways, and not just through traditional channels. The tech community, for example, has worked with refugees and others in the development of apps like Refugermany and Arriving in Berlin as a practical way to assist people find services and support. Individuals have opened their homes for refugees in need of shelter, and hundreds have gravitated to arrival hotspots like the Greek island of Lesvos to help with rescue, medical services, food and shelter and registration.

Another positive has been a shift in the debate, which last year moved beyond the highly simplistic 'economic migrants' versus 'refugees' debate.  There is wide recognition and general acceptance that Syrians, Eritreans and others are prima facie refugees. The discussion has instead tended to turn on how to manage large-scale movements and, increasingly, the important aspects related to the long-term integration of refugees.

For the large part, however, the discourse has been polarised, negative and at times shrill. This is partly due to a long-standing and ever-increasing ‘regulation-expectation’ paradox.

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The more States regulate aspects of social and economic life, the more they strengthen the perception that things can be regulated and controlled, even phenomena occurring transnationally and far beyond the direct control of national or regional regulators, like irregular migration. The pressure can then translate into more ‘innovative’ and extreme attempts at exerting greater control, such as the EU-Turkey deal, which can come at a very high price, financially, bilaterally and in humanitarian terms.

Increased regulation has become widespread in Europe and elsewhere, particularly since the 1970s, visible in education, health, environment, tax and security policy and other areas. Importantly, it has also affected the regulation of international migration. The original Australian Migration Act 1958, for example, was 35 pages long and provided significant discretion to delegated decision makers (although delegations were highly restricted). By 2005, the Migration Act 1958 had expanded to 744 pages with an additional 1993 pages of regulations.

Consequently, areas that had previously been left to the discretion of decision makers were increasingly prescribed, adding greater complexity. A glance at the increase in other federal regulation in Australia indicates that the migration act is unlikely to be a unique case. Similar graphic representations depict changes in other developed countries, including the US.

Number of pages of federal legislation passed in Australia, 1901 to 2006 

Source Berg 2008

Globalisation and the increasing transnational connectivity of non-state actors, such as migrant smugglers and human traffickers, is seriously challenging States and the ability to respond effectively. Some of the manifestations of the regulation-expectation paradox include the perceptions that political leaders are failing.

So where does that leave the evident ‘failure’ of political will in Europe in this ongoing debate? References to the failure of politics as the major issue in the current migration crisis do not adequately account for the more profound and fundamental mega-trends in play. The more pertinent aspects of analysis are in seeking to understand why there has been disunity, polarisation and fragmentation at the political level and, more importantly, what can be done about it. The regulation-expectation paradox needs to be recognised and understood as an integral part of this.  In some senses, the increased scale and sophistication (and complexity) of regulation has meant that developed countries have painted themselves into a corner, and the ability to control migration is perceived by citizens and many commentators as squarely within the remit of state regulators despite the significant changes in transnational connectivity and international migration.

Aside from seeking to manage expectations and reduce or simplify migration regulation, one means of dealing with this paradox is to recognise and adjust one of the key anomalies in the regulation of international migration. Currently, almost migration regulation is at national or sub-national levels. Supplementing national level migration regulation with aspects that could be regulated at a global level would take a monumental effort but would be a major step in the right direction. Moving beyond global dialogue to (some) global regulation would provide a pathway to safeguarding both migrants’ rights and state sovereignty for the longer term.

Photo: Anadolu Agency/Getty Images

Election Interpreter 2016

Almost three years after the 'stop the boats' election, there is a surprising lack of debate on irregular migration in Australia in this campaign. The bipartisan consensus on offshore processing appears to have removed the political incentive for any serious policy discussion. This week there were echoes of the 2013 election when Prime Minister Malcolm Turnbull warned of chaos on Australia's borders in the event of a Labor victory, but this was largely seen as a tactical move to counter Labor's scare campaign over Medicare.

The Lowy Institute's Poll this week probably validates the major parties' reluctance to engage in policy debate. The Poll showed public support for the policy of turning back boats continues, with 63% of Australians agreeing that 'stopping the boats means that Australia can take in more refugees through UN processes'. There are few votes to be won in softening Australia's hard-line stance on asylum seekers who seek to come to Australia by boat.

But Australian politicians are studiously ignoring the reality that the PNG Supreme Court's 26 April ruling that the detention of asylum seekers in Manus was illegal and unconstitutional. This will force a change to the offshore processing policy by removing a key plank of Australia's deterrence strategy in managing irregular migration.

This week the Supreme Court will hear applications for consequential orders that will enforce its decision. While government ministers can argue this process has no legal consequences for Australia, the PNG government will have no option but reiterate its plea to Canberra to relocate the asylum seekers and refugees. Australian voters deserve to hear how their future government plans to respond to this.

There is no excuse for the lack of political debate about the future of the detainees in Manus.

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Prime Minister Peter O'Neill has signalled publicly he no longer has any motivation to resettle those asylum seekers found to be refugees in Papua New Guinea. He moved quickly after the Supreme Court ruling to announce the closure of the Manus detention centre and said he would ask the Australian government to make alternative arrangements for the men detained there. It seems unlikely he will endorse the suggestions of my friend Lisa-Marie Tepu and address the treatment of refugees within Papua New Guinea. Even before the Supreme Court ruling, O'Neill told Australia's National Press Club that his government could not afford to resettle the refugees and wanted to close the Manus centre.

Immigration Minister Peter Dutton tried to deflect earlier debate on the ruling by saying it was a matter for Papua New Guinea. He has reiterated government policy that refugees in Manus and Nauru will 'never' be resettled in Australia. His Labor counterpart Richard Marles concurs. Prime MinisterTurnbull said much the same on Monday night when he told the ABC's Q & A program that people who were found to be refugees in Papua New Guinea did not have the option of coming to Australia; they had to stay in PNG.

Australia says it is PNG's problem and Manus detainees will never be resettled in Australia. Papua New Guinea will neither detain nor resettle the refugees, nor accept any further asylum seekers as a favour to Australia. So what happens now?

Labor's Marles has suggested, rather unhelpfully, that the Australia should offer the PNG government 'more money', or ask it to change the law in order to maintain the detention centre. Marles knows PNG better than most: back in 2013 he was dispatched by Prime Minister Rudd to negotiate the Regional Resettlement Arrangement with PNG's Prime Minister Peter O'Neill. That negotiation resulted in more aid for Papua New Guinea in health, education and law and order in an arrangement known as the 'Joint Understanding'.

Offering more money to the PNG government now would not enable the resettlement of the refugees. Papua New Guinea is in the midst of an economic crisis that is putting extraordinary pressure on its budget. Even if Australia is footing the bill, it will become increasingly difficult for the PNG government to allocate the resources necessary to support some 900 foreign men in a stagnant economy. The government would find it difficult to justify special treatment for the refugees to its people, suffering from the effects of drought, and general elections are only a year away.

At a time when Peter O'Neill stands accused of corruption, suggestions that Australia should offer 'more money' to the PNG government to persuade it to ignore or subvert the Supreme Court's judgment, or to change the nation's laws are highly inappropriate.

Both major parties in Australia need to start being frank with voters about the future of the asylum seekers on Manus. The PNG government will close the detention centre and refuse to resettle refugees. Manus can no longer be the deterrent Australia wants it to be and it will be incumbent on the Australian government to relocate the detainees to another country. A responsible government in Canberra cannot willfully breach PNG's constitution, snub the Supreme Court, or ask the PNG government to prioritise resettling refugees when its budget for essential services is already under huge strain.

Immigration Minister Peter Dutton's claim that the government had anticipated the Supreme Court decision for some months suggests it will have considered what it might do about relocating the detainees. Given previous failures to persuade third countries to take refugees from Manus and Nauru, and Australia's refusal to accept New Zealand's offer to accept some of the refugees, the option Canberra is most likely to be considering would be moving refugees from Manus to Nauru.

Nauru is also in the midst of an election campaign and not without its own problems. The Nauru government's lack of commitment to the rule of law, its lack of transparency, and its antagonism towards journalists have created headlines over the last two years. It has earned the opprobrium of the New Zealand Foreign Minister Murray McCully, who cut off aid to Nauru's justice sector due to concerns about the rule of law. If Nauru is indeed the preferred option to rehouse the Manus refugees, the voters of Australia and Nauru should be informed while they have an opportunity to express a view at the ballot box.

The major parties in Australia should also be canvassing other options. If the Manus 'deterrent' can no longer be a key plank of Australia's immigration policy, how much symbolic value is there in 'never' permitting refugees currently detained in Manus access to Australia or to New Zealand, while we continue to risk our bilateral relationship with Papua New Guinea? Australian voters have accepted policy backflips before and no doubt will again. Our politicians might even persuade us to do so this time if they do us the courtesy of involving us in an informed debate.

Photo Ryan Pierse/Getty Images

  • There has been a lot of coverage on Nauru in recent weeks. The ABC ran a story on Nauru's secret history while more recently A Current Affair was given exclusive access to Australia's detention facilities on the island nation.
  • The 'expose' from A Current Affair has been criticised for a lack of objectivity and superficiality, but it is not the hatchet job many expected. Unfortunately the reporter of the story has responded to criticism by calling advocates for refugee rights conspiracy theorists.
  • For a more authoritative reflection on the state of Australia's detention regime, read this in-depth conversation with Paul Stevenson OAM, who has spent 43 years working as a trauma psychologist. According to him the Australian government is inflicting upon people the worst trauma he has ever seen.
  • The Cook Islands opposition claims to have voted out the government in parliament on Tuesday. The country is now at an impasse as the government is digging in, saying the movement did not follow the correct parliamentary proceedings.
  • A PNG court has suspended the case against National Fraud and Anti-Corruption chief Matthew Damaru. Mr Damaru has called police infighting embarrassing.
  • Meanwhile the PNG Supreme Court wants to enforce its ruling that the detention of asylum seekers on Manus Island is illegal and is calling on lawyers representing detainees and the PNG government to apply for Consequential Orders that will enforce the ruling.
  • Universities across PNG are at an impasse with their students, who are refusing adhere to government and university administration demands that they return to class until justice over the actions of police two weeks ago is delivered. For a recap on events to date see Bal Kama's excellent piece for The Interpreter.
  • Three ni-Vanuatu have been killed and 10 Australian tourists seriously injured in a bus accident this week in Port Vila. The tourists were visiting on a P&O cruise ship; in 2015 almost 200,000 tourists visited Vanuatu via cruise ship.
  • A recent report from the Pacific Network on Globalisation has argued the Pacific should walk away from PACER Plus negotiations, suggesting it puts Australia and New Zealand's interests ahead of the Pacific. The Pacific Islands Forum has slammed the report, calling it a 'lopsided and inaccurate view' of PACER Plus.
  • Finally, I know we have shared this in the past, but it is still on high rotation with the Melanesia team at the Lowy Institute, so here it is again, a cover of Adele's 'Hello' by 14 year old Rosie Delmah from the Solomon Islands. It now has over 30 million views on YouTube, almost 100 times Solomon Islands population.

The Brexit referendum

In a 2002 book called Why Britain Should Join the Euro, a team of experts including LSE economist Richard Layard, Federal Reserve Chairman Paul Volker, European Bank Chief Economist Willem Buiter, Chris Huhne, who sat on the European Parliament's Economic and Monetary Affairs Committee, and others set out the risks of not joining the euro. They warned that rejecting the euro would lead to lost trade, greater economic instability, higher exposure to economic shocks, 'danger that the City's predominance in wholesale financial services could be threatened', and a loss of 'economic and political influence'.

None of these came to pass.

At the time, those who rejected these shibboleths were regarded as small-minded nostalgics. As Larry Elliot wrote in his reflection on the UK's euro debate, 'to suggest that the euro would be supercharged monetarism, Thatcherism with knobs on, was deemed unseemly. People who liked the euro were civilised, supported the arts, went to Tuscany or the Dordogne for their holidays. People who didn't like the euro drove white vans decorated with the flag of St George.'

The campaign over Britain's membership of the EU has rehashed some of these old debates. In an excellent piece published this week, Professor Alan Johnson set out two fallacies of the Remain case: 'no EU, no prosperity' and 'no EU, no peace'. To the two fallacies, I would add two others: 'no EU, no social democracy' and 'no EU, no internationalism'. 

Here, I would like to review these four shibboleths of Remain and identify why they are ultimately unconvincing.

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No EU, no prosperity

The first claim is that leaving the EU would be a catastrophe for the British economy. This is premised, in large part, on the view that British trade is dependent on the EU. The same warnings made in the euro debate a decade ago have reappeared. 

While it is true that the EU is the UK's biggest trading partner, the idea that that exit will entail the severe curtailing of trade with the EU is absurd. Official figures from the Office for National Statistics show that this year the UK's trade deficit with the EU hit a record high. The UK trade deficit with the EU is over £13 billion. It is inconceivable that the EU would walk away from this vital export market, which is the world's fifth largest economy. When the EU is in an economic shambles, it is in no position to cut off its nose (and ears, mouth and eyes) to spite its face.

Furthermore, the notion that prosperity is protected by the EU and impossible without it is a dark joke. The EU has relied on the free movement of people as an alternative to sound economic policies. Mass unemployment is rendered acceptable because, the argument goes, if you are a young person in Spain who can't find a job, you can simply move to Britain and get one there. If you are getting paid €2.50 per hour in Lithuania and want higher wages, move to France where the minimum wage is €9.67 per hour.

The Labour peer Maurice Glasman has described 'the lunacy of including countries with a level of wealth far below that of the founder members in an economic space predicated on the free movement of people'. For free market theorists, viewing Europe as a single undifferentiated economic space — oblivious to historical, linguistic, cultural and other differences — made a great deal of sense. But, as Glasman writes, it is 'a strange way of conceptualising European history'.

No EU, no peace

The EU has always had twin purposes, of course. One purpose has been to fulfil the economic self-interest of its members, even if that means impoverishing less developed economies in the process. The second is the loftier aspiration of achieving peace in a continent which for centuries was wracked by war. 

This is the most compelling and emotive of the Remain shibboleths. Yet, is it correct? It is an empirical claim, with a counterfactual that is difficult to test. Was it the EU which prevented its members from going to war, or is there some other confounding reason (eg. wealth, democracy, region) which helps to explain peace in Europe?

It seems the 'no EU, no peace' shibboleth is a classic case of selection bias. No full democracy has gone to war with another democracy. To be specific, there have been no wars between countries which score eight or higher on the Polity IV scale, a standard ten-point scale used to measure democratic strength. Every EU country scores a nine or a ten on the Polity Score. Many non-EU states in Europe also perform well: Norway and Switzerland unsurprisingly are tens. Macedonia, Montenegro and Moldova are nines. 

It could be argued that the EU creates incentives for states seeking accession to democratise. While this is a creditable claim, it overlooks the ways in which the EU has concurrently been working against the democratic will of its own members. European integration has devalued democracy, strengthened the power of capital and eluded accountability. 

Most visibly, the EU has ignored the wishes of the Greek people after two general elections and a referendum. As trade unionist Fawzi Ibrahim has written, 'When a country is humiliated, its people impoverished and its public assets sold, would that be seen as an act of a friendly and decent institution or an act of war? For, while guns may not have been used, the outcome is the same.' Europe is facing serious internal crises, for which the EU has been a handmaiden. 

No EU, no social democracy

The third shibboleth goes some way to explaining why the Labour Party has enthusiastically backed Remain. The idea is powerful on the British Left: to be a member of the EU 'protects' Britain from (its own elected) Conservative governments while guaranteeing social and labour rights which we could not secure for ourselves. 

Yet, this is simply not accurate. There is no law from the EU for workers which we could not secure ourselves. In fact, as the Labour MP Gisela Stuart has pointed out, many of the rights for workers and women which are credited to our EU membership were actually initiatives of Labour governments. Many UK social rights preceded and even provide stronger protections than EU directives:

  1. Paid holiday leave: EU (4 weeks), UK (5.6 weeks).
  2. Maternity leave: EU (14 weeks), UK (52 weeks).
  3. Maternity pay: EU (no minimum pay), UK (90% for 6 weeks then £140 for 33 weeks).
  4. Equal pay: this was law in 1970 before the UK joined the Common Market. The minister who introduced the Equal Pay Act, Barbara Castle, enthusiastically campaigned for Brexit in 1975.
  5. Wages: the EU has no minimum wage, unlike the UK.
  6. Health and safety: this was law in 1974 and the minister who introduced the Health and Safety at Work Act, Michael Foot, was an ardent Eurosceptic.

No EU, no internationalism

Finally, many on the 'Remain' side argue that staying in the EU is the 'internationalist' choice, whereas voting to leave, as David Cameron himself argued, was the 'little England' option

In spite of pretences to the contrary, voting 'Remain' is itself an inward-looking approach. The EU is a protectionist club. The Remain position sides with Europe against the rest of the world, not with it. On the matter of immigration, to take one example, it is not 'internationalist' to prioritise (mainly white) Europeans at the expense of people around the world who have much stronger historic and cultural ties to Britain. Yet this is precisely what EU free movement rules entail.

By joining the EEC, Britain abandoned its partners in the much more diverse Commonwealth – hundreds of thousands of whose citizens of all faiths and races died fighting for Britain in recent wars. In a 1992 debate in the House of Representatives, Australia's Labor Prime Minister Paul Keating reminded his more pro-British political opponents that Britain 'walked out on you and joined the Common Market'. 

The Remain side seems incapable of distinguishing between internationalism and globalisation. Yet we can surely be internationalist while not succumbing to unfettered globalisation. We can support national reciprocity and co-operation without ceding democratic institutions. We can support immigration without giving up our ability to regulate it.

It certainly would not be plausible to argue that the EU is incapable of doing good things for British workers, nor would it be reasonable to argue that the UK Government cannot work to harm them. The point is that Britain can work for prosperity, peace, social democracy and internationalism without the EU. 

As the Labour MP Michael Foot said during the 1975 referendum, 'I say to our country — our great country — don't be afraid! Don't be afraid of those who tell us that we cannot run our affairs, that we have not the ingenuity to mobilise our resources and overcome our economic problems. Of course we have. We can do that and save the freedom of our country at the same time.'

Photo courtesy of Flickr user Peter Kurdulija.


North Korea has staged a string of test launches of its intermediate-range Musudan ballistic missile this year, the latest apparently just this morning. All six have ended in failure. As decades of failures have shown, it's never easy to get rockets of any purpose to work reliably. But the recent North Korean launches give insight into events inside the Musudan program that go well beyond engineering.

BM-25 Musudan ballistic missiles and launchers. (Wikipedia.)

There's a standard modus for dealing with launch failures, whether the payload on top is a satellite or a warhead. You collect all the data you can find, sometimes literally picking up the pieces of a failed launch. A failure investigation then begins. As with air crash investigations, this can take months. Then remedies must be implemented. Sometimes a rocket goes through a minor design change, or more attention is applied to manufacturing or launch preparations. Other rockets in the same family are typically 'grounded' while this process unfolds. It can take six months or more before the next rocket is deemed fit for launch.

North Korea didn't wait very long between Musudan launch tests. The first was made to coincide with the birthday of Kim Il Sung on 14 April. On 28 April they tried again. Two Musudans were launched this day. Both failed. On 31 May, another Musudan test failed. The latest tests (at the time of writing) took place earlier today, when two missiles were launched in less than three hours. The final launch apparently flew for roughly 400km, further than its predecessors but still well short of its suspected range. This analyst does not believe the flight was deliberately intended to be a short-range firing. The Musudan is believed to have an intended range of somewhere between 2500-4000km.

Engineers would object to such a rushed launch schedule, which does not give enough time for proper analysis or corrections. Clearly, North Korea's engineers have been overruled by their political masters. This suggests desperation and a strong degree of impatience on the part of North Korea's leadership for a successful flight of this missile, which has the potential to alter the strategic calculus of the region.

Ironically, this impatience has probably contributed to the failure of these test launches, much like the fairy tale of the goose that laid golden eggs. Exactly what happens next is unclear, but certain political intermediaries who have oversight of the program could face a bleak future. North Korea would presumably judge that executing or imprisoning key technical personnel would derail their missile development. Then again, politics has already grossly interfered with engineering. Nobody knows what else is happening beyond our view.


With the end of the dry season in the Lower Mekong Basin (LMB) — a period roughly running from November to May — the magnitude of the problems affecting the Mekong River is starkly apparent. With estimates that the river has been at its lowest level in the last 100 years — a circumstance that has had effects throughout the LMB and is particularly marked in the Mekong Delta and the Tonle Sap (Cambodia's Great Lake) — the gravity of the current situation cannot be overstated.

Although it is clear that the fundamental causes of these problems stem from a prolonged drought linked to the El Nino effect that has dominated weather patterns both in the LMB and in China's Yunnan province over the past year, there can be no denying that China's dams have played their part in altering the previous pattern of water flow down the river.

There are six completed dams on China's section of the Mekong (known in China as the Lancang), a further dam still under construction that appears to be operating, and a further three under construction that are not yet operating. As has long been predicted by critics of China's Mekong policies, these dams hold back water that once flowed down the river in the dry season. For instance, as is widely known, 40% of the water that once flowed past the Lao capital of Vientiane during the dry season originated in China. This is a fact that contradicts Chinese claims that the amount of water in the Mekong that originates in China is only 16% and hence that its dams are of little consequence.

In an effort to allay the concerns of downstream countries, China released water from its Jinghong dam in March, opening the dam's floodgates for two weeks. At the same time, and in an action that underlines the failure of the Mekong River Commission to play a role in relations between China and the lower Mekong countries that are its members (Laos, Thailand, Cambodia and Vietnam), Beijing announced the first meeting of the Lancang-Mekong Cooperation Mechanism to 'provide political guidance and a sub-regional roadmap for cooperation.'

It is too early to evaluate the utility of this initiative.

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Neither this initiative nor the hoped-for rains of the rainy season that are now due will do much to mitigate the immediate and serious situation which has seen the waters of the Tonle Sap in Cambodia fall to one of the lowest levels in generations, and a dramatic increase in saltwater incursions into Vietnam's Mekong Delta. Fish caches in the Tonle Sap will be affected and agricultural production in the Delta will suffer. The greatly diminished flow of water down the Mekong also means that the life-giving nutrients that usually accompany the River's flow have been largely absent since drought conditions began in the middle of 2015.

Yet as the critical situation just described has developed, there is no slowing in the dam building program in China and more disturbingly in the LMB. The Xayaburi dam in Laos appears likely to be completed before the end of the decade. A ceremony in January marking the establishment of a coffer dam at the controversial Don Sahong site in the far south of Laos suggests that construction on the main dam wall is now taking place, and in Cambodia construction of the Lower Se San 2 dam on a major Mekong tributary in Stung Treng province is reported to be 40% complete. There is broad scientific consensus that these three dams in Laos and Cambodia will lead to significant reductions in fish catches, the major component of the protein intake in the two countries as well as in the Mekong Delta region of Vietnam.

What I find striking, and disturbing, from a personal point of view and as someone who saw the river before any dams were built, is the speed with which change has come about. Until the 1980s the Mekong had flowed essentially unchanged for millennia. It has now been changed, irrevocably, in less than half my lifetime.

Photo courtesy of Flickr user Vadim.