Lowy Institute

Readers, Monday is the Labour Day public holiday here in Australia, so normal publication resumes on Tuesday. But look out for our usual weekly wrap tomorrow morning, and then at noon, a special Saturday article by the Shadow Foreign Minister, Senator Penny Wong, in what will be her first published article on the US alliance. 

Photo by Flickr user Sigita Manite.

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Today marks the drawing down of the G20 Studies Centre at the Lowy Institute. The Centre was established to provide high quality public analysis of international economic governance. The government supported this work over the most intense period of the G20 for Australia, in the lead-up and the aftermath of the Brisbane Summit. The conclusion of the Centre’s work was marked with a speech today by the Treasurer Scott Morrison, and next week, an address by the head of the Department of Prime Minister and Cabinet, Dr Martin Parkinson

We established the G20 Studies Centre because international economic governance is profoundly important to Australia. Membership of the G20 enables us to further our national interests, not at the expense of other members, but by contributing to global welfare. We can play a significant role in contributing to the design of the rules of the international economic game; and advocating an open, transparent, rules-based international economic order that safeguards our economy.

Australia’s membership of the world’s most important economic forum, the G20, has given Australia a new prominence in global affairs and new opportunities to realise not only our own prosperity and security, but also to justify our place at the table by making a positive and long-lasting contribution to the global governance agenda. For Australia to continue to play a leading role in international economic governance, we need to have a discussion that reaches beyond policy makers. 

This is the kind of work the Institute was made for – to create a national conversation about these issues, and to produce high quality and balanced analysis.

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Throughout our history, the Institute has taken a heterodox approach to the world. We are host to the widest range of opinions, but the advocate of none. This approach has been evident in the work of the Centre. Our scholars have deepened the discussion of the G20, each adding their own voice to the debate. My thanks go to Mark Thirlwell, Mike Callaghan, Hugh Jorgensen, Daniela Strube, Leon Berkelmans, Tristram Sainsbury and Hannah Wurf. 

Other Institute colleagues have contributed to the work of the Centre. Having foreign policy and security experts working alongside economists has produced a rich body of work. 

The output of the Centre has been prodigious. Its experts have been quoted in the New York Times, Wall Street Journal, Financial Times, The Economist, Bloomberg, Reuters, BBC as well as in all the major Australian outlets. Experts from the Centre have published hundreds of Interpreter posts, dozens of op-eds, two dozen G20 Monitors, eight Analysis papers and a book

The Centre has hosted international fellows including David Dollar of the Brookings Institution and Yu Ye from the Shanghai Institute for International Studies. 

Representatives from the Centre have attended the last four G20 leaders’ summits in St Petersburg, Brisbane, Antalya, and Hangzhou and provided expert analysis to the Australian and international media.

Although the G20 Studies Centre is coming to its end, the Lowy Institute will not be vacating the field of international economic governance. There are not many sources of international macroeconomic analysis outside of Canberra, and we plan to stay in the game. 

And why wouldn’t we? The global economy is vulnerable. Populism and nativism are on the rise around the world. Risks loom, not least that of a Trump presidency. If the Institute is to inform the Australian debate about the world and influence our international policy, then international economics must continue to be a central theme of our work. 

Photo: Getty Images/VCG

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Earlier this week tech entrepreneur Elon Musk announced his company SpaceX's vision for human colonisation of Mars. Musk has been treated as something of a visionary in recent years for his leadership of the electric car company Tesla, but the company's planned takeover of SolarCity has been badly received, Tesla continually fails to meet its production targets, and SpaceX had a truly spectacular launch failure recently. So it's fair to say some of the shine has gone off Elon Musk this year, and the social media reaction to his Mars announcement was rather sceptical. But here's a balanced take from ArsTechnica:

...the company has proposed building breathtaking space machines orders of magnitude greater than NASA or anyone else has ever constructed. These are truly audacious space-faring vessels, designed to go where no one has gone before. They are almost unbelievable. Understandably, one might dismiss Elon Musk as a crank, a once-promising visionary slowly degenerating into a Howard Hughes-like madness. A million people on cold, dead Mars? Humans haven’t even been to the Moon, which is right next door to Earth, in nearly half a century. However, SpaceX has made some demonstrable technical progress.

And there's this:

Tuesday’s speech marked only the opening salvo in Musk’s evangelism about the colonization of Mars. His search for a deep-pocketed backer now begins in earnest. For him, personally, and his company, this represents a huge gamble. By putting his entire vision out for the world to see, Musk has emboldened his doubters. Opponents will use details to undermine him. Certainly, they will mock his concept of using a booster with 42 engines...Musk's greatest attribute in an era of space timidity and a stagnated launch industry is probably this: he was never afraid to fail. In what may be his most revealing comment of all on Tuesday, he said, “I just kind of felt that if there wasn’t some new entrant into the space arena with a strong ideological motivation, then it didn’t seem like we were on a trajectory to ever be a spacefaring nation, and be out among the stars.”

Musk decided fourteen years ago to see if he could do something about that. On Tuesday, he finally let it all hang out. This audacious plan might be madness, or brilliance—or both.

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By Rachael Buckland, an intern with the Migration and Border Policy Project, and Jiyoung Song, Director of the Migration and Border Policy Project.

Asia is home to the most refugees and displaced people of any region, including the world's largest-known stateless group, Myanmar's Rohingya. Although Malaysia is not a party to the 1951 Refugee Convention, in 2015 the country was host to 246,270 'people of concern'. At the end of June 2016 there were over 150,000 refugees and asylum seekers registered with the UNHCR in Malaysia. This figure comprises of over 130,000 from Myanmar and several thousand from both Pakistan and Sri Lanka.

A Rohingya refugee vegetable seller working in a market in Klang, Malaysia. Photo: Getty Images/Mohd Samsul Mohd Said

Hamidi at the UN Summit

Malaysia's Deputy Prime Minister, Ahmad Zahid Hamidi, spoke at the UN Summit for Refugees and Migrants earlier this month on behalf of Prime Minister Najib Razak. Zahid's speech drew on Malaysia's enduring role as a go-to destination for many refugees and asylum seekers in the context of ongoing regional political instability and crises. He called for improved practice by the UN High Commissioner for Refugees (UNHCR) in issuing identification cards and implementing resettlement regimes.

In a summit which focused on the challenges afflicting Europe, Africa and the Middle East, Zahid successfully skirted around the severe shortcomings of his government's longstanding domestic treatment of refugees and asylum seekers. Framing Malaysia's obligations as being limited to that of a 'transit nation' for refugees and asylum seekers, Zahid called out 'UNHCR, IOM (International Organization for Migration) and other state parties to the 1951 Refugee Convention and its related protocol', urging them 'to give serious attention and promptly act...especially in providing financial...(and)...other humanitarian assistance' to Malaysia.

Zahid's confidence that Malaysia 'would not neglect...international obligations and commitment in addressing conflict induced migration costs by war, natural calamities and other factors' was presented as being central to the nation's ongoing solidarity with fellow Muslims in Syria. He concluded his speech by restating Prime Minister Razak's 70th UNGA commitment to taking 'three thousand Syrian migrants over three years' and linked these efforts to Malaysia's historical humanitarian role and 'continued devotion to this evolving issue.'

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In the context of Malaysia's below-average international performance in human rights and human trafficking (being only 'partly free' in Freedom House's annual freedom ranking and a 'Tier 2 Watch List' on the US State Department's human trafficking classification), it's unsurprising that Zahid's speech attracted some domestic criticism. Prominent Zahid critic Ramasamy Palanisami, chief minister of the state of Penang, argued that the leadership's willingness to publicly proclaim its support for Syrian refugees and asylum seekers as a ploy to 'score points internationally'. The Institute for Strategic and International Studies Malaysia raised the UN Summit's 'lack (of) focus on Asia', stressing that 'Malaysia is no longer a transit country but a frontline state for refugees' and called for attention to be given to 'boatloads of people (who) are still trafficked and smuggled into the country'.

Malaysia's refugees and migrants 

Malaysian law makes no distinction between refugees and undocumented migrants, which leaves Malaysia's stateless population extremely vulnerable. When Prime Minister Razak announced the decision to take Syrian refugees last year, some feared this would fuel the development of a two-tiered system prioritising UNHCR processing of Syrian refugees ahead of other groups. In a country where many wait years to be processed by the UNHCR, this prioritisation (which includes the provision of temporary working rights) demonstrates disregard for those suffering within Malaysia's borders.

Malaysia is not a party to the 1951 Refugee Convention or its related protocol. In order to comply with its international obligation to protect, the first step is for the Malaysian government to sign and ratify the Convention. This would not only demonstrate Malaysia's commitment to refugee protection to the international community, but would also reflect an understanding of the stronger role government should be playing in this arena.

If formal ratification of the Refugee Convention is too much of a commitment, the Malaysian government should recognise displaced persons in the country as 'people of concern' who need protection. Implementing a government-administered registration scheme has the potential to address two areas the UNHCR view as priorities for stateless persons both in Malaysia and internationally: the right to work and, for children, the right to education. Providing legal work opportunities has potential to significantly boost Malaysia's economy, with the UNHCR estimating that a legalised refugee workforce could contribute RM152 million in annual revenue. The 2015 World Bank Economic Monitor supported these findings, underlining the role that immigrant labour plays in Malaysia's development and pursuit of high-income status. With documented immigrants raising employment and wages of Malaysians, and by connection increasing public revenue, there is a clear incentive for the government to develop a registration scheme. Without the government granting a formal right to work, the large stateless population cannot be protected from corporate abuses and human rights violations. Apart from the clear economic rationale, a right to work and earn an income has a transformational effect on the lives of refugee populations, with increased self-sufficiency attracting a higher standard of living across key areas such as health and education. 

Despite significant improvements in 2015, the government of Malaysia does not fully comply with the minimum standards for the elimination of trafficking, according to the US Department of State. Last year, there were more than 100 mass graves of trafficked asylum seekers found on the Thai-Malaysia border. Illegal boats in the Andaman Sea and porous border control have caused hundreds deaths. Malaysia should step up its international cooperation in search and rescue operations and humane border management.

According to the UNHCR Malaysia representative Richard Towle there have been positive developments relating to refugees' right to work and access to education and health care. These are welcome signs of Zahid's government working closely with the UNHCR country office in Kuala Lumpur.

Poorer countries host the most displaced persons. With this in mind, it is clear that Malaysia has an unequal responsibility both regionally and internationally relative to resources. However, it should not use this solely as an opportunity to attract foreign development aid or an excuse to exploit asylum seekers. Sustainable local integration is a viable option for refugees, and the international community can support this process. For this model to succeed, Malaysia must first demonstrate a strong commitment to protecting the rights of refugees and migrants.

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By special arrangement, The Interpreter presents this obituary previously published by Haaretz.

Friedrich Nietzsche provided the formula that was the essence of Shimon Peres’s long and remarkable life. 'One is fruitful only at the cost of being rich in contradictions; one remains young only on condition that the soul does not relax, does not long for peace,' the German philosopher wrote, as if he was intimately acquainted with the intricacies of the future Israeli leader.

But Peres longed for peace, you might protest, but you’d be wrong. Peres longed for peace for Israel, but not for himself. He fought for peace every way he could, conventionally and unconventionally, with the armies at his disposal and with guerilla tactics, in direct confrontations as well as psychological warfare. If Peres had seen peace in his time he would have grown tired of it and moved on to something else, which he did in any case. His soul never relaxed, as Nietzsche noted, which is why he stayed forever young even as he grew old.

Peres was abundantly rich in contradictions. It made him fruitful and fascinating, complicated instead of straightforward, multilayered rather than direct. It was his greatest strength but also his biggest weakness. Throughout most of his life, the Israeli public shied away from Peres’ complexity. It was misinterpreted as a sign of deviousness and even corruption. It sparked fear and hostility, before these emotions evolved, in the twilight of his life, to appreciation and admiration.

Peres was Israel, from start to finish, but he was never fully accepted as an Israeli. In his life he was often seen as an outsider and in his death he is depicted as an apparition from the heavens above. Peres lived in Israel for 82 of his 93 years, but he never looked like an Israeli, never sounded like one, never behaved like one and never thought like one. He was a man of the world in a country that sees only itself, a connoisseur of nuance and finesse playing to bleachers of bluster and bombast, a rational actor on a stage where emotions reign supreme.

Peres was a founder of the country’s defence establishment but also a pioneer of its search for peace. He fathered Israeli settlements in the territories but crafted the instruments of their potential demise. He was the first Israeli leader to treat Palestinian leaders as human beings, going out of his way to show respect and sometimes affection, but he was a Johnny-come-lately in supporting Palestinian statehood. As prime minister he ordered Operation Grapes of Wrath, possibly for electoral reasons, and it was under his watch that the Israeli Army committed the Qana massacre in South Lebanon, in which over a hundred Palestinians were killed.

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Peres was the architect and sub-contractor of Israel’s doomsday apparatus, but he was ridiculed as a wishy-washy trench-dodger, scorned for preferring suits to khakis, never accepted as one of the boys. He was a hawk who was mistaken for a dove, a local-patriot with cosmopolitan designs, a pragmatist portrayed as an idealist, a man of vision described by his enemies as suffering from hallucinations. Peres was insulted to the very core of his being when his arch rival Yitzhak Rabin branded him forever as a 'tireless schemer' in his 1970’s autobiography Service Book, but he was all that and more: a tireless dreamer, a tireless thinker, a tireless planner, a tireless speaker, a tireless persuader, a tireless reader, a tireless writer and a tireless performer. Sometimes, he was a tireless gossip as well.

Peres seemed like a fish out of water in rough and tumble Israeli politics, but he was also a shark, ready to devour his rivals with nary a thought. He was a vain man who was sensitive to the slightest slight from the lowliest of politicians and journalists, yet he absorbed more scorn and ridicule than any other Israeli politician and always came out stronger.

Peres didn’t suffer fools gladly and he surrounded himself with the best and the brightest. He was always flabbergasted when bettered by the simpler and more direct Rabin and Yitzhak Shamir and amazed when they seemed more popular too. Peres was often too clever by half, way too smart for his own good: perhaps this is the secret of his soft spot for Benjamin Netanyahu, a politician as well-read and as self-conflicted as Peres himself.

Peres fulfilled every major role that Israel had to offer yet often sounded as if he’d been unjustly denied. He was lauded and feted and admired throughout the world, yet felt deprived and thirsted for more. He is being hailed now as the godfather of peace in the Middle East, yet it was Menachem Begin who signed a peace treaty with Egypt and Rabin who reached an accord with King Hussein of Jordan, while Peres’ offspring, the Oslo Accords, stalled and derailed. And while the 1993 agreement was a springboard for an unprecedented Israeli renaissance in the diplomatic, cultural and technological arenas, Peres was denied proper credit and singled out instead as the man who brought terror to Israel’s doorstep.

In his latter years, Peres was Israel’s fig leaf. The man who was always depicted as a foreign entity miraculously metamorphosed into a poster boy for the Zionist entity. He was the Israel that everyone wanted it to be, rather than the country that actually is. He epitomized an innovative, forwardlooking, peace-seeking cosmopolitanism, an Israel that is a member in good standing in the international community, a beacon onto the nations rather than a recalcitrant occupier and subjugator of the Palestinians. He was unappreciated and undermined, by Israeli politicians as well as American Jewish leaders, when he needed help and was in a position to make history; he was embraced and placed on a pedestal only when it made no difference at all.

Peres was, the New Yorker once wrote of Winston Churchill, larger than life, a giant among pygmies, warts and all. Over the course of the past 30 years, it was my privilege and my pleasure to enjoy his company from time to time, on good days as well as awful. Like most politicians, Peres liked to talk, but unlike his peers, he sometimes chose to listen. He was concerned with himself, but interested in his interlocutor as well. He had a wicked sense of humor, though one reserved mainly for his enemies rather than himself.

I was never blind to Peres’ shortcomings, though I can’t say he appreciated it when I occasionally pointed them out. He was brilliant but sometimes obtuse, curious but always self-centered, broad-minded but sometimes petty, generous but sometimes vindictive and mean. He was no Nietzschean superman by any measure but whenever I was with him there was never a doubt in my mind that I was in the company of greatness. 

Photo: Getty Images/Lior Mizrahi

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The Asia Pacific is the most dynamic digital landscape in the world, home to the fastest adopters of new technologies and the largest concentration of mobile and social media users. An escalation in online activism, changing cyber dynamics, developments in digital diplomacy and the exploitation of big data are shaping the region's engagement with the world.

  • Google has overhauled its translation service using an AI-powered translator. Available now for Mandarin, Quartz journalists put the new AI method to the test.
  • As Indonesia becomes an increasingly digital nation, opportunities abound to use new technologies to bring Australia and Indonesia closer.
  • There has been no mobile internet in India-administered Kashmir for over two months.
  • North Korea has accidentally revealed it hosts only these 28 websites (as a comparison Germany has 16 million, China 10 million).
  • Hong Kong Chief Executive CY Leung received an online roasting via Facebook Live last week when his press briefing was flooded with angry emoticons.
  • The NY Times reports on China's start-up boom.
  • There is scepticism from all corners about India's preparedness for cyber attacks.
  • Chinese cyber operations are shifting and it appears operators previously attacking US and western targets have been re-tasked to exploit targets in Asia.
  • How social media is creating an alternative space for assembly, freedom of expression and a challenge to the political elite in Fiji.
  • Xinhua, China's state news agency,  is under fire for sexist tweeting via its sports-focused Twitter account.
  • Silicon Valley investors are trying to disrupt India's seafood market with new delivery service freshtohome.com.
  • China's most valuable company, internet giant Tencent (WeChat, QQ.com), tries to disrupt itself before it is forcibly disrupted. This style of 'intrapreneurship' involves enlisting multiple teams to work on the same products and problems (currently six teams are working on a new live-streaming service).
  • North Korea's state broadcaster KCTV has introduced a basic Netflix style on-demand streaming service called 'Manbang'. In a very 90s fashion, KCTV explains how it works:

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The former Member for Longman's surprise visit to Iraq is drawing plenty of criticism. The ALP's Penny Wong was perhaps the most savage, advising him that Iraq was not a 'place for people to act out their boyhood fantasies', while the foreign minister was also willing to criticise her former colleague in only slightly more diplomatic language, labeling his actions 'irresponsible'.

So should we accept that, now that Wyatt Roy is a private citizen released from the strictures of office, he should be allowed to do what he wishes?

To begin with, there appears to have been little that was private about this visit. Mr Roy's trip to 'see a mate' and speak to captains of Kurdish industry and policy-makers to inform himself of the situation, sounds defensible. But you don't serve in politics without learning a thing or two about self-promotion, and while Mr Roy may not be over-endowed with judgment, he has certainly retained his media savvy. It appears he was traveling for at least part of the time with a UK strategic communications representative from the conservative side of politics, which likely goes some of the way to explaining how this private research trip suddenly resulted in an exclusive story complete with still and video footage broadcast by SBS, followed by an exclusive op-ed for The Australian.

The op-ed was part travelogue, part random foreign policy mutterings. Roy suggested Canberra push for Kurdish independence in Iraq, which must have had DFAT shaking its head in bemusement. Comparing the Kurdish region with Dubai and then with East Timor left me befuddled, I must admit. Still, having complained about the lack of Australian diplomatic representation in Erbil when there were 'like, 27 other countries' diplomatically represented, reasoned thought about the broader regional context and Australia's interests doesn't appear to be Roy's strong suit.

If this episode were just about a self-aggrandising visit to northern Iraq with an accompanying media blitz we could dismiss it as simply the actions of an ex-politician trying to maintain a profile. But it is potentially more serious than this. If something had happened to Roy while he was there, even something as common as a car accident, it is likely the Peshmerga would be on the phone to the Australian Embassy in Baghdad seeking assistance for another Australian traveler in trouble overseas. Only this time it wouldn't be some drunk tourist in Bali who lost his passport, it would be an ex-minister in a war zone. And in an active conflict zone a car accident may well be the least of his (and consequently the Australian government's) problems.

There is also the rather clumsy way a recent ex-minister from the Coalition government has publicly contravened the travel advice issued by his former colleague so that she had no alternative but to publicly criticise him. Politics is hard enough without having one of your own go all Walter Mitty on you.

Photo by Flickr user Giorgio Montersino.

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By Rachael Buckland, an intern with the Migration and Border Policy Project.

  • François Crépeau, the UN special rapporteur on the human rights of migrants, is scheduled to visit Australia in November. This follows written assurances from the Australian government addressing perceived threats of reprisal for those sharing information with Crépeau under the Border Force Act.
  • The Royal Commission into child abuse has indicated that it will not visit Nauru or Manus Island as part of any expanded investigations into abuse in detention centres.
  • The Australian Federal Government has overhauled the proposed 32.5% tax on earnings up to A$37,000 for temporary working holiday makers. Treasurer Scott Morrison announced the drop to 19%, which many hope will encourage an increased flow of working holidaymakers. The Australian Chamber of Commerce and Industry is sceptical.
  • Karen Middleton has unpacked RAND's report assessing the consolidation of the Australian Customs and Border Protection Service (ACBPS) and the Department of Immigration and Border Protection (DIBP). 
  • Australian Border Force industrial action at international airports, cruise ship terminals and cargo facilities is expected to continue until 9 October. ASPI's Dr John Coyne has expressed concern that this constitutes a security risk to Australia's borders, weakening capability to combat organised crime and terrorism.
  • Monash University's Andrew Markus has questioned Essential poll findings that a majority of Australians support a ban on Muslim immigration, highlighting methodological issues and poor media reporting.
  • The UN Development Programme and the International Organization for Migration have signed a statement of intent on strengthened cooperation.
  • Since November 2015, seven bills have been introduced in US Congress by GOP members empowering governors to refuse refugee resettlement. In addition, more than 30 bills seeking to increase refugee screening or reduce the number of refugees entering the country have been introduced. According to the Migration Policy Institute, this opposition could limit Obama's resettlement commitment of 110,000 in fiscal year 2017.
  • French President Francois Hollande announced his government's plans to close the Calais 'Jungle Camp'. Calling on British authorities to 'play their part,' Hollande announced plans to relocate asylum seekers living in the camp across the country.
  • Children's Commissioner of England Anne Longfield and her French counterpart Geneviève Avenard have called on the French government to urgently provide protection for children and ensure that they are properly identified, registered and accommodated before the shutdown of the camp.
  • On 2 October, Hungary will vote in a referendum to decide whether the country will accept the EU refugee resettlement quota.
  • Drawing on the Asian Development Outlook 2016 Report, Brookings' Katherine HS Moon has asked why Asia is 'missing in action' on accepting asylum seekers and resettling refugees.
  • Brookings' Sarah Dryden Peterson has published a three-point plan to orientate global action on refugee education.
  • A new report by UNICEF indicates that between 2010 and 2015, child refugee numbers have increased by  77%, from 5 to 8 million:

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Tomorrow will be the final official day of the Lowy Institute for International Policy’s G20 Studies Centre. 

Australian Treasurer Scott Morrison will be speaking at the Lowy Institute tomorrow on the themes of trade, investment and immigration, all crucial dimensions to current discussions about globalisation.  

Next Thursday, Dr Martin Parkinson, secretary of the Department of the Prime Minister and Cabinet, will talk on Australia’s approach to international governance and to the G20. The closing address of the G20 Studies Centre promises to make a unique and fitting contribution to a debate that the Institute has been hosting in recent months on how Australia should best approach international economic engagement.  

These timely speeches reinforce one of the primary goals of the G20 Studies Centre: to add to the quality and volume of Australian voices on matters of international economic governance and the G20.

On a more personal note, tomorrow also marks my last day at the Institute after two years as an international economic governance scholar. 

In my office I have a photo. It is of one of my favorite memories of the G20. It is of me playing a drive at a cricket match during an ‘Aussie barbeque’-themed lunch during the Australian G20 presidency. 

The game started among Australian officials and support staff, but quickly became a joint participation event as many delegates from around the world experienced their first backyard cricket match. One (prominent) attendee’s contribution sticks in my mind. Holding the cricket bat in a way that would make baseball aficionados proud, he had a tendency to launch bowlers over their head and over a nearby fence. And each time he hit the ball over the fence, it set off an alarm.

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The longer I have spent in a think tank, the more I believe the boundary-hitter had it a bit easy. Sure, this was the first time he was playing the sport, with (by that time) a large crowd watching him. But as Mike Callaghan, the inaugural director of the G20 Studies Centre, described to me before I joined the Lowy Institute, the life of the think tanker is one of lobbing balls over a fence without ever being sure whether targets on the other side are hit. As outsiders attempting to add value to the closed-door G20 process, it is very rare to be able to draw a clear causation between our ideas and the public policy agenda, let alone the sort of on-the-ground outcomes that affect people’s lives. And we are public commentators, with our names attached to everything that we publish (and as I have learnt recently, sometimes things we don’t). We point instead to correlations and aim to be an influential voice in a debate. 

The G20 Studies Centre was established in 2012 with the support of the Australian government and with a mandate to help strengthen the G20 through independent analysis, fresh ideas and constructive, pragmatic recommendations. We coordinated the Think20 process in 2014, bringing ideas from around the world to feed in directly to the 2014 Australia G20 Presidency. We have had an excellent vantage point in Sydney in monitoring the forum’s progress as Russia, Australia, Turkey and China have each stepped up and taken the hosting reins. 

The last four years have certainly been insightful for those interested in international economic governance. It has become clearer where the value of the G20 lies. The G20 remains the premier forum for international economic cooperation, and it provides insurance value as an avenue for policy cooperation during crises. The forum has delivered some success stories for longer-term governance challenges, mainly in the progress made in the realms of cross-border financial regulation and international tax (although both areas can still be described as ‘work in progress’, with much still to be achieved in both areas). It has been the site of broader technical cooperation among G20 governments in a range of areas.

But one thing that is striking, looking back, is how many of the overarching challenges that were evident in 2012 continue to plague governments across the world. In the overview to the first G20 monitor, Mike Callaghan pointed to a weak, unbalanced and vulnerable global economy, failures of governments to act in a way consistent with their role of providing global economic leadership, worries that the G20’s agenda had expanded too widely and covered too many unrelated issues, and calls for the G20 to get ‘back to basics’. 

It is fair to say these are still prominent issues. The world hasn’t emerged from the long shadow of the ‘great recession’, and the inability to point to significant advances in several key areas has contributed to growing public perception that the G20 is not acting effectively at a time where governments face increasing incentives to focus domestically and lower their sights away from global challenges. 

None of this obviates the need for global cooperation on genuinely global issues. Indeed, Glenn Stevens, former governor of the Reserve Bank of Australia, has highlighted how international engagement is an inherent and arguably increasingly worthwhile objective, notwithstanding rising anti-globalisation and protectionist sentiment. Given this, my firm view is that economic engagement in the G20 remains a no-brainer for Australia

To that end, we need to continue to see high-quality public analysis and debate on international economic issues and the best approach to Australia’s international economic relationships and memberships. Being at the Lowy Institute provides a unique blend of insights into attitudes from academia, the media, civil society, business and the general public, both within Australia and internationally. As I move on, I look forward to seeing my wonderful Lowy Institute colleagues continuing to lead the charge in this important public policy space.

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US presidential race 2016

It’s hard to imagine either Hillary Clinton or Donald Trump made many converts with their performances Monday evening at Hofstra University, despite over 80 million Americans tuning in. But the debate did its job in getting Americans talking about the candidates and the issues. 

By most accounts, Trump won the first half hour of the debate. He was able to hang all the problems of the past decade around Clinton’s neck and set her up as a piñata for those who believe America has been too politically correct at home and too weak abroad for too long. And she had no effective response. 

She is the experienced politician who had her hand in creating many of the policies Trump is shredding. She is not shy about offering her candidacy as an extension of the Obama presidency, a reign mired in negative approval ratings until recently (this spring, when voters started considering the alternatives, Obama’s approval rating finally climbed above 50%).

The remaining hour-plus of the debate belonged to Clinton. She showed a commanding knowledge of the issues and she was wise enough to recognise when Trump was ready to be Trump. In large part, she stepped aside and let Trump strangle himself in tales of his past racism, sexism, birther logic and bankruptcy abuse. Perhaps his greatest sin was revealing that he was proud of not paying any federal tax on his vast income.  

The contrasts were extreme. Clinton demonstrated why she is one of the best qualified candidates in decades (at least, as measured by traditional standards). Trump demonstrated his ‘shoot first, aim later’ style that many feel disqualifies him from getting anywhere near the Oval Office, much less the nuclear football.

The realities here appear clear: America is deeply divided on the direction of the country, perhaps as divided as in the turbulent 1960s. And the choices are not encouraging. These are two deeply flawed presidential candidates. Pro-Clinton and pro-Trump zealots are hard to find. It’s much easier to find the haters, those who would vote for Lucifer rather than vote for Clinton or Trump. Polls suggest about 70% of likely voters think the US is on the wrong course today. The question Americans must answer is which is better: more of the same or a roll of the dice on an unknown new direction?

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The American system of governance is built on checks and balances. Some who make the case for Trump do so knowing that Congress, the Supreme Court and the civil servants who run the day-to-day bureaucracy can keep America from lurching into the ditch. When tested with Franklin Roosevelt’s illness and Ronald Reagan’s final year, this system worked. The counterargument is that none of the checks and balances kept George W Bush from going to war without justification or from crashing the economy.

Character matters here; so does context.

The backdrop of Monday’s debate was a week in which two more black men were fatally shot by police under controversial circumstances. Does that advance Trump’s argument for reviving stop-and-frisk policing practices? Or does it argue for Clinton’s identification with the black community and her views on racial bias? 

There are many such twists throughout this campaign. Every time Trump lets his mouth run ahead of his brain, he prosecutes Clinton’s case that he is unfit to be president. Every time Clinton discusses policy, she prosecutes Trump’s case that it’s just more of the same. 

The race appears to be so close it’s within the margin of polling error. Clinton’s perceived debate win will likely give her a small bump, but not enough to change the trajectory of a photo finish. The pollsters and statisticians continue to rate Clinton’s chance of an electoral college victory. But are they right? 

Whoever wins likely will face a divided congress that will make bridging the national rift impossible in four short years. Trump is 70 years old; Clinton is 68. As they trade jabs about releasing health records, neither has the air of someone who will have sufficient grounding to seek a second term. For some Americans, the good news is we may get a do-over in 2020. It’s been that kind of a political season.

Photo: Getty Images/Spencer Platt

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The multilateral trading system has served Australia and our region exceptionally well, and it has delivered a program of trade liberalisation and reform over the years that has been important in underwriting global growth.

But there is no doubt it is now facing multiple strains. The regrettable failure of the Doha Round underscores the need for a change in the way the system is functioning. That failure is a symptom of a bigger issue: the weakening of multilateral processes and institutions. 

The new global reality is the increasing trade and economic significance of large emerging economies such as China, the world’s largest merchandise trading country. Gone are the days of the major developed countries solely determining the direction of the global trading system. With these changes in the global economy has come a debate about the extent of the contributions and leadership that is now needed from the major emerging countries in support of global efforts to open markets and encourage growth in trade and investment. 

At the recent Hangzhou summit, G20 leaders made a commitment to revitalising the WTO’s negotiating function, and talks are now underway in Geneva to explore the way forward. 

Australia has historically been a strong supporter of multilateral deals, reflecting the fact that we have global trade and investment interests. The successful result of the WTO ministerial meeting in Nairobi last December (which resulted in the historic agreement to ban agricultural export subsidies) shows the value of multilateral rules.

But the Doha experience underscores the need to be realistic. If we are faced with the choice of making progress with a sub-set of WTO members (those with a shared interest in liberalisation and reform) or no progress at all, we will choose to move forward.

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Rule-making is a key value-add of the WTO. While FTAs are primarily focused on opening up access to markets for goods, services and investment, they have only limited capacity to introduce disciplines on actions by governments that distort trade, most notably subsidies.

Australia is playing an active role in the talks on future WTO negotiations. Those discussions are looking at new issues for negotiation as well as new ways of moving forward. These efforts are being informed by the experiences of many countries, including Australia, in tackling new issues in bilateral and regional FTAs. The stalemate in the Doha round has resulted in the proliferation of new rules on a number of issues not covered by the WTO. 

Developing these new rules has made sense as a response to the realities of the global marketplace and the needs of the business community. But there are some risks that multiple rules could increase the complexity of trade, which in turn could introduce restrictions and distortions. ‘Multilateralising’ these rules (getting broad adoption and adherence) would help to minimise some of these risks.

So-called plurilateral negotiations, involving a sub set of WTO members and often on an MFN basis, are one option being explored. Current examples of such an approach are the negotiations for the Environmental Goods Agreement (EGA), which Australia is chairing, and the Information Technology Agreement (ITA). Efforts are underway to conclude the EGA this year. In both cases, the benefits of the deal are extended to the entire WTO membership, an important feature in ensuring these deals strengthen the WTO system. Australia’s involvement in the Trade in Services Agreement (TISA) negotiations is also premised on using that plurilateral platform as a basis for making future multilateral progress through the WTO.

Possible future candidates for new or expanded plurilateral negotiations include digital trade, investment, government procurement, fish subsidies, competition policy and good regulatory practices. All of these have been incorporated in the Trans-Pacific Partnership Agreement (TPP).   

In discussing possible new issues, we have not lost sight of the fact that many of the issues that were on the Doha agenda remain critically important for Australia, notably domestic agriculture subsidies and services regulation. We are continuing to push for these issues to be addressed in the WTO’s forward negotiating agenda. 

We are hopeful that agreements can be reached on this new agenda at the next WTO ministerial meeting at the end of 2017. Progress will be challenging; even achieving incremental movement will be tough, but equally, any progress on the WTO agenda can be a positive factor in improving the conditions facing Australian exporters and businesses operating internationally.

Photo: Getty Images/Bloomberg

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It was announced earlier this month that Apprentice (note: no definite article, so no Trump) will be Singapore's entry to next year's Academy Awards:

In my occasional visits to Singapore over the last decade, my observation is that while the country remains politically closed, it has liberalised a lot culturally, an impression reinforced by the trailer for this film, which seems to take a confronting look at Singapore's harsh capital punishment laws.

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It is rarely acknowledged that the list of Australian journalists working on China in recent times is pretty stellar. Just off the top of my head I can think of Jane Perlez (New York Times), John Garnaut (formerly Fairfax), Stephen McDonell (BBC), Chris Buckley (New York Times) and of course Richard McGregor, former China bureau chief for the Financial Times and author of the widely praised ‘The Party: The Secret Life of China’s Communist Rulers’. (Sorry if I’ve left any worthy names out; please let me know in the comments.)

I was proud to introduce Richard last night at a Lowy Institute event at the National Press Club in Canberra, and afterwards we talked about the big theme of his speech, which was Xi Jinping. In this podcast Richard talks about Xi’s record as China’s leader, his reputation both at home and abroad, and how much control he really exercises over foreign policy decision-making.

Apologies for the below-standard audio, but it is definitely listenable.

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By Harriet Smith, an intern with the Lowy Institute's Melanesia Program.

  • The Prime Minister of Fiji delivered a keynote address to the UN General Assembly, during which he stated Fiji will be 'more discerning' in its choice of friends, a marked change in rhetoric.
  • The work behind the Lowy Institute’s mapping project ‘Chinese Aid in the Pacific’ is examined here, including the utility of social media.
  • The Solomon Islands has called for Indonesia to allow UN Special Rapporteurs into West Papua to prove Indonesia’s claims that there are no abuses of human rights occurring in the province.
  • The significance of West Papua’s presence on the Pacific Islands Forum agenda is examined in this post by Nic Maclellan on The Interpreter.
  • Vanuatu has started public consultations about an income  tax.
  • Australia’s Minister for International Development and the Pacific Concetta Fierravanti-Wells, has outlined a potential new visa that would allow overseas-born citizens and permanent residents to bring their parents over to Australia.
  • Crowd-funded lawyers representing the former MPs who were arrested following an anti-government protest have arrived in Nauru.
  • The initial eight months of the presidency of the first woman to be elected head of government of a Pacific independent state, Dr Hilda Heine, President of the Marshall Islands, is examined here.
  • American Samoa is seeking to follow the French territories to Pacific Islands Forum membership.
  • The Asaro Mud Men from the highlands of Papua New Guinea are in residence at the Australian Museum in Sydney this week, showcasing their work and contributing to cultural exchange between neighbours.
  • Peter King, a long-time Australian supporter and campaigner for West Papuan self-determination, has passed away.
  • After a warm welcome, the Prime Minister’s XIII defeated PNG 58-0. 
  • The upcoming Disney film 'Moana' will be the second set in the Pacific Islands (after ‘Lilo and Stitch’ in 2002). It tells the story of Moana, a Polynesian girl, who teams up with the demi-god Maui. The film has sparked discussion about the representation of Pacific Islanders, with some raising concerns about cultural appropriation.

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Mapping China’s opaque aid program in the Pacific Islands was more complicated and time-consuming than I had anticipated. I made peace with this fact when I found myself building a makeshift 270-degree visual cocoon out of every electronic device in my apartment so that I could cross-check the various colour-drenched excel spreadsheets feeding into the Lowy Institute’s updated Chinese aid in the Pacific map.

Earlier this month, the Lowy Institute’s Melanesia program launched a major update to the Institute’s flagship research mapping project on Chinese Aid in the Pacific.  The map now contains a decade of Chinese government aid activities in the Pacific Islands region, making it a valuable resource for anyone working on and interested in the region's shifting geopolitical landscape. Kudos to the map’s original architect, Dr Phillippa Brant, who set incredibly high standards for the project and left big shoes to fill. Here's how we did it.

A Chinese-language researcher was hired to help crawl through Chinese Government budget documents, embassy pages and media articles. With the odd exception, Chinese translations helped confirm what we already knew and provided another source to underpin project classifications. Pacific Government budget documents were a necessary input to extract information for large projects, particularly those which have received little media attention. However, these figures were often optimistic estimates and weren’t always a reflection of what was (or wasn’t) occurring on the ground.

More than 660 sources fed into the updated map, but thousands more potential sources were searched and discounted along the way.

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I encountered the usual combination of obstacles when trying to map even the smallest of grants: incorrect figures cited by the media, overlapping projects and announcements, missing budget documents and confusion about the true origin of the funds. Hours could be spent on research, only to discover that while a particular grant may have been publicly handed over by the Chinese embassy, the funds actually originated from a Chinese community association, a business association (see 'Olympus donation') or a provincial government.

Other reported flows of funds, including an A$99,500 ‘One China’ grant to Vanuatu and an A$332,500 donation to Fiji (to compensate for the cost of President Xi Jinping’s 2014 state visit) were tracked but considered outside the scope of development assistance.

Follow the trail of money online (especially via Facebook)

There is no substitute for in-field research. But when the budget doesn’t allow for hundreds of site visits across dozens of islands and when many official websites haven’t been updated in years (and are often coated in malware), social media becomes invaluable.  

Thanks to continued mobile broadband growth, Facebook is now a vital source of information for understanding political and social developments in the Pacific Islands region. Public profiles, discussion groups, images and videos posted on the platform provide a window into how capital citiesrural towns and even local debates are impacted and shaped by China’s development assistance and expanding engagement. Analysing images and extracting metadata from Facebook (ie. dates, locations, media type) often provided crucial missing pieces and final confirmation that a project has indeed entered the construction phase

There are plenty of Chinese aid projects (potentially) around the corner

It is worth noting what is not on the map. There are a lot of projects we researched but could not include for a variety of reasons. Some seem to have permanently stalled. Others have been announced but haven’t actually started. For example, Samoa has lined up funding for a police and overseas peacekeeping facility, a US$50 million China Exim Bank loan is in the pipeline to upgrade Dili’s drainage system in Timor-Leste (although there are setbacks), and maintenance repairs are planned for China-constructed buildings in the Cook Islands.

Another project in the works is PNG’s proposed National Broadband Network (NBN) which is majority funded by a $US59 million China EximBank loan. Huawei signed on to be the NBN technology partner in 2013 and Prime Minister O’Neill touted the project back in 2014. But since then information has been scant and with little concrete proof the project has begun, it was decided to omit it from the map.

Project run-off: Who else is settling into the region?

One of the interesting parts of working on a project like this, especially one with a heavy online component, is keeping an eye on what else and who else pops up on the fringes. Like China, most of the region’s newer and re-emerging partners are concentrating their resources in PNG and Fiji.

 

As previously covered by The Interpreter earlier in the year, Fiji has been on the receiving end of $A11.5 million worth of military ‘donations’ from Russia. This relationship is one to watch. It's hard to imagine Fiji-Russia relations taking off, but newly established bilateral mechanisms offer plenty of opportunities for the security-heavy relationship to expand.

Israel, via its Ministry of Foreign Affairs and its development agency, has started providing aid to PNG and the Marshall Islands in the form of humanitarian assistance and professional training support. In a strange development, Israel also provides defence and intelligence support to PNG. Taiwan’s overseas development program is small but continues to have a surprisingly broad presence in the region, including in Pacific Island states that recognise China. It was surprising to find a fair bit of activity in Bougainville, where Taiwan has funded IT centres and computers, donated solar panels and provided agriculture training.

It was recently announced that South Korea is setting up a regional foreign aid office in Fiji.  South Korean ICT experts will be spending more time in PNG and the the country's navy is now also a regular regional visitor. But it's a $US300 million PNG-South Korea port agreement that signals South Korea's clear fisheries interests in the Pacific Islands.

One of the most interesting developments is India’s increased aid engagement in the region, particularly in PNG. A string of rare high-level visits culminated in an announcement this year that the Indian Government, through the Exim Bank of India, offered and signed a US$100 million credit line with PNG for infrastructure financing and HIV/AIDs medication. Also in the pipeline in PNG is a 'centre of excellence' for information and technology. Earlier in the year India provided assistance when Cyclone Winston devastated Fiji and has offered to help the Fjiian Government (as has China) with a proposed new naval base and officer training.

China Exim Bank funding and money laundering 

While social media content helped flesh out details of new Chinese aid projects, a lack of visible media and social media coverage also prompted questions, particularly when sizeable amounts of development money were budgeted and allegedly being spent.

For example, it’s hard to tell whether PNG’s 'distance education network community college' — which is being funded with a US$35 million EximBank loan — ever eventuated. The mysterious project was recently caught up in a high-profile money laundering case in Singapore after authorities detected suspicious transactions that led to the bank account of former PNG Prime Minister Michael Somare (of which he denies knowledge). PNG Government budget documents report the project funds are currently in a trust managed by law firm Young & Williams Lawyers (who were the subject of 2015 investigations by SBS  and Fairfax). 

This development,  which may unravel further and is gathering steam across PNG's online discussion forums, should spook Chinese Government officials working in the region. An opaque aid program is already a tough sell in the Pacific Islands where mistrust, misinformation, frustrations and resentment about China's regional intentions abound.

Foreign aid programs are important tools of soft power and therefore linkages between aid and corruption, whether concrete, alleged or completely unfounded, equates to terrible PR for any donor. This is particularly true for China, which is already undergoing its own anti-corruption crackdown and dealing with domestic debates that charity should begin at home. PNG, a country marred by its own corruption issues, is wasting no time in lining up more Chinese concessional loans. The Chinese Government needs to make sure it steers well clear of any future allegations of corruption. Providing greater transparency around development assistance is the crucial first step. 

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