Lowy Institute

News that the UK has upgraded its terrorism threat level from 'substantial' to 'severe' will undoubtedly help the Abbott Government to prosecute its case for enhanced anti-terror legislation. However, Sam Roggeveen is right to point out that the Government has so far failed to adequately link the scale and nature of the problem with its suggested remedies.

While senior members of the Government, including Tony Abbott, Julie Bishop and George Brandis have all indicated that the terrorist threat posed by the conflicts in Syria and Iraq is a significant increase on anything Australia has previously faced, this is not the same as explaining how the new laws will address this threat.

Nevertheless, there is a strong case that most elements of the Government's anti-terror package (this is a link to a media release; the draft legislation has not been released yet) are both necessary and proportionate to the increased threat.

A caveat: I am focused here on the two most controversial legislative measures: (1) lowering the threshold for arrest without warrant for terrorism offences, and (2) the new offence of traveling to a designated conflict in which terrorist organisations are operating without a legitimate purpose.

I focus on these measures because, unlike other elements of the legislative package, they represent a specific and tailored response to the intelligence 'black hole' that Western security agencies are dealing with in Syria and Iraq.

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This absence of information is due to a variety of factors including the increasingly sophisticated methods used by foreign fighters to disguise their travel to these theatres, their increased numbers as compared with previous conflicts, and the almost complete lack of Western presence of the ground.

The main problem is that the present legislation was conceived during a period in which the threat predominantly emanated from 'home-grown' terrorism as demonstrated in cases like Operation Pendennis and the plan to attack Holsworthy Army Barracks. Whereas the terrorism offences introduced by the Howard Government have proved adequate in accounting for such plots (with 38 people prosecuted in Australia as a result of CT operations and 22 people convicted under the Criminal Code Act 1995), they have proven far less effective against Australians based overseas.

For example, the Australian Federal Police faced substantial challenges in preparing the prosecution of Jack Thomas upon his return from training with al Qaeda in Afghanistan. Indeed, the limitations associated with conducting the investigation in Pakistan (where Thomas was detained) ultimately led to the overturning of his conviction for receiving funds from al Qaeda. It is reasonable to assume that there are other cases of returning extremists that have never seen the light of day due to the existing legislative constraints.

When the inadequacies of the current regime are matched with the fact that the Syria and Iraq theatres contain more Australians than all previous extremist conflicts combined, the rationale for the new laws becomes clearer.

While the threat level in Australia hasn't changed (at least for the time being), the nature of the threat has. The significant number of Australians fighting for Islamic State (and let's not forget Jabhat al Nusra as well) creates the opportunity for these individuals to link up with their countrymen and potentially plan an attack on Australia from offshore. Such a scenario would make it infinitely more difficult for Australia's security agencies to thwart an attack.

Moreover, under the current set of laws, it is conceivable that the AFP would be unable to arrest a suspect upon reentry to Australia, even where that individual was known to have fought with a proscribed terrorist organisation. This is because the evidentiary requirements for the existing terrorism offences are rightly high, while the ability of law enforcement agencies to collect evidence in countries such as Iraq and Syria is limited. True, there are arrest warrants out for the high profile IS fighters Khaled Sharrouf and Mohamed Elomar, but this is almost certainly on the basis of their social media use rather than from evidence gathered in Syria. There are many more Australian extremists in the Levant who stay away from social media but maintain the same abhorrent world view as these two. The lack of warrants for these other extremists is instructive.

In short, the nature of the threat has evolved in the last decade. The solution is for tougher measures that fill the gap between the law and the new paradigm.

Photo by REUTERS/Stringer.

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Sam Roggeveen is certainly right to praise the achievement of an Australia-Indonesia Code of Conduct.

There is, however, an additional point to be made. The ambiguity of the text, which Sam says is mutually beneficial, exposes the nature of the negotiations: Australia gave away nothing, and Indonesia had to back down from its initial position.

President Susilo Bambang Yodhoyono wanted to sort this out before his term ends in October, so he was under some time constraint, while the Australian negotiators have demonstrated by their 'sit on your hands and wait for the storm to blow over' attitude that they see no urgent need to fix the relationships with our close neighbour.

This outcome has two drawbacks. First, it confirms the commonly held Indonesian view that Australia is characteristically sombong ('arrogant'). More seriously, it shows that intelligence policy-making is still in the hands of the people who got us into trouble in the first place. It was a serious lack of judgment that had us listening to the telephone conversations of SBY's wife (and members of the Cabinet who were not sensible targets for this sort of operation, such as the Minister of Finance). This lack of judgment is, unfortunately, all too common. It was demonstrated again by the attempts to bug the Timor border discussions, to the benefit of Australian commercial interests.

This agreement would have been more beneficial still if it had demonstrated that the Canberra intelligence community has learned something from its mistakes.

Photo courtesy of DFAT.

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Great piece from Fairfax's US correspondent Nick O'Malley today on those in Washington who are resisting the rush to war in Iraq and Syria, most notably prominent foreign policy realist Stephen Walt, who argues that a large scale US intervention against Islamic State (IS) 'could make the broader regional situation even worse. Even if such a reaction was to work, he says, it would be disproportionate to the threat posed to the US by the IS, which Walt believes is real but limited, and certainly not existential.'

I agree with Walt and I said some broadly similar things last week. This evidently surprised the people at Crikey. In a curious item they posted yesterday which collects the views of various pundits who are sceptical of military action against IS, I am described as a 'usually right-wing commentator' who has 'taken a jump to the Left'.

But of course you don't need to be left-wing to oppose the use of military force. It is true, anti-war conservatism has become marginalised in the US by the neo-conservative faction, but before the 2003 Iraq war, there was a small rump of realist and conservative critics of George W Bush's plans to topple Saddam Hussein, including figures such as Brent Scowcroft, national security adviser to George HW Bush.

These are not dewy eyed one-worlders who think peace is around the corner if we can all just learn to get along. They recognise that international politics is fierce and anarchical, and that states need to defend themselves, sometimes with force. But they also insist on a rigorous examination of their country's core interests and are wary of the hubristic tendency to believe that lasting political reform can be imposed by outsiders through force.

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I have just returned from St Petersburg, regarded as the most 'European' of all Russia's cities. Burgeoning investment has made St Petersburg look modern (if still a little grim), and many of its residents have a worldly and cultured air. Shiny new office developments are starting to crowd out older grey concrete monoliths, and expensive products are advertised everywhere.

But for all that, St Petersburg is still Putin's Russia. The only media sources are state-approved. Bloggers with more than 3000 followers must register as official media entities and are subject to tight laws that carry jail terms for criticising public officials. All internet companies must store data on their users and make it available to the government. Journalists who are too critical of the Kremlin receive 'warnings' via a phone call to their superiors.

Near the famous Hermitage museum, market stallholders sell a bewildering array of clocks, clothing and crockery, all emblazoned with Putin's stern face. You can buy 'Russian leader' tea (the Putin variety is naturally the strongest). Against a backdrop of fighter planes and tanks, a T-shirt bearing the slogan 'Russian Military Power' is currently a hot seller.

In many ways, St Petersburg is emblematic of Putin's novorossiya ('New Russia'): modernised and affluent. Yet Russians are strangely determined to constantly remind everyone – and themselves – of Russia's status as a world power.

Many of Russia's foreign policy specialists subscribe to a school of geopolitics which places an emphasis on stability in Eurasia based on the spread of Russian language, ethnicity and culture that was notionally achieved under Catherine the Great. Yet novorossiya has a deeper and more troubling meaning than a new modern Russia with a radicalised politics of identity. It was used during the Russian Empire of the 1700s and 1800s to denote the territory north of the Black Sea, currently part of Ukraine. It included much of the industrialised Donbass region and the cities of Luhansk and Donestsk, as well as the coastal town of Mariupol where Russian (and Russian-backed) troops have opened a new front.

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Putin has made two major recent references to novorossiya. The first was in April this year, to justify the annexation of Crimea. The second came when he addressed the 'militia of novorossiya' on 28 August. Now he has explicitly called for the formation of a new state in Eastern Ukraine.

If this was just posturing or signalling, there would be little reason for the West to worry. The problem, though, is that Putin is using a significant amount of hard power to bring about his vision. The T-72B1 tanks (which are not used by Ukraine) videoed near Amvrosiyivka in Ukraine are proof that he has escalated from a campaign of deniability and deception to outright intervention. Russian media made little attempt to explain what ten Russian paratroopers captured by Ukrainian forces were doing on the other side of the border, except for a bland suggestion that they had 'got lost'. When the ten were swapped for over 60 Ukrainians, it sent the message that Russian lives were intrinsically more valuable than Ukrainian ones. And the decision to keep sending relief convoys to the separatists is designed to goad Ukraine into taking action against them, which would be a pretext for a full-scale invasion.

The vast majority of Russians, including even some among the marginalised 'liberal' intelligentsia, would strongly back Putin doing exactly that. Notwithstanding his media dominance, Putin is genuinely popular, especially among young people. He is seen as having restored Russia's sense of Derzhavnost: acting and thinking like a great power. Russians also generally accept Putin's regional Eurasian Union vision as being institutionally legitimate, just like the EU. They see his moves in Ukraine as authentically humanitarian, with a solid basis in international law. After all, they ask, why is it acceptable for the West to intervene in conflicts and not for Russia, whose own people (ethnic Russians) are being threatened?

Westerners are also often surprised to find that Putin is seen at home as a moderate. The Russian political landscape allows generous airtime for figures like the one-time Putin confidante Aleksandr Dugin and Vladimir Zhrinovsky, the clown prince of Russian politics. Dugin was formerly the ideologue of the proto-fascist Russian National Bolshevik party, and among many other antics Zhirinovsky's misnamed Liberal Democratic Party of Russia once published a foreign policy manifesto entitled Plevok na zapad ('Spitting on the West'). When Zhirinovsky recently suggested that Putin should be made 'supreme leader', Putin demurred, saying he ruled only due to the will of the people.

It is often said that Putin appears to hold all the aces in the imbroglio with Ukraine. This is mistaken. The EU is far more powerful economically, and so is the US, which is also vastly superior militarily. Closer to the truth is that Putin is the only one prepared to play the cards he has. The US is hoping that the Ukraine problem will go away, and sees managing Putin as a job for Brussels. But given its small military capabilities and deep internal divisions, the EU has little option but to appease members (like Germany) who are not keen on punishing Moscow too much.

Photo by REUTERS/Alexander Natruskin.

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Foreign investment policy is back in the news. The Business Council of Australia (BCA) is warning that Australia's foreign investment regime is discouraging Chinese investment, particularly from Chinese state owned enterprises (SOEs). The BCA has put forward a number reform options, arguing that change is necessary because we are competing for foreign capital.

Others have flagged the need to overhaul the foreign investment review system too. Former Australian Competition and Consumer Commission (ACCC) chairman Allan Fells has called for the Foreign Investment Review Board (FIRB), which screens foreign investment applications, to be reconstituted as an independent and transparent agency modeled on the ACCC. It is currently a non-statutory body. The Australian National University's Shiro Armstrong says the FIRB system is like Swiss cheese, particularly with random free trade agreements (FTAs) introducing new review thresholds. Add to this changes for agriculture investment and possibly new rules for foreign real estate investment.

At a conference on 29 August, Treasurer Joe Hockey suggested the Government is contemplating a more liberal approach to investment from China's SOEs. He did not signal specific changes but said a number of times that the Government hopes to conclude an FTA with China by the end of the year; it is likely that a more liberal approach to Chinese SOE investments will be part of the FTA.

Chinese negotiators are demanding the same treatment for their government-owned investors as in other Australian FTAs. But if there is a carve-out for Chinese SOEs similar to that in the Korean and Japanese FTAs, this would add more holes to Australia's Swiss-cheese foreign investment policy.

Australia needs a clear foreign investment strategy. Foreign investment thresholds should not be a bargaining chip in free trade negotiations.

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Currently, all investment applications from SOEs have to be screened by FIRB. For foreign private investors, investments over $248 million need to be screened. But in Australia's FTA with New Zealand and the US, only investments above $1.078 billion are screened. The same threshold is included in the recent FTAs with Korea and Japan.

The reason SOEs are treated differently reflects a concern that, as state entities, SOEs will may not be motivated solely by commercial motives.

The BCA notes that if FIRB screening is removed, this will stimulate investment in Australia but could expose Australia to investments 'contrary to the national interest'. But removing screening of SOEs under an FTA also exposes Australia to investments that could be contrary to the national interest. Perhaps the benefit of increased market access for Australian exporters under the FTA will offset the risk of foreign investments contrary to the national interest. However it is unlikely such a cost-benefit assessment is undertaken as part of the negotiations.

Ministers have said one of the benefits from the FTAs with Japan and Korea is increased investment by these countries in Australia. But if our foreign investment policy is excessively deterring investment in Australia, we do not have to enter FTAs to increase screening thresholds. Australia can make that change unilaterally.

The BCA's reform options range from removing FIRB screening altogether to doing nothing at all. In between are five options based around different screening threshold levels (such as the US/NZ FTA level at $1 billion or the general threshold for private foreign investment at $248 billion), and options where such thresholds would only apply to SOEs with a good track record in Australia or to those meeting specific operational criteria.

The core criteria that needs to be established in order to assess the reform options is the degree to which SOE investments are likely to be contrary to Australia's national interest. It is clear that not all SOEs are the same and Chinese SOEs are changing. In particular it needs to be established if there is a real economic threat or whether it is more a case of appeasing community concern over SOE investment. If it is the latter, the focus should be on community education.

Australia does need to overhaul its foreign investment review system. It needs a coherent strategy, not one based on concessions in FTAs. Moreover, the whole system should be reviewed, not just the treatment of SOEs. And Alan Fells is right; changes need to be made to the FIRB. The OECD has recommended that Australia needs to 'further promote foreign direct investment by easing the stringency of screening procedures'. But Australia needs a clear foreign investment policy strategy, and not one that looks like Swiss cheese.

Photo by Flickr user bleu celt.

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Cambodians with copies of a Khmer Rouge Tribunal verdict. (Flickr/ECCC.)

Interpreter readers will be aware that I have frequent criticised the Khmer Rouge Tribunal (the Extraordinary Chambers of the Courts of Cambodia, ECCC) for problems of corruption, lack of cooperation from the government, the sometimes dubious results stemming from the tribunal's character as a body with both Cambodian and international participation, and the glacial slowness of its procedures.

So it was salutary to sit down with Youk Chhang, the head of the Documentation Center of Cambodia, in Phnom Penh last week to hear his views on the tribunal.

Youk Chhang and his family suffered under the Khmer Rouge and he has made it his task to assemble the widest possible archive of evidence for the events that occurred under Pol Pot's regime. The Documentation Center has also worked to ensure that knowledge of the Khmer Rouge period is taught in Cambodian schools and that the general population has the opportunity to understand what the tribunal has been trying to achieve.

Youk Chhang has no illusions about the problems of the tribunal, making many of the same points that have formed the basis of my criticisms. But overall he argues that the tribunal has been a worthwhile exercise. He offered an analogy. Think, he said, of the tribunal as being like a house. It is buffeted by storms, rained on, even struck by lightning, but if it is still standing after all those problems it has justified its existence.

Because of the tribunal, many hundreds, even thousands of Cambodians have been able to share their experiences in testimony before the tribunal or by attending the tribunal's sessions to see the court processes in action and the defendants having to appear for judgment. In outreach programs undertaken by the Documentation Center, Youk Chhang and his co-workers have found that their compatriots are concerned about 'justice' and do believe that despite its slowness, the ECCC has been able to deliver justice, even if defining the term is difficult for many with whom they talked.

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Given Russia’s superior military capabilities this is a war that Ukraine cannot win, at least not by military means. The alternatives are to make a deal with whatever terms are possible or to continue the struggle for a long time, hoping that inflicting a high cost on Russian forces will eventually turn Russians against their government’s adventure. The former will lead to the collapse of the Ukrainian government. The latter will take a very long time at best and result in huge numbers of civilian casualties.

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'The Federal Reserve enters its second century as the closest the world has to a global central bank.' So says Ted Truman, who speaks with some authority as he played a key advisory role for many years with the Fed (the US central bank) and the US Treasury.  However, Truman's detailed account of the Fed's international role over the past three decades demonstrates how limited (and sometimes arbitrary) that role has been.

The central issue here is whether the US Fed can act for the global interest where American interests aren't involved or might conflict.

Truman identifies fourteen occasions where the Fed has acted in response to global events, and a clear pattern emerges: where US foreign policy interests are at stake, the Fed will act to assist with global problems. Thus Mexico's crises (in the 1980s and again in 1994) spurred a vigorous and helpful response. The 1998 crises in Thailand and Indonesia hardly rate a mention in Truman's account, while the concurrent crisis in South Korea (where 35,000 US troops were stationed) resulted in a path-breaking (and principles-breaking) intervention in which the US orchestrated controls on capital outflows from Korea. Foreign banks, pressured by their own national central banks, refrained from withdrawing funds which they had lent to Korean banks. An Australian bank (ANZ) was a significant participant in this stand-still, which fortunately turned out well, with Korea able to resume repayments within a short time.

The US Fed's swap operations are akin to global central bank operations, effectively making short-term US dollar loans to foreign central banks, which can on-lend these to their domestic banks to help them through a foreign currency liquidity crisis. This is analogous to traditional liquidity operations, where central banks make domestic currency loans to banks in need of liquidity.

These Fed swap arrangements have been a powerful and valuable stabilising element during global financial crises since 1965 or even earlier. Until recently, however, they have been available only to a small group of advanced economies (including Australia), plus Mexico.

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In 2008 the swaps were a crucial part of the crisis response, especially for Europe. The Reserve Bank of Australia was able to use this facility to on-lend US dollars to Australian banks in need of foreign currency liquidity when the New York money market dried up. 

The usefulness of this facility was demonstrated even more powerfully in 2008 when South Korea experienced a foreign currency crisis. Its own substantial foreign exchange reserves were not sufficient to stabilise confidence. The crisis ended as soon as the Fed's swap facility was announced, arriving like the US cavalry over the horizon to save the embattled Koreans.

As the Korea experience demonstrates, the swap facility is a more powerful instrument than a country's own reserve holdings. This is a current policy issue, as many emerging economies (especially in Asia) are building up huge foreign exchange reserves in readiness for renewed episodes of capital flow volatility. Such reserve holdings have to be funded, so are expensive and often disrupt monetary policy. Wouldn't it be helpful if the Fed really did act as a global central bank, offering this swap facility to everyone?

Unsurprisingly, the Fed offers swaps only to its trusted friends. In 2008, for example, it refused Indonesia's approach for access to the swap facility. It is not, and is unlikely to become, a global facility that would make the US Fed analogous to a global central bank.

Those, like Australia, in the swap network should be grateful that this powerful facility is available to us, though we might note that Truman reports earlier efforts by the Fed staff to close down the facility.

Truman avoids specifically addressing a vexed current issue. What obligations does the Fed have to consider the impact of its policies on other countries? Financial markets certainly expect a significant global effect from the unwinding of quantitative easing (QE). Raghuram Rajan, the Indian central bank governor, sees the Fed as having important obligations to countries so affected. But beyond ensuring that these QE operations are understood by financial markets, the Fed sees itself as having no wider obligations.

It's hard to see how the Fed could act otherwise. There are, in fact, historical examples where the US has helped its closest friends and paid a price. In 1927 it lowered the discount rate in response to the entreaties of Montagu Norman, governor of the Bank of England, who was struggling to contain the damage from Churchill's disastrous return to the gold standard two years earlier. This lower interest rate encouraged the asset-price boom which ended in 1929 with the Great Crash, ushering in the Great Depression.

If the US Fed cannot be an effective global central bank, what about the IMF? Truman talks of the IMF as if it is a simple extension of US policy. Taken together, perhaps there is some truth in the idea that the US Fed and the IMF can serve as a global central bank. But a precondition for this to be acceptable to the rest of the world is to implement the IMF governance reforms (especially voting shares) which are currently held up, pending US Congressional approval.

Photo by Flickr user jareed.

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An RAAF C-130H Hercules deploys aid to civilians in northern Iraq. (Image courtesy of the Department of Defence.)

There's a lot to be concerned about in the way Australia is approaching the decision to intervene militarily in the civil war engulfing northern Iraq and Syria. There has been scant debate of the decision to go to war in parliament: traveling war-memorial exhibitions were more closely examined in Question Time last week than the war ADF personnel are now risking their lives in.

The rhetoric on both sides of the debate has gone straight to 11, with terms like 'genocide' and 'humanitarian catastrophe' being bandied about. Critics quick to rule out any intervention at all are making simplistic and mostly erroneous comparisons between this crisis and that of 2003. Sycophantic journalists, apparently briefed on background by the Prime Minister or his office, are detailing the military tools to be used before any public articulation of strategy has occurred. There is a real danger that by a process of incremental tactical adjustments, Australia ends up committing to a multi-year military campaign without articulating a strategy or building the political consensus necessary to support it when the going gets really tough.

I'll have more to say at a later date on the strategic options Australia might consider, and the threshold we need to cross before committing to joining the US military campaign against Islamic State. But right now, here are the top five fallacies I've seen so far in Australian thinking on the Iraq crisis.

Fallacy 1: There will be no boots on the ground

Since this crisis began our political leaders have pledged that there will be no boots on the ground. This is political code, communicating the implicit promise that there will be no Australian body bags returning from this war. As New York Times columnist Frank Bruni notes, politicians use this phrase instead of frankly discussing the costs and risk calculations of going to war: 'we're not good at discussing this, at confronting head-on what the toll of our best intentions and tortured interventions can be. We turn to abstraction'. Such abstraction is dangerous, effectively masking the spurious political promise that a country can go to war and pay no cost. 

Promising no boots on the ground is a fallacy for two reasons. Firstly, even a military campaign designed around limited air strikes to contain ISIS will require some ground combat presence: to determine what and who is to be targeted, to foster intelligence networks, to assess battle damage, and to recover any downed pilots.

More importantly though, the destruction of Islamic State cannot be achieved from the air. As the NATO experience in Libya showed, air strikes can stop insurgent forces from massing and conducting conventional military operations. But air power alone cannot destroy an insurgent group or its leadership. If our intent is to stop ISIS from catalysing barbaric violence and destabilising the Middle East, then someone will eventually have to commit ground combat forces. If Australia, the US, and other partners are unwilling to shoulder this burden then it will fall to our proxies like the Kurdish peshmerga.

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Fallacy 2: This is solely a humanitarian mission

One of the Australian Government's clear talking points in the past fortnight is that Australia's military intervention in Iraq is necessary for humanitarian reasons. I can only assume the political strategy behind this is that it will distance the current operations from the Iraq conflict of the last decade. This political strategy is problematic. If Australia's pressing national interest in the region is to prevent the slaughter of civilians, then we should have intervened in Syria when civilians were gassed and children struck with barrel bombs. We should also be intervening in Burma, where more than 250,000 people have reportedly been displaced by conflict this year. And if our concern is truly humanitarian, then we had better prepare to accept a lot of refugees from northern Iraq into Australia.

The reality is that our mission is to destroy ISIS as an organisation. That means killing its fighters, dissecting its financing and recruiting operations, and negotiating political power sharing for the disaffected Sunni Muslims giving life to the organisation. None of that will be easy. But better for the Government to be upfront about what our national calculations on Iraq are, rather than seeking to change the narrative by sprinkling humanitarian dust over public statements. 

For Australia, this is also about playing an active part in an alliance that helps preserve our national interests and maintains the global order necessary for us to live our lives safely and prosperously. Though I am not yet convinced that contributing to this US campaign is the most effective way Australia can share its alliance responsibilities, it is good to see that the Government has been upfront about this aspect of our national interest.

Fallacy 3: This is just an extension of the 2003 invasion of Iraq

The current crisis in Iraq has given oxygen to all the ideological arguments of the last decade surrounding the US-led intervention. Political wars are being dusted off and refought in some quarters.

But this is not 2003 redux. For proof, look no further than the fact that France is a member of the forming military coalition against Islamic State. George W Bush is no longer in the White House, Iraq is no longer a dictatorship, and there are no grand plan for regime change in Syria. The haunting 2003 ideological strains among the analysis of Iraq operations in 2014 are not always helpful. Simplistic comparisons between the military campaigns obscure detailed analysis of the motives of the Government in intervening, and the strategic options it should be considering. Let's deal with the issue of what Australia's strategy on ISIS should be, and then we can return to resolving all the lingering issues of the conflicts of the last decade.

Fallacy 4: Military action will increase the domestic threat of terrorism in Australia

I've heard this reasoning mentioned by a few commentators now, and it doesn't stand up for me. Firstly, behind it is a logic that Australia can just tuck its head down and the evil currents in the world will wash around us. That seems unlikely. We have important interests in good global order and the security of our allies and partners from terrorism, and responsibilities as a global citizen. If we think ISIS is a threat to the global order, we shouldn't duck the fight against it (though that doesn't automatically mean we should deploy military forces into Iraq). Secondly, the terms of the conflict between ISIS and Western countries like ours are already set and there is little we can do to change them or appease Islamic State leaders. ISIS is against the rule of law, and for the rule of bloody violence. We are not.

But there is also little evidence to date that ISIS fighters plan to return to Australia and carry out acts of terrorism. Yes, Syria and Iraq are providing a terrorist university in which extremists, Australians among them, are learning advanced military tactics and developing skills in urban fighting. But, as far as I am aware, in the three years since the conflict in Syria started not a single arrest has been made of an Australian who has returned to this country with the intent to conduct a terrorist attack. Australian military contributions are not likely to significantly increase the domestic terror threat. ISIS already knows we are an ally of the US.

Fallacy 5: This problem can be solved without a strategy for Syria

Air strikes in northern Iraq can contain ISIS and limit its advance into Iraqi Kurdistan. But to deny terrorists safe haven, to destroy Islamic State as a group, to stop civilian slaughter and restore relative order in Iraq, ISIS positions and strengths in Syria need to be targeted. That means a decision to intervene in Syria's civil war and alter the power balance between the Assad regime and the forces arrayed against him. That's something Obama and his allies have avoided for three years, despite a number of provocations. And the complexity of determining a strategy on Syria is why the US has not yet formed a comprehensive strategy to deal with this current crisis.

It will not be easy, but if a case for a US military campaign against ISIS is to be made next month it will have to include a strategy for Syria. Australian decision-makers should be thinking beyond just northern Iraq to determine our view of the best outcome in Syria, and what burden we might be willing to shoulder in order to achieve it.

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In this fast-paced world of media grabs, it is easy for selective quoting to misrepresent what leaders say. In his 28 August press conference for instance, when President Obama was asked whether he needed Congressional approval to go into Syria and attack Islamic State, he said 'I don't want to put the cart before the horse. We don't have a strategy yet.' President Obama was excoriated for not having a Syria strategy years after the crisis began, when he was actually commenting on the military approach to IS in Syria.  Clumsy language perhaps, but he wasn't evincing a complete absence of US strategy towards Syria.

More disturbing was a comment a little further into his press conference. In talking about the future of President Bashar al Assad in light of the IS threat, Obama said 'I don't see any scenario in which Assad somehow is able to bring peace and stability to a region that is majority Sunni and has not so far, you know, shown any willingness to share power with them or in any kind of significant way deal with the longstanding grievances that they have there.'

With this simple sentence Obama virtually sidelined religious minorities in the region, appeared to indicate that Sunni Islam was the region's political as well as religious orthodoxy, and suggested that only 'they' could rule and guarantee stability at the same time. Rather than simply state that Assad's illegitimacy rested on his flouting of international norms and lack of popular consensus, Obama bought into the religious argument.

Now, one could be kind and say Obama has to talk this way because Washington is trying desperately to build a coalition of apparently reluctant regional Sunni states to take military action against Sunni jihadists operating in a Shi'a Arab majority country. But part of the problem with the region is the way in which Sunni-majority states (and some Shi'a majority states, it must be said) see religious identity is a precondition for political leadership, thereby marginalising the rest.

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Obama's use of religious identity in discussing the region's politics also exposes him to accusations of double standards. What about Bahrain, for instance, where the Sunni minority actively discriminate against the Shi'a majority with no effort being made to work towards a substantive power-sharing arrangement? But the Fifth Fleet is headquartered in Bahrain, and if Obama's rather strange words are to be taken at face value, political discrimination is only practiced against Sunnis.

I'll write more in the future about the strange bedfellows that a regional and Western anti-IS coalition is going to throw up, and the double standards that are likely to abound when they take military action. But a president trying to put such a group together would do well to steer clear of any reference to religion. Religious identity is part of the problem in the region, and including it in his speeches and statements will just leave Obama open to the religious intolerance practiced by both Sunni and Shia.

Photo by Flickr user James Gordon.

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In Systems of Survival, Jane Jacobs describes the two moral codes that co-exist in modern life: the merchants and the guardians. Merchants trade, competing within the laws, and are open, industrious and pragmatic. Guardians are loyal traditionalists, hierarchical, expert; they command political, military, professional and civic power. Merchants seek profit while guardians value honour. The two castes co-exist warily, they need each other but effective law must separate and regulate them. It is easy to see that problems occur (especially corruption) when they mesh dysfunctionally.

In China, socialism was intended to be a guardian system, but collective ownership drew the guardians into business. Running state owned enterprises (SOEs) was vastly lucrative. Jiang Zemin welcomed private entrepreneurs into the Party. The merchants and the guardians merged.

This is the ideological dilemma President Xi Jinping is facing. His SOE reform program has until now been confusing, even contradictory. But clarity has emerged in recent days.

At first, reforms emphasised 'mixed ownership', bringing more private sector involvement into SOEs. This was always questionable. While indebted local governments are gung-ho about privatisation, the private sector suspects 'a ploy for SOEs to draw in money.' Others worry the entire system is rigged against private investors. SOEs often struggle to serve both the state and the market: monopolistic central SOEs have become complacent and remain largely closed (Sinopec's restructuring is a notable exception), while smaller SOEs burdened by welfare obligations are hammered by competition. Without a clear profit mandate, SOEs have pursued scale, leading to over-capacity. There are suspicions that managerial carpet-baggers have looted state assets over the years. And previous reforms failed because insular SOEs struggled to hire professional managers from outside.

Some thought the solution was to pay SOE managers more. A State-owned Assets Supervision and Administration Commission (SASAC) official beamed as he described his new opportunities: 'SOE managers, now permitted to fire workers, could be measured on profits, in which they could share.' A major bank said that it was 'urgent' to introduce stock options, a move which would surely be followed enthusiastically by rivals.

Yet in recent days a very different message has descended from the leadership: pay and perks for SOE executives are to be cut by as much as 50%. While not paid extravagantly by international standards, these bosses enjoy royal benefits. Their comedown will be publicly popular, and Xi Jinping may likewise be harnessing his widely supported anti-corruption campaign to force through reforms in the SOE sector. The campaign invokes 'shock and awe' so managerial resistance may be muted.

What aim does the President have in mind? 

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I believe Xi is trying to mark a clear distinction between the administrative role of the state and the executive management of the companies it owns. His model is Singapore. At an operational level, independent professionals will be well paid in line with the market, while the government will appoint directors in a supervisory role. Like elsewhere, there will be a gap between executive and non-executive compensation. The Party-member directors will be paid less, perhaps much less, than the SOE executives they oversee. They will be paid as guardians, not as merchants. They will bear the honour of serving the people; those seeking riches should look elsewhere.

So much for the principle. The question is whether it can work in reality.

So far this administration has surprised many with its ferocity. The tough tactics have been mirrored in Xi's martial language ('reform wielding a knife,' for example). Indeed the very force of change, ruthlessly executed by his 'fireman' Wang Qishan, has caused unease that due legal process is not being observed and that law enforcement is politically motivated. Even reform cheerleaders are wondering where this is all heading, with Caixin's Hu Shuli plaintively reminding us that 'effective rule of law must be the endgame of anti-corruption.' There are some steps towards judicial reform but it's not clear if Xi can truly 'verticalise' legal power and simultaneously empower local judges with more independence, which seems to be his plan.

What is clear is that economic reform is being handled with a political iron fist. The leadership appears to have reached an anti-liberal reform consensus. Or perhaps Xi is merely guarding his ideological flanks. Or maybe there is no consensus and this is a naked power grab.

In any case, the guardians of China's party-state are being asked to rally for a higher purpose. For Xi Jinping the reform program, and the anti-corruption campaign subsumed within it, has an overarching goal of making China more stable, equitable, just and governable. Xi's language evokes a struggle of life or death. Just as Jane Jacobs predicted, properly separating guardians from merchants has become Xi's system of survival.

Photo by Flickr image APEC 2013.

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By Jojiana Cokanasiga, an intern in the Lowy Institute's Melanesia Program. She is completing a Masters in Applied Anthropology and Participatory Development at the Australian National University. 

Lawyers, entrepreneurs, academics and civil servants are some of the female candidates standing in Fiji's upcoming elections. Fijians will vote on 17 September, the first elections since the 2006 military coup. Of the 249 approved candidates, 44 are women. This is certainly an improvement compared to the 2006 elections, when just 30 out of the 338 candidates were women.  

Several factors have contributed to the increase in women's representation this year. Firstly, women in Fiji are beginning to break social and cultural barriers with respect to education, even though unemployment rates for women are still higher than for men. Increasingly women are coming out as better educated, more career driven and more able to cope with the demands of culturally and socially constructed gender roles. The improvement in female participation can also be credited to Fiji's active women's rights movement. Fem Link Pacific, the Fiji Women Rights Movement, the National Council of Women and Soqosoqo vaka marama I-Taukei together convened the first ever Fiji Women's Forum in April 2012. This created a platform for increasing women's participation in politics and leadership. The final National Women's Forum Outcomes Statement called for a 50% women's quota in any new national legislature and/or a compulsory 50% candidates quota for political parties. Women's NGOs have certainly put in the hard yards in advocating and promoting gender equality in politics and leadership in this year's elections.  

While political parties are still a long way from fielding a balanced gender representation in their choice of candidates, it is worth noting that some parties are now ensuring gender balance in management roles by having women as party presidents.

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Women party presidents are Peoples Democratic Party's Lynda Tabua, Fiji First's Tiko Luveni, National Federation Party's Tupou Draunidalo and Fiji Labour Party's Lavenia Padarath.

Political leadership of parties is however still very much a male-dominated space, and when a government is formed after 17 September it will be the leader of the party that has a parliamentary majority (should that occur) that will take on the role of prime minister.

The Social Democratic Liberal Party (SODELPA) is the only political party that has a female leader, who also happens to be a paramount chief. Whether by strategy or coincidence, having Ro Teimumu Kepa as party leader of SODELPA is expected to garner much indigenous support. She not only carries the title of paramount chief but also has the capacity to influence chiefs of other confederacies. Recently, she has been able to field immense support from other chiefs, not only in her own province of Rewa but in other confederacies as well. In turn, it is expected that these chiefs should be able to influence their own people.

Ro Teimumu Kepa isn't new to politics. She contested the 2006 elections, winning her seat and becoming the Minister of Education in the Soqosoqo Duavata ni Lewenivanua (SDL)/Fiji Labour Party-led coalition government (SODELPA is the reincarnation of SDL). Given her political and traditional standing, there is some chance that Ro Teimumu Kepa may become Fiji's first female prime minister.

Women candidates contesting Fiji's elections boast a wealth of experience, outstanding academic qualifications and longstanding community service. There is also an increasing number of women lawyers advocating for women's issues and gender equality as well as contesting this year's election. Tupou Draunidalo of the National Federation Party and Lynda Tabuya of the People's Democratic Party have had long legal careers and have contributed immensely to Fiji's legal community. There is also a good number of businesswomen, teachers and civil servants contesting this year's elections.

The People's Democratic Party, Fiji First Party and the National Federation Party remain the parties fielding the most number of women candidates, each with nine women out of the 49, 50 and 46 candidates respectively. In 2006, 8 out of the 27 female candidates contesting elections made it to parliament. This figure is expected to increase given not only the number but also the calibre of women contesting this year's elections.

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