Lowy Institute

In a previous post, I pointed out how the Australia-India nuclear cooperation agreement departs from Australia's longstanding safeguards requirements. In particular, there is a risk that the follow-on 'administrative arrangement' could deprive Australia of the ability to track and account for Australian uranium supplied to India.

It is not too late to address this problem in a way that ensures the agreement is meaningful and can command bipartisan support in Australia. There will be a crucial role here for the Australian Parliament's Joint Standing Committee on Treaties (JSCOT), which will have the opportunity to scrutinise the agreement and to ask the necessary and difficult questions about the administrative arrangement.

Here there are two practical issues: the administrative arrangement has not yet, as far as we know, been negotiated, so it will not be available when JSCOT commences its review of the agreement; and in any case it is the usual practice to treat administrative arrangements as being confidential.

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The Abbott Government should proceed no further with the agreement unless it can give an assurance that all of Australia's longstanding safeguards requirements will be met. Of course, the Government may try to dismiss any discussion of the administrative arrangement as being merely speculation. The problem is that, in considering the potential impact of such a confidential document, the public and the Parliament may never know the facts. Yet, a way needs to be found to ensure that a confidential document does not negate the effective operation of a treaty-level agreement. 

Therefore, when the agreement is brought to JSCOT for review, the Committee should insist on examining the terms of the proposed administrative arrangement. If necessary, given the sensitivities, this can be done in a closed session. The key question for JSCOT will be whether the terms of the administrative arrangement will enable Australia to confirm that its safeguards conditions are fully met and that Australian uranium and other nuclear material subject to the India agreement is properly accounted for. 

This may take some time. The Committee may need to withhold its final conclusions on the agreement until the text of the administrative arrangement is available. It would help if the Government were to make the text publicly available.

Both major parties in Australian politics now support the principle that Australia should be able to sell uranium to India to help it meet its energy needs, subject to proper safeguards. However, a nuclear agreement with India should be on the same conditions Australia applies to our other partners, not terms dictated by India. 

Even some supporters of closer Australia-India ties have made the point that safeguards should discriminate neither against India nor for it. Australia has demonstrated good faith to India by reversing our longstanding policy with respect to the NPT and signing a civil nuclear agreement. It is up to India to demonstrate good faith by accepting the same safeguards arrangements as all our other nuclear partners.

John Carlson AM is a Nonresident Fellow at the Lowy Institute. He was Director General of the Australian Safeguards and Non-Proliferation Office and its predecessor the Australian Safeguards Office from 1989 to 2010.

Photo courtesy of Flickr user YY

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The ongoing student-led demonstrations in Hong Kong, which oppose China's undemocratic framework for the 'selection of the Chief Executive by universal suffrage', are similar in cause, focus and likely outcome as the 2003 mass demonstrations against the then attempts to implement Article 23 of the Basic law.

The anti-sedition act aimed at fulfilling Article 23, which was withdrawn after the 1 July 2003 marches, states that 'The Hong Kong Special Administrative Region shall enact laws on its own to prohibit any act of treason, secession, sedition, subversion against the Central People's Government…'.

As in 2003, the present attempt to fulfil the conditions of the Basic Law under the 'one country, two systems' formula has led to hundreds of thousands of supposedly non-political Hong Kongers to protest in the centre of the city. Also similar to 2003, the primary and existential cause was Hong Kongese fears that the Central Government in Beijing was deepening the 'one country' part of this formula and eroding the two systems, by restricting Hong Kong's freedoms and undercutting its liberal tenets. Tenets that find expression in the acceptance of peaceful political protest.

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The 2003 demonstrators focused their political voice against the deeply unpopular Chief Executive Tung Chee-hwa, whose support for the anti-sedition law was seen as capitulating to, or conniving with, Beijing to make Hong Kong a region more closely administered by authoritarian China. The current Chief Executive, the equally unpopular Leung Chun-ying, is feeling the brunt of the present student-led demonstrations and the earlier 'Occupy Central with Love and Peace'. This is mainly because of Leung's endorsement of China's plans to ensure that the nominating committee for the election of the Chief Executive by universal suffrage is neither broadly representative nor reflective of democratic principles.

The 2003 demonstrations, the loss of Tung Chee Hwa's legitimacy in Hong Kong and his utility in Beijing were key factors in his resignation in early 2005. The present demonstrations could well see Leung Chun-ying not finish his five-year term that ends in 2017 for similar reasons. However, unlike in 2003 when the anti-sedition law was withdrawn, Beijing is not likely to withdraw its framework for ensuring that Hong Kong's Chief Executive will be chosen from a very short list of Beijing-approved candidates.

The similarities between the present demonstrations and those in 2003 show that the 'two political systems in the one country' formula is unworkable. One is a liberal system seeking true democracy and one is authoritarian where liberal thought and democracy are anathema.

Unfortunately for Hong Kong, the system that hundreds of thousands came out to defend in 2003, and today, will likely continue to be eroded. As for China's plans to uphold the one-country two system model for democratic Taiwan, the likely outcome of the ongoing demonstrations are another nail in an already very well sealed coffin.

Photo courtesy of REUTERS/Carlos Barria.

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A little over a quarter of Myanmar's population has access to electricity. Despite this incredible statistic, the country has tremendous energy potential. Criss-crossed with rivers (not to mention an abundance of hydrocarbons), hydropower could provide for much of Myanmar's energy needs. However, it was attempts to harness this hydropower that led to renewed conflict in Kachin state in 2011. A new proposed dam could provoke a similar fallout.

Myanmar's Ayeyerwaddy River; Photo by Author

In order to support the country's development, Naypyidaw is under pressure to generate more electricity. Low wages and operation costs mean that many foreign manufacturers have flocked to Myanmar since the easing of sanctions. Over the next 20 years, a business as usual estimate by the Asian Development Bank forecasts a 3.1% annual growth in energy demand.

New hydropower projects are one way of boosting power generation. Some sources put the number of proposed dams in the country at as many as 45. Many of these are planned along the mighty Salween River. The 2400km-long river (known as the Nu River in China) runs from Yunnan province in China to Thailand, with 53% of the river basin in China, 42% in Myanmar and 5% in Thailand.

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On 16 September, the Deputy Minister for electric power, Maw Thar Htwe, announced in parliament that a new mega dam on the Salween had been approved, pending further impact assessment (Australia's Snowy River Engineering Corporation will reportedly be conducting the environmental and social assessment).

The proposed dam will be situated in the country's eastern Shan state, close to areas controlled by  Shan State Army-South, an armed ethnic group. As one lower house lawmaker from the region noted: 'Fighting could break out if the government does not discuss this project with the rebels.'

This concern has precedent. In 2011 the fallout and lack of community consultation for a dam project in Kachin state in northern Myanmar led the Kachin Independence Army to abandon a 17-year long ceasefire and re-engage in fighting with the Myanmar military (locally known as the Tatmadaw).

This fighting continues, with tens of thousands displaced.

The Burma Rivers Network, an alliance of several local environmental activist groups, estimate that up to 50 clashes between the Tatmadaw and armed ethnic groups have occurred in relation to ongoing hydropower projects since 2011.

The new dam, known as the Mongton or Upstream Thanlwin hydropower project, would be bigger than the Myitsone dam in Kachin state. It is projected to generate 7000 MW, making it the biggest in Southeast Asia. An earlier Thai-led project, the 7000 MW Tasang dam in the same area, has been stalled since 2007. This recently announced project is in effect its reincarnation.

Displacement of communities will be necessary for the construction of the dam and it will be a hard sell that might require force. Protests will undoubtedly occur against the Government-backed project.

Local protest could also take aim at its international backers. One of the developers of the dam will be China's Three Gorges Corporation. This Chinese corporation was in charge of building the dam that now shares its name. The Three Gorges Dam, the world's largest, displaced over a million people. In recent years anti-Chinese sentiment was sparked over large projects such as the Myitsone dam and the Letpadaung copper mine. 

Meanwhile, the Burmese partner, IGE, will also be scrutinised. It is owned by the son of a former minister and has plans for eight hydropower projects with Chinese companies.

These disputes aside, the project may generate generating antipathy toward the government from local Shan populations. A nationwide ceasefire agreement between armed ethnic groups and the Myanmar Government continues to make headway and, despite delays, is still expected to be signed in the final months of this year. The Mongton dam, and other large scale infrastructure projects, could upset a very delicate balance if proper consultation and compensation is not forthcoming. 

Myanmar's democratic transition and economic development is fraught with problems and must walk a very fine line to avoid backsliding. Large infrastructure projects such as the Mongton dam pose risks to maintaining the fragile and hard-won peace and stability. Community consultation and, insofar as possible, local ownership of these projects is essential. Without it, trust cannot be built between previously warring parties and their constituents. And without their support, the current ceasefires will be short-lived.  

*This article draws on a larger policy brief produced by the author for the Institute for Security and Development Policy (Sweden) in February 2014. That document can be found here

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There, a young girl cradled my head and poured water into my eyes. Some others wiped the chemicals off my arms and legs. When they went on to help the next injured person, an old woman kept watch over me, speaking soft Cantonese and plying me with all manner of snacks and drinks.

  • Finally, the protests viewed from a drone:

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The signing last month of a civil nuclear cooperation agreement between Australia and India has been greeted as an important step towards closer relations between the two countries, as well as bringing India into the global nuclear energy mainstream. These are worthy objectives, but not at any cost. 

Now that the text of the agreement has been quietly made public, some substantial departures from Australia's current safeguards conditions are evident. These suggest, disturbingly, that Australia may be unable to keep track of what happens to uranium supplied to India.

In this post I will explain what is wrong with the Australia-India nuclear cooperation agreement and why it appears that the Abbott Government may be abandoning Australia's longstanding safeguards requirements for India. In a subsequent post I will explain what can and should be done about it.

Negotiations for the agreement began under the Gillard Government in 2012, after Labor came around to an in-principle acceptance of uranium exports to India provided they were properly safeguarded. This was always going to be contentious, primarily because of Australia's longstanding policy against supplying uranium to countries outside the Nuclear Non-Proliferation Treaty (NPT).

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It is short-sighted and self-defeating to make the agreement even more contentious by compromising Australia's safeguards standards. This will jeopardise bipartisan support for the agreement, raising the prospect of future governments suspending exports under it. It will also expose the agreement to potential legal challenge under the 1987 Safeguards Act, and it risks re-opening the wider uranium debate in Australia. None of this is in the interests of the Australian or Indian governments or of the nuclear industry in either country.

Two documents are critically important here. First, let's look more closely at the agreement itself. It departs in the following ways from Australia's standard requirements on countries receiving our uranium:

Consent to reprocessing – reprocessing, involving separation of plutonium from spent fuel, is the most sensitive stage of the nuclear fuel cycle. To date Australia's consent to reprocessing has been limited to the EU and Japan, and has been given on what is called a programmatic basis, i.e. Australia has approved the specific 'downstream' facilities using separated plutonium and the purposes involved. In this agreement, however, Australia has effectively given consent in advance for India to reprocess in accordance with an 'arrangements and procedures' document India concluded with the US in 2010. This covers safeguards at two reprocessing plants which India plans to build, but includes only a vague reference to management of plutonium, and nothing corresponding to programmatic consent;

Right of return – Australia's standard conditions include a right for Australia to require the return of material and items if there is a breach of an agreement. This agreement contains no such provision;

Fallback safeguards – Australia's standard condition is that, if for any reason IAEA (International Atomic Energy Agency) safeguards cease to apply, the parties are to establish safeguards arrangements that conform with IAEA safeguards principles and procedures and provide equivalent assurance. This agreement requires only that the parties consult and agree on 'appropriate verification measures', a vague term readily open to differing interpretations;

Settlement of disputes – Australia's standard requirement is for negotiation, backed by an arbitration process. This agreement refers only to negotiation, with no mechanism for resolving deadlock.

Even more consequential than the agreement itself may be a second, follow-on text that the public may never get to see, a so-called 'administrative arrangement' which sets out the working procedures for the agreement. Officials are presumably working on this at present. The key question here is, will this administrative arrangement enable Australia to track and account for the nuclear material that is subject to the agreement with India?

The administrative arrangement should set out detailed procedures for identifying and accounting for the specific nuclear material to which the agreement applies. This includes not only the initially-supplied Australian uranium, but all subsequent generations of material derived from it, especially plutonium. If it is not possible to apply the agreement's provisions to specific material, the agreement will be meaningless. 

To be effective, these procedures need to include a requirement for regular reports to Australia showing the flow of material under the agreement through the nuclear fuel cycle in India. Australia needs to be able to track and account for this 'Australian-obligated nuclear material'. This is both a proper public expectation and a legal requirement under section 51 of the Safeguards Act.

Bipartisan support for, and public acceptance of, uranium exports is based on the assurance that Australia is able to track our material and determine that our conditions are being met. Australia's safeguards requirements were developed by the Fraser Government, are in line with international standards, and have been applied under all our safeguards agreements ever since – today we have 22 agreements covering 40 countries. 

Disturbingly, it is reported that Indian officials will not provide Australia with reports accounting for material under the agreement, and that the Abbott Government seems prepared to waive this requirement for India. The same issue has arisen under India's arrangements with the US and Canada. In response, Washington has held firm: the US-India administrative arrangement has been outstanding for several years; reportedly the US is insisting on receiving tracking information and India is refusing.

In the case of Canada, the Harper Government gave in to India, an outcome described as the 'meltdown of Canadian non-proliferation policy'. The Canadian Government refuses to reveal the details of its arrangement. If Australia follows Canada down this path, it will put the wrong kind of pressure on the US, the EU and Japan in their own dealings with India.

Apparently India considers that its acceptance of IAEA safeguards should be good enough. But India's refusal to provide reports on Australian supplied material calls into question whether India will in fact identify and account for this material, as required by the agreement. If India will account for this material, the additional effort in providing reports to Australia should cause India no problem. However if it will not account for the material, India will be in breach of the agreement.

Why is India being so difficult on this issue? India has an expanding nuclear weapon program. It has not fully separated its military and civilian nuclear programs and some facilities are still dual-purpose. India's safeguards agreement with the IAEA does not impose the same restrictions as bilateral agreements in areas such as reprocessing, higher enrichment, retransfers to third countries, research and development or the production of tritium (which has uses in nuclear weapons). 

If India succeeds in delinking foreign-obligated nuclear material from individual bilateral agreements, making it impossible to identify which batch of material is covered by which agreement, then India could work a 'pea and thimble' trick in which no supplier could tell whether their material was being used contrary to bilateral conditions. The mere possibility of this is sufficient to call into question India's commitment to observing bilateral agreements. 

Without proper reporting, Australia has no way of knowing whether India is in reality meeting its obligations to identify and account for all the material that is subject to the agreement, and to apply Australia's safeguards conditions to this material. It is not good enough to simply say that we trust India because it has an 'impeccable' non-proliferation record (and India's record in any case is not 'impeccable').The reporting procedures are not optional; they are fundamental to Australia's ability to confirm that our safeguards conditions are being met. They have long applied to close and trusted partners such as the US, the EU, Japan and South Korea. There is absolutely no case to waive them for India.

John Carlson AM is a Nonresident Fellow at the Lowy Institute. He was Director General of the Australian Safeguards and Non-Proliferation Office and its predecessor the Australian Safeguards Office from 1989 to 2010.

Photo courtesy of REUTERS/Adnan Abidi.

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In these times of budget austerity, imagine if someone came up with a proposal that could potentially save the Defence budget tens if not hundreds of millions of dollars from its bottom line without impacting on overall capability. Indeed, a plan that could actually enhance performance while significantly reducing expenditure.

Far from being a pipedream, this kind of potential exists within the Australian Army Reserve, just waiting to be unlocked by the right combination of reforming zeal and political will.

As Australian Army Major Mark Smith has argued, the Reserve is disproportionately expensive for the capability it provides and the impact it has on advancing Australia's national security interests.

This is not a criticism of the men and women of the Army Reserve, 'chocos' as they are affectionately known, who have proven themselves over many years of continuous deployment both at home and abroad in scenarios as diverse as domestic disaster relief to counter-insurgency operations in Afghanistan. Rather, it reflects the fact that the Reserve is operating in basically the same way that it has done since the Vietnam War.

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Sure, the powers that be can point to Plan Beersheba, the Strategic Reform Program, and other measures as evidence of recent attempts to modernise the part-time force. However, these initiatives dance around the edges of the problem and do nothing to address the structural inadequacies of the current system.

With the Army Reserve no longer deployed in the Solomon Islands or East Timor, now is the time to review our approach to part-time military service with a view to enhancing efficiency and reducing costs.

The core problem is the Army Reserve force structure, which is based on conventional principles of military organisation whereby soldiers are organised into battalions and regiments, which are then grouped into brigades and subsequently divisions. While this structure has worked well for the Reserve and its equivalents around the globe, it is patently unsuitable for a part-time force where units which should consist of 500+ personnel often attract less than a hundred to training. Additionally, individual readiness requirements are met by barely 50% of Army Reserve members.

The end result is an unwieldy system where there are too many officers and not enough soldiers. It is further exacerbated by the fact that the Reserve has to comply with essentially the same corporate governance regime as its full-time counterpart. This means that time and resources that could be spent on training are instead diverted to activities such as assessment reports for soldiers who may have performed as little as 20 days of duty over the course of a year. 

Ask reservists themselves, and most readily accept that the system is in need of an overhaul. Many would even forego the current lucrative (but administratively intensive) retention bonuses if these were replaced by reforms that more clearly defined the role of the Army Reserve and the expectations placed on its members.

So what should a reformed Army Reserve look like?

One option, advocated by Mark Smith, is to consolidate the existing force structure into fully-manned units that incorporate a broader range of capabilities (such as infantry, artillery, signals) but under a single administrative regime.  

This model represents a radical departure from the status quo yet there is sufficient precedent to suggest that the upheaval would be justified. Indeed, modern armies are increasingly organised into multi-faceted 'battlegroups' in which troops with differing specialities (and originating from separate units) are brought together under a unified command based on the specific operational requirements at hand. While such arrangements are almost always temporary, with the detachments returning to their parent unit once a task is complete, it provides a potential basis for the reorganisation of the Army Reserve. 

Permanently maintaining the 'battlegroup' structure for the Reserve would have several advantages, not least of which would be a significant cost reduction associated with administering the many disparate, under-manned units that currently constitute the Army Reserve. Additional benefits would include the pooling of equipment, the rationalisation of scarce resources and enhanced interoperability between the sub-units.   

There is no doubt that the above proposal is a controversial one insofar as it would involve disbanding units that trace their history back as far as World War One and the Boer War. Indeed, a battalion such as 4/3 Royal New South Wales Rifles can trace its lineage to both world wars.

The key point is that the Army Reserve is badly in need of reform and that this proposal has the added attraction of potentially saving the Government significant funds at a time when it is looking for savings across the range of Commonwealth responsibilities.

Photo courtesy of Australian Department of Defence.

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An LA Review of Books essay on Dan Washburn's The Forbidden Game: Golf and the Chinese Dream:

...although construction of new golf courses has been banned in China since at least 2004, more than 400 were built between 2005 and 2010, making China the only place in the world experiencing a golf boom. Government officials who enjoy hitting the links register at golf courses under false names, afraid of leaving a paper trail connecting them to a game most often associated with capitalism and corruption. And while massive golf course complexes lined with luxury villas populate large tracts of land outside Chinese cities, their owners attempt to hide the courses in plain sight, giving them convoluted names like the “Anji China Ecotourism and Fitness Center.” Like so much else in contemporary China, golf occupies a gray zone: officially forbidden, yet tolerated — even encouraged — behind the scenes, as local government officials and land developers reap massive profits from the construction of new courses.

Photo by Flickr user g33kgrrl.

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Photo: @Charles_Lister

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In a new Lowy Institute Analysis launched today, Nicholas Humphries, the Australian Customs and Border Protection Service Fellow at the Lowy Institute, examines how Customs can increase Australia's trade competitiveness at a time when goods and services are increasingly produced across borders in so-called 'global value chains'. 

The Analysis argues that to harness the opportunities of a changing global trading environment, Customs must develop an Authorised Economic Operator (AEO) program. AEO programs are currently being established around the world as a means of rewarding low-risk traders with secure supply chains. Humphries argues that an AEO program will enable Customs to help Australian industry exploit new global trading opportunities, while still providing the Australian community with border protection services. 

'Without an AEO program, Australia is at a severe competitive disadvantage', argues report author Nicholas Humphries.

The Analysis can be downloaded from the Lowy Institute website. It was written as a part of the Australian Customs and Border Protection Service Fellowship at the Lowy Institute.

Image courtesy of the Australian Customs and Border Protection Service.

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Many of us are holding our breath wondering what is going to happen next in Hong Kong. There are concerns that what is happening now might come to the same tragic end as what happened in Tiananmen Square in Beijing in 1989. 

Universal suffrage is the ultimate aim in Hong Kong, according to Article 45 of its Basic Law. People are protesting because although China agreed to the universal suffrage clause during handover negotiations with the UK in the 1980s, on 31 August the National People's Congress Standing Committee announced that candidates not approved by Beijing would be screened out of the running.

Many – although not all – in Hong Kong are angry that promises for full suffrage in 2017, while not broken as such, have been cleverly reshaped so that while everyone would be able to vote, they would only be able to vote for Beijing-approved candidates.

While the Hong Kong authorities are already using harsh violence, at this point it has not gone past tear gas and threats of rubber bullets. I think that escalation to another Tiananmen is unlikely, for a number of reasons. One particularly important reason is that individuals count when it comes to decision-making, and Xi Jinping is not Deng Xiaoping.

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As events unfold in Hong Kong, decisions about how the leadership should best react are being made from scratch; the direction and result is not preordained. China now is not where it was in 1989 economically, politically, or socially. Under Deng in the reform era, ideological struggle was being subjugated to economic development, and a new social contract that still holds today was being forged. With this new social contract, the people would not oppose or compete with the Party for political power as long as the Party served their economic needs and improved standards of living.

China's role in the world was also fundamentally different. At that time China was becoming increasingly engaged with the rest of the world, so China's pariah status as a result of Tiananmen, at least in the West, had real and tangible domestic implications. This loss of (much) international legitimacy had profound implications for Deng's domestic project, creating an urgent need for the leadership to shore up its side of the domestic social contract, particularly given that social dissatisfaction of various sorts was what had led to the Tiananmen demonstrations in the first place.

Xi Jinping and the current Chinese leadership will be all too aware of the damage Tiananmen caused to China's international status, and, more importantly, the implications for China's domestic development. Given the current circumstances of the Chinese economy, and China's growing role in international affairs, I believe that the Communist Party is very unlikely to choose to use more violence on these protesters in Hong Kong to the extent of that used in Tiananmen. 

Xi Jinping is presiding over an era where maintaining the breakneck economic growth required to maintain the social contract forged in Deng's reform period is neither really desirable nor possible. The Party is already in a very difficult bind as to how to demonstrate its legitimacy and mandate domestically. Messaging around events in Hong Kong is carefully controlled, key search terms such as 'Occupy Central' and even 'Hong Kong' do not come up with anything related to the protests. Reportage of how events are being covered in the mainland can be found here. What coverage does exist describes the protesters as instruments of anti-Chinese forces in the UK and US, "whose hearts belong to colonial rule and who are besotted with 'Western democracy'." 

As such, domestic political and social uprisings on the mainland in response to a more severe crackdown in Hong Kong would not necessarily be the primary deterrent of intensified violence. However, the economic impact of the global loss of legitimacy that would follow another crackdown like Tiananmen would be too high a cost in the current economic climate. 

We should also not underestimate the skill and experience the Chinese Communist Party has when it comes to managing dissent. It has a range of well-honed options at its disposal, which it deploys regularly in protests and demonstrations across the mainland, that we never really see reported in Western media. 

What is happening in Hong Kong now is undeniably a very real challenge to the Chinese authorities, but precisely because of the risks associated with getting it wrong, it will be handled carefully, skilfully, and without recourse to violence anywhere near the level of what was seen in Tiananmen in 1989.

Photo courtesy of Flickr user Pasu Au Yeung.

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Most discussions about the security of Asia in the 21st century beg the comparison with the East-West confrontation of the 20th. In the nuclear realm, as in other domains, the question 'Is Asia different?' is central. Judgments on the stabilising or destabilising nature of Asian nuclear weapons at sea depend on a few key parameters, on which there does not seem to be major disagreement among contributors to the debate launched in this series:

  • It is generally agreed that secure second-strike capabilities at sea were a stabilising factor in the strategic relationship between great powers during the Cold war; there is no a priori reason why things would be radically different for Asia tomorrow.
  • Asian nuclear powers already have a modicum of secure second-strike capabilities. Through protection, mobility, concealment and deception, at least some of their land-based missiles are de facto immune to an adversary’s first strike. Or, to put it differently: no Asian nuclear-armed country could reasonably consider that it has a disarming first strike option on another.
  • Submarines armed with strategic (ballistic but perhaps also cruise) missiles would thus probably increase strategic stability in the region without necessarily being a complete game-changer.
  • However, for that increase in stability to happen, two conditions would have to be met:
    • All three major Asian nuclear powers would need to have them; in the meantime, access to strategic submarines by one or two (but not three) could be more destabilising than stabilising.
    • Maritime nuclear forces would need to be protected from attack either through continuous at sea deterrence (CASD) or through heavy natural protection (such as the Hainan island base); otherwise, they could become tempting targets, with the risk of adding more instability than stability. This also implies an investment in nuclear force protection (anti-submarine warfare frigates, maritime patrol aircraft etc) to ensure that a ship leaving for patrol does not become an easy target; any investment in a sea-based nuclear capability implies an additional investment in non-nuclear forces.
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  • These two conditions are unlikely to be fulfilled anytime soon, and the peculiarities of the Asian maritime theatre (access to oceans, nature of the waters) will make them harder to achieve than in the East-West context. This is another reason why, for operational patrols, 'bastion' practices will be more tempting than 'dilution' ones.
  • Because of command and control challenges, countries which combine assertive nuclear control cultures and de-mating practices (China and India) will not naturally be inclined to allow for operational patrols of submarines. In other words, CASD will not come easily to Asia.
  • That said, access to modern submarine-based secure second-strike capabilities might be faster, relatively speaking, than it was in the East-West context, due to technological developments that will make some key capabilities (accoustic discretion, secure communications, etc) easier to achieve than was the case in the 20st century.
  • It is hard to argue that theatre nuclear weapons at sea (for use against other maritime forces) would increase strategic stability in the region. They may lower the nuclear threshold in a conflict.
  • Finally, an inescapable feature of the Asian nuclear landscape is its multilateral nature (four nuclear countries in the region plus Russia and the US). Three independent Asian nuclear actors plan to put part of their nuclear weapons at sea, and since the beginning of this discussion, it has been learned that the fourth (North Korea) may also have plans in this regard. This 'built-in complexity' of the Asian nuclear scene may be more important, at the end of the day, than the structure of the respective arsenals of the countries concerned. 
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In Cambodia, a country of remarkable ethnic unity (close to 95% of the population is ethnically Khmer) and with the religion of Buddhism dominant, religious extremism has been absent. What is new and notable is the emergence of political activism among some Buddhist monks. 

Over the past year there have been frequent reports of Cambodian Buddhist monks taking part in anti-government demonstrations.

Some of these demonstrations are linked directly to protests mounted by supporters of the Cambodian National Rescue Party headed by Sam Rainsy, and others to such issues as garment workers' wages and calls for the protection of environmentally threatened forests. Very recently, Buddhist monks have been among those protesting against the agreement reached between Australia and Cambodia for the transfer of asylum seekers to Cambodia.

By comparison with the role of monks in Sihanouk's Cambodia during the 1950s and 1960s, when the Buddhist sangha was largely passive, or to a limited extent supportive of the ruling regime, such contemporary political activism offers a marked contrast with the past.

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Some qualification is nevertheless required. During the worst years of Vietnamese control of Cambodia in the early decades of the 19th century it is clear that Buddhist monks played an important part in sustaining a shared sense of Cambodian identity. And in the period of French colonialism the sangha was involved in resisting, if only passively, efforts by the French to interfere in what it saw as fundamental elements of the country's culture, for instance, the French attempt to introduce a romanticised written form of the Cambodia language. Moreover, Buddhist monks were at the forefront of the one major protest against French rule during the Second World War, the so-called 'Revolt of the Parasols' in 1942, which took its name from the fact that monks were carrying their saffron-coloured umbrellas as they protested. All this noted, it is correct to say that before the victory of the Khmer Rouge in 1975 Cambodian Buddhism at no stage played the overt political role seen elsewhere in Southeast Asia, as in Burma both before and after independence or, in very different circumstances, in South Vietnam in the 1960s.

Under the Khmer Rouge Buddhist observance was abolished and all monks forced to defrock, though as the most authoritative Western observer of Cambodian Buddhism, Ian Harris, has noted in his important book, Buddhism Under Pol Pot, there have been two instances of monks continuing to live out their role despite general regime opposition. The Vietnamese invasion and the overthrow of the Khmer Rouge regime at the beginning of 1979 saw the slow re-emergence of Buddhist practices and a sangha closely linked to and controlled by the People's Republic of Kampuchea (PRK) government. While the degree of government control has now been loosened since the early 1990s, there is good reason to endorse Ian Harris' view expressed in his book published that the 'problems affecting the sangha remain deep and seemingly intractable.' Noting the presence of 'corruption and stagnation', Harris aptly observes that the 'Buddhist order is, in fact, the mirror of a wider society'. In this regard, the Supreme Buddhist Patriarch, Tep Vong, is widely recognised as having been, and still remaining, a firm supporter of Hun Sen's Cambodian People's Party.

It is against this background that some Buddhist monks have become more active in playing overtly political roles, taking advantage of the right they now have to vote and increasingly turning to the use of social media. It is difficult to provide a precise figure for those who are involved in this activism. The Independent Monk's Network for Social Justice (IMNSJ) established in 2013 claims a membership of 5000. This figure needs to be placed against a total membership of the sangha between 5-7000. It appears that political activism is mostly found among monks based in Phnom Penh.

It is unlikely that there will ever be a return to the pattern of the past in which Buddhist monks played little active part in the political life of Cambodia. At the same time, and just as Ian Harris has reflected on the sangha mirroring society at large, the evidence of the past two years suggests that a sea change has occurred in Cambodian politics. This change is a reflection of a sharp demographic shift so that over 50% of the population are now under 30 and the staggeringly rapid rise of new social media. Human rights groups are now more active and outspoken, so that it should not be a surprise that change has also taken place among the Buddhist clergy.

Photo courtesy of Flickr user Luc Forsyth.

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Anxious friends called me last night in Wanchai, at the edges of the Occupy Central protest. The police had baton-charged at the crowd and fired tear gas, and people were streaming away from the event, crying and wailing. Yes, tear gas really works. No, Hong Kong is not afire, and life goes on this morning in the downtown business district (the stock market is down 1.7%).

Other large cities experience violence and civil disobedience, and continue to thrive. We have not reached the apocalypse yet.

Still, as I've said before, street protests are bad news for Hong Kong and it's hard to discern any winners from this event.

The Wall Street Journal and the Financial Times Asian edition front pages both headlined last night's confrontation as a 'harsh crackdown.' The police will be criticized for their heavy-handed tactics, even though the boys in blue are just doing their job. The Hong Kong Government will be mocked as feckless lackeys and puppets, acting only for the interests of tycoons and on Beijing's commands. There was a telling scene a week ago when Xi Jinping summoned these businessmen, the emperor and his vassals.

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Beijing itself is rebuked for dissembling on its Basic Law commitments and thereby provoking this civic response. The Occupy Central organizers who claim to lead a campaign for 'love and peace' have already lost control of affairs. The students (some as young as 13) tear-gassed last night will be described as naïve, led astray by troublemakers. The silent majority who just want to carry on with business will be condemned for being craven and apolitical.

How did we get here? To recap, Beijing has offered a restricted form of universal suffrage in which a 1200 person nomination committee (mainly loyal to mainland interests) must pre-approve candidates. Hong Kong's legislature can now choose either to accept or veto this arrangement. Actually, these choices are pretty good. If Hong Kong declines Beijing's formula, on the principled basis that it is a 'fake democracy' like Iran's, we will revert to the old-style (2002) system where voters get only a limited say in Hong Kong's governance, which is still more inclusive than the rule of British colonial administration.

If Hong Kong abides by Beijing's recommendation, the territory must elect candidates acceptable to China, hardly unreasonable, many may think. Although domestically Beijing insists that loving the country equates to loving the Communist Party, it has clarified rather awkwardly that its definition of Hong Kong patriotism merely requires not to oppose China's one-party rule. Besides, the democrats utterly lack an electable candidate in any case. So for all the much-ridiculed crocodile tears about the loss of freedom, one must question what better governance alternatives exist.

How bad could it get? Very bad. Twenty five years ago, we saw what happened when a threatened Beijing is backed into an existential confrontation. Today, China is a country with a triumphal sense of infallibility. It is so resolute and confident of its sovereign power that it can deliberately taunt large neighbors like Vietnam and India as a matter of routine. Hong Kong is a mere flyspeck by comparison, and a domestic concern at that. Of course, this is not June 1989, and Hong Kong is not the capital. But the protesters need to realize what they're dealing with here: a state that will use lethal force if it deems it necessary. Then there'll be real tears.

Photo courtesy of REUTERS/Tyrone Siu.

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With other international institutions reiterating their forecasts of declining growth in the emerging economies, the latest Asian Development Bank Outlook Update has a more positive view, at least those in our region. Not only are they sustaining a 6%-plus growth rate, but trade integration continues apace.

Australia has not found much of a role for itself in this supply-chain revolution so far, but our strong services sector gives us potential opportunities.

Among the many reasons for Asia's superior economic performance has been the success of supply-chains (what the ADB calls global value chains), which divide the production process so that each stage is carried out in a country which has comparative advantage in that particular process. From 1995 to 2008, the share of Asia's value-chain trade in worldwide manufacturing exports almost doubled from 8.6% to 16.2%. The message from the IMF on emerging economies has been gloomy for the past few years, but those in Asia have sailed ahead at a pace around three times that of the advanced economies, and the ADB sees this continuing. 

What made this possible was close integration and freedom of regional trade.

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Following the implementation of the ASEAN Free Trade Area, over 70% of intra-ASEAN trade incurs no tariff, and less than 5% of that trade is subject to tariffs above 10%. Non-tariff trade facilitation – making it easier to ship things across borders – is the objective of the Asian Economic Community and the Regional Comprehensive Economic Partnership initiatives. The national single window (a one-stop shop to speed customs clearance within ASEAN) has gone live in Indonesia, Malaysia, the Philippines, Singapore, and Thailand, with full roll-out planned for all significant ports and airports by 2015.

Where does Australia fit into all this? Have we been left behind with these fast-expanding opportunities, just at the time when we need to find a substitute for commodities to drive our growth? What have we got to offer?

Japan played a key role in promoting supply-chains when it shifted its manufacturing to lower-income countries. Taiwan provided managerial support for the initial stage of China's manufacturing growth, with Foxconn as the prime example. South Korea's sophisticated electronics industry provided inputs for other countries' manufacturers. All of these countries had inherent advantages in finding a role in the supply-chains. Australia, as a net capital importer and commodity exporter with modest manufacturing capacity and few global manufacturing brands, has found it hard to find a role in the manufacturing boom in Asia.

Many of our best opportunities will be found in services. Our engineers are seen all over Asia, in mining and infrastructure. Australian accountants, lawyers and financiers are there too. But the supply-chains should provide new opportunities, especially as Asian manufacturing goes up-market and needs sophisticated design and better distribution know-how to gain greater access to Western markets. 

Photo courtesy of Asian Development Outlook 2014 Update

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