Lowy Institute

Even for long-time watchers of the Middle East like myself, the region's enmities and alliances have become very difficult to keep track of.

This has just been taken to a mind-bogglingly new level by Saudi Arabia's decision to launch a military campaign in Yemen against the Houthi movement.

Last September the Houthis, backed by Yemen's deposed president, Ali Abdullah Saleh (whom the Houthis fought against in 2009), stormed the Yemeni capital Sana'a. Since then they have captured large parts of the country, forcing President Abd Rabbuh Mansur Hadi to flee to the southern city of Aden.

The Houthis are Zaidi Shia, and are seen as closely aligned with Iran, which is a key reason why the Saudis, backed by other Gulf allies and seemingly by the US, have now intervened. But the Houthis are also fighting al Qaeda elements and Islamic State supporters in Yemen.

So in Iraq and Syria, the US, backed by Saudi Arabia (at least nominally), is fighting against al Qaeda and Islamic State, and both groups are also being fought by Iran. But in Yemen, Saudi Arabia, backed by the US, is fighting against the Houthis, who are supported by Iran but who are fighting al Qaeda and Islamic State. 

Confused? So am I.

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In a speech to the National Press Club yesterday, Foreign Minister Julie Bishop said she is 'scoping the opportunities for our next term on the United Nations Security Council.' 

Australia performed well during its 2013-2014 term on the Security Council, and the time has come for a decision to be made about the next term. It would be a welcome change if a bid were to be launched under a Liberal government.

It is a commonly held perception that the Labor Party is friendlier to the UN than the Liberal Party. Australians themselves are largely supportive of the UN: 63% hold a favourable view of the organisation. Labor stalwart Dr HV Evatt was the great agitator on behalf of medium and small nations at the founding conference in San Francisco, 1945. He later served as the fourth president of the General Assembly.

The Liberal Party, on the other hand, is seen as being more conflicted over the UN. The Howard Government worked ably with the UN on Timor, while it later rode roughshod over the rules-based order when it joined with allies the UK and the US to invade Iraq.

In 2000, Alexander Downer famously derided the UN, saying that, 'if a United Nations committee wants to play domestic politics here in Australia, then it will end up with a bloody nose.' He was later appointed UN Special Envoy to Cyprus.

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But there is a healthy pro-UN camp within the Liberal Party. Dr Russell Trood founded the UN Parliamentary Group while serving as a Liberal senator. The group is now co-chaired by Melissa Parke MP (Labor) and Senator Chris Buck (Liberal). Trood is now chairman of the UN Association of Australia, succeeding the former Liberal senator Robert Hill (former defence minister and former Australian permanent representative to the UN).

Other voices in the party tap into the anti-UN sentiment, which runs deep on the hard right (ie. the 28% of Australians that hold an unfavourable view of the UN). But this sentiment is born mostly of ignorance of the UN system and its limitations. But it is not as suspicious a minority as that in the US, where the positively unhinged 'black helicopter' conspiracy theorists continue to irrationally oppose the Arms Trade Treaty and Agenda 21 (a non-binding pact on sustainable development) for fear that the UN will one day take over the world.

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A couple of weeks ago, Prime Minister Abbott suggested that Australians were 'sick of being lectured by the UN.' In opposition, the Liberals also opposed the bid for a seat on the Security Council, citing issues of cost and timing.

In keeping with the Liberal Party's contradictory approach to the UN, Foreign Minister Julie Bishop actually took advantage of the seat, and performed admirably on numerous occasions (on MH17 and during the presidencies of 2013 and 2014). During her speech yesterday, Bishop espoused the virtues of Australia's term on the Council: 'I believe we exceeded expectations of the impact that we could have as a non-permanent member.' By all accounts, the P-3 (France, US, UK) enjoyed Australia's company on the Council, while the Russians found us a worthy adversary.

Bishop also took the opportunity to focus more broadly on the question of how Australia would look to build a post-Council legacy. She signaled Australia's intention to support 'efforts to strengthen the effectiveness of both United Nations peacekeeping and peacebuilding.' This support is timely. Jose Ramos-Horta's High Level Independent Panel on Peace Operations delivers its report in the middle of the year and Obama hosts his summit on peacekeeping at UN HQ in September.

Bishop also made mention of the need to 'ensure women are more deeply engaged' in the UN's efforts towards peace. This flags ongoing Australian support for the women, peace and security agenda enshrined in resolution 1325.

This year is a big year for the UN, which is celebrating its 70th Anniversary, and the options for meaningful engagement are plentiful.

On the immediate horizon will be the Palestinian Question (as it is known at the UN). Although Bishop made no mention of it in her speech, the recent Israeli election result could prompt a showdown at the UN some time this year. With the Obama White House signalling a potential change its stance at the UN, it remains to be seen whether Australia too will alter its policy. The UK and France are also likely to push for the recommencement of final status negotiations.

The Millennium Development Goals are up for renewal. The new post-2015 development agenda promises to be more inclusive and far reaching.

The UN's humanitarian architecture is also under immense strain brought on by a record number of IDPs and refugees (57.5 million), a result of the numerous crises afflicting the Middle East, North and Central Africa. US$ 16.4 billion will be required this year alone.

Despite the UN's growing needs, Australia's brand of niche diplomacy is likely to get more of a workout than its cheque book (or the boots of ADF personnel).

Photo courtesy of the Foreign Minister.

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Just over a decade ago Illicit: How Smugglers, Traffickers and Copycats are Hijacking the Global Economy, hit bookshops around the world. Written by the then editor of Foreign Policy and former Venezuelan Minister of Trade and Industry Dr Moises Naim, Illicit outlined how the 'black' economy risked undermining the regulated economy, reshaping politics to the detriment of societies and destroying lives around the world.

Illicit received widespread praise for its thoroughness and accessibility. Some reviewers, however, suggested that Naim had overstated the impact illicit actors were having on states' abilities to regulate the movement of goods and people. Other reviewers commended him for persuasively arguing that illicit trade patterns threaten 'the very fabric of society' itself.

Ten years on from Illicit, what has changed? Have responses been effective or is the threat Naim outlined still present?

Naim's book covered illicit industries ranging from small-arms trading to illegal drugs to money laundering, but this column focuses on one area: migrant smuggling. Back in 2005, Naim argued that smuggling and its more sinister manifestation, human trafficking, were both growing illicit trades. He cited UN estimates that the combined business in smuggling and trafficking was worth US$7-10 billion annually.

Today, there is little doubt that migrant smuggling continues to pose many challenges, including for migrants risking death and exploitation during their journeys, and for states seeking to manage their borders. The patchy data available on smuggling indicate the number of people being smuggled around the world appears to be increasing overall, albeit unevenly geographically. It also seems that an increasing number of illicit actors are making considerable profits from that exploitation. Some estimate that up to US$1 billion was paid to smugglers along the Mediterranean Sea route alone in 2014.

The latest EU data show that 2014 saw a massive increase in illegal cross-border detections, most notably by sea across the Mediterranean, with almost 100,000 people being smuggled by sea between July and October alone. The use of cargo ships to smuggle on a larger scale in the Mediterranean, such as the recent Ezadeen ghost ship abandoned at sea by its crew, is an ominous sign that migrant smugglers are reaching a new scale of operational capacity.

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African-based analysts have found that while the true scale of regional smuggling and irregular movement is difficult to quantify, the smuggling route to Europe via Libya continues to grow. They have also highlighted that in Libya migrant smuggling is directly linked to the smuggling of drugs and weapons, placing asylum seekers and refugees in the hands of criminal gangs.

US Border Patrol data stretching back several decades shows a big drop in illegal migrant apprehensions across the Southwest border with Mexico from the onset of the global financial crisis in 2007, however last year saw smugglers fill a soft market with extremely vulnerable migrants from Central America. The number of unaccompanied minors and families with minors who were apprehended in FY 2013–14 almost tripled to around 135,000, undoubtedly sending a collective chill through the spines of policy makers, international organisations and migrants' rights groups worldwide.

Closer to home, some of the largest migrant smuggling routes are thought to be in Southeast Asia, particularly between Indonesia and Malaysia. Analysts estimate the illegal migrant population in Malaysia to be around 2.2 million, with more than half from Indonesia.

Smuggling of asylum seekers to Australia is now in abeyance, at a time when factors enabling smuggling — modern transportation and communication networks; the growing prevalence of opportunistic unregulated actors — have perhaps never been greater. The current policy and operational framework in Australia has halted maritime migrant smuggling, but it is fragile in the face of such global forces, and it has come at a substantial cost.

Ten years on from Illicit and it's difficult to say whether the 'very fabric of society' has been irreparably harmed, though some communities in some societies have experienced just that. What is clear is that few inroads have been made in eradicating human smuggling globally in a substantive and sustainable way. There are at least three main reasons.

Firstly, there remain significant gaps in our understanding of migrant smuggling. Patchy data indicate that some smuggling routes are closely monitored while others are not; some smuggling routes have been effectively shut down while others appear to be flourishing. Improved data collection and targeted research is enhancing our understanding of smuggling but we still don't know the true scale and nature of many smuggling networks. We have a limited understanding of how inter-connected smuggling is with other forms of illicit activity; we may not yet appreciate the level of danger and insecurity experienced by those being smuggled.

Secondly, it is clear that while migrant smuggling is big business and multiple factors underpin the phenomenon (including poverty and relative deprivation), we are now in the midst of the largest episode of human displacement due to war, conflict and persecution seen for two decades. This has a direct effect on smuggling. EU data show that Syrians currently make up the majority of those intercepted in the Mediterranean Sea. Greater support of countries hosting refugees, realising the end of conflict in places such as Syria, and expanding durable solutions to displacement are all high global priorities.

Finally, a transnational problem requires transnational solutions involving multiple sectors and stakeholders that complement national initiatives. Policies, practices and operational responses that can account for international smuggling patterns, industry-specific labour needs and better industry regulation, international monetary flows, migrants' rights and motivations, as well as transnational linkages, have a greater chance of reducing migrant smuggling, securing borders and enhancing protection. There remains much work to be done.

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Alan Dupont concludes his thoughtful response to my comments on his Lowy Analysis paper, Full-Spectrum Defence: Re-thinking the Fundamentals of Australian Defence Strategy, by posing some good questions.

First, he asks, should we see irregular warfare as the dominant form of future conflict, both between and within states? The answer depends on what we mean by 'dominant'. Do we mean 'most common' or 'most serious'? Irregular warfare is likely to be the most common form of conflict in future, as it always has been in the past. What I suppose we must call 'regular warfare' – large-scale conflict between the armed forces of states – has always been much rarer, and I expect this will remain true too.

But regular warfare is more serious than irregular warfare, at least for a country like Australia. If we were Yemen or the Congo or (for much of its history) Indonesia, then irregular warfare would pose a more serious threat than regular warfare, and it would make perfect sense to design our armed forces primarily for that kind of conflict.

But we face no credible or even conceivable risk of internal insurrection, and no risk of insurrections spilling onto our territory from elsewhere on anything but the smallest scale, a scale for which police are more relevant than armed forces. And the risk of state-sponsored irregular warfare against Australia by a neighbouring state was tested at length by the 'low-level contingency' concept which was so central to our defence policy in the 1980s. I think Alan would agree with me that the closer one looked at that concept, the more improbable it seemed.

Of course the risk of Australia being involved in a regular conflict is pretty low too. But I would argue that changes in the regional strategic order mean it is not as low over coming decades as it has been since the early 1970s, and that this risk is much more serious for Australia than risks of irregular warfare. And that is why I think it should predominate in our force planning.

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Second, Alan asks whether the 'force structure determinants' used in previous White Papers 'have any redeeming value'. By 'force structure determinants' Alan means the core strategic objectives which the Government decides the ADF should be built to achieve, and which therefore determine what kinds of forces we need and how much money we should spend.

I think setting these strategic objectives for the ADF does have value. Indeed I think deciding what we want our armed forces to be able to do is absolutely essential to making sensible decisions about what capabilities we need. In his paper, Alan says they are no use because governments sometimes ignore them in choosing capabilities, and often use the ADF for tasks different from the ones they identify as force structure determinants.

He is quite right about both of these, but that does not mean the idea of setting core objectives has no value. Governments do sometimes violate their own policy principles (the Howard Government did when it ordered the C-17s that Alan mentions), but the fault here might lie with government decisions rather than the principles they sometimes ignore.

More importantly, the fact that governments use the ADF for purposes other than that for which it was designed does not mean it has been designed for the wrong purposes. It often makes sense to use something for a purpose for which one would not buy it.

There is a separate question, of course, about whether the strategic objectives that have been laid down as force structure determinants in recent white papers are the right ones for Australia over coming decades. I do not think they are, because they assume that Australia's strategic risks will remain much the same in the next few decades as they have been in the last few. What objectives we should adopt instead is a question for another time.

Third, Alan asks whether I still think we should have a primarily maritime military strategy, and if so how space and cyber fit into it? The short answer to the first part is 'yes'. Most of the core strategic objectives I would set for the ADF can be achieved most cost-effectively by maritime operations, and I would focus most of our capability there.

What about cyber and space? Let's clear up a muddle here: when we talk about cyber and space as new domains of warfare, are we talking about the impact of cyber- and space-based actions on the systems that support and enable the conduct of conventional military operations in the other three domains, or are we talking about the impact of such operations on society more broadly, to achieve a direct strategic effect?

If it is the former, then clearly we need to develop our maritime forces to operate in a contested cyber and space environment, based on a sober assessment of the risks involved. This might be hard technically, but it poses no conceptual challenges to policy.

If it is the latter, the issue is much less clear. Cyber attack on national information systems is a serious potential threat, but armed force is little or no use in responding to it, so it need not shape our defence planning. Space-based attack directly on civilian populations or systems? Unless we mean such familiar problems as ballistic missiles, I'm not sure what we are talking about here. Denial of satellite services, perhaps? Whatever it is, I doubt that armed forces are going to be the answer.

Photo by Flickr user DVIDSHUB.

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The Indo-Pacific is a strategic system encompassing the Indian and Pacific oceans, reflecting the expanding interests and reach of China and India as well as the enduring role of the US. The Lowy Institute's International Security program presents a weekly selection of links illuminating the changing security picture in this increasingly connected super-region.

  • US Senators who head the Senate Armed Services Committee and the Senate Foreign Relations Committee have sent a letter to Secretary of State John Kerry and Secretary of Defense Ash Carter expressing concern over China's expanding land reclamation efforts in the South China Sea. The disputes in the East China Sea also need some crisis management attention.
  • Has the US-UK split over the whether to join the Chinese-backed AIIB exposed significant divisions over the question of how to accommodate a rising China?
  • Sam Roggeveen was in India last week and has written on his impressions of the country's strategic debate.
  • The Indian Navy has raised alarm with the government over China's deployment of a nuclear attack submarine to the Indian Ocean late last year. 
  • China now operates more attack submarines than the US. But the US Navy is confident that it retains a qualitative advantage.
  • It seems China has invited Japan to its World War II commemorations in September. Also, Japan's largest warship since the war, a helicopter destroyer, has entered service.
  • The Japanese Self Defense Force intercepted more Russian Tu-95 bombers off Japan's coast this week.
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Throughout the P5+1 negotiations with Iran over its nuclear program, we've been treated to constant commentary on why a nuclear agreement with Iran is a terrible idea.

But none have been as ridiculous as this from Joshua Muravchick. According to him, war with Iran is a better way to prevent it from going nuclear. He couldn't be farther from the truth.

The best way to assess the success of a policy is to examine what it's trying to achieve. What would be the goal of a military campaign against Iran? Presumably, to stop Iran getting a nuclear weapon. But military action doesn't guarantee the destruction of Iran's nuclear program. In fact, it makes a nuclear Iran more likely.

Those who endorse strikes against Iran advocate for an air campaign targeting Iranian nuclear facilities. But Iran's nuclear program is no Al-Kibar or Osirak. Iran's nuclear program is far more extensive and spread out than those targeted in the past by the US and Israel. What's more, it bears reminding that some facilities are impenetrable, or at the very least, very difficult to penetrate because they are too far underground. Iranian facilities are also well protected and Iranian air defences are solid.

Total destruction of the program is, to put it mildly, highly unlikely.

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If everything hasn't been destroyed, then it can be rebuilt. What then? Can the US or Israel commit to 'mowing the lawn'; striking Iranian facilities every few years? Iran would likely rebuild its facilities further underground and hidden from all. Each successive attack would need more firepower and better intelligence. Not an easy commitment to make. 

Now let's assume that all of these obstacles are overcome. Let's assume that a military operation against Iran destroys all of its (known) nuclear facilities. What of the information, data and skills that remain? Knowledge can't be bombed away. 

Instead, military action will play beautifully into the hands of the Iranian Government. It will give them a legitimate excuse to forgo its non-proliferation commitments and go hell for leather on the nuclear program. It will encourage Tehran to drive the program underground and cease all transparency. Muravchick argues that if Iran currently has hidden facilities, they'll be hidden from an agreement too. Perhaps, but the aim of an agreement is to ensure that Iran submits to the most stringent inspection regime devised to date. Surely that's a step up from nothing, which is what we would be left with if force is used.

Military action will also give the Iranian Government more ammunition for its anti-American rhetoric. The Islamic Republic thrives off external enemies. What better way to galvanise support for Iran's leaders than to be the victim of airstrikes? That would turn even the most moderate Iranian against the West. And let's not forget the international community; even US allies are unlikely to back military action if there is no obvious Iranian-caused tripwire.

Finally, military action will spark retaliation. Sure, Iran may be deterred from anything too drastic. But the use of force has been on the table for 20+ years, and it hasn't deterred Iran from using its proxies and pursuing its interests. Iran may refrain from closing the Straits of Hormuz, for example, but that's only because it stands to lose the most from closing it. 

It's not just that, as Muravchick acknowledges, there 'are risks' to military action, it simply won't work. In fact, it is bad policy because it clearly results in the opposite end-state from the stated goal of stopping a nuclear Iran. 

Photo courtesy of Flickr user US Department of State.

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First, let's get past the histrionics over the Asian Infrastructure Investment Bank (AIIB). Beijing undoubtedly has scored a symbolic diplomatic win over Washington, whose stance increasingly looks churlish. The Chinese have prevailed in what may become an epic saga of skirmishes over the outmoded Bretton Woods system.

They were always going ahead with their overseas investment efforts, with or without Washington's support. It is understandable that other countries should now reconsider 'getting inside the tent' when the AIIB initiative has gained so much momentum. Many American experts recognised early that opposing AIIB was a strategic error, especially when Congress had blocked attempts to reform the IMF. Their Chinese counterparts now supposedly gloat over Washington's 'petulant and cynical' sulking.

Look more closely at this situation and it gets even stickier. Development banks are unwieldy politically driven bureaucracies that submit even the most honourable objectives to a soul crushing ritual of arbitrary decision-making, petty infighting, endless red tape, shelved reports and, frequently, corruption. I should know; I worked as adviser to a major multilateral lending agency some years ago in the Indian energy sector. Well-paid delegates would arrive from everywhere on lavish travel budgets, bearing no apparent relevance to a given project, which after two years would run full circle, ending where it had started. Apparently this wasn't an unusual experience, either then or now. Lou Jiwei, China's finance minister, rightly queries why international standards should be his aspiration: 'I don't acknowledge best practice. Who is the best?'

Although influence and power are what's at stake, the battle over the AIIB is technically about governance. In theory, making this Chinese-led institution a multilateral one should improve transparency and objectivity.

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A major gripe about existing institutions is that they bestow veto rights upon incumbent hegemons (the US and Japan, notably) who hold under 20% of the equity capital. China intends to own 49% of AIIB. Its offer to surrender the veto is an empty gesture; practically Beijing's will could only be blocked if every other shareholder opposed it. And when it comes to building infrastructure, Beijing thinks best practice is Chinese practice: brusque, efficient, decisive. 'Bureaucratic procedures and tedious methods' such as public consultation or EIAs are spurned. As Lou says, 'we need to consider (developing countries') needs and sometimes the West puts forwards some rules that we don't think are optimal.'

Another complaint about today's development institutions is that they prioritise the preferences of the sponsor. Examining the Asian Development Bank's (ADB) disbursements against a range of geopolitical criteria, Christopher Kilby showed that 'both Japan and the US have systematic influence over the distribution of ADB funds.' Two other academics, Edward Lincoln and Karen Mingst, have even documented American (!) complaints about Japan's outsized role in the ADB. China may exert similar influence in favour of its pet projects, its allies and its own contractors, just as the Japanese did. According to one estimate, locals in Vietnam got only 3% of the money doled out by ADB there during the last fifty years.

Development banks underwrite risks that a huge and capable global private sector is not coordinated or motivated to take on. That means making non-commercial lending as commercial as possible, so politics inevitably is involved. No doubt China earnestly wishes to improve its neighbours' transport linkages, for example, and that is a win-win outcome. But when AIIB's tenders come in for the bullet-train line through Cambodia or Kyrgyzstan, we can be sure which country will oversee, manage, supply and construct the railway.

Roughly 30 countries have signed on, but it is telling that recent Western joiners, such as Australia and Britain, have overtly emphasised their commercial interests. These countries think they see a giant money pot. Their wishes are forlorn. Concessionary lending makes poor business, and Chinese contractors and suppliers can easily undercut foreign companies.

Still, the AIIB is good news. There is no shortage of need in the world, and different institutions can complement each other. Just as the World Bank targets poverty and public health, the AIIB is aimed at regional infrastructure building, where the ADB reckons there is a US$800 billion annual shortfall. This happens to play to China's industrial strengths and it is encouraging that, at least, the AIIB is inviting others for the ride. Alternative Chinese initiatives are far more parochial, like the colossally unaccountable China Development Bank or the mercantilist Silk Road Fund.

In fact a chastening experience in Sri Lanka or Venezuela might lead Beijing to better appreciate the advantages of good governance. Because for all the yelping about the 'riven west' choosing between 'accommodation or appeasement', there is a serious practical issue of rules here. Put simply, does the world trust China to do the right thing? If Beijing builds a parallel geo-financial order, will others have a voice? How fair will it be? In this regard, the AIIB has been challenged to match other multilateral agencies. It should aim higher.

Photo by Flickr user The Climate Group.

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One of the stranger stories to come out of Syria lately was the case of Northern Territory Labor Party president Matthew Gardiner's disappearance to Syria to fight against ISIS. Mr Gardiner upped and left his wife and family to join the ranks of the Kurdish YPG. Only two weeks later, another Australian, Ashley Johnston, became the first foreigner reportedly killed fighting ISIS, also with YPG.

The Syria conflict has made for some awkward alliances and strange bedfellows. But these two cases present a particularly complicated legal predicament in the realm of Australian counter-terror law.


Peshmerga forces in action against ISIS. (Flickr/Times Asi.)

YPG is considered the military arm of the Democratic Union Party (YPD), the Syrian branch of the Kurdistan Worker's Party (PKK), a Kurdish socialist guerrilla army behind an insurgency against Turkey, a conflict that has killed over 40,000 in the last three decades. The PKK is listed as a terrorist organisation by the EU, US, and Australia. It is the only non-Islamic organisation on the terror list in Australia.

Kurdish factionalism is a complex beast. There is little love lost between the outlawed PKK, based in the Qandil Mountain area of northern Kurdish Iraq and the Eastern Turkish border, and the Peshmerga, the legitimate armed forces of the Kurdish Regional Government which governs semi-autonomous Kurdish Iraq. However, the emergence of ISIS has seen interests converge. Kurdish factions, rivalrous Shiite factions, the Iraqi army and even some Sunni tribes have united in the battle against the militants.

With coalition air cover to help them, the battle-hardened YPG has emerged as the key partner for the US-led coalition fighting ISIS in the Syrian city of Kobani, on the central northern border with Turkey. PKK, YPG and Peshmerga forces battled ISIS for months to win back the city in early February.

Australia is of course a partner in the US-led alliance against ISIS. The coalition is arming and training the Iraqi Army, and providing air cover to local partners in Iraq and Syria. The Royal Australian Air Force joined the US-led coalition against ISIS in Iraq in October, and in March the Government announced an additional 300 troops will join the nearly 200 already assisting Iraqi security forces and the 400 Air Force personnel conducting air strikes against ISIS in northern Iraq.

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But just as the US-led alliance is providing arms and training to the Iraqi armed forces, so the Iraqi Army is partnering with the Peshmerga. And in turn, the Peshmerga is teaming up with the YPG. This reporter has witnessed YPG-Peshmerga cooperation in northern Syria, and it is safe to say that arms directed to the Iraqi Army will end up in YPG hands. They may even end up in the hands of Matthew Gardiner as he battles ISIS.

Yet under Australian law it is a criminal offence to fight with any side in a foreign conflict. It is also an offence to be a member of any terrorist organisation. A new foreign fighters bill passed in October last year makes it an offence to travel to certain conflict zones other than for legitimate purposes.

The Australian Federal Police is reportedly investigating Mr Gardiner and he could face prosecution on return to Australia. Attorney General George Brandis says that 'participation by Australians in the Syrian civil war is against Australian law, irrespective of which side they are fighting on...Those who contemplate travelling are putting themselves in mortal danger. Those who are already there should leave the conflict zone immediately...there are safer, legal ways of helping the people affected by these conflicts than travelling overseas to fight'.

So far, there have not been any prosecutions of Australians involved in fighting with the PKK, the YPG or the Kurdish Peshmerga. Nor have there been any prosecutions of Australians for terrorism offences relating to the PKK.

One way to get around this awkward contradiction would be to de-list the PKK as a terrorist organisation. The PKK was first listed under a Criminal Code regulation in 2005 and was last re‑listed on 18 August 2012. The 2012 listing expires on 18 August and will be reviewed again before that date.

There several good arguments for removing the PKK from the list. One is that could pave the way for direct cooperation between the YPD and the US against ISIS. It could also give the peace process between the Kurds and Turkey extra steam. The leader of the PKK, Abdullah Ocalan, agreed from his prison cell in May 2013 to a pact ending hostilities and withdrawing fighters from Turkish soil, paving the way for a full settlement. The PKK was originally listed by the US as a terrorist organisation in 1997 at Turkey’s urging and at the peak of hostilities. But now, as he approaches a general election in June, a final settlement of the Kurdish question will also prove critical for Turkish President Recep Tayyip Erdogan. 

But that doesn't solve the problem of what do about Australians providing support to the PKK or traveling to Turkey, Iraq and Syria to fight on 'our side', and afterwards potentially coming home. It appears the only solution to that quandary is to ignore it, at least selectively, and hope no other high profile Australians fighting against ISIS make the press.

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In a new Lowy Institute Analysis paper released today, Howard Bamsey and Kath Rowley argue that a failure to pay high-level attention to international climate change negotiations raises several risks to the national interest. Australia and Climate Change Negotiations: At the Table, or on the Menu? argues that climate change negotiations are changing the global economy in ways that matter to Australia. Strong, constructive engagement in those negotiations by Australia would serve climate, economic and other national goals.

'As one of the world's biggest fossil fuel producers and exporters, Australia has an important stake in when and how the world pursues emissions reductions,' say Bamsey and Rowley.

Climate change negotiations will create new norms, standards, rules and laws. These developments create challenges and opportunities for Australian businesses and individuals. Bamsey and Rowley argue that ministerial leadership, a strong negotiating team, and active support for preparations for the Paris conference in December would return much needed momentum to Australia's negotiating effort.

Read or download the Analysis from the Lowy Institute website.

Photo by Flickr user The Danish Wind Industry.

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Yesterday afternoon I sat down with Lowy Institute's Non-Resident Fellow and distinguished historian of Southeast Asia Milton Osborne to talk about the legacy of Lee Kuan Yew.

We discussed Singapore's beginnings as part of the Malaysian Federation, its reputation abroad in the 70s and 80s, and Lee Kuan Yew's signature achievement of keeping Singapore corruption-free. You will also hear me reference Milton's opinion piece in the Financial Review, which you can read here, where he talks about Singapore resembling, in the early days, a 'tropical slum'. As you will hear, Milton spent time in Singapore in the early 60s, and that description is no exaggeration.

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The Abbott Government will shortly release a discussion paper on the Australian tax system. It will be the first step towards the much anticipated tax white paper. International factors should figure prominently in the white paper — specifically, how to ensure that Australia has a resilient tax system given the challenges of globalisation.

Treasury Secretary John Fraser recently said our tax system looks 'remarkably like it did back in the 1950s – but our economy looks very different'. How true.

Among the most significant changes are the internationalisation of the Australian economy, and the influence of technology. Australian exports and imports as a share of GDP have increased from 30% in the early 1960s to around 45% now. But this figure does not do full justice to the extent to which Australian business and consumers operate across national borders and participate in the global economy. 

The integration of economies and a global rather than a national approach to doing business is challenging our tax system.

For example, the underlying principle of corporate tax is that firms pay tax where economic activity takes place. This was fine when goods were entirely produced in Australia. However it is not so clear when inputs – both goods and services, such as R&D, advertising, marketing and intellectual property rights – are sourced from many countries. Increasingly, this involves companies operating production across many national borders. When there are such intra-company operations it can be difficult to determine the value-add and tax liability in each jurisdiction. Companies can readily manipulate prices in intra-firm operations.

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The Government has countered with transfer pricing rules which seek to apply an arm's length principle to value related party trading. But this is increasingly difficult when intangibles, such as unique intellectual property rights, are a major part of the production process. As a guide to the rising importance of intangibles, in 1978 the asset distribution of S&P 500 companies was 95% tangible assets, 5% intangible. In 2010, the breakdown was 20% tangible and 80% intangible.

The breakdown of the production process across many countries and the increasing importance of services and intangibles in international trade makes it easier for firms to shift profits to zero or low tax jurisdictions. Combating corporate 'base erosion and profit shifting' is a G20 and OECD priority. But the resilience of the corporate tax base is particularly important for Australia given its high reliance on corporate tax. From 1983 to 2011, the OECD average corporate tax rate as a percent of total revenue remained around 8.5%. But Australia's corporate tax revenue rose from 9% of total revenue to 20% over the same period.

Another aspect where international developments will loom large is the competitiveness of the Australian corporate tax rate.

Australia's corporate tax rate is 30% compared with an average 23.5% in the Asia Pacific and an OECD average of 25%. The UK has recently cut its rate to 21%. If the international community is successful in combating base erosion and profit shifting, and taxes are actually paid where economic activity takes place, then economic activity (investment) will increasingly shift to countries with low corporate tax rates. The 2009 Henry Report on the tax system recommended that Australia's corporate tax rate be lowered in order to ensure that Australia remains an attractive place for investment.

The breakdown of national borders is also impacting the resilience of the GST. Online shopping has grown rapidly, with 75% of Australians who shop online making purchases from overseas sites. The total value of overseas online purchases falling below the threshold of $1000 when GST is to be applied was more than $7 billion in 2012-13. Australian retailers have argued that the low-value threshold should be lowered, although both the Productivity Commission and the Board of Tax concluded that the cost of collecting GST on overseas purchases below the threshold is prohibitive.

The challenges from online purchases from overseas are likely to grow. While Australia's online purchases have grown significantly, they still lag the US and UK markets.

In addition, it is one thing to impose GST on goods purchased from overseas; the GST is paid when the goods are released from customs. It is not so easy to impose GST on services and intangibles that are purchased overseas and delivered via the internet. This challenge is also likely to increase. For example, the spread of 3D printers could increasingly see patent rights purchased overseas and delivered via the internet , with the goods 'printed' in Australia. 

The global integration of the Australian economy and the spread of technology will not stop. More likely it will accelerate. As such, they must figure prominently in the tax white paper if Australia is to have a modern tax system for the 21st century.

Photo courtesy of Flickr user Tony Abbott.

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American Sniper has emerged as a major hit. It is the best-grossing film of 2014, perhaps even the highest grossing war movie ever. Serious reviews suggest it may be the greatest American war movie of all time. It rates a solid 72% from Rotten Tomatoes. But as the hype dies down, we can better see it in the wider context of other war films. It is actually quite conventional and shows the viewer little that we have not seen before.

But American Sniper is the Iraq War movie that war supporters have been pining for. To use Walter Russell Mead's famous categories of US opinion regarding foreign policy, this is a 'Jacksonian' portrait of the war: US soldiers doing the right thing, bringing a tough, righteous violence on those who deserve it. Consider how conventional the film's portrait actually is according to its two most celebrated aspects:

1. The protagonist suffers personally from the impact of combat exposure

This seems to be the film's strongest selling point, and it is indeed clear that in real life, sniper Chris Kyle (the film's protagonist) and his family found the experience harrowing. But this is hardly an insight, cinematic or otherwise, anymore.

'Soldier's heart' (the old term for what we now call post-traumatic stress disorder or PTSD) is so well-known to Western publics at this point that it should act as a break on the use of military force. In film, PTSD is a trope going all the way back to All Quiet on the Western Front. It has been said that any good war film must inevitably be an anti-war film, and showing the brutalising effects of combat, for however noble the cause, has been a constant theme. No serious American director, no matter how patriotic, has made a war movie as ridiculous as John Wayne's Sands of Iwo Jima or Green Berets since then.

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Nor, curiously, does the film actually show Kyle suffering all that much compared to others (Stop-Loss deals with this issue more directly). He even says to his post-rotation psychiatrist that he is prepared to stand before God and account for every bullet he fired, an astonishing statement suggesting Kyle was little afflicted by the confusion and guilt common to PTSD sufferers. In fact, the film even flirts with portraying Kyle as more comfortable in combat than at home, an issue raised long ago by Ernest Juenger and toyed with again in The Hurt Locker.

Showing an American soldier enjoying combat, as Platoon and Casualties of War did, would have been truly cinematically disruptive, as America would prefer to see its soldiers as reluctant warriors. And in the end, Eastwood sticks with this morally conventional and less controversial portrait.

2. The combat sequences are ultra-realistic

Surely, but this too is not new. Many Global War on Terror (GWoT) films have gritty, brutal combat sequences that are difficult to watch, with choreography and production supervised by combat veterans, ex-special operators, and so on. Generation Kill, by far the best visual Iraq War portrait so far, was based on book by an embedded journalist and supervised by members of the platoon. Similarly, Lone Survivor was based on the direct experience of a US SEAL in Afghanistan, and in filming Zero Dark Thirty, Kathryn Bigelow was notoriously rumoured to have gained unique access from the White House.

And this is just in the past few years. Vietnam veterans praised Platoon and Full Metal Jacket in their time, and the infamous drill sergeant of Full Metal Jacket was in fact played by a real drill sergeant. Saving Private Ryan, Band of Brothers, and The Pacific all received similar accolades from World War II veterans.

Beyond these two conventional elements, the film has no exceptional selling points. The acting, production values, direction, and so on are fine; Eastwood is clearly talented. But this is not a genre-defining masterpiece like Apocalypse Now or Saving Private Ryan. So what accounts for its huge popularity? I suggest the deep craving of Americans, not just conservatives, to finally see a portrait of this horribly mistaken war that fits our self-image.

Probably the best evidence of this is Fox News' relentless coverage (read: lionisation) of the film over the last three months. This is very much the movie about Iraq that Iraq War supporters have wanted to see for years. Most GWoT films to date have been ambiguous or downers, and while Americans will in time make critical films about Iraq, just as we have about Vietnam, it is likely too soon after 9/11 right now for films like Stop-Loss or Rendition.

So for the 'Jacksonian' set, Eastwood at last lifts the political gloom and gives them what they want. Eastwood has an established reputation of both conservative politics and tough-guy masculinity. Chris Kyle, both in life and the film, clearly believed in the mission and the war. The film shows 9/11 and then shortly cuts to the Iraq War, suggesting a link. That Saddam Hussein was not involved is unmentioned. The villain wears all black, and Kyle kills him in a dramatic slow-mo shot worthy of Call of Duty. Kyle calls the Iraqis 'savages.' All the unpleasant controversies are pleasantly avoided: no mention of pre-war intelligence failures; no hint of the mismanagement and incompetence of the occupation; no discussion of Abu Ghraib or America's heavy-handed search tactics, especially in the early days; no examination of Iraqi nationalism or suggestion that resistance to US occupation had any legitimacy whatsoever. It's all straight-up American hero stuff to balm neocons' frayed sense of American exceptionalism.

One day, with some distance from the war, the searching, honest Apocalypse Now of GWoT films will come. But it is likely too soon. In the interim, try Generation Kill.

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  • The latest reports on the impact of Cyclone Pam in Vanuatu have the death toll at 11 with 166 000 people affected on 22 islands. Food and water shortages are still of great concern.  
  • Foreign Minister Julie Bishop visited Vanuatu over the weekend and pledged Australia’s long-term support for the recovery effort.  
  • In Kiribati it has become clear that the damage to outer islands hit by the cyclone is much worse than initially thought.   
  • A research team from the University of Technology Sydney elaborates on the strengths and weaknesses of Vanuatu’s disaster preparedness plans
  • These before and after shots from Vanuatu show just how drastically the natural landscape has changed in parts of the country. 
  • On the Aus-PNG Network, Michelle Redman-MacLaren explains how collaborations between Australian and Papua New Guinean researchers have strengthened HIV research capacity in PNG
  • March 24 was World TB Day. Tuberculosis is a growing crisis in PNG, where journalist Jo Chandler contracted a multi-drug resistant form. Here she reflects on her experience of the disease compared to what she witnessed in PNG.  
  • Medecins Sans Frontieres has been using new technologies to track tuberculosis in remote areas of PNG.  

 

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An article in last weekend's The Saturday Paper on the supposed affinity between ex-military personnel and the Coalition Government lists the ex-military now serving in parliament and those (me) wanting to serve in parliament, and quotes Professor Hugh White at his patronising best:

...at one level, it is good to have former military people in the parliament, and any increase in their representation reflects the rise in prominence of the ADF since deployment to East Timor in 1999. However, he adds that it would be wrong to assume former ADF personnel necessarily possess the strategic abilities needed for setting sound defence policy. 'The ADF is not a strategic organisation. It is very much focused at the tactical level,' he says. 'One of the risks is that military personnel are given more deference than they deserve.'

This is an unworthy generalisation. Perhaps Hugh has watched too many re-run documentaries about the Cuban missile crisis. JFK said: 'The first advice I am going to give my successor is to watch the generals and to avoid feeling that just because they were military men their opinions on military matters were worth a damn'. So no one denies that, based on this example, some generals at some time may not have possessed the strategic abilities to give sound defence advice. But then again JFK, a civilian president, initiated US involvement in Vietnam.

I thought governments set defence policy, not generals.

I am aware that the Chief of the Defence Force and the Secretary of the Department of Defence give advice on such matters. I am not aware that there has recently been a massive split between a CDF and a secretary over such advice, though Hugh could know something I don't. To make Hugh's statement true, the advice given by a CDF to the government on defence policy would have to have been inadequate, and a non-military person, probably the Secretary, stepped in to correct the advice because he, as a civilian, possessed the strategic abilities needed for sound defence policy. And then of course, the government would have to have accepted the Secretary's advice over the CDF's because, much as Hugh and many others don't like it, the government of the day defines what is sound defence policy, just as Papal infallibility is assisted by the Pope defining infallibility.

I suspect something else is going on here: those who argue that current or retired military personnel lack the strategic abilities needed for setting sound defence policy simply don't agree with the advice those people are offering.

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I would have let Hugh's remarks pass except that I noticed this thread of articles. A civilian analyst is arguing with several retired and serving officers about the future of the army and how it should be structured and equipped. The analyst does not agree with current defence policy as laid down by a conservative Coalition government, in which the Government wants the option to deploy land forces outside a narrowly defined region. Because this does not align with the personal view of the analyst, he decries the policy and the capabilities that enable it.

Even Professor White falls for this one. He characterises the procurement of a capability to enable the army to actually achieve what the Government wants as 'a big waste of money and a big strategic mistake' because he does not agree with the Government's defence policy.

The approach such people take is that when their preferred defence policy is not adopted by government, they advocate only those capabilities that match their defence policy. This is generally a civilian trait as the military know that once a military policy has been decided on, it is they who have to make it work. Continued argument is a luxury.

But I don't dismiss these fine people just because they have no idea about military operations and therefore stay at the vague level of clever strategic posturing. Still, if professors are permitted to be arrogant in their generalisations, then permit me to at least be blunt in my reply: no one should be permitted to give strategic advice involving the military unless they have at least a familiarity with military operations and tactics. The uniform currently or once worn is irrelevant. I know civilians who can and have done it, but not many. The greatest gift of anyone who calls themselves a strategist must be the ability to align policy, strategy and its implementation.

Because I am ex-military, I have worked at the highest levels of government, taking policy through strategy to successful implementation, and I strongly object to Hugh's generalised views of myself and my military colleagues.

Leave the strategy for the bright civilians and the implementation through operations and tactics to the simple soldiers? What a recipe for a disaster. The most prominent recent example I can think of is US Defense Secretary Donald Rumsfeld's ignorant rejection of military advice on the number of troops needed to occupy Iraq in 2003, and President Obama's rejection of military advice on the importance of leaving behind in Iraq a residual force of US troops in 2011.

I wonder if these failures of policy and strategy by the non-military balance out the Cuban missile crisis?

Photo by Flickr user Len Matthews.

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Elliot Brennan's comparison between the Khmer Rouge and ISIS raises a number of questions.

No one is more aware than I of the terrible cost of Khmer Rouge rule in Cambodia between 1975 and 1979. It was a period that devastated a country I knew well, and which led to the death, as Elliot rightly notes, of at least 1.7 million people, including several of my close friends.

But there are several reasons for offering a more nuanced view of what occurred under the Pol Pot regime than Elliot suggests, and reasons for wondering whether the Cambodian experience has all that much to tell us about what is happening in the Middle East. There are also some factual points that need adjustment.

The fact that the US bombing campaign had a terrible cost is beyond dispute. However, the revelations that bombing began in 1964 under President Johnson, before Nixon's authorisation of Operation Menu, which lasted from 1969 to 1973, needs to be put against the fact that little of this bombing, however damaging it may have been, was in populated areas. During the more than six months I traveled around Cambodia in 1966 (including in the northeast of the country), there was simply no general awareness that bombing was taking place.

There is another problem in relation to the bombing. While it is quite clear that the Khmer Rouge made the bombing a successful basis for propaganda and recruitment, we simply cannot say with any certainty just how much this contributed to its recruitment campaigns. Interviews with former Khmer Rouge cadres can only tell part of the story. For the record, I have acknowledged the importance of the bombing for recruitment in my book Before Kampuchea: Preludes to Tragedy.

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More to the point, and on an issue of fact, the overthrow of Prince Sihanouk was not the result of the American bombing campaign, as Elliot suggests. The coup was mounted by men of the Cambodian right who had been Sihanouk's close associates. It is not correct to link the bombing and the March 1970 coup. The best account of the coup is provided by David Chandler in his book The Tragedy of Cambodian Historywhere he describes the anti-Vietnamese feeling and resentment of Sihanouk's consort's family as prime factors in his overthrow.

As to the extent to which the bombing explains later Khmer Rouge actions, I think this is far from clear.

Philip Short's excellent biography of Pol Pot presents a picture of a man and his close associates who were ready to transform Cambodia well before the US bombing took place. As for the phrase 'Year Zero', now so routinely associated with the Khmer Rouge, David Chandler, whose judgment I accept, maintains that this was never used by them. The term was originally associated, it is suggested, with Lenin. But it seems to have gained currency in relation to Cambodia because of its use as a book title by Francois Ponchaud, Cambodge Année Zéro.

What were the Khmer leaders' views of Cambodia's past?

As Elliot notes, Pol Pot referred to Cambodia's Angkorian past as a symbol of what the nation he now ruled over could achieve. So it is not all that surprising that the physical symbols of the past were not destroyed by the Khmer Rouge regime. While looting on a major scale took place in the Angkor region after the Khmer Rouge was defeated in 1979, there is no evidence of the Khmer Rouge setting out to damage the Angkor temples while it was in power. Indeed, the one serious instance of damage at Angkor Wat appears to have been the result of a missile launched by Lon Nol forces.

The priceless treasures in Phnom Penh's National Museum remained untouched while Pol Pot was in power. And despite claims made in some editions of the Lonely Planet Guide to Cambodia that the Silver Pagoda was looted, my own judgment is that the collection of Buddha images that can be seen there today is very much the same as could be seen before 1975. The one notable loss from the royal palace in the 1975-79 period was the royal regalia. The sacred sword, known as the Preah Khan or 'Lightening of Indra', has never been recovered. 

Action against genocidal groups is indeed a necessity. But one cannot readily equate one genocidal group with another. The lack of a religious element in the Cambodian genocide (or 'auto-genocide', to use Jean Lacouture's term) is surely vitally important given the central role religion plays in the beliefs of ISIS.

In short, one genocide may have some similarity with another, but it is just as important to give due weight to the differences between them.

Photo courtesy of Wikipedia Commons.

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