Lowy Institute

If you live in an authoritarian state the answer to the question 'How do you fight terrorism?' is relatively straightforward. I say 'relatively' because it is by no means a simple question even for dictators. In recent decades even authoritarian governments have had to weigh up the most effective method of fight terrorism and it hasn't always just involved applying as much repressive force as possible.

But for a democracy, or more specifically a liberal democracy, fighting terrorism is not straightforward because it is not just a matter of efficacy; it is also a matter of rights and values. In defending itself against terrorism, a liberal democracy is not just protecting the physical security of its citizens, it is also defending the integrity of the political system in which these citizens participate.

So while an authoritarian government must simply find the most efficacious way to fight terrorism, a liberal democracy must find methods that are effective but which do not undermine the rights and values that distinguish the political system, most notably the rule of law and the various freedoms (of expression, of assembly, of the press etc) that make up our civil liberties.

I think we have entered a period, which may well last as a long as a decade, in which Australia will face a far more serious terrorist threat than it faced in the aftermath of 9/11. It is a threat we will face as much at home as we will abroad, as the events at the Lindt Café last December underline. 

But in responding to that threat it is not enough to simply ask what further powers or resources we can provide to our intelligence agencies and police forces. We also have to ask ourselves what damage these and other steps do to the values and rights that define us as a society. We have to ask ourselves: how do we find the balance between security and liberty?

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Of course, this is an old debate, predating even the terrorist threats we have faced in recent years. All democracies to some degree compromise the liberties of their citizens to protect them from a variety of domestic and external threat and to preserve the political system in which they live. Freedom does have some necessary limits.

Yet as old as this debate about liberty versus security is, we are not really having it in Australia at the moment. There are echoes and fragments of it, most often when things go wrong (either a gross transgression of liberty or a terrorist attack). But mostly the two sides of this debate talk past each other rather than at each other.

On the one hand, the proponents of liberty will focus on the rights and the freedoms they argue are being undermined in the fight against terrorism. Too often, however, this group will tend to minimize or downplay the threat. Terrorism, they say, is hyped; more people, they argue, will die falling off ladders than will die at the hands of terrorists.

On the other hand, the proponents of security will argue for significant new resources and powers for the agencies fighting terrorism and new limits placed on those parts of the community from which the threat is seen to come. But too few in this camp ask whether, in taking these measures, we are doing more damage to our society and principles than the terrorists are.

I would like to see a debate in which the proponents of liberty acknowledge the threat, understand that it provokes genuine fear in much of our society (even if more people die falling off ladders or in car accidents) and then ask themselves which of our liberties we should compromise for the sake of security. As the Charlie Hebdo case underlined, we don't even seem to be clear about the liberties we are defending.

I would like to see a debate where the proponents of security recognise that the threat to our societies comes not just from terrorism but from the way in which we fight terrorism, and that we should be prepared to accept certain levels of risks for the sake of preserving our rights and principles.

I am probably being naïve in expecting such a debate to take place. It is not just on this issue that we talk past each other. Nevertheless, I am convinced that we need to have that debate, not least because I fear that we will see more episodes like that which played at the Lindt café in the years to come.

Photo courtesy of REUTERS/Jason Reed.

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When the IMF produced its last World Economic Outlook in October, one of the risks it forecast was a possible oil price increase. A US$25 per barrel increase, the IMF said, would take at least 0.5% off global economic growth.

Now, even with the change in oil price twice as large and in the opposite direction, the IMF has once again revised its growth forecasts down, trimming 0.3% off global economic growth this year and next.

These persistent downward revisions to the IMF's forecasts (see Box 1.2 here) always hog the headlines, with their melancholy message that things are worse than we thought. But the commentary should do more than focus just on the downward revisions to the forecast numbers. The forecasts should also be put in the context of what has already happened during the recovery phase since the 2008 crisis, summarised in this table:

Table cites fourth-quarter growth rates rather than year-on-year growth, to better reflect of the shape of the cycle.

The post-2008 recovery started well enough, with worldwide fiscal stimulus boosting growth in 2009 and 2010. But the 2010 Greek crisis triggered widespread angst about excessive government debt. Fiscal stimulus was replaced by austerity.

Instead of the above-average growth normally associated with a recovery (the US, for example, typically records around 5% growth after a recession), growth in the advanced economies was anaemic. Overall global economic growth was, however, maintained at a reasonable pace by the continuing good performance of emerging economies, which grew three to four times faster than advanced economies.

So, this is not a story about a slowing global economy, either in recent years or in the forecast: global economic growth has started with a '3' for the past three years and in the two years that have been forecast. Instead of talking about forecasting failures, the theme should be why this recovery — both in the recent past and in the outlook — has been much less vigorous than usual, with the advanced economies stuck in a rut.

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So why is world GDP below trend and growing slower than normal?

(Source: Min Zhu, 'Unlocking Global Growth', International Monetary Fund)

Any explanation has to acknowledge the policy failures of the past six years: the mistaken switch from stimulus to austerity in 2010; the failure to reschedule adequately the unsustainable peripheral debt (Greece, Spain, Portugal, Ireland and Italy); the European Central Bank's ham-fisted monetary performance; and the lost opportunity to use the sustained period of low interest rates to tackle widespread infrastructure inadequacies. 

But recessions don't last forever. Eventually balance sheets are repaired; old equipment needs replacing and housing over-investment is taken up. The fiscal austerity (which took 2% off European growth in  2011 and 2012 and the same off US growth in 2012 and 2013) has now run its course. The ECB has finally agreed on some quantitative easing-style stimulus. The downward cyclical phase in the European periphery has found a turning point, with even Greece and Spain registering some growth (from a miserable starting point 25% below the 2007 GDP level). And the global oil price is down more than 50%, which the IMF says, taken by itself, would add 0.3-0.7% to global economic growth.

This might be the moment to call an end to the repeated downward revisions to growth forecasts, and take a punt on global economic growth being a bit stronger (this year and next) than the new IMF forecast predicts.

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Last week Thailand's National Legislative Assembly, a junta-stuffed body, impeached the country's former prime minister, Yingluck Shinawatra. She will now be barred from politics for five years and will face criminal charges in the Supreme Court which could see her imprisoned for ten years. 

Her sentencing came at the hands of the nine-month-old Thai junta, which seized power on 22 May 2014 with the promise of reform. What this verdict shows is that the stale politics the junta swore to remove are just as entrenched as ever.

Days after enacting martial law in May, then-army chief General Prayuth Chan-ocha seized power claiming it was the only choice in order to bring an end to the six months of crippling and increasingly bloody street protests. He promised to be an impartial peacemaker and to reform the country's broken political system, which has seen numerous coup d'etats and more than a decade of growing clientelistic politics.

Few disagree that Thailand's democracy was a mess. Yingluck's rice subsidy (for which she was impeached) was so poorly implemented that it ruined an otherwise healthy economy. Yet little evidence has been made public of how directly she was involved.

Among Thailand watchers, many of us pondered whether Prayuth's power grab could indeed offer the country's broken politics a much needed restart. Yingluck's impeachment is the final breath of this dying hope. While there have been many dubious moments in the junta's maladroit statecraft – among them broken promises for elections, continued martial law, the detention of youth for Orwellian 'attitude adjustment', and the appointment of a puppet parliament – this is the most desperate.

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It shows that the junta is still prone to the beggar-thy-neighbour politics they ostensibly seized power to remove. Under the junta in August last year, charges were dismissed against Yingluck's opponents, protest leader Suthep Thaugsuban and former PM Abhisit Vejjajiva, for their role in the 2010 crackdown that left scores dead. So a dismissal of the Yingluck case would have been wise. At the very least, her case should have proceeded with transparent legal authority, and under an elected parliament with a valid constitution. 

Instead, this was a show trial.  

After a long period of cooling off, this impeachment rubs salt in old wounds. Despite a statement by Yingluck's Pheu Thai party that they will not encourage protests, the ruling has already angered her huge support base. Prayuth re-emphasised during the trial that martial law was still in place and any unauthorised assembly would be dealt with under that law. This, along with strict media control, has silenced Yingluck's supporters. But in  the long run, it will likely only make them louder and angrier.

Yingluck will now either be thrown into exile like her brother Thaksin or sentenced by the junta's Supreme Court to a decade in prison. If this happens she will become a martyr for her supporters, their own Aung San Suu Kyi.

Adding to worries of renewed political violence is the deterioration in the King's health. The passing of the much-revered 87-year-old leader would most likely lead to a 1000-day mourning process, during which no elections could be held and political manoeuvring frowned on. That would mean three more years of junta rule. That is if the highly politicised royal succession doesn't aggravate the already deep political divisions at all levels of society. 

The junta would be wise to live up to the promises that initially won at least tempered support from much of the population. Not pursuing the criminal charges against Yingluck would be a good step in that direction. Making public a detailed reform agenda or calling new elections as initially promised would also go a long way to regaining some confidence. Such confidence is crucial for businesses and the stability of the economy.

The US has a good opportunity to pursue these points next month when the the Cobra Gold joint military exercise is staged. Water cooler conversations should reiterate that the US will only accept military control and martial law in Thailand in the very short term, and that it must be accompanied by reform. Australia and other concerned states should make similar utterances.

If citizens aren't given a voice, mobilisation and mass protests will eventually spill over into violence. With the military in charge, that could be very bloody.

Photo by Flickr user APEC 2013.

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I have no idea how the Greek election results are going to affect the repayment of Greece's debt. But here are a few things to keep in mind.

First, the debt burden is massive...for the Greeks. But the Greek economy is small. This morning on Twitter, Stephen Koukoulas reminded us that the Greek economy is half the size of the economy of NSW. A renegotiation or a default by the Greeks should not, by itself, cause widespread problems in the rest of the eurozone.

The problem with Greece, as it has always been, is contagion. If, due to problems in Greece, investors start to question the sustainability of the debt burdens of Europe's giants, we could be in trouble. This self-fulfilling questioning happened in 2011 and 2012. At that time, interest rates on Spanish and Italian debt rose. A debt burden that was sustainable at 4% interest was no longer sustainable at 7%.  Everything changed when Mario Draghi said the ECB would do 'whatever it takes' to save the eurozone. For this, and other reasons, the situation now appears different to 2012. Financial markets outside of Greece have not reacted too adversely to the election result...yet.

Spain has elections due at the end of the year. If the relationship between the new Greek government and creditors breaks down, and election results in Spain mimic the Greek results, then things could get rocky again. Even if Greek debt is written off smoothly, political tensions will remain. As Zsolt Darvas, a research fellow at Brugel, a think tank, said: 'How can the Spanish or Italian prime minister tell voters that Greece has a lower interest burden than we have but we still need to give them debt forgiveness?'

The Greeks, including the election winners, want to stay in the eurozone. My guess is that Greece will stay in. An exit from the euro would be complicated and likely chaotic. Barry Eichengreen has noted that there are some parallels between the gold standard and the euro, except that the euro is harder to leave. So I have a hard time seeing how it would happen.

Photo by Flickr user Cindy Photography.

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When Prime Minister Tony Abbott restored knights and dames to the Australian honours list in 2014, I said in an Age column that in the symbolic landscape of Australian civic culture, his move stood as one of the most pompous, pretentious, nostalgic and self-indulgent prime ministerial decisions in a generation. 

Abbott got away with it. Imperial-era gongs were awarded to outgoing Governor General Quentin Bryce and her replacement, General Peter Cosgrove. Long-serving NSW Governor Marie Bashir was next in line. These champions of public service and community were warmly and rightly praised irrespective of the archaic honour they were receiving. 

But the consequences of the Prime Minister's decision on Australia Day to add the Duke of Edinburgh to the list goes far beyond the rarefied air of national symbols.

It goes directly to the image of this country in its own region and the wider world. Since the 1960s both Liberal and Labor governments have set about abolishing these kinds of colonial anachronisms, whether it be by removing the words 'British subject' from the cover of Australian passports or replacing God Save the Queen with Advance Australia Fair as the national anthem. At every stage of this exit from Empire, leaders on both sides of politics have pointed to the more modern, outward-looking, self-confident idea of the nation that such changes project to the rest of the world. 

Since that time, updating the trappings of nationhood has been inextricably linked with how Australia wants to be seen by both its regional neighbours and global partners. Prime Ministers from Holt to Gorton have all, in their own ways, made this connection.

So how does Abbott's decision square with his foreign policy ambition to look more to Asia than to Europe (more 'Jakarta than Geneva', as he once put it)?

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It's an odd signal to send. Paul Keating used to fume about Australians carrying the symbols of yore – principally the Union Jack in the corner of the national flag – into the region. Going with the  'ghost of empire about us',  he once commented, 'remains debilitating...to our destiny as a nation in Asia and the Pacific'. Keating's point, in essence, was that Australians had to be 'unambivalent' about who we are as a people and how we carry ourselves into the region.

So what will leaders and governments throughout Asia make of this decision? The chuckles and guffaws must be rippling through the cables being sent back to their diplomatic masters.

There is one precedent in recent Australian history that shines a light on the Prime Minister's bizarre decision, and that is the announcement in June 1963 by Prime Minister Robert Menzies that the unit of Australia's new decimal currency would be named the 'royal'. Just as in recent days, the reaction of the press was swift and relentless, producing a groundswell of popular disaffection. As Stuart Ward and I argued in our study of post-imperial Australia, The Unknown Nation, it was arguably the greatest public outcry of the Menzies era. 

Sydney's Daily Mirror led the charge: 'What in fact we've been given for our new decimal currency', it roared, 'is the most outlandish hotchpotch of medievalism you could find in fact or fiction...The Federal government has leant so far backwards that it has tumbled off the ramparts and finished up in the moat, dripping with alien imbecilities. Today we stand bewildered, angry, humiliated, incredulous'.

Other newspapers were equally unforgiving. The Courier-Mail condemned Menzies decision as 'an antiquated throwback to medieval thinking', while the Age observed pointedly that the government had 'misjudged public opinion on this matter...like money, the currency of loyalty can be debased by excess'.

Comments elicited from a broad section of community leaders echo many of those made in reaction to Abbott's so-called 'captain's call'. The idea of naming the currency the 'royal' was 'not progressive', had 'no Australian flavour', was 'unimaginative and undistinguished', 'quite useless and purposeless', reflected a 'taint of colonialism' and would inevitably become a 'joke'. The president of the Victorian Housewives Association summed up the feelings of many: 'what a ghastly choice. It's so terrible it leaves me speechless'. 

A poll by the Brisbane Telegraph at the time found 97.3% of respondents against.

To be sure, the Menzies Government's 'royal' decree was the outcome of months of deliberation and community consultation.  Treasurer Harold Holt had personally headed the special Cabinet Committee assigned the task of naming the new currency, a position that enabled him to quickly put aside tongue in cheek suggestions such as the 'coo-ee', the 'sheepsback', the 'bonzer' and even – wait for it – the 'bobmenz'. One more serious candidate, 'austral', was disqualified due to the unfortunate but inevitable slurring that would be produced by multiples ending in the letter 'n' – thus 'fourteen Australs' spoken quickly risked becoming 'forty nostrils'.

But the choice of the 'royal' (over the other shortlisted candidate, the 'regal') was at Prime Minister Menzies' personal behest.

Holt himself, not unlike many of today's federal ministry, was embarrassed at the backlash. The public and political outcry in 1963 ultimately forced the Menzies Government to retreat. 'There can be no doubt', Holt said subsequently, with barely a hint of understatement, 'that we have made a very unpopular choice of name'.  Cabinet then ended the controversy – after a particularly rancorous meeting – by adopting the 'Australian dollar'.

There are surely lessons here for the Prime Minister. He can now hardly repeal the honour he has bestowed on the Prince. But the public cynicism towards Menzies' decision on the 'royal' came when Australia was slowly and painfully emerging from Britain's shadow and trying to find a new post-imperial footing. How ludicrous it must seem to even the most impartial of observers today, then, to observe the Prime Minister's tumble into Menzian farce.

Photo courtesy of Wikimedia Commons.

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We should have one ASEAN regulator for air traffic, one ASEAN safety standard, one pilot training qualification, so there will be mobility of workforce.

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Thanks for checking in with us, but today is Australia Day, a public holiday around the country. Check out the Weekend Catch-up for links to all the best posts from last week, and see you tomorrow.

Photo by Flickr user Loulse.

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Bringing together the best longer Interpreter articles you were too busy to read this week.

This week US President Barack Obama delivered the annual State of the Union address for 2015, and King Abdullah of Saudi Arabia passed away, with Crown Prince Salman assuming the throne. First Rodger Shanahan on Saudi Arabia after Abdullah:

The new king faces significant security challenges: ISIS on its borders in Iraq, the loosening of its grip in Yemen, plunging oil prices and a challenge for regional influence from Iran. But none of these are existential threats, and the regional situation faced by King Abdullah when he succeeded was also complex. I was in Riyadh when King Fahd died in 2005 and Saudi Arabia was in the grip of an internal security threat more serious than anything it faces now. Back then, there was a near full-scale conflict in Iraq between the US-led occupation forces and both Sunni and Shi'a insurgents, Iran had announced the resumption of uranium conversion, and shortly afterward it elected hardliner Mahmoud Ahmedinejad as president.

A few thoughts on Obama's State of the Union speech from Sam Roggeveen:

Speaking of unintended messages, what about this line: 'If you want somebody who’s going to get the job done, hire a veteran.' I wonder if John McCain smiled when he heard that. It would have made a decent campaign slogan in 2008...

I'm told Republicans regard Obama's growing informality in his successive State of the Union speeches as unbecoming because it gives the speech a campaign flavour. From an Australian perspective, I would say it gives his remarks a parliamentary tone. It's quite common here for parliamentary speakers to engage with their own side and tease the opposition. The public hates it but good parliamentarians and effective leaders know it is a crucial tool for building morale among your own MPs and undermining the opposition. Maybe Obama sees that too.

And Merriden Varrall's analysis of the Chinese media's coverage of the speech

Firstly, it would seem that at this juncture, the Chinese leadership does not want to stir up nationalist anti-US sentiment. This may imply that the Government wants to pursue engagement and discussion with the US in the near future, and wishes to create the public policy space in which to do so.

Second and relatedly, this should not be misread as any shift in China's fundamental beliefs about what the world should look like and what roles the US and China should play. The overall narrative still paints a picture of a US naturally and inherently inclined to hegemony and unilateralism, but in inevitable decline; and China as a fair, impartial and constructive global player, doing its best in a system it didn't create, and which in time will have to adjust to the rise of new global powers with different (but not threatening) views of how the world should work. 

President Obama is also off to India this week, as the guest of honour of Prime Minister Modi during India's Republic Day celebrations and parade. Shashank Joshi wrote a worthy primer on the trip:

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That said, high-level political attention can enable dramatic shifts, as it did when the Bush Administration engaged with Modi's predecessor in 2005. If Obama and Modi are willing to make the effort, and see this as a priority, they can accelerate defence cooperation more quickly than is supposed. And the onus here is on India. As Ashley Tellisobserved in the Hindustan Times on Thursday, India 'needs to explain how this affiliation with Washington stacks up against the more than 30 other strategic partnerships India enjoys with countries as diverse as Argentina, Canada, Iran, Japan, Mozambique, Russia, South Africa, and South Korea'

With two Australian citizens set to be executed in Indonesia over drug charges, Elliot Brennan explored the role of the death penalty in Southeast Asia:

For law enforcement, the trade in narcotics has its upside. Extracting bribes from tourists caught taking drugs is big business. For poorly paid police, such bribes can net thousands of dollars (sometimes a year or more worth of pay). The incentives for them to crack down on drugs are therefore skewed. The threat of capital punishment exerts fear on drug offenders and therefore increases the bribes that can be extracted. Drug kingpins are seldom charged, let alone put to death. Rather it is the lowly traffickers and drug users who suffer the most grievous of punishments.

It is perhaps a strange logic, but abolishing the death penalty will go a long way to improving law enforcement and governance in Southeast Asia, thereby diminishing drug trafficking,  which is the ultimate aim of governments that enforce the death penalty.  If the region is serious about tackling drug trafficking it would be wise to abolish the death penalty. Tackling the scourge of drugs in Southeast Asia means tackling the death penalty.

Catriona Croft-Cusworth on how Jokowi has handled the tragedy of the AirAsia Flight 8501:

Faced with tragedy, Jokowi has been praised for showing confidence as a leader and coordinating a swift and effective response. In just over two weeks, search-and-rescue efforts have uncovered the aircraft's flight data recorder and cockpit voice recorder, which are expected to provide essential evidence on the cause of the crash. The discovery of the fuselage of the aircraft last Wednesday is also hoped to signal that the bodies of all victims can now be accounted for.

But the national response has also shown the limitations of the Indonesian navy and other elements of the armed forces.

Mike Callaghan refuted some arguments about the IMF's role in the Ebola crisis in west Africa:

These debates over the IMF are not new. The Fund is regularly criticised as being 'anti-poor', with its focus on balancing a country's books, which results in a reduction in social spending. Protests were once a regularly feature at annual IMF meetings.

But the reality is that countries usually enter into IMF programs when they have significant economic problems, including unstable public finances and excessive debts. For this reason, it has been pointed out that it is not relevant to make comparisons, such as spending on health, between countries who do and do not have IMF programs. As Tom Murphy notes, 'The reason a country would get a loan from the IMF, generally a lender of last resort, means that things are not going great'.

The Panama Canal will soon have a competitor if construction is completed on the Nicaragua Canal. Julian Snelder took a look at the China connection:

The century-old Panama Canal, which is struggling through its own US$5 billion upgrade to double its potential traffic, generates about US$2 billion in annual revenues, about half of which are retained as profits. Building parallel infrastructure in Nicaragua at huge sunk expense will provoke a knife-fight response from Panama, which has capacity to spare. Although the Nicaragua canal will allow larger-sized ships to pass, Panama should retain most of the transit share, and will slash pricing to make sure. In that case, the canals' combined annual profit pool might be much less than the US$1 billion today.

Commercially speaking, this US$50 billion gambit is courageous, if not reckless.

This week also saw China report lower than expected economic growth. Stephen Grenville tried to dispel some of the speculation:

Predictions of China economic slow-down have been routine headline stories over the past few years. Judging from this Wall Street Journal reporting, it seems to have returned with a vengeance. But it is seriously misleading.

China's 'high-growth heyday' ended in 2007, when two decades of double-digit growth were punctured by the global financial crisis. An enormous fiscal and financial stimulus in 2009 temporarily took growth over 10% again, but this was unsustainable. For the pasts three years, China's growth rate has started with a '7'.

Anyone putting much weight on the decimal figure misses the point. At the current pace, China is doubling its GDP in less than a decade, is growing at over twice the US pace and 10 times as fast as Europe.

Nick Bryant reviewed Australia's time on the UN Security Council...

The farewell receptions are taking place, featuring far superior wine than is ordinarily on offer at Turtle Bay drinks parties. The diplomats that led the Australian mission at the UN during its two-year stint on the Security Council are shipping out. Ambassador Gary Quinlan and his deputy Philippa King will be missed. So will Australia's presence at the most famous table in world diplomacy. It has been an impressive stint.

The main contribution has been a significant boost in humanitarian aid to Syria. Australia authored three separate resolutions that produced the biggest humanitarian breakthrough of the near four-year conflict: allowing aid convoys to cross over the border without the permission of the Assad regime in Damascus. Up until that point over 90% of UN-administered aid had gone to government-controlled areas. Afterwards, food and medical supplies reached besieged cities where women and children had survived by eating grass.

 ...while Robert Ayson laid out New Zealand's debut:

New Zealand's foray marks an early attempt to deliver on the promise McCully himself made in New York on the eve of the ballot in which Spain and Turkey were also competing for a Security Council seat. In a speech which almost read as if all of the problems in the Middle East were down to the Israel-Palestine impasse, he insisted that as a small-state member, New Zealand would stand up and demand a lot more from the Council. Yet even for a small portion of his demands to be met, perpetual and united pressure from all of the other non-permanent members, and more, will be needed. 

Wellington is signaling that is has brought an independent foreign policy to Manhattan. Independent, that is, from some of its traditional partners. There is certainly no ANZUS position on this issue, and McLay was quick to challenge some rather odd speculation back home that New Zealand would be beholden for the next two years to the US.

Lastly, Bruce Hill raised an important and pressing issue, freedom of the press in the new democracy of Fiji:

Visitors to Fiji can see this for themselves. Just turn on the television and watch a news bulletin. It is regarded as a perfectly normal thing for a newsreader to simply read out, in full, a Government press release. This is the sort of thing you'd expect to happen in North Korea, Zimbabwe or Cuba, not a democratic Fiji.

There is a culture in Fiji of not answering questions from journalists that has grown since the military coup of 2006, and the attitude towards the media, both local and foreign, was not particularly friendly even before then. 

Photo courtesy of Flickr user Tribes of the World.

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In his State of the Union address on Wednesday, President Obama mentioned China a total of three times.

One was to praise China's commitment to cut carbon emissions. The second was to encourage American manufacturing executives to bring back jobs from China. The third was a call-to-arms to prevent China from writing the trade rules in the Asia Pacific.

China watchers inhaled sharply at this third point, given the sensitivity in China about who should be calling the shots in Asia. However, the media coverage in China of Obama's remarks has been surprisingly restrained, suggesting that the leadership does not want to encourage anti-American nationalist fervour at the moment.

The language and tone also reiterates China's view of the US role in the world, its own place in the world order, and how both might change in the future.

The People's Daily ran subdued coverage of Obama's speech yesterday, and today, except for a factual article in Xinhua's Chinese language paper, Chinese media made no mention of it at all. The English version ran a piece which focused on Obama's vow to rebuild the economy to help the middle class, but it did not mention anything about who should be writing the rules in the region, or the Sino-US relationship. A Chinese language version of the same article appeared in Thursday's China Daily's business section.

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Yesterday's Chinese-language People's Daily noted there was a 'deep meaning' behind China being mentioned three times, and argued that Obama emphasised the competitive nature of the Sino-US relationship. The article called on the expertise of Sun Zhe, Director of the US-China Relations Research Centre at Tsinghua University, who said that although Obama did not directly discuss the Sino-US relationship, he implied that China should comply with what he described as US (note, not international) rules in the global marketplace. Sun Zhe concluded that overall, Sino-US relations will continue to grow in 2015.

Coverage of Obama's address in the English version of the People's Daily was limited to how Obama was positioning himself in domestic politics.

Both the English and Chinese versions of the Global Times yesterday ran more incendiary coverage of Obama's speech. 'The US still wants to dominate the world. They worry that China's fast development will challenge the status of the US', according to Zha Xiaogang, a Research Fellow at the Shanghai Institute for International Studies. The article also said China was not the only country to be 'irked' by Obama's address, and quoted Russian Foreign Minister Sergei Lavrov as saying that the speech 'shows that at the centre of the (US) philosophy is one only thing: "We are number one and everyone else has to recognize that".' In addition to describing the US as a self-centred hegemon, the article reminded readers that China operates differently, wanting only for 'all parties to work together to create a fair, open and transparent environment for economic cooperation as well as to contribute to the improvement of world trade rules' (Foreign Ministry spokeswoman Hua Chunying). 

In another Global Times article, Renmin University School of International Relations Deputy Dean Jin Canrong drew on the popular discourse that the US has been in decline since the global financial crisis and argued that while the US may be worried that the world's rules are being redesigned by new powers, it can no longer rely on its own strength alone to manage global issues. The article also noted that Obama's address highlighted the complexity of the Sino-US relationship, since it referred to China in both positive and negative ways. 

Taken together, the Government-aligned media coverage in China of Obama's 2015 State of the Union suggests two things.

Firstly, it would seem that at this juncture, the Chinese leadership does not want to stir up nationalist anti-US sentiment. This may imply that the Government wants to pursue engagement and discussion with the US in the near future, and wishes to create the public policy space in which to do so.

Second and relatedly, this should not be misread as any shift in China's fundamental beliefs about what the world should look like and what roles the US and China should play. The overall narrative still paints a picture of a US naturally and inherently inclined to hegemony and unilateralism, but in inevitable decline; and China as a fair, impartial and constructive global player, doing its best in a system it didn't create, and which in time will have to adjust to the rise of new global powers with different (but not threatening) views of how the world should work. 

Photo courtesy of Flickr user NASA HQ PHOTO.

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It's always good to leave a job while you're still enjoying it. After almost eight years, today is my last day as director of the International Security Program at the Lowy Institute.

I am proud to have contributed a substantial part of my working life to the Institute's development as a force to be reckoned with in foreign and security policy debates, whether in Australia, its Indo-Pacific region or globally. In turn, I am grateful for the privilege of having been part of a powerhouse of ideas, dialogue and policy entrepreneurship.

From next week, my foremost professional loyalty will be elsewhere, as I take up the post of Head of the National Security College at the Australian National University. My new mission will be very much about helping shape an inclusive and contemporary approach to Australia's security and foreign policy challenges.

I will remain affiliated with Lowy as a nonresident fellow, and I won't forget where I came from. A certain sandstone building on Bligh St in Sydney will always seem to me the forge where I finished a long apprenticeship – across diplomacy, intelligence analysis, journalism and academia. It has played a formative role in my vision of what a policy think tank can and should be.

It's impossible now to imagine the Australian foreign and security policy scene without the Lowy Institute. But the Institute is just 11 years old, and it wasn't always thus.

Lowy has played, and will continue to play, an exceptional bridging role between the realms of politics, official policymaking, media and academia. For too long, these were parallel domains in Australia, often characterised by a lack of understanding or even of respect for one another's way of making sense of a confusing world. For a country of Australia's size, and a democracy, this was never a sustainable or constructive state of affairs.

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In 2015, as Australia comes to terms with a world of increasing uncertainty, complexity and strategic risk, the need for policy communication and innovative thinking across the old boundaries of politics, bureaucracy, scholarship and journalism is greater than ever. Lowy, the National Security College and others in Australia's healthily expanding think tank scene will all have their parts to play.

The unique vantage point of the Lowy Institute – offering insights into business, media and wider community attitudes – has sharpened my sense of Australia's national interests and how they need to be protected and advanced.

My time at Lowy also leaves me with a rich trove of memories – illuminating dialogues with foreign counterparts, energetic debates on tough strategic problems (including on this excellent blog), fascinating research excursions, times when governments listened and times when they did not, rewarding moments of insight, and frustrating illustrations of the obstacles to good policy.

In particular, I have benefited from having such a strong platform to help advance Australia's understanding of its fast-changing Indo-Pacific region, and to encourage a sensible constellation of strategic relations with India, China, Japan, Indonesia and other regional powers as well as a revitalised and properly-explained alliance with the US.

In all of this, I am especially fortunate to have collaborated with and learned from so many talented colleagues. They range from wise veterans of the craft through to a successor generation of Australian strategic analysts, whose skills and interest I have been proud to encourage and cultivate. I thank them all.

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This is my last week at the Lowy Institute, and this will be my final India Links. Thank you to all the readers who have followed this series, and everyone who has tweeted or emailed suggestions over the years.

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The chemistry between President Barack Obama and Indian Prime Minister Narendra Modi last September was evident. Modi was reportedly 'really touched' by parts of the visit, and the co-authored op-ed, joint statement, and body language all indicated a degree of warmth that was far from assured.

Indian police rehearse for the annual 26 January Republic Day parade. (REUTERS/Ahmad Masood.)

When they met two months later at the East Asia Summit in Myanmar, Modi extended what was reported as a 'spur of the moment' invitation for Obama to attend India's Republic Day parade as chief guest (although the Times of India suggests a less spontaneous process). The parade is an annual commemoration of the date on which India's constitution came into force — the Dominion of India then becoming a republic — and on which occasion it shows off, among other things, the best of its military hardware in the heart of Delhi. This is a big deal, steeped in historical significance.

It will not be lost on Indians that many of the missiles to be rolled under President Obama's nose were developed in the face of US technology denial and sanctions from the 1970s onwards, nor that the parade will mark the fiftieth anniversary of the 1965 Indo-Pakistan war in which the US imposed an arms embargo. That was another time, another era — a time when the chief guests at the parade were a string of Yugoslav, Soviet and non-aligned leaders (though the Queen came in 1961, Jacques Chirac in 1973, and Malcolm Fraser in 1979).

We've come a long way.

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In September, the US and India promised to 'treat each other at the same level as their closest partners, including defence technology transfers, trade, research, co-production, and co-development'. This is a remarkable – indeed, an unrealistic – promise from the American side, given the depth of its defence relationship with allies like Israel, Britain, and Japan. It is also consequential for India, which has co-developed a hypersonic cruise missile with Russia, historically its closest defence partner (Russia's defence minister visited the production site this week), and plans on co-developing a fifth-generation fighter jet with Moscow too, though progress has been slow. Grand statements are easy; follow-up is harder.

As I explained on the Interpreter last year, the likely appointment of Ashton Carter as US defence secretary (subject to the whims of Congress) is likely to give a fillip to US-India defence ties. India now also has its own dedicated defence minister, Manohar Parrikar, after six months in which the ailing and overworked finance minister held the office. As the Indian defence journalist Ajai Shukla has explained in two pieces – one an excellent survey, and the other an analysis of Indian pathologies – over $8 billion of Indian arms purchases from the US are in the pipeline, including attack and heavy lift helicopters, surveillance and transport aircraft, and jet engines. Shukla notes that 'top Indian intelligence officials say there is an unprecedented level of intelligence sharing, including on topics that both sides earlier regarded as off-limits', and that the US conducts more military exercises with India than any other country.

All that is impressive. But technology transfer, co-manufacture, and co-development have all moved slowly, for reasons I explained last month and which may be compounded by last week's premature sacking of the director of India's Defence Research and Development Organisation. Reports suggest this visit will see agreements to build the RQ-11 surveillance drone and roll-on/roll-off modules for the C-130 transport aircraft in India, but expectations seem to be much lower for other areas, such as an electromagnetic launch system for India's indigenous aircraft carrier.

That said, high-level political attention can enable dramatic shifts, as it did when the Bush Administration engaged with Modi's predecessor in 2005. If Obama and Modi are willing to make the effort, and see this as a priority, they can accelerate defence cooperation more quickly than is supposed. And the onus here is on India. As Ashley Tellis observed in the Hindustan Times on Thursday, India 'needs to explain how this affiliation with Washington stacks up against the more than 30 other strategic partnerships India enjoys with countries as diverse as Argentina, Canada, Iran, Japan, Mozambique, Russia, South Africa, and South Korea'.

Also on the agenda is counter-terrorism. Last September's joint statement promised 'joint and concerted efforts' against a string of Pakistani terrorist groups, including Lashkar-e-Taiba (LeT). In the past week, Pakistani reports suggest Islamabad has frozen the funds of LeT's front organisations and imposed a travel ban on its leader. Pakistan may be bowing to US pressure, implementing its so-called 'National Action Plan', or a mixture of both. Such bans have, in the past, been merely cosmetic, allowing militant groups to change their name and continue their work. Indeed, LeT's leader Hafiz Saeed plans to hold a public rally in Karachi on the day of Obama's arrival, and a Pakistani minister had questioned whether Saeed is a terrorist at all. India is sure to lobby the US to keep pressure on Pakistan in this regard, as well as ask for more real-time intelligence sharing.

Further west, in Afghanistan, two important shifts have occurred since Obama and Modi last met. First, Obama decided to allow US forces to undertake more of a combat role in 2015 than had previously been envisaged and, in December, slightly upped troop numbers to offset lower-than-expected NATO contributions. That's exactly what Modi had called for at the Council on Foreign Relations in September. On the other hand, and less encouragingly for Modi, the new Afghan Government has made a pivot to Pakistan by cancelling a longstanding request for Indian arms, making a prominent presidential visit to Pakistan (including a controversial visit to Pakistan's army headquarters), and acquiescing to China-brokered talks with the Taliban. In the Hindu a few days ago, India's former ambassador in Kabul outlined Indian anxieties. Modi is likely to seek assurances on the future US presence, as well as Washington's attitude to these regional shifts.

Away from defence and security, other issues on the table, as Brookings analyst Tanvi Madan notes in her detailed piece, include trade and investment, civil nuclear cooperation, climate change, clean energy, and visa policy. The trade and investment challenge alone is extremely daunting. As former US ambassador to India Frank Wisner noted in this week's Hindu, India lacks a bilateral investment treaty, isn't part of WTO negotiations on key areas like IT services and government procurement, isn't a member of APEC, and isn't being considered for Trans-Pacific trade negotiations. It therefore 'risks being excluded from the world's most potentially dynamic market areas'.

None of this can be resolved in a week. But this is the longest trip to India by any US president, and the first such repeat visit. Obama and Modi have a great opportunity to consolidate the symbolic and substantive gains of their previous meetings, and perhaps identify a few priorities that deserve a harder push from the top.

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New Saudi monarch King Salman bin Abdulaziz Al Saud. (Wikipedia.)

With the death of King Abdullah, the Saudi succession machinery has immediately swung into action. The Saudi monarchy prizes stability, and in order to forestall any damaging intrigue regarding succession, particularly in light of heir Prince Salman's reported poor health, Prince Muqrin was announced as the deputy crown prince in March last year.  So now King Salman and Crown Prince Muqrin ascend to their respective positions, and the opaque manoeuvrings for access to power for the next generation of Saudi Arabia's extended ruling family begins in earnest.

The new king faces significant security challenges: ISIS on its borders in Iraq, the loosening of its grip in Yemen, plunging oil prices and a challenge for regional influence from Iran. But none of these are existential threats, and the regional situation faced by King Abdullah when he succeeded was also complex. I was in Riyadh when King Fahd died in 2005 and Saudi Arabia was in the grip of an internal security threat more serious than anything it faces now. Back then, there was a near full-scale conflict in Iraq between the US-led occupation forces and both Sunni and Shi'a insurgents, Iran had announced the resumption of uranium conversion, and shortly afterward it elected hardliner Mahmoud Ahmedinejad as president.

This shouldn't be forgotten when pundits speak of the regional security challenges facing Saudi Arabia today.  The region faced near continuous crises of one form or another for nearly all of Abdullah's rule, and the decision makers in Riyadh are hardly unschooled in addressing them.  The change at the top of the House of Saud is unlikely to presage any significant change in Saudi domestic or foreign policy. 

What it will do is force Saudi Arabia and others to look more closely at the next generation, the grandchildren of Abdulaziz. It is likely that one of these (and perhaps even King Muqrin, if he accedes to the throne) will face the types of challenges — domestic instability caused by the House of Saud's inability to meet the terms of the political contract it has with its religious leaders and the social contract it has with its population; the possibility of an economically and politically dominant Iran operating in a post-sanctions environment; as well as a raft of other as yet unforeseen issues — that are likely to truly threaten the stability of the Kingdom. 

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Every few years, Southeast Asian countries make headlines for their capital punishment practices, and invariably these headlines come when foreigners are sentenced.

On Thursday, Andrew Chan, an Australian accused of drug trafficking in Indonesia, lost his appeal for presidential clemency. He is one of two Australians (the other, Myuran Sukumaran, lost his appeal in December) who will be executed by firing squad.

Under the new Indonesian president, this year has already seen six convicted drug traffickers executed. Among those executed were citizens from Brazil, Vietnam, The Netherlands, and Nigeria. These executions have, once again, brought Indonesia's death penalty into the international spotlight.

Human Rights Watch has called out Indonesia's double standards. While Indonesia carries out the death penalty on drug traffickers, Jakarta has since 2010 lobbied Saudi Arabia to pardon one of its citizens on death row for murder. With thousands of Southeast Asians working in Saudi Arabia (many often in precarious employment positions), it is not uncommon for migrant labourers to face capital punishment. Most recently, the beheading of a Myanmar citizen in Mecca earlier this month caused uproar when a video circulated of the woman pleading her innocence moments before the sentence was carried out.

The persistent work to highlight such cases, particularly by NGOs like Human Rights Watch and Amnesty, has contributed to gains made in some Southeast Asian countries to abolish the death penalty.

In January last year Myanmar commuted all death sentences to life imprisonment. There have been no known executions in the Myanmar since 1989, nor in Laos since that time. Thailand has not carried out capital punishment since 1988. In effect these states are what Cornell University's Death Penalty Worldwide database describe as 'abolitionist de facto'. The Philippines, East Timor and Cambodia have abolished capital punishment entirely. Brunei hasn't carried out any known executions since 1957 (though with the enactment of the first wave of hudud law last year, that tide may turn).

Yet capital punishment is still practiced in Indonesia, Singapore, Vietnam, and Malaysia. Most controversially, all these countries permit the death penalty for drug trafficking.

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In a mass trial last year, Vietnam's highest court upheld the death sentence for 29 drug traffickers. In 2005, Singapore executed Melbourne man Van Tuong Nguyen for drug trafficking. Most recently, two Singaporeans were executed for the trafficking of pure heroin in July last year. In Malaysia, drug traffickers are among the 900 currently on death row. In Indonesia, of the 133 people on death row in 2012, more than half (71) were there for drug trafficking.

While the influence of powerful religious conservative groups is certainly a factor in the maintenance of capital punishment in Indonesia and Malaysia (just as it is in the US), a more holistic analysis of why the death penalty continues in Southeast Asia must place greater weight on the damage done by narcotics.

The region has a long and troubled history with narcotics. Drug gangs and their huge profits threaten internal security and development. Drug-related diseases such as HIV devastate populations and drug-fueled violence terrorises communities across Southeast Asia. It was against this backdrop that ASEAN set the ambitious (or fanciful) goal of having a drug-free region by 2015. Given recent rates of production, it was a pipedream.

The Golden Triangle still produces a quarter of the world's heroin. According to the UNODC 'almost all the heroin produced in the Southeast Asia is consumed in East Asia and the Pacific'. In 2011 the region consumed 65 tons of pure heroin with a retail sales volume of approximately US$16.3 billion. Crackdowns on heroin production in the Golden Triangle have led to the advent of amphetamine-type stimulants (ATS), which are easier to produce. In the Greater Mekong subregion some 1.4 billion ATS, known locally as yaba, are consumed annually, with an estimated market value of US$6.5 billion.

From the Golden Triangle, narcotics are then trafficked and consumed through the region. That trade will likely become easier at the end of the year when the ASEAN Community is set to introduce freer movement around the region. This in itself could see a push for stricter application of death penalty laws.

For law enforcement, the trade in narcotics has its upside. Extracting bribes from tourists caught taking drugs is big business. For poorly paid police, such bribes can net thousands of dollars (sometimes a year or more worth of pay). The incentives for them to crack down on drugs are therefore skewed. The threat of capital punishment exerts fear on drug offenders and therefore increases the bribes that can be extracted. Drug kingpins are seldom charged, let alone put to death. Rather it is the lowly traffickers and drug users who suffer the most grievous of punishments.

It is perhaps a strange logic, but abolishing the death penalty will go a long way to improving law enforcement and governance in Southeast Asia, thereby diminishing drug trafficking,  which is the ultimate aim of governments that enforce the death penalty.  If the region is serious about tackling drug trafficking it would be wise to abolish the death penalty. Tackling the scourge of drugs in Southeast Asia means tackling the death penalty.

Photo by Flickr user Brian Jeffrey Beggerly.

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The Asia Pacific is the most dynamic digital landscape in the world, home to the fastest adopters of new technologies, the largest concentration of social media and mobile users, and some of the world's most innovative tech companies. The rise of mobile messenger apps, use of big data and online activism are shaping the region's engagement with the world.

  • China's cyber watchdog has revealed one billion posts were deleted in 2014 as part of an 'Internet cleanup operation.' In addition, 20 million online forums, blogs and social media accounts and over 2000 websites were closed. Was yours one of them? Check here.
  • Indonesia's young and tech-savvy population is attracting new investment. Before you invest here are ten things you need to know, from the difficulties for foreign companies to the importance of social media (15% of the world's tweets come from Indonesia).
  • Why 2015 will be the year of India's next technology revolution. Mobile health applications, electronic commerce and app-based automation of public services are pinpointed by the Washington Post as areas to watch.
  • Internet-based civil society groups are mentioned in this Devpolicy blog post as one of the few areas of hope for Solomon Islands politics. The author is likely referring to Forum Solomon Islands International, which has grown from a Facebook discussion group to a registered NGO that uses ICT tools to crowd-source policy ideas from its members to influence political outcomes.
  • Chinese consumer electronics company Xiaomi is shaking up the consumer electronics and smartphone market with plans to expand to Southeast Asia, Russia and Brazil. Founder Lei Jun, Forbes Asia's Businessperson of the Year in 2014, recently said: 'I've said on many different occasions that if I had been called the "Steve Jobs of China" as a 20- year-old, I would have been very honoured...As a 40-year-old, however, I don't want to be considered second to anyone.'
  • China is considering a range of measures to rein in poorly behaved Chinese travelers, including sending text messages to tourists as they arrive at their destination reminding them to observe good manners. The move comes shortly after CCTV pulled its Be a Good Panda, be a Good Tourist ad filmed in Sydney after a backlash on Chinese social media.

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