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Great Britain’s Time of Troubles: Why it Matters

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British politics is in a state of flux, with potentially major implications for European unity and transatlantic relations. 

Last month, the United Kingdom came close to dissolution as the Scottish electorate toyed with the idea of striking out alone.  Earlier this year, the UK Independence Party (Ukip) beat all three of the major parties in elections to the European Parliament—the first time in over a century that a party other than the Conservatives and Labour had won the popular vote in a UK-wide election.

There were points during the Scottish referendum campaign that it looked as though the 307-year old union between England and Scotland would be terminated.  Many believe that a decisive slice of Scotland’s voters were persuaded to maintain the status quo only on the promise that Scotland’s devolved parliament at Holyrood would be given extra powers.  As such, the ‘No’ campaign’s victory hardly can be interpreted as a vote of confidence in the British system.  Scots demanded constitutional reform.  What is more, politicians from across the political spectrum undertook to respond.

The defeat of Scotland’s bid for independence, then, offered only momentary respite for those invested in maintaining the Union.  A commitment has been made to rush extra powers for Holyrood.  At the same time, however, the demand for heightened devolution (“devo-max”) in Scotland has been matched by cries of unfairness by politicians in England.  Why should Scotland be afforded greater insulation from politicians in London when English matters are still being voted on by Scottish MPs?  Why is England the only country of the United Kingdom to lack its own devolved assembly?  Although English nationalism has not yet reached fever pitch, there is at least a growing appetite for the entire apparatus of the British state—not just its Scottish elements—to be revisited.  An uneven and unequal distribution of power cannot survive in the long-term.

Sub-national constitutional questions are not the only ones plaguing the Conservative-led government in Westminster, however.  Ever since Ukip won the European elections this summer, the question of Britain’s future in the European Union has been placed firmly at the top of the national agenda.  Ukip is virulently anti-European, with withdrawal from the EU comprising the party’s flagship policy.  Ukip’s stubborn popularity, then, is cause for consternation among the largely pro-European Westminster political elite.  Simply put: many ordinary Britons would like to see the back of Brussels.

The Conservative party in particular finds itself squeezed by the rise of Ukip.  Desperate to win a parliamentary majority next year, the Conservatives can ill afford to hemorrhage votes to the nationalistic Ukip on its right flank.  Two Conservative MPs already have defected to Ukip, their resignations prompting high-profile by-elections when the government would much rather project an image of unity, competence and stability.  Earlier this month, Ukip won its first ever elected Member of Parliament as a result of one of these by-elections.  Analysts predict that the insurgent force could gain as many as 30 seats in the House of Commons next year.

Ukip’s electoral success points to another trend that threatens to undermine the stability of British politics—that is, the country’s long suffering two-party system looks to be in potentially terminal decline.  A third party, the Liberal Democrats, has been in government since 2010.  As noted above, Ukip came first in national polls held this summer.  The Scottish National Party has been the largest party in the Scottish Parliament since 2007.  Nationalists also poll strongly in Wales, while Northern Ireland operates its own party system altogether.  Across Britain, Ukip and other parties such as the Greens—whose numbers have swollen of late—threaten to chip away at the Conservatives’ and Labour’s electoral dominance.

All of these developments should be of concern to Britain’s allies in the North Atlantic.  Britain’s future in Europe is the most obvious potential casualty of the political turbulence.  Ukip and Conservative backbenchers are loudly calling for a referendum on the issue.  The pro-European cause is hardly helped by the ineptitude of Eurocrats in Brussels: unbelievably, EU officials have recently ordered London to contribute an extra £1.7bn ($2.72bn) to the mammoth EU budget, punishment for Britain’s economy having out-performed its continental counterparts.  Cameron has vowed to ignore the request; his Eurosceptic critics argue that the government is powerless to resist.  What might otherwise have been an embarrassing political headache has the potential to become a major catalyst in the present context.  Steering Britain through such tempestuous seas will take great foresight and political leadership.

Britain used to be known as Perfidious Albion because of its reputation as an unreliable ally.  The charge then was that Britain only could be relied upon to pursue its own selfish interests, never to act with honor or altruism.  Today, the country might more accurately be described as Precarious Albion—an unreliable ally not because of perfidy but because of its inability to guarantee a future for itself as a strong and united player at the heart of Europe.  Its domestic political system in flux, Britain risks becoming a rickety transatlantic bridge indeed.

Image: Office of the Prime Minister: UK/Flickr

TopicsDomestic Politics RegionsUnited Kingdom

The Future of War Is Here: Proxy Warfare

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Unconventional warfare isn’t popular among Western strategists these days. Whether it’s supporting insurgent groups (the strict definition) or supporting militias allied with government forces, proxy warfare has a bad reputation. The complex situation in Syria and Iraq isn’t helping matters: the US is struggling to find a reliable proxy in Syria and confidence in Iraq’s security forces and associated militias is low. In a recent editorial in the Canberra Times, Hugh White said, “For half a century America and its allies have been trying to win messy civil wars without fighting themselves and by training and equipping one side or the other. It never works.”

Professor White’s not alone in his dismal assessment. The New York Times’ Mark Mazzetti reports that a recent CIA study came to a similarly dim conclusion—that US efforts at unconventional warfare had little effect on the long-term outcome of conflicts. Despite those conclusions, it’s unwise for strategists prematurely to dismiss the idea of supporting insurgent groups and working with non-state armed groups in both current and future conflicts.

For those who find proxy warfare detestable, its poor record mightn’t seem worrisome. Unfortunately, global trends suggest future conflicts will be characterized by insurgents, militias, and non-state armed groups who’ll be important in determining outcomes. Reports, including the National Intelligence Council’s Global Trends 2030, show that increasingly those groups emerge to fill the security vacuums of failing states. They have easier access to external sources of support. Russia and Iran clearly see proxy warfare as part of their strategic culture. Even most conventional future scenarios—what Douglas MacGregor calls “wars of decision”—will have insurgents seeking to influence outcomes before, during, and after decisive actions. So it’s critical that strategists understand unconventional warfare and how to counter it. No matter how detestable we might find proxy warfare, it does work and our enemies would be happy to use it against us.

The data on supporting insurgent groups helps to illustrate my point. Studies of insurgencies and civil wars consistently demonstrate that external support is the most common enabler of insurgent success and that failure to isolate insurgents from external support is one cause of unsuccessful counterinsurgency campaigns. If external support matters so much in determining the outcome of civil wars, but US and allied efforts have a bad record, what’s the obvious conclusion? The problem isn’t that unconventional warfare doesn’t work; the problem is that we’re not good at it! The US and its allies are either doing something wrong or failing to do something important.

Actually, it’s both. Generally speaking, when supporting insurgent groups in the past, the US and its allies have either committed too little and/or expected too much. It’s important to recognize this failing now and to make a concerted effort to better understand how to incorporate unconventional warfare in future strategy. To be fair, the US and its allies have had some success when they chose to support a side in both insurgent and full-blown civil wars. Successful examples include Afghanistan in the 80s, at the beginning phases of Operation Enduring Freedom in 2001, and in Yugoslavia during World War II to name just a few. (There are more.) However, according to Mazzetti, the report claims that CIA efforts were less effective when insurgent militias fought “without any direct American support on the ground.” That’s a point I’ve emphasized before. Proxy forces will be more effective (and more malleable) when advisors are on the ground and providing them with capability, trust, advice, and support. Proxy forces live in the dangerous reality of civil war and social anarchy, and therefore have different immediate and long-term interests than their sponsors. It’s a principal-agent problem that has to be addressed. If we don’t commit blood and treasure to their cause, we can’t expect to influence their behavior—or the outcome.

Even if the commitment to proxies is strong, there’s also the danger of expecting too much from unconventional warfare strategies. In those cases where the US has been successful in supporting proxies, the desired outcome was broad. In Afghanistan in the 80s the US sought to punish and expel the Soviet Union from Afghanistan and cared little about what came next. Unconventional warfare with the commitment of only material support was good enough for the US, because Pakistani ISI provided the on the ground advice. In Operation Enduring Freedom, material support, in addition to on the ground advice and capability (air power) to the Northern Alliance was enough to defeat the Taliban—albeit not enough to secure the peace. In Yugoslavia during World War II, the objective was simply to keep Hitler’s divisions occupied. In each case, the objectives of unconventional warfare efforts were simple, broad end-states. The more control one expects over the outcome, the greater the need for a comprehensive strategy within which support for insurgents is merely one strand.

The lessons for anyone interested in military strategy are pretty clear. Future conflicts will be filled with sub-state and non-state armed groups. The capability to assess, influence, support, and integrate those entities into operations and strategy is something every credible military force needs to possess. Strategists need to understand those groups in both the context of the conflict at hand and in theory. The ability to influence such groups requires commitment. And, of course, the ability to influence outcomes requires that unconventional warfare efforts be part of a bigger strategy.

Lieutenant Colonel Jan K. Gleiman is an active duty US Army officer and a visiting fellow at ASPI (where this first appeared) from United States Pacific Command. 

Image: U.S. Army Flickr.

TopicsSecurity RegionsUnited States

Why the Hong Kong Student Protest Movement Is in Trouble

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While the Hong Kong protests vanish from the front pages of the press, replaced by other shiny-object foreign-policy issues, they reinforce why meaningful political and economic change in China will remain phantoms in the air for the foreseeable future. The Chinese Communist Party, as many already know, is incestuously tied to business interests in Hong Kong and the mainland. Change to the political system risks wreaking economic havoc on politically tied business interests. Thus, neither business, nor political elites have any reason to alter the current system. The protesters in Hong Kong, specifically the students, are directly challenging this relationship in the territory. This is a commendable effort that, as negotiations this week demonstrated, will ultimately fail in achieving the desired end state. Unfortunately, the students walked right into an ambush this week by engaging in publicly televised negotiations with the Hong Kong government.

Before we explore why the students just bolstered the Hong Kong government’s ability to drive a wedge between them and other Hong Kong interest groups, it is important to highlight some uncomfortable figures about the Special Administrative Region. Hong Kong has the twelfth worst Gini Coefficient in the world. In comparison, mainland China ranks 27, Singapore 32 and the United States 41. Hong Kong is in the company of Haiti, Sierra Leone, Central African Republic, Honduras and Guatemala in this ranking. While Hong Kong only registers 3 percent unemployment, approximately 20 percent of the population lives in poverty. Press reporting indicates that students, as well as religious and political actors are well aware of these economic inequalities.

Representatives of these groups make public statements that suggest they feel Beijing’s political patronage networks are increasingly seizing the economy and limiting the ability of average Hong Kong citizens to improve their stations in life.

The August 2014 announcement by the Standing Committee of the National People’s Congress to limit the choice of Chief Executive candidates only to those approved by the Hong Kong Election Committee has further increased the sense of political insecurity. While students, Christian religious leaders and longtime Democratic activists believe this ruling jeopardizes Hong Kong’s political future, they do not all agree on a viable alternative solution. The Hong Kong Federation of Students (led by Alex Chow) and Scholarism (led by Joshua Wong) believe that Hong Kong citizens should have the right to directly nominate Chief Executive candidates for election consideration. In 2013, Scholarism created a petition for parties in Hong Kong’s Legislative Council (LegCo) to sign. The petition would demonstrate these parties’ support for direct nominations of Chief Executive candidates by citizens of Hong Kong. No party fully supported Scholarism’s petition. The Democratic Party along with several others refused to sign the petition. These parties believe there is a better solution to nominate Chief Executive candidates than that proposed by Scholarism.

Several Christian religious leaders and other Democratic operatives are throwing their support behind Occupy Central with Love and Peace (Occupy Central). The founders of Occupy Central are both religious representatives in their communities. Benny-Tai is the group’s first leader and a Christian Law professor at the University of Hong Kong. Reverend Chu Yiu-ming is a Baptist leader who is concurrently the new leader of Occupy Central. According to press reporting, members of the Democratic Party, such as founder Martin Lee, support Occupy Central.

Occupy Central started forming in the summer of 2013. By August 2013, the Hong Kong Catholic Diocese used its main publication, Kung Kao Po, to legitimize the use of civil disobedience to force the new Chief Executive’s government to propose a universal suffrage solution. The Diocese claimed that the government had twice put off referencing the issue to Beijing, as called for in the Basic Law; was violating the fundamental rights of the people based on the UN Charter for Human Rights by not developing a universal-suffrage system; and that any proposal must not only offer universal suffrage, but must also include a process of nominating the Chief Executive candidates that allowed for the consideration all opinions.

While the students want direct nominations, other leading political groups want a less disruptive approach to gather opinions. This tension of interests makes it difficult for the Hong Kong government to provide any viable solution that satisfies all groups. What unifies these two movements is their disdain for the voting solution offered by Beijing and what they perceive to be the most recent affront to their lives by Beijing authorities.

This brings us to this week’s negotiations. One early complaint by the students was that the Chief Executive was not engaging in meaningful dialogue with Hong Kong citizens, despite campaign promises. His refusal to come and literally talk with protesters only reinforced this view. Now his government is publicly speaking to the students. While the government offered no roadmap, as the students demanded, it did start laying the groundwork to create the impression that it is sincere about engaging with the students. The goal of the government is to publicly make the students appear stubborn and spoiled, while the government builds the narrative that it is the responsible, grown-up party.

The Hong Kong government’s approach aims to directly show that the students do not have Hong Kong’s economic interests at heart, lack an appreciation for their political rights and have no meaningful solution to offer Hong Kong. This message may resonate with Hong Kong citizens who own small businesses, make their livings driving taxis and are old enough to remember harder economic times.

As noted earlier, the students want direct nominations of Chief Executive candidates and some even want an end to the functional constituencies in the Election Committee. Liberal parties do not agree with this solution. By suggesting publicly that the election rules can change after 2017, the Hong Kong government is attempting to put a carrot in front of these liberal groups. Simultaneously, the government is using the students’ own demands to demonstrate to the public that their interests collide with the political goals of the liberal parties. The students walked right into it—unfortunately.

At the end of the day, the students are unintentionally positioning themselves as the political losers. The Hong Kong government is using its public engagement with them to shape their grievances as separate from those of the average Hong Kong citizen, civil society and liberal political groups. The bigger losers, though, will be the citizens of Hong Kong, as the larger socioeconomic issues—Party patronage networks, corruption and social immobility—will continue to fester. Given that the mainland suffers from these issues, without any meaningful realignment of political rights that reduce the Party’s hold on economic levers of power on the mainland, Hong Kong will continue to experience growing economic inequality and a sense of social insecurity resulting from Party-business ties.

Nicholas Iorio is a private-sector international security affairs consultant specializing in the Asia-Pacific.

Image: Wikimedia Commons/Underbar dk/CC by-sa 4.0

TopicsDomestic PoliticsDemocracy RegionsChina

Japan and America: Forging a Global Alliance?

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Recently, the US and Japan released the Interim Report on the Revision of the Guidelines for US-Japan Defense Cooperation (PDF). The revision’s the first since 1997 and occurs in the context of Asia-Pacific power shifts. So countries in the region are watching closely just how much the USJapan alliance is changing, both practically and conceptually. That includes the Australian government, which has long been supportive of a more ‘active’ Japanese security and defence policy at both the regional and global level. It’s a line Japan’s current Prime Minister Shinzo Abe has also been pushing.

Indeed, the five-page interim report points to the prospect of a USJapan alliance moving beyond a narrow focus on the territorial defense of Japan against major aggression (from China or North Korea, for example). Instead, it’s based on a “strategic vision for a more expansive partnership” and the need to build the alliance as a “platform for international cooperation that would continue to make positive contributions to the region and beyond.” It stresses that among other things future bilateral defense cooperation would focus on:

- “seamless, robust, flexible, and effective bilateral responses;

- the global nature of the U.S.-Japan Alliance; and

- cooperation with other regional partners.”

Moreover, the report’s interesting for what it doesn’t say: in recognition of the expanding scope of geographical cooperation, the report doesn’t mention “situations in areas surrounding Japan,” a phrase that underpinned the 1997 guidelines.

While the 5-page document isn’t specific on details, the report provides some ideas on what these three aforementioned headings might entail. When it comes to “seamlessly” ensuring Japan’s peace and security, it observes that there could be “cases where swift and robust responses are required to secure the peace and security of Japan even when an armed attack against Japan is not involved [italics mine].” In other words, in theory at least, Japan could be asked to provide protection for US forces in hostile environments beyond its immediate neighborhood; for instance in the area of ship-based ballistic-missile defense.

Concerning increased “cooperation for regional and global peace and security,” the document notes that “areas of cooperation to be described may include, but are not limited to”: peacekeeping operations; international Humanitarian Assistance/Disaster Relief; maritime security; capacity building; intelligence, surveillance, and reconnaissance; logistics support; and non-combatant evacuation operations. While the US continues to try to reassure Japan about its security commitments (for instance, the US Navy just announced plans to forward deploy three more ballistic-missile-defense-capable destroyers to Japan over the next three years), Washington also sees the revised guidelines as a chance to move the alliance beyond Tokyo’s preoccupation with the “China threat.”

How likely is the emergence of a more “global” USJapan alliance? The good news is that Japanese officials involved in drafting the interim report agreed to the report’s language, probably in anticipation of the Abe government’s expectations. Moreover, Japan has been stepping up its Asia-Pacific defense engagement. For example, it agreed to provide both the Philippines and Vietnam with modern Coast Guard vessels. As well, Japan and India are in talks about the possible sale of Japanese amphibious aircraft. Lastly, there’s still the prospect of a submarine deal with Australia.

But serious obstacles stand in the way of a truly global—or even regionally more active—USJapan alliance. For a start, Japan’s new ‘three conditions for the “use of force” as measures for self-defense’ still impose significant restrictions on the Self-Defense Forces in the exercise of Japan’s right of collective self-defense. If Japan decides to support the US in a regional or global contingency, it’ll probably remain strictly limited to tasks such as logistical support or minesweeping outside the area of actual combat. Moreover, despite much talk about Japan’s “remilitarization,” in reality there’s no such thing. As Brad Glosserman and David Kang have observed in these pages:

“Japan’s defense policies are evolving to keep pace with a changing regional environment, but the idea that Tokyo will be able to threaten its neighbors is just not credible. There is no will, nor the capability to do so.”

As I’ve argued (here and here), Japan’s defense policy remains fundamentally defensive in nature. As Alessio Patalano has shown (paywalled), Japan’s naval modernization reflects a “targeted enhancement” of capabilities required for the protection of its sea lanes, particularly in the area of anti-submarine warfare and basic expeditionary capabilities to safeguard its many islands. Moreover, security reform in Japan remains a cumbersome process (PDF)—and there are already signs that attempts to flesh out at the legislative level what exactly the JSDF could or couldn’t do in support of the US in a conflict mightn’t come to fruition any time soon. Lastly, the Japanese side’s apparently frustrated that the interim report emphasizes the alliance’s global role but makes no mention of China.

We’ll have to see what the final guidelines bring. But in any case, it’s prudent to expect evolutionary, not revolutionary, changes in the USJapan alliance—and in Japan’s defense policy in particular.

Benjamin Schreer is a senior analyst at ASPI. 

Image: U.S. Navy Flickr. 

TopicsSecurity RegionsUnited States

Why the Battle for Kobane Matters (and Doesn't Matter)

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If you relied only on the media, you could be forgiven for thinking that the focus of the fight against ISIS has been on the Syrian city of Kobane.

This is thanks to the easy access for international media to the Turkish side of the border near Kobane and the resulting images, as well as the work of the Kurds and their associated lobby groups who want the world to focus on their issues. At one point the Australian Broadcasting Cooperation (ABC) even claimed that a hill near the town was “strategic.” Tactically important perhaps, but strategic? I don't think so.

As US Secretary of State John Kerry noted, the US does not consider Kobane a defining element of the coalition strategy. Rather, it quite rightly sees that Iraq is ISIS’ main effort and hence the bulk of Washington's force is directed there.

Kobane's value though, lies in what it represents more than what it is. One of the principles of war that applies to insurgent groups as much as it does to conventional armies is the maintenance of momentum. If you have momentum, then you force your opposition to make reactive decisions under pressure that often turn out to be sub-optimal. You can also create fear and panic in the opposition, as ISIS showed in its attack on Mosul and subsequent drive south, which resulted in the collapse of several Iraqi army divisions. ISIS has also relied on battlefield victories to replenish its ammunition stocks and gain military equipment and recruits.

The capture of Mosul, though, may well represent a high point in ISIS's campaign.

While the group is still pressing its advantage in al-Anbar province in Iraq, it has lost Mosul dam and has been investing in Kobane for over a month without success. If it is unable to capture Kobane, it will have lost significant personnel and resources against some Kurdish irregulars (with coalition air support) for little to no gain. One of ISIS's lines of operation will have stalled, and very publicly so.

ISIS is a media savvy organization and it realizes that being beaten back in Kobane would be a very public loss. And in the social media world ISIS inhabits, a public loss can also be a strategic one. Images of coalition airstrikes and Kurdish fighters tearing down ISIS flags don't do much for ISIS's reputation as a near-invincible jihadist war machine, an image on which it has relied for much of its success to date.

Kobane also offers the coalition opportunities greater than the limited value of the town itself. In the past week the coalition has increased its support for the Kurdish fighters, indicating a willingness to fight for the town's defense. This limited action offers some significant practical benefits for the coalition. It will be learning much about integrating airstrikes with indigenous forces and can use the Kobane battle as a live run for future actions against ISIS in Iraq. At the same time, the coalition is able to degrade ISIS forces in the region, which appear to be reinforcing failure in their assault on Kobane.

This piece was first posted on The Interpreter, which is published by the Lowy Institute for International Policy.

Image: U.S. Air Force/Flickr. 

TopicsISIS RegionsSyria

America’s Air-Sea Battle Concept: An Attempt to Weaken China’s A2/AD Strategy

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Editor’s Note: The following is an excerpt from the recent China Policy Institute Report - America’s Air-Sea Battle Concept: An Attempt to Weaken China’s A2/AD Strategy. You can read the full report here.

Significance:

Over the last several years, American military planners have begun the complex task of reorienting U.S. military capabilities towards presumed challenges of the future. While such planning may be slowed thanks to U.S. and allied operations against the “Islamic State”, strategists from both political parties recognize long-term trends in military technology along with the diffusion of advanced, precision strike weapons guarantee that fundamental changes in U.S. military planning, procurement, and overall grand strategy are needed to preserve existing military dominance.

What We Need To Know:

Beginning in roughly 2007 under the George W. Bush administration with a new U.S. Navy maritime strategy, a shift away from counterinsurgency operations began. Indeed, U.S. defensive planners since the early 2000’s have become increasingly concerned over the emergence of what China calls “counter-intervention operations” or what many in the West refer to as Anti-Access-Area Denial (A2/AD) military challenges. Such a strategy, broadly stated, attempts to slow, limit, deny or deter a superior technologically advanced foe from conducting threatening military operations. Using a combination of various military platforms such as ultra-quiet diesel submarines, over 80,000 sea mines, various types of cyber warfare, anti-satellite weapons and swarm attacks by ballistic and cruise missiles Chinese military planners are constructing what various scholars have referred to as an “assassin’s mace” of A2/AD capabilities. Chinese strategists in most scenarios assume United States military forces and their allies would be the intended target in scenarios ranging from military action over the East and South China Seas, operations concerning Taiwan, and increasingly over any and all areas in and around the first island chain.

Just as past experiences—events like the 1995-1996 Taiwan Crisis and the 2001 Hainan Island Crisis—have pushed China towards an A2/AD-based strategy, America’s own history will guide its response to future challenges with A2/AD being a major part of Washington’s post “war on terror” strategic outlook. American military planners have long considered A2/AD challenges an area of priority stretching back at least as far a  1992, when the first reference of the term “anti-access” was used in a largely forgotten RAND study. Since then, specifically since 2007 onward, U.S. strategic thinkers have considered a number of options that could negate the impact of A2/AD tactics and weapons platforms, with heavy focus squarely aimed at specific Chinese A2/AD military capabilities.

Image: U.S. Navy Flickr/Creative Commons. 

TopicsSecurity RegionsUnited States

A Perfect Solution to Nuclear Talks with Iran: A Deal Deemed Imperfect by All

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In today’s Middle East, dysfunction is a bigger enemy than hostile states. The United States needs as many partners as possible in this part of the world to tackle the current chaos. Relations between Iran, a dominant state in the region, and the West are today at a vital crossroads. Reaching a deal with Tehran will not only constrain its nuclear program, but potentially pave the way for engagement on regional security issues.

The rise of ISIS and the instability left behind by the Arab Spring has cemented dysfunction in the Middle East. While hostile states are undesirable, deterring or defeating them is still within the realm of possibilities for a country like the United States. But no one has a solution to utter chaos.

Strong regional partners are vital to managing the current disorder. States like Turkey and Saudi Arabia partially fulfill that role. But Iran is a dominant state in the region. It is large, resource rich and a potentially powerful partner in an unstable region. It is the largest country in the Middle East with the capacity to pursue a serious international agenda. A nonhostile relationship with a Tehran who could be convinced not to want nuclear weapons would be worth its weight in gold.

The future course of the West’s relationship with Iran hangs on reaching a nuclear deal. For better or worst, meaningful dialogue with Iran is predicated on resolving this issue—all other problems have taken a back seat over the past two decades. If the negotiators aren’t able to bridge their differences, then there will be little future dialogue with Iran.

Aside from constraining Iran’s nuclear activities, a deal would boost President Rouhani’s more moderate agenda domestically. While a strong, liberal and independent Iran will naturally pursue its own interests, it will be more sympathetic to Western goals if it develops ties with the EU and the United States. Iran could be coaxed into a role as part of the international community, not in opposition to it. Dialogue could become the norm, rather than the exception.

In Iraq, both sides are conscious of the role the other can take in effectively tackling ISIS. Washington and Tehran share the same goals: avoid Iraq’s partition and defeat ISIS. Iran is more committed to Iraq than any other regional player. Last time Iraq’s interests were fundamentally opposed to Iran’s there was a devastating, eight-year-long war. Not only does ISIS threaten Iran’s interests in Iraq, but it poses a direct threat to Iran’s borders—something Iran hasn’t seen in a long time.

ISIS can’t be defeated with just U.S.-led airstrikes. The coalition needs local and regional support. Of course, it’s politically impossible for either side to openly cooperate with one another. No one envisages joint combat roles, but instead separate and complementary tactical approaches and coordination between the coalition and Iran to effectively tackle ISIS. But very little can be done until the nuclear file has been dealt with.

If there is no deal, the hardliners in Tehran will be strengthened. The failure of the talks will be attributed to the West and their “excessive demands.” Tehran will turn away from the United States and the EU towards countries that are less selective in their foreign relations, such as China and Russia. Iran will continue its often-obstructive foreign policy, because it will have little interest in contributing to Western foreign-policy goals in the region.

It’s imperative that both sides explore all avenues for overlap in the nuclear talks. Tehran believes the P5+1’s demands are “excessive.” For Iran, the key issue is to avoid the reality or appearance of coercion. What would happen to President Obama if he appeared to give in to bullying by a foreign power? The same goes for Tehran—it can’t accept a deal that makes it look like it said “yes” with its tail between its legs.

But the P5+1 seems to have a more flexible negotiating position than the Iranians give it credit for. If the P5+1 can effectively communicate this to Iran, then a settlement is plausibly within reach.

By definition, a successful agreement will be one where neither side feels it has achieved a perfect deal. But if the P5+1 and Iran reach a comprehensive deal, it will constrain Iran’s nuclear program, boost Rouhani’s liberalism in Iran and pave the way for a new era where the West can more comfortably coordinate with Iran on regional crises. Everyone will be better off. 

TopicsDiplomacyNonproliferationNuclear Weapons RegionsIranUnited StatesEurope

The Biggest Threat to U.S. Jobs: The "Contestability" Nightmare

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The Federal Reserve’s mandate has never been well defined, and there are no concrete definitions to adhere to. Federal Reserve Chair Janet Yellen has begun to deviate from the traditional characterization of full employment to something far more nebulous. Recognizing this shift is critical to understanding the Fed, and its new relationship with the two esoteric mandates of stable prices and full employment. 

At a conference in Boston, Yellen stated that she was concerned about rising inequality. Before listing off a blistering round of statistics that show the US has become more unequal over the past few decades, Yellen succinctly articulates why the Great Recession was responsible for widening the gap further: “But widening inequality resumed in the recovery, as the stock market rebounded, wage growth and the healing of the labor market have been slow, and the increase in home prices has not fully restored the housing wealth lost by the large majority of households for which it is their primary asset.”

One piece in particular of the above statement stands out—and has broad implications for the understanding the Fed mandate. A normal recovery would see wage growth and the labor market move together in a lagged fashion—the labor market heals and tightens, followed by wage increases as labor becomes increasingly scarce. But this has not happened during the current recovery, and it has not occurred economy wide in quite some time.

The new target for the Fed may be best described as not simply “full employment” but "full wages". At first glance, it seems unreasonable for the Chair of the Federal Reserve to be concerned with how the income of the country gets dispersed. However, in many ways, “full wages” are at the intersection of the fed mandates. In essence, Yellen is admitting that the past few decades were not kind to a significant swath of the US, and that this endangers future economic growth.

Many of the jobs US middle skilled workers once took for granted can now easily be outsourced or contested—even some previously thought untouchable. This “contestability” is increasing as more jobs become relocateable or replaceable with computing power due to advances in communications technology. Contestability is fundamental to Yellen’s concern. If a US job is contestable internationally, then US workers are competing with cheap labor around the world. This limits the bargaining power of the US worker, and keeps a lid on wage inflation in the US. The cheap-but-educated global labor force is becoming an increasing threat to the US worker.

Yellen sees this middle skilled squeeze phenomenon in the data, but also sees the lack of deflationary wage pressure on the top of the income ladder. The highest paying jobs tend to have little competition from outside—requiring creativity and high levels of education. The question to ask is why this has occurred, and whether the factors underlying it are dangerous to the US economy.

And in many ways—they are dangerous. If ignored long enough, the disintermediation of the middle class is at best disinflationary and may be deflationary. With stagnant wages across the economy, the middle cannot increase consumption—one can only borrow so much. If contestability continues to erode the wages of US middle skilled workers, wages could be pressured or even decrease toward more internationally competitive levels. This would be disastrous for consumption and inflation expectations, especially in a service oriented economy where many of the jobs could be at risk. 

If the U.S. continues to see this type of wage pressure, there may be enough jobs (for people who want them), but the ability to consume at previous levels will not be there. Deflation—generally—is bad for an economy, and wage deflation might be the worst kind. Deflation puts pressure on prices, making it more difficult to consume on the aggregate as the economy previously did. The standard of living declines. Further, the potential for wage pressures, in the current recovery, is low. The jobs created during the recovery disproportionately skew towards part-time relative to previous recoveries, and part-time jobs do not yield much bargaining power. There are few reassurances about the labor market.

This puts the Fed in a particularly odd place. Its mandate is supposed to be two separate pieces of a puzzle, but Yellen appears to have identified an intersection. The Fed runs the risk of missing both its “full employment” and “stable price” mandates without pursuing—either explicitly or implicitly—a “full wage” target.

Yellen’s statement has little to do with fairness or equality. It is directly connected to ensuring the US has created enough uncontestable jobs for the Fed to step away, and these jobs are the type that will lead to—or at least allow for—future wage pressures. Prime examples are the jobs created by the current shale oil boom and housing construction during the boom through 2006. Many of the jobs created for the oil patch require the presence of the worker—and cannot be done without a significant amount of education. These characteristics make them difficult to offshore or relocate. As quantitative easing begins to roll-off, the ability of the US shale revolution to stand on its own will be tested, and the jobs engine of Texas may suffer. This would be a tremendous hit to a sector where wage pressures exist, and the contestability is low. The Fed should be watching this closely.

Yellen's wage war is a battle the US does not know it must win. For the Fed, it ties together both pieces of its mandate, and gives them a reasonable basis for stimulus when observers feel it unnecessary. The Fed is muddling the mandate to fight a wage war, but the Fed will struggle to justify its continuous actions to counteract those forces. The middle skills squeeze is not a swiftly passing phenomenon. It may mean that extraordinary monetary policy and unconventional intervention are increasingly normal.

Image: Creative Commons/Flickr. 

TopicsEconomics RegionsUnited States

The Next Ebola? Beware of Marburg

The Buzz

Ebola and Marburg are both hemorrhagic fevers and belong to the same family of viruses. The hosts for both are identified as animals, especially fruit bats—both diseases crossover from animals to humans. Incubation periods are around twenty-one days. The two diseases have similar symptoms and similarly high mortality rates. Both diseases spread through contact with bodily fluids, making family members and health care workers especially vulnerable. There is no pharmaceutical that cures either disease, and patients are treated in much the same way. The ill are isolated and medically supported until they recover or die. Efforts must be made to trace all those who came into contact with the ill.

Ebola at present is centered in west Africa, but it was first publicized in what is now the Democratic Republic of the Congo. Marburg is also found in the Congo, where between 1998 and 2000 it is reported that there were 154 cases and 128 deaths attributed to the disease. In Angola in 2005, there were 374 cases of Marburg, and 329 deaths. In 2007, 2008, 2012 and 2014, in Uganda there were cases of Marburg in the single digits with very high mortality rates, ranging from 50 to 100 percent. When Ebola first appeared in west Africa, it was an unfamiliar disease, one reason among many why the response to it was slow. In east Africa, however, there is greater familiarity with Marburg, and officials move quickly to respond to the threat of an outbreak.

Accordingly, officials in Rwanda and Uganda are closely monitoring their common border for a possible outbreak of Marburg after a confirmed case in Kampala, Uganda. As a safety precaution the Ugandan government has isolated ninety-nine people, none of whom have tested positive.

The World Health Organization is saying that Ebola is now “entrenched” in Conakry, Monrovia, and Freetown – it has become an “urban” disease. Marburg, however, appears to remain primarily in rural areas. West Africa’s high rate of urbanization has helped facilitate the rapid spread of Ebola, especially in urban slums. Urbanization in east Africa could have a similar impact.

This piece first appeared in CFR’s Blog Africa in Transition here.

TopicsEbolaMarburg RegionsAfrica

Property: How Beijing has Captured China's Middle-Class

The Buzz

In The China Fantasy (2007), James Mann debunked the hopeful delusion of Western liberals: that a Chinese “middle class” would emerge to countervail centralized state power. Mann instead argued that China's development model had co-opted this tribe through inducement and suasion.

The Government Next Door by Luigi Tomba explains exquisitely how Beijing's policies have been instrumentalized at the local and neighbourhood level.

The Chinese state has built a compartmentalized and highly controlled system of local bodies which manage housing privileges, welfare and livelihoods. As Tomba says, “The liberalization of housing markets has resulted, somewhat counter-intuitively, in the use of residential space as a tool to facilitate a wide range of governmental interventions.”

An observant visitor to a Chinese city notices two things: high walls and security guards. Tomba saw that “Chinese planners, real estate tycoons, and citizens alike appear to share a passion for gated communities.” For the rich they provide relative autonomy and security, and promote powerful conservative ideals. The omnipresent guards reinforce cellular segregation, in what Tomba calls the “forting-up” of Chinese cities.

His fieldwork shows the chasm between large rich cities, especially Beijing, and the many poorer ones. The reason is simple: property. “Early access to privatization of housing has become a major discriminant” of wealth and status. The current and retired professionals of the state-owned enterprises (SOEs) see themselves as the deserving vanguard because of their professional skills and loyalty. This model middle class has been rewarded financially as well as with perquisites in education, welfare and healthcare. The 1990s privatization of danwei housing, often at knockdown prices, was the greatest windfall. Home ownership in pricey Beijing is 80%, more than two-thirds gifted to SOE employees. Almost 70% of SOE employees own one (and often multiple) homes. Tomba argues that “The middle-class strategy of the Chinese government has employed a redistribution of public assets...in a way that has greatly favored sectors of urban society with strong ties to the state.”

To this trusted elite, the state's hand is benign, and light.

By contrast, in deprived regions like the northeast rustbelt, “visibility, rather than invisibility, remains crucial to the governing strategy.” Community officers, volunteers and patrols sloganeer about “saving the working class.” Public townships are a world apart from Beijing's enclaves, but they “share two characteristics: they are enclosed within walls and behind gates, and both require exclusive membership, in the form of registration or property rights or both.” He notices that “while the burden of governing in middle-class neighborhoods is becoming lighter,” in less affluent cities “social distress is attracting more resources, heavier governing practices, micro-governing.” A retired worker summarizes: “the poorer a place, the more numerous the cadres.”

Everyone acts for collective and self interest. As Tomba points out, “The grannies in Shenyang have mobilized to protect...what is left of their once generous industrial working class benefits. The Beijing homeowners watch over their right to see a contract honored and more autonomous lifestyle fulfilled, at least in their backyard.” The alleyway aunties tyrannising Shenyang parallel Beijing's imperious homeowner committees. A manager there trumpets “the 3-in-1 system: management company, developer and community, all under the supervision of the Party.” True, there are 450,000 civil representative bodies in China, but most are GONGOs, sinews of state power which strictly circumscribe real popular rights of dissent.

Officialspeak is harnessed by all: “community activists use the language of patriotism to justify their grievances against real estate developers; disgruntled ex-workers invoke the socialist spirit of central policies to frame their dissatisfaction with local leaders; the same discourses of 'harmony', 'quality' and 'security' are equally used by the state to justify intrusive policing...and by real estate developers to sell prestigious properties to status-hungry families.” Wrapping up in the flag
“shields limited social action from repression.” There are protests but they are highly localized, strictly controlled and often mediated positively by officials: “When limited conflicts erupt...their effect might well be to reinforce the overall legitimacy of the state rather than to undermine it.” The daily concerns of Chinese – real estate, pollution, healthcare – may be debated; the Party's authority may not.

Above all, Chinese urbanization is a civilizing project: “Morality, nation building, patriotism, human quality (suzhi), and modernization” transcend “the societal autonomy (normally) associated with the emergence of a civil society.” The concept of suzhi recurs repeatedly in social discourse. “The educated and affluent groups inhabiting the new compounds become exemplars of a self-responsible, well-behaved, high-suzhi citizenry,” and thus a strong nation. Importantly, though, “high suzhi citizens enjoy a significant (albeit spatially limited) autonomy to govern themselves and successfully avoid the direct control of public neighborhoods.”

Now we understand Mann's puzzle of the illiberal masterclass, “the most responsible citizens who, by virtue of their higher suzhi, will secure the reproduction and strengthening of Chinese civilization.” In Tomba's words, this “justifies the deficit of citizenship rights imposed on less accomplished social actors” such as migrant workers, who might otherwise resort to violence. “China's educated, increasingly wealthy, conflict-prone, but reliably nationalistic middle-class has become an agent for the development of a harmonious nation.” The homeowner class, and particularly the SOE families, “reproduce and amplify the dominant discourses of the state: order, suzhi, patriotism.” As Tomba concludes: “my middle class neighbors appeared more as staunch supporters of than as challengers to the Chinese regime, particularly with regard to social stability.”

This piece was first posted on The Interpreter, which is published by the Lowy Institute for International Policy.

Image: Flickr/Creative Commons. 

TopicsEconomics RegionsChina

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