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Janet Yellen's Reserved Monetary Insight

The Buzz

In her speech at the central bank retreat in Jackson Hole, Federal Reserve Chair Janet Yellen said something remarkable for an economist—the labor market data lacks clarity, is confusing, and is sometimes contradictory. Yellen admitted the Fed is having a difficult time understanding precisely what is happening in the labor markets, and the difficulty of understanding the data has been magnified following the Great Recession. Some variables appear to have lost some of their meaning or ‘predicative power’, while others do not seem to have been affected much at all. This requires a shift in interpreting some data, and not necessarily extrapolating past tendencies and correlations to the present.

In the speech, Yellen subtly argues some data her colleagues are relying on should be interpreted with care. Some may not be relaying the same information about the labor market (and output, and wages and so on) as before the Recession. One to be wary of is the number of people working part-time for economic reasons. Yellen points out that there are “structural”—permanent—forces at work here, such as the shift to a services oriented economy where part-time employment is more common. But there is also a “cyclical”—temporary—component and Fed policy should be effectual here.

The Fed caused itself a problem by stating that monetary policy would be tightened as the unemployment rate dropped and inflation stayed within bounds. This is causing some issues now, as some at the Fed believe the unemployment rate—what the Fed has tied itself to—is not a good measure of the labor market. So Yellen proffered an idea about how to avoid the problems that using a single data point to determine policy could wreak:

“I believe that our assessments of the degree of slack must be based on a wide range of variables and will require difficult judgments about the cyclical and structural influences in the labor market. While these assessments have always been imprecise and subject to revision, the task has become especially challenging in the aftermath of the Great Recession, which brought nearly unprecedented cyclical dislocations and may have been associated with similarly unprecedented structural changes in the labor market—changes that have yet to be fully understood.”

The critical element embedded in this statement is the use of a wide range of data to understand an economy vastly different from the one we knew before.

To drive her point home, Yellen gives a few examples of what happens when data is not properly understood. Are more job vacancies a good sign for the labor market? Maybe:

“Given the rise in job vacancies, hiring may be poised to pick up, but the failure of hiring to rise with vacancies could also indicate that firms perceive the prospects for economic growth as still insufficient to justify adding to payrolls. Alternatively, subdued hiring could indicate that firms are encountering difficulties in finding qualified job applicants.”

Job vacancies and hiring are linked, and not understanding this link could render an analysis useless. Or, simply looking at the rise in job vacancies could lead to an inaccurate assessment of the labor market and the number of workers being demanded.

Other variables may not be so difficult to understand, even now. The quit rate—the number of people who quit their jobs as a proportion of the workforce—is one of those. As more people quit their jobs, the better the labor market is assumed to be. It indicates workers’ confidence in finding alternative employment, and how broadly firms are competing for talent. But, as Yellen points out, the quit rate is still “somewhat depressed,” and this could be a sign the labor market is not as dynamic as some think. While many of the variables may have been deeply affected by the Recession, the logic behind quitting a job is unlikely to have changed.

Yellen is a labor economist—this is her territory. It is disconcerting when she admits there is uncertainty regarding the state of the labor market, and how the Fed should react to it. But today Yellen did something truly brilliant. Instead of providing economists and Wall Street with specific policy plans, Yellen gave economists and Wall Street a lesson on how to acknowledge a lack of clarity in the data. This may not sound like a monetary policy, but it is. By allowing for uncertainty and calling for a broad range of variables to be used in the determination of policy, Yellen is allowing for almost any policy to be justified by data. After all, the data could be good, it could be bad, but it is certainly indeterminate.

Image: Flickr/DonkeyHotey/CC by 2.0

TopicsEconomicsDomestic Politics RegionsUnited States

Newsflash: There Is No “Wonder-Weapon” When it Comes to Modern War

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As Herman Göring might have said, “when I hear the name Carl von Clausewitz, I reach for my gun” (he actually made the comment about the word “culture”.). Particularly when the reference occurs early on in a speech and when it’s followed, in short order, with a machine-gun like spray of other military theorists—finishing up with Azar Gat. There was, however, method in  Australian Air Marshal Geoff Brown’s dinner speech to the Australian Strategic Policy Institute and the reference to Gat (who believes traditional war is in decline in today’s world) was certainly not accidental.

The Chief of Air Force began with a discursive explanation of how airpower had begun, during World War One, as little more than an ancillary to the real protagonists deciding the result on the ground. Then came the almost obligatory development of his theme, the transition from appendage to enabler in World War Two.

Perhaps I’ve listened to too many after-dinner speeches. I’d almost begun to drift off and count the rosettes on the ceiling. “Now,” I thought to myself, “there’ll be an elaboration of how the RAAF has subsequently become the decisive factor in the military equation.” That was a mistake.

When Brown turned to the present he suddenly became specific. Gone were the broad brush-strokes with their theoretical references; replacing them came details and particulars. But, and much to my surprise, there weren’t any references to the third generation of war—one where airpower reigned supreme. Instead the Chief emphasised something we journalists find it difficult to get our heads around: there are no simplistic answers in modern conflict. It requires a team to achieve the objective, and every player has their part.

It’s interesting to hear this sort of talk from one of the three service chiefs, particularly at a time of increasing financial stringencies. While it’s true the announcement that Australia is going to buy the Joint Strike Fighter means the RAAF has already been given its Christmas and birthday presents for many years to come, technology is developing fast.

The big question, of course, is how rapidly unmanned systems will develop. As long ago as 2011, even the Economist was predicting that the piloted plane could soon become a thing of the past. But, and as Brown pointed out, that’s misreading the lessons of history.

His message was that there is no silver bullet. Military effects are created by a system of systems. Brown had just as much time in his speech for the maintenance engineer as he did for the unmanned drone.

We don’t reflect on that often enough. It’s in our nature to look for the sensational breakthrough technology; the wonder-weapon. Those don’t exist. That’s probably not the message Brown wanted us to take away from his speech—but it’s not a bad one. And it’s a relief to see that even the head of the RAAF’s capable of understanding that airpower alone never wins wars.

Apart, of course, from Bosnia.

Nic Stuart is a columnist with the Canberra Times. This article first appeared in ASPI’s The Strategist here.

Image: U.S. Air Force Flickr. 

TopicsSecurity

China vs. America: The "Freedom of Navigation" Debate

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Comments by China’s Foreign Minister Wang Yi at the ASEAN Foreign Ministers Meeting recently highlighted the futility of the US-China dialogue over the freedom of navigation. In remarks to the press, Wang challenged Washington’s call for unhindered navigation of the high seas by arguing that the ‘current situation of the South China Sea is generally stable, and the freedom of navigation there has never seen any problems.’ The circular nature of this debate makes it clear that support for the US by third parties, such as Europe, will be necessary to break the logjam and reinforce a principle that Europe also relies on for its prosperity and security.

What was not apparent in Wang’s remarks is that the dispute between the US and China over the freedom of navigation is not about commercial ships, but military ones. According to Beijing’s interpretation of the UN Convention on the Law of the Sea (UNCLOS), military activities within a country’s Exclusive Economic Zone (EEZ) – which extends 200 nautical miles seaward from a state’s coastline – are banned. Washington argues that this is a distorted understanding of the law, and is supported in this view by the majority of states worldwide. Only about two-dozen countries openly agree with China’s interpretation.

There are many facets of China’s disputes with the United States over the South China Sea, but none generates more rancor than the question of military activities within an EEZ. This dispute has been the source of most US-China flashpoints in the region, including China’s harassment of the surveillance ship USS Impeccable in 2009 and the near-collision of a Chinese vessel with the guided missile cruiser USS Cowpens earlier this year. Following China’s announcement of an Air Defense Identification Zone over the East China Sea in 2013, it now appears that Beijing is seeking to exert sovereign control over the skies as well, and given China’s tendency toward harassment and coercion, mid-air confrontations with the US cannot be ruled out.

Yet while the US has defended its right to conduct military activities during recent crises, Washington is coy about raising the issue on a routine basis, favouring instead a vaguer call for ‘freedom of navigation.’ This could be due to a lack of support in the region for the US position. Countries such as Vietnam, the Philippines, Thailand, India, and Japan have all expressed reservations over the rights of foreign military vessels to operate in their EEZs. While these countries are all vigorous proponents of UNCLOS, and are skeptical of the legality of China’s historically based maritime claims, they are largely silent over the EEZ issue. This of course adds to the potency of Wang’s recent comments: they suggest that the US is an outlier in the region and has a policy that is not recognized by others.

Some countries believe that unfettered military activities in coastal waters may invite gunboat diplomacy or threaten their resource sovereignty. Others, such as Japan, are hedging directly against China. Amid doubts over the US ability to uphold the principle of the freedom of the high seas, Tokyo believes that the proscription of military activities within its EEZ may be one day come in useful in deterring intrusive activities off Japan’s own coastline.

Stakes:

The stakes in this dispute are clear. First, while the freedom of military navigation within EEZs has undoubtedly contributed to the US Navy’s global supremacy, it has also ensured the security of merchant traffic from the predations of state and nonstate actors, and underpinned the stability of world shipping lanes for centuries. The days of piracy, arbitrary taxation, and trade monopolies are long over – partly because navies around the world are free to conduct constabulary operations.

Second, for any law to be effective, it has to be clear. Freedom of the high seas should be, as the British saying goes, ‘exactly what it says on the tin.’ Exceptions to this rule muddy the waters over what is permissible and impermissible behavior. To paraphrase Thomas Schelling, theoretically, limits can be set on the freedom of navigation, but only on terms that are qualitatively distinct from the alternatives. ‘Freedom of navigation’ is clear and easy to understand. ‘Freedom of navigation under some circumstances’ is more problematic, and leaves ships open to selective enforcement of the law by the coastal state.

Third, freedom of the high seas is important in achieving stability among major powers. While the EEZ question has led to spats in the past, in general, the regime has fostered predictability, knowledge of one’s adversaries and awareness of conflict ‘red lines.’ Throughout most of the Cold War, the US and Soviet Union conducted maritime surveillance operations in each other’s EEZs and while these operations were never welcomed, they were tolerated as a part of an open global system. This attitude explains why the US accepted a Chinese spy ship shadowing the RIMPAC exercises last month, and why Washington is disappointed that Beijing is not returning the courtesy.

What should Europe do?

As the world’s largest economy, Europe has benefited from freedom of the high seas as much as the United States, and it is within its interests to defend it. The continentalist vision of maritime security, in which states can dominate the sea in the same way they do the land, would not only put an end to uninterrupted maritime traffic, but also see the extension of territorial disputes to the sea, where strong states would carve out their spheres of interest at the expense of the weak.

The US can achieve any number of its security objectives in East Asia through the commitment of military hardware, diplomatic effort, and economic resources. Yet it cannot shape global norms alone. Freedom of the high seas is a norm that grew out of international recognition, not the efforts of one country. If it is to be sustained, it must enjoy similar levels of support. This is a role that likeminded partners such as Europe should play.

Europe could assist in a number of areas. It should invite emerging powers such as China and India to take a greater stake in ensuring security of the maritime commons. This means continuing to conduct joint operations in counter piracy, disaster relief, and civilian evacuation. It would also mean accepting China and other big regional players need powerful navies with expeditionary capabilities, but this is a price worth paying.

Second, Europe should seek to engage China in a discussion about its desire for a closed maritime system. China has historical reasons for this approach – some of which are fed by a contemporary sense of insecurity – but there is no proof that the current system is not working in Beijing’s interests, and lots of proof that it is. As one senior Chinese official made clear at the 2014 Shangri La Dialogue, as a global trading nation ‘freedom of navigation is important to China […] we are very much dependent on it.’ How would China cope in a system in which these benefits would continually be under threat?

Third, and most importantly, Europe must come out in open support for the freedom of military activities with EEZs. This would embolden Washington to state its position more clearly – force Beijing to do the same – and would reassure other countries in the region that the principle is being fought for and not forgotten. Europe is accustomed to feeling powerless in East Asia, but on this question its role could be vital.

Edward Schwarck is a research fellow in the Asia Studies Department of the Royal United Services Institute (RUSI). The following article first appeared in CSIS: PACNET here.

Image: U.S. Navy Flickr. 

TopicsSecurity RegionsChina

A Time for Deterrence

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American politician and poet Eugene McCarthy once said that the media are like blackbirds on a telegraph pole. Once the impulse goes through, they all jump in the same direction. Fortunately for McCarthy, the Washington punditocracy was not as developed then as it is now.

No sooner did Washington and the European Union announce that they were considering new sanctions on Russia for its war in Ukraine then the Beltway cognoscenti sprang into action with a new line. Unfortunately, it is the same line echoed by Moscow, consisting of the following arguments: First, the new sanctions will not work or really hurt Russia, but will push Moscow and Putin into a corner from where Putin might lash out and stage an even bigger invasion of Ukraine than has hitherto been the case. Second, and related, is that we therefore have to negotiate with Russia over the future of its role in the lands of the former Soviet Union.

Moscow has added to this line of reasoning through its own arguments. Not only do Russian spokesmen breathe defiance and dismiss Western sanctions as ineffectual, Foreign Minister Sergei Lavrov has complained disingenuously that Moscow does not know what Washington wants of it. He has further added that even if there had been no Ukrainian crisis, NATO would, in any case, have found new ways to commit aggression against Russia.

The fallacies of these arguments are obvious. First, they do not square with the facts. It is quite clear what the West wants: namely, an end to the invasion of Ukraine, the withdrawal of Russian troops, the cessation of all acts of belligerency against Ukraine and neighboring states, and the recognition of the new Ukrainian government.

As well, in the wake of mounting sanctions, Russian President Vladimir Putin has doubled down, sending more weapons to Ukraine, evidence suggesting the shelling of Ukraine from Russia, and dispatching more of Moscow’s “specialists”, including Vladimir Antufeyev.

As a result, there is nothing to talk about. It is abundantly clear that Moscow does not accept existing borders or respect the sovereignty of the countries of the “post-Soviet space,” despite a host of treaties that it has signed to that effect. Offering negotiations that might reward its aggression only strengthens Putin’s belief that he is dealing with weak, corrupt governments lacking in the courage to defend their interests openly.

Classical deterrence theory teaches us that it is necessary to make the deterrent threat to an aggressor sufficiently credible and palpable so that he can readily see that that his costs will escalate out of control unless he reverses course. Having bet his future and that of Russia in a struggle over Ukraine, Putin can be stopped only by a deterrent threat of sufficient magnitude—such as providing Ukraine with the military weapons and financial assistance it needs to expel the invaders and begin to set its house in order. Only such a step will register in Moscow as a sign of unmistakable resolve on the part of the United States and Europe.

It is the collective fault of Western governments that to date they have been too timorous and concerned for their investments to grasp this state of affairs. Their hesitation has allowed Putin to bring us to this point, at which the threat of a wider war in Europe now lurks in the wings. But it is not too late for us to regain the policy initiative and take the steps necessary to not only sustain Ukraine, but also preserve Europe and bolster international security in the process.

Stephen Blank is Senior Fellow for Russia at the American Foreign Policy Council in Washington, DC.

Image: White House Flickr. 

TopicsSecurity RegionsEurope

Should Asia be Afraid? China's Strategy in the South China Sea Emerges

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China continues to play a long game in asserting its territorial claims and hegemonic ambitions in the South China Sea (SCS). After its confrontation with Vietnam over the Haiyang Shiyou 981 oil rig in May this year, Beijing has recently announced that it intends to build lighthouses on five islands in the SCS, two of which appear to be in waters also claimed by Vietnam. Indeed, China’s traditional position of “strategic ambiguity” regarding its willingness to compromise on its territorial claims within what it calls the ‘nine-dash line’ looks increasingly obsolete.

Its assertiveness in the SCS needs to be seen as part of a new framework of Chinese foreign policy emerging under President Xi Xinping. China watchers point out that the new leadership appears to have conducted a reassessment of China’s security environment, its relative position and policy responses. Predecessor Hu Jintao’s description of the international environment as a “harmonious world” has disappeared. So too has Deng Xiaoping’s guideline to “hide our capabilities and bide our time, be good at maintaining a low profile and never claim leadership.” Instead, the security environment is assessed to be “under a new situation” and according to Xi, China “needs to protect and make the best use of the strategic opportunity period to safeguard China’s national sovereignty, security and development interests.”

From a Chinese perspective, the “new situation,” characterized by the U.S. strategic shift to Asia and growing tensions over maritime territorial disputes, requires “proactive assertiveness” in the SCS. And the leadership is optimistic about winning a decade-long game for hegemony there. Bonnie Glaser and Deep Pal succinctly outline the thinking behind that approach:

“Beijing’s proactive economic diplomacy [in Southeast Asia] is part of a larger strategy aimed at binding its neighbors in a web of incentives that increase their reliance on China and raise the cost to them of adopting a confrontational policy towards Beijing on territorial disputes. At the same time, China continues to engage in a steady progression of small steps, none of which by itself is a casus belli, to gradually change the status quo in its favor. In the near term, China’s leaders anticipate some resistance. Over time, however, they calculate that their growing leverage will be sufficient to persuade weaker and vulnerable neighbors to accede to Chinese territorial demands.”

Can this strategy succeed? If regional and external players display a lack of political will and coordination to raise the costs for China, it well may. It’s difficult, for instance, to counter Beijing’s tactic of using swarms of fishing vessels backed by heavily-armed coast guard vessels to intimidate weaker neighbors.

But that outcome isn’t inevitable. So far, China hasn’t attempted to use military force to occupy disputed islands, which would be a dramatic escalation. It’s reasonable to assume that Beijing is aware of the significant reputational damage it would incur through such a move. There’s also the risk of unwanted escalation. Contrary to conventional wisdom, states do go to war over territorial disputes that seem devoid of strategic value. The end of strategic ambiguity in the SCS provides China’s neighbors with a clear understanding about its intentions and the need to respond strategically. That response should include both investments in military capabilities (such as maritime domain awareness and asymmetric denial assets), as well as paramilitary, civilian and political tools to raise China’s reputational costs in the event of a major crisis.

It has also encouraged Southeast Asian countries to develop (or revitalize) stronger defense ties with external actors. More than ever, the region looks to the U.S. for strategic support. Sensing the broader challenge to its leadership in the Asia-Pacific, the U.S. has stepped up its rhetoric against China’s ‘nine dash line’ and has intensified its Southeast Asian defense engagement as part of its “rebalance.” China can’t exclude the possibility that attempts to settle the territorial disputes by military force could well draw in the U.S. Moreover, major external Asian powers such as Japan and South Korea now engage in regional defense capacity building, aware that what happens in the South China Sea will matter for maritime Northeast Asia.

Thus, China’s strategic success in the SCS is far from a done deal. Somewhat paradoxically, the end of China’s strategic ambiguity might increase regional stability by forcing all players to signal their intentions more clearly. Greater strategic competition isn’t necessarily a bad thing if it helps to define the parameters of mutual restraint in conflict situations.

What does that all mean for Australia? The Abbott government is on the same page as the U.S. and Southeast Asian nations about the need to manage maritime disputes peacefully. Australia also has a major interest in strengthening Southeast Asia’s strategic resilience against coercion by outside powers. Whilst that doesn’t mean sending warships or fighter aircraft into the region, the ADF should, for instance, offer its expertise in maritime-domain awareness to countries such as the Philippines. Moreover, it should seek to utilize the U.S. alliance more actively as a vehicle for multilateral regional defense engagement. Careful playing of the long game in Southeast Asia must become a priority for Australian strategic and defense policy.

Benjamin Schreer is a senior analyst at ASPI. This article first appeared in ASPI’s The Strategist website here.

Image: Flickr. 

TopicsSecurity RegionsChina

Coming to the South China Sea: Asia’s Big Energy Mistake?

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Editor's Note: Please see Stewart Taggart's previous articles: A Plan to Save the South China Sea from Disaster as well as A Plan to Save the East China Sea from Disaster.

Planned Floating Liquid Natural Gas(FLNG) projects in Asia raise hard questions about the technology’s suitability.These include unproven durability,  questionable efficiencies and
“Tragedy of the Commons” resource exploitation. Regionally-interconnected gas pipelines look like a much better long-term deal.

To date, the largest FLNG project planned for Asia is Shell’s US$12 billion Prelude project off Northwest Australia. Further north, Malaysia’s state-owned Petronas  has approved a two billion cubic meter per year FLNG project for the shallow waters off Malaysian Borneo. Australia’s Woodside Petroleum is studying FLNG for Northwest Australia’s offshore Browse Field. Japan’s Inpex is considering FLNG for its Abadi project in offshore Indonesia. China National Overseas Oil Company (CNOOC) is considering FLNG to develop gas supplies in disputed waters of the South China Sea.

The costs of offshore pipelines and FLNG can be compared by adjusting each for distance to market (in kilometers) and annual capacity (in billion cubic meters). The result is a pipeline or LNG project’s US dollar (US$) cost per billion cubic meters of capacity per year (bcm/yr) per kilometer (km) -- or US$/bcm/km/yr. This allows pipelines and LNG project costs to be compared on a common basis. It excludes inflation.

Shell’s $12 billion, 5 billon cubic meter per year Prelude project will export natural gas compressed into LNG to markets in Japan and South Korea 9,000 kilometers away. That results in an investment cost of roughly US$300,000 bcm/km/yr. By contrast, subsea sections of the proposed Trans-ASEAN Gas Pipeline (TAGP) network range from $100,000-$160,000 bcm/km/yr for the biggest capacity (18 bcm/year) segments of the network, according to the ASEAN Centre for Energy. Smaller capacity (1-3 bcm/year), shorter-distance (100-200 km) subsea segments of the TAGP range from $250,00-500,000 bcm/km/yr. This suggests powerful economies of scale,  a suggestion supported by costs of other gas pipeline projects.

The 2007 North Sea Langeled gas pipeline between Norway and the UK (1,200 kms, 25 bcm/yr) cost roughly $100,000 bcm/km/year while the 2011 Nordstream pipeline connecting Russia to Germany (1,200 kms, 54 bcm/yr) cost roughly $170,000 bcm/km/yr.

In addition to apparent cost advantages, pipeline networks also deliver gas to multiple destinations and can also handle multiple fuels. By contrast, FLNG can only carry natural gas between fixed locations using single-purpose infrastructure -- a huge technological rigidity.

This flexibility of pipelines will become increasingly apparent over time as Asia adopts policies to limit climate change, reduce geopolitical tension and enhance long-term economic growth through deepening regional market integration.

Opposition to FLNG is beginning to emerge. For instance, the use of FLNG to develop Northwest Australia’s offshore gas resources is being opposed by Western Australia Premier Colin Barnett. Barnett believes FLNG short-changes host regions by reducing land-based investment.

China’s CNOOC  is studying FLNG  for developing gas fields in the South China Sea’s disputed waters for just that reason. CNOOC says FLNG avoids any need for regional land-based facilities. Any move by China to deploy FLNG in disputed waters  is certain to raise geopolitical tension, particularly with  the Philippines and Vietnam. These two countries also claim areas of the South China Sea likely to be targeted CNOOC.

The result is that FLNG could create a “Tragedy of the Commons.”

This occurs when unsettled resource property rights lead to conflict because ambiguous property rights favor “first movers” who, in turn, have no incentive to develop the resource sustainably. Instead, “first movers” have every incentive to develop the resource rapaciously, since waiting may require sharing it.   

A first step in this direction occurred earlier this year when China placed an exploratory rig in waters claimed by Vietnam, a move that sparked violent anti-Chinese protests in Vietnam.

In both the South China Sea and Australia’s Northwest Shelf, large new gas supplies will be developed in coming decades. These are going to require large capital investment better directed to multi-purpose pipelines. In Australia’s Northwest Shelf a gas pipeline would enable aggregration of onshore and offshore natural gas supplies for delivery to Northeast Asia. This would create economies of scale for construction of a large, common-carrier, open-access natural gas pipeline system. This pipeline system could later offer a route to market for Timor Sea and Eastern Indonesian gas supplies. In the South China Sea, meanwhile, Joint Development Areas shared by China and her Southeast Asian neighbors could link into this larger, regional common-carrier, open-access gas delivery network. Both China and her neighbors already voiced support for Joint Development Areas as one way to peacefully manage conflicting territorial claims.

In coming years, Asia and the world must make a transition to cleaner forms of energy. This requires long-term thinking and investment of trillions of dollars in new infrastructure. Subsea pipelines represent a long-term solution. FLNG, by contrast, looks like an example of short-term thinking that costs more in the long run.

Stewart Taggart is principal of Grenatec, a research organization studying the viability of a Pan-Asian Energy Infrastructure of high-capacity power lines, natural gas pipelines and fiber optic cables stretching from Australia to China, Japan and South Korea.

TopicsEnergy RegionsChina

What China and America Are Wondering: Is "Major War" Obsolete?

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August has seen a wave of reflection on major war. It’s a question we seem to revisit every time the key anniversaries of WWI and WWII roll around, but given special significance this year by the 100th anniversary of the outbreak of WWI. Some pundits are keen to draw parallels between 1914 and 2014—though on its face it’s not apparent to me why 2014 should be more like 1914 than 2013.

Academic strategists familiar with their disciplinary history will know that the issue of whether major war is obsolete received a detailed coverage back in Survival magazine in the late 1990s. To save readers the trouble of digging through their archives, one contributor, John Mueller, argued that it was obsolete—gone the way of slavery and dueling—while others wrestled partly over how to define obsolescence and even more over how to define major war. Was the Vietnam War "major"? Was the Cold War a "war"? Michael Mandelbaum argued that perhaps major war was just a poor policy option nowadays—because of the steep rise in the costs and the thin rewards for success.

It’s intriguing that the question about the obsolescence of war is typically qualified by the adjective "major." No one seems particularly keen to claim that nasty little wars—in particular, nasty little wars in faraway places—are obsolete, perhaps because they patently aren’t. From memory, Mueller didn’t want to call those conflicts ‘wars’, though; he saw those more as “opportunistic predation.” (That’s the reason the cover of his book, The Remnants of War, features an image—from the Balkan conflict in 1991—of a thug swigging from a bottle.)

9/11 came along and sideswiped that whole debate. The nasty little wars of the 1990s didn’t stay in faraway places. A superpower got up and marched off to war—albeit a war against al Qaeda, its supporters, and all its works. Somewhere along the line the mission became conflated with a host of other problems, and Washington ended up obsessing about the Global War on Terror for longer than it probably should have done. But Washington’s behavior at least answered one question related to the Big One: did great powers still go to war? Yes. Now, the question still unanswered—unanswered since 1945 if you think major war has to be hot; unanswered since 1991, if you think major war can be cold—is whether or not major powers still go to war with each other.

Psychologist Steven Pinker has recently argued that the better angels of our nature are making us turn away from violence. I’m not wholly convinced by his argument—the better angels of our nature seem pretty militant to me, and always have been. (See Ephesians, 6:12.) But academic research from a few decades back suggests that great-power wars against each other aren’t common. Jack Levy in his research on war in the international system between 1495 and 1975 found only nine of what he would call “world wars”—wars where almost all great powers were involved. Much more commonly, he found “interstate wars”—113 of which engaged a great power. I cite those figures to underline two points. First, if world wars are rare, maybe we don’t need special explanations to say why there hasn’t been one since 1945 (hot) or 1991 (cold). Second, that definition of major war is still a problem.

Let’s put aside the academic arguments and look straight at the case that most worries. Is a great-power war between US and China possible? I think we could answer that question directly:possible, yeslikely, no. Great powers, especially nuclear-armed ones, don’t go to war with each other lightly. But sometimes wars happen. And they aren’t accidents. They’re about international order. They’re about, as Raymond Aron said, the life and death of states. And the principal reason for fighting them is that not doing so looks like a worse alternative.

Moreover, the paths to war—including rare major-power war—are not reserved solely for conventionally-armed states. Where both powers are nuclear-armed we should expect a conflict, even one at the lower rungs of the escalation ladder, to be fought with a high degree of political control, and an understanding that the objectives of the conflict are limited. Naturally, it would help if both sides shared a common understanding of where the firebreaks were between conventional and nuclear conflict, and already had in place a set of crisis-management procedures, but it’s possible that neither of those conditions might exist. (Neither would prevent a war, but both would provide a better sense of the likely escalation dynamics of a particular conflict.) Indeed, it’s because major war is possible that we retain such a keen interest in war termination. Unconstrained escalation doesn’t lead to a happy place.

Rod Lyon is a fellow at ASPI and executive editor of The Strategist where this first appeared

Image: U.S. Air Force Flickr. 

TopicsSecurity RegionsUnited States

Moving Past "Potential": Can America and India Become Real Partners?

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The US-India strategic partnership is either the most under-performing bilateral relationship in the world or its most overrated.

As a new chapter in this relationship is written with the ascent of a center-right government in New Delhi (whose earlier incarnation in the late-1990s had in fact proclaimed the US and India to be 'natural allies'), the aura of hyperbole that permeates ties needs to be shed. Equally, with John Kerry and Chuck Hagel having journeyed through New Delhi over the past fortnight with proposals to deepen defense cooperation, and with Prime Minister Narendra Modi due at the White House in late-September, the conceptual gap in value systems and national interests that has provoked this under-performance needs to be internalized. Another decade-and-a-half of inflated expectations and modest delivery in terms of strategic congruence would be a tragic waste. It would also detract from both countries' pursuit of a fundamental interest that aligns their purposes in the Indo-Pacific: the maintenance of a stable geopolitical equilibrium.  

With the passing of the bipolar international order and India's own shift toward market economics, it was assumed that the traditional commonality of democratic values, complemented by an increasingly robust set of inter-societal ties, would accentuate a dramatic convergence of national interests between the two countries. Washington and New Delhi were to be bound by a common interest in preventing Asia from being dominated by China, eliminating threats posed by international terrorism as well as by state sponsors of terrorism, arresting the spread of weapons of mass destruction, promoting the spread of liberal democracy, deepening expansion of the international economic and trading order, and securing the global commons, especially the sea lines of communication.

Aside from a growing convergence on proliferation-related interests, little of this bold agenda has come to pass or is set to materialize in the years ahead. China-India ties have witnessed more top-level political and defense ministerial exchanges over the past couple of years than between the US and India; the road to AfPak stabilization and troop drawdown runs unchanged through Rawalpindi; Washington, DC and New Delhi occupy opposite poles at practically every multilateral trade, economic, and environment negotiation; India's non-prescriptive practice of democracy enlargement and non bloc-based approach to securing the commons contrasts with America's more advocacy-based and a la carte prone model. If anything, the gap between the two countries' worldviews and policies on international and regional matters has widened.

In the afterglow of the US-India civil nuclear agreement, a narrower but seemingly more congruent set of geo-strategic and defense objectives was also envisioned. First, New Delhi would assist Washington in curbing Iran's nuclear ambitions. Second, New Delhi would align with the major maritime democracies of the Indo-Pacific and countervail Chinese power. The veiled possibility of interdicting Chinese sea-bound commerce in the narrow Andaman Sea during an East Asian contingency was a closely-held card. Third, India would cooperate in HA/DR missions and post-conflict reconstruction efforts, including those not mandated or commanded under a UN flag, on both sides of the Indian Ocean. And, fourth, India would provide access at strategic locations across its territory to US military forces - perhaps even 'over-the-horizon' rotational bases, down the line, to deter or manage contingencies in West and East Asia.

Again, aside from gradual cooperation on Iran oil sanctions, little of this ambition has come to pass. Far from growing into its designated role as the US deputy sheriff in the Indian Ocean region (and perhaps someday as a co-partner across the Indo-Pacific region), New Delhi has double downed on its autonomist leanings. It has resisted participating in major multi-service combined exercises that prepare for high-end operational missions, stayed away from stationing personnel at US combatant command headquarters, turned down a series of foundational pacts that would have enhanced logistics and battle-group networking, opted for Russian rather than US high-precision, military-grade navigation signals, opted to strip out tactical interoperability aids (high-end electronics and avionics suites) while purchasing US-origin platforms (P8I and C-130J aircraft), and even allegedly passed up the opportunity to buy a to-be decommissioned supercarrier - the USS Kitty Hawk - for free! (so long as New Delhi agreed to purchase five dozen or so Super Hornet fighters to be operated off the carrier). Defense ties with Japan and Australia too have been limited to the odd naval exercise, with little scope for logistics sharing or information exchange envisaged.

Some $15 billion of US defense hardware sales - not doctrine-sharing exchanges, harmonized force postures or command and control systems integration - has been the sole deliverable for all the exertions. The failure has not been one of effort (or will); rather it has been one of conception.

The disappointments have not tempered the belief of the faithful. Undaunted, it is argued that with the departure of the previous government and its long-serving, proto-socialist defense minister, US and India defense - and particularly mil-mil ties - stand poised to once again break out of policy stagnation.

Washington and New Delhi, it is counseled, should reauthorize and update their 2005 Defense Framework agreement (which they indeed must) to enable collaboration in multinational operations of common interest. The Indian Navy has possessed this latitude to participate in such muscular activities, yet chose to operate its anti-piracy missions in the Indian Ocean region independent of the US-organized Combined Maritime Forces command. Washington should place military intelligence exchanges on the front-burner and formalize institutional links to share classified information on the region. Navy-to-navy intelligence exchange was a key accomplishment of the 2005 Defense Framework agreement, yet the channel lapsed by the end of the decade due to disclosure policy guidelines that limited sharing of actionable or desirable information.

Washington should deepen service-to-service engagements and incorporate service chiefs and regional commanders within institutionalized policy mechanisms, given the military's visibly friendlier interest in such ties. While civilian masters in the Indian Defense Ministry's planning and international cooperation wing have been a rotten impediment, the roots of New Delhi's civil-military dysfunction in fact stem from the unwillingness of senior uniformed folks to shed their operational command profile and assume a policy advisory role. A unified services command and an integrated civil-military MoD is nowhere in sight. Finally, Washington should use the recent DTI initiative (defense trade initiative in the US, defense technology initiative for New Delhi) to graduate the defense sales relationship beyond the buyer-seller model to one of co-development and co-production. Again, while unimpeachable in intent, New Delhi's expansive definition of technology sharing tends to be confined not just to technology itself but the entire know-how behind how a technology is produced, including systems integration and the overall intellectual capital development. The Initiative also risks being oversold in both capitals: it elevates India to one among three-dozen defense partners in terms of preferential categorization - not one among a half-dozen or so such countries as has been advertised.

At bottom, operating in denial of past lessons risks repeating those errors.

In important respects, the questions that went unanswered 15 years ago remain valid today: what is the template by which one operationalizes a defense and strategic partnership with a critically important country that will never be a treaty ally (and is the primary antagonist of a 'non-NATO ally' - Pakistan), yet is more than just a friendly, non-hostile state? Can enhanced defense cooperation and technology handouts infuse a strategic congruence or must the causality run the other way? If technology sharing boosts India's autonomous defense capability, then does it not detract from the fundamental purpose of deepening 'jointness'? If New Delhi, of its own accord, bears a larger share of the region's security burden, what is its imperative to simultaneously tighten its roles and missions 'jointness' with US forces in the region?  

The bestowal of an incredibly generous civil nuclear deal as well as the mainstreaming of New Delhi within the international technology-sharing regime, at a moment of US primacy, did not furnish the desired answer to these questions. In the more constrained age ahead, it is not clear why New Delhi's strategic calculation vis-à-vis the US will be any more favorable now. Although China's rise and behavior could supply this rationale, Beijing is a key pivot in India's multi-aligned foreign policy strategy and successive governments in New Delhi have seen greater wisdom in operating in the slipstream of Beijing's meteoric rise than by aligning against it. New Delhi appears to defer to the core interests, principles, and (economic) content laid out in the Xi Jinping government's 'new type of great power relations' and periphery diplomacy initiatives than most other governments in the Indo-Pacific. That most observers continue to implicitly - and lazily - base the 'natural' convergence of US and Indian interest in Asia on the belief that China and India are irrevocably locked in strategic competition may, to the contrary, provide a hint as to why Washington's relationship with New Delhi has serially fallen short of expectations.

The future of US-India strategic ties is too important to be constructed solely or even primarily through a China-management lens. The defense cooperation elements within this relationship - joint exercises, intelligence exchange, arms deals, technology-sharing, weapons co-development and co-production, etc. - should be constructed rather on more modest but firmer foundations that are geared to nudging the Indo-Pacific region's multilateral security relations toward a more consociational model of international relations where power is shared and balanced within. Embracing and working through the balance between autonomy and alignment in the US-India strategic partnership will also lock the two countries in a strategic embrace that will favor freedom in the long run.

Sourabh Gupta is a senior research associate at Samuels International Associates, Inc. This article first appeared in CSIS:PACNET newsletter here

Image: U.S. State Department Flickr. 

TopicsSecurity RegionsIndia

Guess Where This Hawkish Group Thinks Iran's Nuclear Sites Are

The Buzz

It’s probably the most famous attack ad in American history. A little girl stands in a meadow, plucking the petals off a daisy, counting each one—getting a few numbers wrong on the way—up to ten. Then the piercing tannoy voice comes in, counts down. Zero. Flash. Mushroom cloud. “These are the stakes!” proclaims the voiceover. “To make a world in which all of God's children can live, or to go into the dark. We must either love each other, or we must die. Vote for President Johnson on November 3rd. The stakes are too high for you to stay home.”

The ad was part of a broader effort by the Johnson campaign to paint Republican challenger Barry Goldwater as a reckless hawk who would lead America into a horrific confrontation with the Soviets. Johnson went on to hammer Goldwater—the Arizona senator would only capture six states and less than 40 percent of the national vote.

Now LBJ’s ad is getting a reprise. Secure America Now, a Washington-based 501(c)(4) advocacy outfit. The ad, “Daisy 2,” targets the Obama administration’s handling of Iran’s nuclear program. The new voiceover: “These are the stakes. We either stand up to supporters of terrorism, or we and our allies risk losing the freedom we cherish. We must not let the jihadist government of Iran get a nuclear bomb. President Obama has an opportunity to stop it. But he is failing. Join with us. Let's secure America—now.”

The video directs viewers into a net of “microsites,” including TruthAboutIran.com and IransIllegalNuclearProgram.com, in addition to Secure America Now’s homepage. TruthAboutIran.com focuses on the Iranian government’s support for terrorism and the not-cuddliness of President Hassan Rouhani; Secure America Now’s site offers an animated GIF-listicle of “Thirteen Reasons to Impeach Barack Obama.” But it’s the Iran’s Illegal Nuclear Program page that takes the cake, thanks to this map of Iran’s nuclear sites:

The map offers an interesting interpretation of Iran’s geography. The seminary-city of Qom, normally south of Tehran, is taking a vacation north of Tehran in the mountains near the Caspian; the massive underground enrichment halls at Natanz have wandered off into the deserts to their northeast. We find Arak, home to a heavy-water reactor under construction, and Isfahan, with its uranium conversion facility, close to where we left them, but the pressurized-water reactor at Bushehr, having been foolishly constructed on a fault line, has shifted inland and to the southeast. (This has likely caused an environmental disaster.) The uranium mine north of Yazd, once in an area due west of the Saghand mine, is now southwest of it, possibly inside Yazd itself.

This is a bold alternative to the mainstream media’s rigid narrative of where all those places are:

IransIllegalNuclearProgram.com offers other revelations, too. The ongoing nuclear negotiations, which conventional sources suggest will end on November 24, actually ended on July 20, according to the site:

And Russia’s ten-year agreement to fuel the Bushehr reactor becomes “unsettling,” though most would agree that guaranteeing Iran’s fuel supply from Russia would weaken Iran’s claim that it needs to conduct enrichment on its own and strengthen America’s case for zero enrichment—and thus actually make America more secure.

It’s not surprising, then, that this group would revive an attack ad that sought to portray a presidential contender as dangerously eager for confrontation to attack a president for being too soft. Secure America Now’s ad hints that Obama “has an opportunity to stop” Iran’s nuclear efforts. But they say that his current approach “is failing.” So what alternative policy would they have us pursue? Perhaps they would like us to bomb Iran’s nuclear facilities. If that’s so, our pilots should use different maps to find their targets.

TopicsNuclear WeaponsNuclear ProliferationDomestic Politics RegionsIran

Tensions in Asia are Rising: How Strong is the U.S.- Australia Relationship?

The Buzz

With the annual Australia–US Ministerial Consultations (AUSMIN) recently concluded in Sydney, it’s a good time to reassess the broader Australian–US strategic relationship. I want to frame that assessment here by employing a SWOT analysis. The methodology is clunky but simple enough to allow a set of insights about the relationship’s strengths, weaknesses, opportunities and threats. I’ve allowed myself three of each, as follows.

Three strengths: familial closeness, shared grand strategies, and a solid foundation. First, closeness. The Anglosphere’s our international family, and while it’s easy to mock the importance of belonging to an international family, states that don’t belong to one (like Japan) would beg to differ. Ties of blood and culture run deep. Second, grand strategy: the best long-term allies are those who essentially want the same thing. In grand strategy, Washington and Canberra both want a stable, liberal, prosperous global order. And that’s a good basis for long-term cooperation—because the tie isn’t just of blood but of interest. Third, the foundation: we both enjoy an alliance that’s over 60 years old and is as close today as it’s ever been. Both allies are still looking for new ways to cooperate in order to make the alliance more relevant to the 21st century.

Three weaknesses: time, place, and strategic personalities. After the Global War on Terror the U.S. is a weary Titan. That effect might last another five to ten years, but—over the longer haul—U.S. vigor will wax as well as wane. There’s a second, longer-term “time” factor, and that relates to the broader pattern of regional transformation: while the US rebalance to Asia is good, Washington’s rebalancing at a time when Western influence in the region is slipping because of the rise of regional great powers. Second is geography. At the best of times, Australia’s not Washington’s top priority—geographically we sit too far back from a strategic order essentially built along the Eurasian rim lands. True, the shift of strategic weight in Asia is changing that, to some degree—but we’re never going to be as relevant as front-line U.S. partners. Finally, personalities: the U.S. and Australia are two different strategic personality types: Americans are Extroverted, Intuitive and Feeling; Australians are Extroverted, Sensing and Thinking. In short, we‘re British empiricists, they’re the City on the Hill. There’s a messianic core to U.S. strategic policy that isn’t replicated in ours.

Three opportunities: a more receptive Asia, a U.S. more interested in Southeast Asia, a treaty with an in-built capacity to engage. Evidence of the more receptive Asia abounds. Regional countries want to do more with both the US and Australia. Japan’s the obvious example, but others aren’t as far behind as some think. It wasn’t always thus: remember, we couldn’t do much more with Japan before Abe, nor much more with Indonesia before SBY. A second opportunity, a shifting U.S. perception of Southeast Asia. Washington has traditionally seen that sub region as a set of sea-lanes, and after 9/11 as a possible second front in the War on Terror, but it’s finally coming to see it as a set of influential players at the intersection of two key oceans. Third, both the U.S. and Australia are classic networkers. And the ANZUS treaty already gives them scope (in the unused Article 8) to do more networking together in the regional context. I’m amazed we aren’t doing it.

Three threats: complacency, category mistake, and distraction. Let’s start with complacency, because that’s the most insidious threat to the relationship. There’s something of a danger on both sides of the Pacific that capitals will treat the relationship as “business-as-usual.” Oddly, the simple regularity of AUSMIN actually increases that danger, reducing high-level political commitment to the alliance to an annual ministerial meeting. We need to work to sustain a broader base of political engagement. Second, the threat of the category mistake: that we come to see ANZUS as a barrier to our closer engagement with Asia, rather than an enabler of such engagement. It’s a simple mistake to slip into, and it typically follows from seeing ANZUS as a strategic hangover from a different era. And finally, there’s the threat of distraction. Distraction can come to both capitals from a range of sources. Washington can easily be distracted by more urgent priorities, both domestic and international; but so too can Canberra. Despite the excitable tones in which the future of our strategic partnership with the U.S. is sometimes debated, the real threat isn’t that our relationship will be ruined by disastrous war, nor even that it’ll be traded away to accommodate China: it’s that the relationship will be eaten out from the inside, leaving a hollow, reactive partnership in the place of a substantive, proactive one.

Rod Lyon is a fellow at ASPI and executive editor of The Strategist, where this article first appeared here

Image: U.S. Sec. of State (Flickr) 

TopicsSecurity RegionsUnited States

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