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A Plan to Save the East China Sea from Disaster

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Editor's Note: Please see Stewart Taggart's previous article - A Plan to Save the South China Sea from Disaster. 

Disputed islands. Air identification zones. Incidents at sea. Arguments over history. These ongoing headlines obscure the real challenges of the East China Sea. These include increasing energy security, limiting climate change and enhancing economic prosperity.

But there could be a way to move towards a resolution (see the graph above). The model here is the Internet.

In the past 25 years, the Internet has dissolved borders, increased trade and spawned innovation in every field. In the next 25 years, an ‘Internet of Energy’ can link Northeast Asia’s neighboring economies -- creating powerful new constituencies for diplomatic stability.

Amid all the claims to water, sky and rocks in the East China Sea, we don’t hear similar claims being to the subsea fiber optic cables. The South China Sea and East China Sea now host two of the densest meshes of sea-bottom fiber optic cables anywhere in the world. These now generate more economic wealth each day than any stretch of open water or uninhabited rock ever will.

This, of course, underscores the large gains to be had from multilateral, ‘positive sum’ thinking.

China, Japan and South Korea have a collective annual economic output roughly $16 trillion -- or about one quarter of global GDP. Interconnecting their power grid, gas pipeline and fiber optic systems across the East China Sea makes more sense than anywhere else in Asia.

In the East China Sea, a gas pipeline already stretches halfway from China to Japan. It connects Shanghai to the Pinghu Field. This means both fiber optics and natural gas pipelines already extend halfway across the South China Sea between China and Japan. Power lines could follow, using Chinese HVDC technology. A number of proposals already have been along these lines.

One possible topology would be to lay the infrastructure along the geographic ‘median line’ equidistant from each country’s mainland shorelines. This line already has been used by China, Japan and South Korea to agree on the boundaries of two Joint Development Areas. To date, unfortunately, neither has developed very far.

Progress on the China-Japan JDA stopped in late 2010 after a collision between a Chinese fishing boat and a Japanese Coast Guard vessel. Meanwhile, progress on Japan and South Korea’s JDA has been slowed by mistrust. But these should be surmountable if the prize is wealth-creating economic growth in which all share.

Meshing China’s infrastructure-building expertise with Japanese advanced technology and South Korean selective excellence in areas like tidal energy can create a winning situation all around. This is particularly so given the expansion of funding entities for future infrastructure investment. These range from China’s proposed Asian Infrastructure Investment Bank, the so-called BRICS Bank, and the South Korea-based Green Climate Fund. Multilateral meetings later this year in Asia such as APEC and the G20, also offer opportunity.

Finally, Joint Development Areas provide an avenue for China’s, South Korea’s and Japan’s navies to work more closely together on collective security initiatives that could reduce territorial tensions.

Examples of this include joint East China Sea drills held by Japan and South Korea late last year, China’s recent participation in multilateral naval exercises off Hawaii, and plans for US, Chinese and Australian soldiers to participate in joint maneuvers in October in Northern Australia.

Applying this model to the East China Sea, the navies of China, Japan and South Korea could cooperate in providing security to key subsea and surface infrastructure. This could be done by dispatching ships as needed from Shanghai as well as South Korea’s Pusan naval base and Japan’s Sasebo naval base in Fukuoka.

An example of the benefits of such cooperation occurred after the devastating 2011 Fukushima earthquake. This damaged important subsea-fiber optic cables off Japan that carried data from Asia to North America were severed off Japan. A regionally-based telecommunications salvage vessel dispatched out of Shanghai repaired the cable. The same model could apply to energy infrastructure.

All of this points to the powerful economic impetus created by networks, and the potential they have to encourage growth, battle climate change and reduce tension. What’s needed now is to mesh this vision into those for investing in infrastructure and economic reform.

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.

TopicsEast China Sea RegionsChina

Don’t Underestimate Putin’s Ambitions in Ukraine—Instead, Shape Them

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What are Vladimir Putin’s intentions towards Ukraine?  Is the Russian leader bent on annexing eastern portions of the country, or are his ambitions much more limited than his most ardent critics—including hawks in Washington—would suggest?  More to the point, how should leaders in western capitals respond to what they believe is being planned in Moscow?

There are those who believe that Putin’s goals in Eastern Europe are relatively circumscribed.  Harvard’s Stephen Walt, for example, recently posted on Twitter to ask whether there was any “hard evidence” that Putin wants anything more than to prevent Ukraine from drifting (further) into the orbit of the west.  Although posed as a “serious question,” Walt’s subsequent tweets seem to clarify that his true intention was to cast doubt upon the notion that Moscow is acting upon expansive revisionist designs.  “Don’t believe the hawks,” Walt was essentially saying.

Walt, of course, is a defensive realist.  His theory of international politics holds that states tend to want to preserve a balance of power between themselves and their adversaries.  As such, leaders usually keep a lid on the extent of their geopolitical ambition.  To do otherwise would be to risk incurring the negative repercussions of strategic overreach.  For Walt and others of his genre, offense is not always the best form of defense in the long run.

Like any good theory, Walt’s brand of realism makes some valuable contributions to our understanding of world politics—cautioning against exaggerating the threat posed by Russia and implying a set of policies that might be implemented to manage the geopolitical fallout of Putin’s meddling (as well highlighting the policies that ought to be avoided).  Yet no analytic perspective is without its costs; each obscures certain facets of reality even as it usefully brings others into sharp focus.

The drawback of presuming until proven otherwise that Putin harbors limited ambitions towards Ukraine is that such a presumption risks over-estimating the importance of leaders’ long-term intentions.  Even the best laid schemes in world politics rarely pan out as intended.  Events, both domestic and international, intervene to throw diplomacy into disarray and to present leaders with opportunity structures that they are ill prepared to navigate.  This inherent unpredictability of international relations has been markedly evident in Putin’s recent foreign policy moves.

Indeed, if Putin’s long-term intentions truly translated into foreign policy outcomes via anything even approximating a perfect conveyor belt then the current crisis in Ukraine would never even have materialized; Kiev never would have been allowed to entertain closer relations with the EU and NATO in the first place because Russia would years ago have nipped the attempted realignment in the bud.  Nor does it appear credible that Putin nurtured plans to annex Crimea before the opportunity presented itself in February-March of this year; that he ultimately decided to do so is not so much evidence of Putin’s long-term calculations as it is of ruthless pragmatism on his part.  In short, Putin is responding to events as well as playing a decisive role in shaping them.

While Walt and others may be right that Putin currently has no particular design on eastern Ukraine, then, it is important to recognize the limits of such a presumption.  If the present crisis has demonstrated anything about what drives foreign policy, it has shown that leaders respond to short-term factors and exigencies as much as (if not more than) they adhere to long-term strategic plans.  Like any self-interested political leader, Putin can be expected to devour low-hanging fruit and exploit opportunities as they present themselves, even if for no other reason than to improve his bargaining position vis-à-vis his detractors on the world stage.  It would thus be wrong to assume that Crimea was a one-off.

Putin’s intentions towards Ukraine are not fixed.  Politics, after all, is the art of the possible.  As the realm of possibility facing Putin expands and contracts, so too will his political ambition wax and wane.  The challenge for western leaders is to influence, even if not entirely manage, the extent of that ambition—not merely to gain an estimation of it.

Image: Office of the President, Russian Federation. 

TopicsRussia

Why Asia (and the World) Should be Worried: The Death of the Great Bargain

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In 1972, Nixon and Mao met in Beijing to begin the Great Asia Bargain. Nixon called it the week that changed the world. The Republican and the Revolutionary ushered in a glorious period.

Almost as an aside—a prelude to the geopolitical plotting—they launched an economic engagement that turned China into the phenomenon of the modern age. As the man who took the U.S. dollar off the gold standard, Nixon started a process that will see the Yuan become a global currency to equal the greenback. Talk about unintended consequences. And that was just an aside.

Look back at what Mao and Nixon wrought because of what Shinzo Abe’s is now doing. Making Japan a security power—even claiming Japan’s right to be a “superpower”—marks the demise of an important residual element of the Bargain.

Of course, much else disappeared long ago. The central driver of the Bargain was the primary threat from the Soviet Union. For both leaders, Russia was the number one danger. Kissinger judged that following military clashes along the Soviet–China border, Beijing moved beyond ideology to deal with the U.S. “Their peril had established the absolute primacy of geopolitics. They were in effect freeing one front by a tacit nonaggression treaty with us.” With that tacit treaty, China was aiming to use “one set of barbarians to balance another.”

Today China and the U.S. see each other as their greatest threat, the binary reality rendering the Bargain an artifact of history. Even so, as with the economic deal, security elements of the Bargain have continuing effects, often of major importance. Losing those lingering security deals after four decades tells us how much uncertainty now envelops Asia.

Beyond China–U.S. national self-interest, the Bargain rested on understandings about U.S. interests in Taiwan, Japan, and South Korea. The explicit understanding on South Korea also carried implications for what China would do to restrain North Korea—another area where the Bargain failed long ago.

Mao assured Nixon that Taiwan was not an important issue and China could show patience about its return to the motherland. Kissinger quoted Mao: “We can do without them [Taiwan] for the time being, and let it come after 100 years.” For all the push and shove since, that promise holds.

That long view on Taiwan was linked to acceptance of the U.S. alliance with Japan and a particular understanding of how the alliance should work. Kissinger quoted this from Mao: “Japan must not feel neglected by the U.S.; Japan was inherently insecure and sensitive. He would see to it that China did not force Tokyo to choose between the U.S. and China. That might polarize; it would surely enhance Japanese insecurity and might give rise to traditional nationalism.”

Kissinger wrote that China came to accept America’s argument that the U.S. alliance with Japan should be viewed “as a guarantee of America’s continued interest in the Western Pacific and a rein on Japanese unilateralism.”

The military balance in the Bargain was elegant. The U.S. would keep its troops in Japan to maintain a firm foot on Japan’s neck. China’s former occupier was not to return to any form of assertive nationalism, much less military power.

If Washington was to maintain boundaries on Japan, then Beijing should do the same to North Korea. Allowing North Korea to go nuclear rates as a major breach of Mao’s undertaking not to disturb Japan or South Korea.

All this is context for Japan’s Defense Minister, Itsunori Onodera, arguing Japan is more than just back. Japan, he says, is “drastically moving its security policy forward: because of “severe challenges” to Asia’s security order. Expanding defense cooperation with the U.S., Australia and Southeast Asia is normal: “It is natural for a great power like Japan to play a responsible role for the region based on the significance of the area and the increasingly acute regional security environment.”

That “great power” line led the Wall Street Journal to ponder Japan’s identity confusion and whether it is, indeed, a great power. The fascination in the piece was the link to Amy King’s analysis of Chinese writings, showing that Beijing certainly does not view Japan as a great power; that Great Bargain effect persists in Beijing, even if the U.S. and Japan have ditched it.

Asia has long outgrown the Bargain bequeathed by Mao and Nixon; I was going to say blessed rather than bequeathed, but that confers too much grace on a hard-eyed geopolitical compact. If the Republican and the Revolutionary—a pro and a tyrant—could do the deal, their successors should be as competent and as ambitious in seeking a new power-sharing order in Asia or a new responsibility-sharing order.​

Graeme Dobell is the ASPI journalist fellow. This article originally appeared in ASPI’s The Strategist website here.

Image: U.S. Navy Flickr. 

TopicsSecurity RegionsChina

Will Hamas Accept a Ceasefire?

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Nearly 800 Palestinian killed; 36 Israelis (the vast majority soldiers) lost in the line of fire; an estimated 150,000 Palestinian civilians in the Gaza Strip scurrying to safer places in order to protect themselves and their families from the fighting; hundreds of homes and buildings destroyed in strikes from the Israeli air force.  Operation Protective Edge, the code name for Israel’s latest military operation against Hamas militants in the sealed-off enclave, is now in its second week of combat.

As of July 24, those are the raw numbers—a set of disturbing figures that will continue to go up if Israeli and Palestinian factions are unable to arrive at an arrangement that would calm the waters, stop the rockets from flying, and cease the pounding that has pummeled Gaza’s already terrible infrastructure for the past two and a half weeks. 

After nineteen months in the job, Secretary of State John Kerry has guaranteed himself the label of the planet’s most famous, recognizable, and tireless negotiator.  The discussions over Iran’s nuclear and uranium enrichment programs, Syria’s chemical weapons arsenal, Ukraine’s war against pro-Russian separatists, and the attempt to arrive at an Israeli-Palestinian peace agreement, however different they may appear, have one thing in common: Kerry is the middle of all of them.  The flare-up in violence between Hamas and Israel, however, has stretched Secretary Kerry and the Obama administration’s national security team to a breaking point.  Right now, getting the quiet restored along the Gaza-Israel border—and saving countless Israeli and Palestinian lives in the process—is a foreign policy priority at the very top of the administration’s “to-do” list.

John Kerry and his State Department team have been camped in the region since July 21 and are doing as much as they can to send home the message to Israel and Hamas that a cessation of hostilities is in both of their best interests.  John McCain, Lindsey Graham, Elliot Abrams, and the folks at the American Enterprise Institute may like to remind him of his failures over the past year and a half as America’s top diplomat, but what the critics cannot do is call Kerry passé or lazy.  Indeed, just as he sought earlier in the year to create and push forth a two-state framework that both Israel and the Palestinian Authority could accept (with reservations), Kerry is again choosing to sacrifice more of his diplomatic capital on the Israel/Palestine portfolio.  The only difference this time is that his efforts today are far more immediate and could be the difference between life and death for the tens of thousands of civilians in the middle of the conflict through no fault of their own.

The United States, of course, is not the only powerbroker in these ceasefire discussions.  Qatar, Turkey, the Palestinian Authority, Egypt, the Arab League, and the European Union are all involved and each party is talking with the other for precisely the same objective: a full and immediate stop to the violence.  Qatar and Turkey, two countries that have the best relations with the Muslim Brotherhood to which Hamas is technically a part, will be crucial in getting Khaled Meshal to sign on any dotted line.  The U.S. and Europe will serve the same function for the Israelis.  The Arab League, the United Nations, and Egypt are important as well: for any ceasefire to stick, it will be vital for all three of these actors to endorse the accord in full and provide guarantees that longer-term issues—a loosening of Israeli restrictions in Gaza, demilitarization of the territory, the opening of the Gaza’s borders, post-war economic reconstruction, international investment, political reform, etc.—are addressed to the fullest extent possible.

It reports are accurate that Secretary Kerry has drafted a new ceasefire proposal, the war that has filled the world’s television screens and newspapers for the past two and a half weeks is now at its most dramatic point.  An acceptance to the proposal could pave the way for a difficult but much needed discussion on the grievances that have driven Gaza into war three times over the past five years.  A rejection by Hamas, on the other hand, could persuade Israeli Prime Minister Benjamin Netanyahu and his security cabinet that expanding the Gaza ground operation, deploying more troops into the field, and setting more ambitious goals for the campaign is the only way to deal Hamas a heavy blow over the long-term. 

The onus is on Hamas.  John Kerry and the rest of the international community hopes that the group will wise up and make the right decision.

Image Credit: Israeli Defense Forces/Flickr.    

TopicsHamas

Westphalia with Chinese Characteristics

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What will be the future implications of China’s rise in power?  The towering political scientist Stephen Krasner has produced a lucid synopsis for the Hoover Institution.  One of the biggest take-away points is that the organization of global governance stands to undergo a significant overhaul if Beijing’s capabilities continue to expand vis-à-vis the United States.

In terms of the international economic order, Krasner notes that:

“[t]he existing trade and investment regimes more or less assume that corporations are independent of the state; this assumption is comfortable for the United States. It is not so comfortable for China: a more powerful China might press for principles, norms, and rules that were more accepting of state direction of the economy.”

It warrants pointing out that China’s preferences for statism in economic affairs are not simply because of its communist leadership.  Rather, developing economies in general tend to rely upon government intervention for growth.  This was true of the so-called Asian Tigers in the 1970s and is certainly true of China and the other BRICS nations today, all of which blend an appreciation for markets with a dyed in the wool commitment to a form of dirigisme.

The difference between the newly industrialized countries (NICs) of the 1970s and the BRICS of today, of course, is that the latter entertain hopes of refashioning the international economic architecture to better suit their particular interests.  Hong Kong, Singapore, South Korea and Taiwan never aspired to global leadership.  Whether the BRICS will succeed in their bid any time soon is far from certain; as yet, the BRICS lack the cohesion, the will and the means actually to lead a new global order.  Nevertheless, their dissatisfaction and rise in power do combine to produce a long-term potential threat to the western-made status quo.

China’s rise might also portend implications for how states engage with each other politically and diplomatically.  “China’s internal divisions make it one of the strongest proponents of the sanctity of sovereigntist principles that totally reject external interference in the internal affairs of other states,” Krasner points out. “The United States as a proponent of human rights, and as target for transnational terrorist, has a much weaker commitment to non-intervention.”

There is some irony to this mismatch in attitudes.  Sovereignty, territorial integrity and non-intervention are the cornerstones of the Westphalian system, a model of international relations that emphasizes the centrality of state actors to global politics and which is supposed the epitomize the western approach to international organization.  Yet Krasner is correct that the U.S. and Europe have been at the forefront of enervating Westphalia over the past several decades while China has emerged as a champion of Westphalian principles.

Just as the Westphalian ideal has been at times convenient for western powers and inconvenient (and ignored) at other times—a system of “organized hypocrisy” in Krasner’s own words—so too are Westphalian norms a valuable (and pliable) resource for China’s leadership.  As Stephen Hopgood argues in his book The Endtimes of Human Rights, the logic of Westphalia affords Beijing a rationale for maintaining authoritarian rule at home and opposing the imposition of western influence abroad (including, recently, in Syria).

Westphalia can also be applied by China to legitimize its actions, at least rhetorically, regarding its various territorial and sovereignty disputes: from Xinjiang and Tibet to Taiwan and the islands of the East and South China Seas.  All of this means that Westphalia can probably be expected to remain firmly in place as a core tenet of international order under Chinese leadership, even if the application of Westphalian norms will look cynical and opportunistic to observers in the west.

If China does reassert sovereignty as an inviolable cornerstone of international organization then it will be a hammer blow to western interventionists on both the right and left.  This is partly what Krasner means when he concludes that “the world would be a very different place than it is now if an autocratic China became the indispensable nation.”

Not everybody in the west would be sad to see a reduction in of overseas interventions, of course, but if it takes Chinese preponderance to curtail the west’s adventurism then this might leave a bitter taste—especially if it comes accompanied by other changes to international order.  An uncertain future impends.

TopicsSecurity RegionsChina

Asia's Next China Worry: Xi Jinping's Growing Power

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Since Mao Zedong died in 1976, power in China has slowly decentralized. Deng Xiaoping’s reforms promoted the lifting of the hand of the state from the economy while ultimate authority within the Chinese Communist Party has become more dispersed. Part of this process is generational: no Chinese leader has enjoyed the authority of either Mao or Deng and in its place collective rule has become the norm.

The ascendance of Xi Jinping to the top position in China has challenged those trajectories. During his short period in office, Xi has brought back executive authority, serving as secretary general of the Chinese Communist Party, president of the PRC, chairman of the Central Military Commission, and as an ex officio member of the Standing Committee of the Politboro. If that resume wasn’t impressive enough, he has also claimed the chairs of two groups established at the Third Plenum of the CCP, held last fall: the National Security Commission and the Central Leading Group for Comprehensively Deepening Reforms. Those gavels go along with the two older Leading Small Groups he also chairs, one on Foreign Affairs and the other on Taiwan Affairs. He is chairing yet another new group to oversee military reform. Observers see Xi’s hand in economic affairs as well, usurping in many ways the role traditionally held by the prime minister. Xinhua reported that he chaired a leading group of financial and economic affairs, and described him as its director, a position usually held by the premier.

This consolidation of power is impressive but Xi’s authority is also being boosted by his anti-corruption campaign. Record numbers of party members – tens of thousands – are being disciplined and prosecuted for misconduct. Senior officials, referred to as “tigers” in the media, are being hunted as well, including senior PLA figures previously thought untouchable. The country waits with baited breath to see if Xi will take down a former Politboro Standing Committee member, a position long considered immune from investigation.

The drive to purge the party of its corruption cancer at its core – and the fear that the initiative is as much aimed at political opponents as corrupt party members – has prompted many bureaucrats and officials to lower their heads and withdraw from decision making in an attempt to ensure that they don’t attract attention. There is a marked increase in suicides among officials. In this environment, such an activist leader can be even more assertive and Xi seems to relish the opportunity.

The desire to centralize authority is also evident in the government’s pursuit of advocates of transparency. Rather than seeing them as erstwhile allies in the anti-corruption effort, the government has gone after them as doggedly as it has corrupt officials. Plainly, Xi wants to retain control of the anti-corruption campaign, in particular who it targets.

This is consistent with the effort to assert tighter control over the media, both in broadcast and print, and the internet. Analysts speak of unprecedented censorship and oversight in the last year.  It may not be a coincidence that Xi also chairs a new small group that oversees internet security.

Some argue that Xi’s “new authoritarianism” is a prerequisite to economic reform: he has to shore up his left flank from attacks by the old guard.  Others worry about an old-fashioned power grab, in which Xi isolates, marginalizes, and ultimately crushes any challenge to his authority.

Whatever his ultimate aim, Xi’s support for reform has very clear limits. Cleaning up the party is intended to rehabilitate and legitimate the CCP, not loosen its grip on China’s politics. 

How should outsiders feel about what is happening in China?

Elements of Xi’s program might improve governance in China.  In principle, the anti-corruption campaign could lighten the burden imposed on the Chinese people resulting from unjust treatment by avaricious officials.  It reflects a degree of increased, if indirect, accountability of the ruling party to the public.  And if Xi uses his accumulated power to break through the resistance of special interest groups and successfully transform China's economy (which former Premier Wen Jiabao called “unstable, unbalanced, uncoordinated, and unsustainable”) to a stable and sustainable maturity with more reliance on domestic consumption rather than exports, then  he would bless both his people and the global economy.

However, Xi does not seem interested in promoting the liberal values that Americans and many friends in the region believe are conducive to justice, prosperity, and peace.  His accumulation of power represents a step back toward the dictatorial paramount leadership of the Mao era – ironically, an inclination that got Bo Xilai in trouble. Still, there is little danger of a return to a cult of personality in China and events as calamitous as the Cultural Revolution are extremely unlikely. China has changed too much. The appropriate analog for Xi is more Putin than Mao.

A selective purge of corrupt officials, combined with continued crackdowns on dissent, may not be enough to satisfy the demands of an increasingly empowered and savvy civil society, however.  The CCP’s domestic insecurity is likely to continue during Xi’s tenure, which means continued risk of Chinese overreaction to a perceived challenge to China's dignity by foreigners.

A relatively high concentration of power in a paramount leader might increase consistency and predictability in Chinese foreign policy-making, simplifying  the task of reaching agreement on how to achieve and maintain a stable peace as China becomes the region’s second great power.  There is only one guy we need talk to, Xi Jinping.  But any advantage is lost if he insists China’s vital interests require encroaching on other states’ vital interests.  And the likelihood of an intemperate foreign policy is greater if a smaller number of people are in charge, with a one-man dictatorship being the worst case (well exemplified by Pyongyang). 

If Xi’s foreign policy is an extension of his domestic political agenda, outsiders may be unqualified to judge whether it is successful.  Based on China's external interests, however, Xi seems to have walked China into the trap that Deng Xiaoping warned about: alarming neighbors into security cooperation against China before the difficult task of Chinese economic development is completed.

Brad Glosserman is executive director of Pacific Forum CSIS. Denny Roy is senior fellow at the East West Center in Honolulu. This article originally appeared in CSIS:PACNET newsletter here

Image: Flickr. 

TopicsDomestic Politics RegionsChina

Iranian Press, Citing Algerian Parody Site, Claims Lionel Messi Donated €1m to Israel

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A major Iranian media outlet is reporting this morning that Argentine soccer superstar Lionel Messi has given one million euros to Israel. In a story dated July 23, the Iranian Students’ News Agency (ISNA) proclaims, “One Million Euros of Aid from Messi to the Zionist Regime,” and says that the donation comes “as the regime occupying Qods [Jerusalem]” commits “war crimes” in Gaza.

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The story cites “Israeli newspapers,” and says that European newspapers are also carrying the claim. However, the claim actually appears to originate at Le Compétiteur, an Algerian parody site. On July 17, Le Compétiteur ran a story headlined “Lionel Messi Offers One Million Euros to Israel,” declaring that the little Argentine had given an amount equivalent to his World Cup bonus to “the State of Israel,” and notes (like the Iranian story) that this comes amidst attacks on Gaza. The story also says that the claim was ignored “in the Zionist press.”

This story then appears to have been misconstrued by a number of outlets—such as El Fagr in Egypt on July 20 and Réflexion in Algeria on July 21—as a serious report. It has also been spreading on Twitter, complete with doctored photographs of Messi holding a “Stand With Israel” t-shirt. ISNA, or someone else in this game of telephone, appears to have mistranslated Le Compétiteur’s claim that the “Zionist press” was ignoring the story to read that the “Zionist press” had originally reported it. The “Zionist press” then became “Israeli newspapers.” ISNA even took the the time to update Le Compétiteur’s casualty count for the Gaza conflict—250—to 600.

This is not the first time the Iranian press has made this mistake. In 2012, the hardline Fars News parroted a report in the American satire site The Onion that Iran’s then president Mahmoud Ahmadinejad was more popular among rural white Americans than Barack Obama. And it’s not the first time it’s happened to Messi, either. In the World Cup, Messi had scored a heartbreaking stoppage-time winner that helped knock Iran out of the contest and denied the Iranian squad a historic draw with the powerful Argentine side. After the game, an account linked to the Islamic State of Iraq and al Sham congratulated Messi and “invite[d] him to join the jihadist call.” The Sunni jihadists of ISIS are indeed no fans of Iran—but the account was apparently fake. Messi will have to stick to soccer.

Image: Danilo Borges/copa2014.gov.br Licença Creative Commons Atribuição 3.0 Brasil.

TopicsMedia RegionsIran

Why Gross Domestic Product (or GDP) is Grossly Inaccurate

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Gross Domestic Product (GDP) is meant to be the singular summarizing statistic of economic growth and prosperity for a nation. It is in fact an inaccurate, untimely, and vague indication of economic activity. “The economy grew at…” should never quote GDP, because GDP does not capture the entirety of economic output.

As pointed out in a Wall Street Journal article last year, economic data is highly unreliable when it is initially released. By the time the data has been revised to the point of usefulness, it is no longer useful. The first quarter of this year is a prime example: the advance print was +0.1%, second estimate was -1.0%, and the final (for now) estimate was -2.9%. Revisions take months and sometimes years, and basing decisions on a first estimate could prove disastrous.

The Economist recently showed that portions of the economy, such as illegal activity, are not counted in GDP. Some countries in Europe are expanding what is counted in GDP to include drugs and other illegal activities, which will boost their economies by anywhere from 0 to 5%. The oft cited debt-to-GDP ratio will narrow instantaneously without any change in the financial condition of the government. Of course, adding lines to GDP statistics increases the level of GDP, but it does not alter the underlying economy. More stuff gets counted, but nothing has changed in the everyday life of the economy.

What the Europeans are attempting to measure is the informal—or underground—economy. The informal economy is the economic activity not typically measured due to under or unreported income, tax dodging, legality, or otherwise. And it is not trivial. Eurostat estimates US GDP would increase by 3% if the European changes were instituted in the US.

What is the underground economy as a whole hiding? One paper estimates 18-19 percent of income is unreported to the IRS. At the end of 2013, personal income in the U.S. was $14.1 trillion. This means that somewhere in the neighborhood of $2.5 trillion is earned off the books. Apply a tax rate of 15% to that figure, and, suddenly, $375 billion appears in tax coffers. With the US deficit expected to be $583 billion, it becomes apparent why there is a need to understand the informal economy.

Possibly even more surprising than its size is the fact that the underground economy is not all drug dealers and hedonistic economic participants. California estimates only 15% of the underground is made up of illegal activity. Most of the informal economy is construction and other forms of easily concealed labor; i.e., workers doing legal things “under the table”.

The US has a lot of cash outstanding, and this encourages an underground economy. It is difficult to have a vibrant underground economy without cash or another untraceable means of exchange. As electronic forms of payment became increasingly popular, it was thought the US would be able to more easily convert informal labor to formal labor. Crypto-currencies, such as Bitcoin, may be a method of building a 21st century informal economy.

And this raises the question of whether the electronic economy can force labor to move to the formal economy. It appears not. The new “micro job” culture is being spurred by innovations in retail and nearly ubiquitous access to the internet. Some of these effects may be showing through the part-time employment figures that have been persistently high during this recovery. Understanding how to convert informal labor market participants into formal ones is critical, simply because of the massive amount of tax revenue that is at stake.

GDP does a decent job of measuring the size of the formal economy—it just takes some time and a few tries to get there. As such, it is very useful for understanding, in hindsight, what broad components of the economy drive growth or contraction. But, like most economic statistics, GDP means little without the proper context and analysis. It struggles to articulate the finer points of the economic story.

Since GDP is left exclusively to the formal sector, economists, policy makers, and business leaders are not getting the entirety of the economic picture—regardless of the eventual accuracy of the GDP report. Without having some understanding of the informal economy, decision makers are dealing with only a partial picture of GDP, employment, productivity, and wage growth. Measurement of the informal sector may have started with GDP in Europe, but it should continue to other economic measures (in some cases it already has).

Granted, if the US were to estimate the informal economy GDP, employment, and other statistics would likely suffer from larger revisions and decreased accuracy. But we would have a more thorough measure of the output, a more accurate picture of employment, and more insight into how an economy functions. At the moment, the US is only measuring part of the economy, and not even doing that very well.

Image: Flickr. 

TopicsEconomics RegionsUnited States

How to Deal with America’s China Problem: Target Beijing’s Vulnerabilities

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Recently completing a book manuscript assessing the status and outlook of U.S. relations within the broad Asia-Pacific region reinforced this writer’s opinion in an earlier article that the United States remains unsurpassed in regional influence and leadership. The Obama government’s nuanced and multifaceted rebalance initiatives mesh well with regional priorities and promise growing security, economic, and political ties. By contrast, China, the only other possible competitor for regional leadership, pursues conflicted policies at odds with key regional concerns of independence, sovereignty, and stability.

China’s recent unrelenting drive to use coercive and intimidating state power, short of direct application of military force, to advance control of disputed territory in the East China Sea and the South China Sea poses a major problem for the United States. The Chinese “salami slicing”, a term used to describe the accumulation of small changes that gradually change the strategic picture, undermines the credibility of U.S. alliances and U.S. standing as the region’s security guarantor. The Obama government has adopted a harder public line against China’s actions and has deepened security cooperation with allies and others threatened by Chinese provocations. These steps presumably pose some costs to China’s regional standing and its long-standing goal to reduce the US security presence around China’s periphery. Whatever the costs, they have not gotten the Chinese to stop.

 

Former Pacific Commander and Director of National Intelligence Dennis Blair, members of Congress responsible for national security matters, and a variety of other experienced observers urge the U.S. government to break out of the prevailing pattern of the U.S. reacting to Chinese provocations. They push the United States to take initiatives that would show China the serious costs for Beijing in its salami slicing strategy of the disputed East and South China Sea. In response, the Pacific Command is reportedly pursuing enhanced surveillance and monitoring of Chinese activities in disputed seas and possible consideration of shows of force and U.S. escorts of allied ships in disputed seas. How these and other measures will deter determined Chinese salami slicing is not at all clear, especially as it remains to be seen how strongly the Obama government will pursue such initiatives. Notably, such U.S. actions risk possible confrontation with Chinese forces at a time of serious troubles in U.S. foreign relations with Russia and protracted problems in Ukraine, and throughout the Middle East and Southwestern Asia.

Against this background, this writer judges that Chinese advances, and subsequent negative consequences on U.S. interests, have reached a point where careful consideration needs to be given to options that focus on the many weaknesses and vulnerabilities China faces in dealing with the United States. The thinking in congressional deliberations is that China’s use of coercive measures, short of military force, targets U.S. weakness in dealing with such technically non-military threats. The United States should do likewise, targeting Chinese weaknesses and vulnerabilities, which are more than those of the United States.

Most of these options can be implemented easily by U.S. policymakers and are within U.S. budget constraints. In most cases, the options can and probably should be employed without heavy publicity, strong rhetoric, direct arguments, or public confrontation with China.

Rather, Washington should continue to pursue its close engagement with China and leave it to China to react to the U.S. initiatives which will show China’s leaders the kinds of costs and risks they run if Beijing insists on pursuing policies that undermine the US position in the Asia-Pacific. Such an approach is similar to China’s recent record of pursuing expansionist policies in the disputed seas as well as economic and trade, nuclear non-proliferation, and human rights policies with profound negative implications for the United States while still seeking the positive goal of a so-called new great power relationship in US-China relations. The United States can do the same by mixing negatives and positives in U.S.-China relations.

Meanwhile, options raised in congressional hearings often do not reflect the full policy awareness and knowledge of current, and sometimes hidden, circumstances that only the U.S.executive branch experts can provide. Nonetheless, their importance will grow if China, as expected, is undeterred by prevailing US policies.

The options include the following:

1)     US attack and missile submarines go undetected by weak Chinese anti-submarine warfare capabilities and possess the firepower to annihilate any advancing Chinese forces in the disputed East China Seas and South China Sea. The surfacing of US attack submarines near disputed areas of the East and South China Seas, perhaps in conjunction with Japanese and Australian submarines, would remind China of its serious anti-submarine limitations. In response, Beijing will doubtless seek to fix the problem. Yet to remedy China’s anti-submarine warfare limitations will require prolonged and large-scale costs and diverted resources for Chinese military planners and Chinese leaders juggling budget priorities in the period of wide-ranging and difficult change in Chinese development and governance. In sum, the solution will also incur major costs for China.

2)     Taiwan is an area of acute sensitivity for China; one where the United States has several options to raise significant costs for China. As the United States seeks to check China’s recent coercion and intimidation of neighbors, it could devote more attention to Taiwan – which has faced unbridled Chinese military coercion and intimidation for almost two decades. One option is to complicate Chinese defense plans and overall strategy toward Taiwan by allowing the sale of the 66 F-16 fighter jet long sought by the Taiwan government. The cost to China of such action involves not just the planes themselves but the significance of the substantial US demonstration of support for Taiwan in the face of China’s pressure and threats. Another option would involve a more active U.S. posture in support of Taiwanese free expression and identity represented by the so-called Sunflower Movement on the island. Beijing has shown no postive response to the rising importance of such demonstrations of Taiwan identity at odds with Chinese interests. The demonstrations tend to support Taiwan’s political opposition’s wariness on dealing with China. U.S. support for such expressions of Taiwanese identity could further shift Taiwan politics in favor of the opposition against the unpopular government of President Ma Ying-jeou. China would face costly and difficult reevaluation of its reasonably successful policy toward Taiwan, should the opposition win the 2016 presidential election.

3)     Recent demonstrations in Hong Kong – another very sensitive area for China's leadership – also foreshadow a possibly costly and delicate policy reevaluation for China. The United States could easily add to the salience of the demonstrations and the related costs for China by adopting a higher profile in support for free expression in Hong Kong.

4)     The main external reason why the North Korean problem continues to threaten the Asia-Pacific region is continued Chinese support for the brutal regime. Official U.S. rhetoric could focus more on this fact. This could add considerable weight to the reputational costs China faces as a result of its expansionism in disputed areas of the East and South China Seas, perhaps tipping the scales and compelling China to alter its practices.

5)     The United States could demonstrate a concrete response to China’s practice or to deploying conventionally armed Chinese ballistic missiles targeted at U.S. bases and forces in the Asia-Pacific over the past 20 years. These missiles are a direct threat to U.S. service personnel and US allies. The US response could involve conventionally armed multi-warhead U.S. ballistic missiles deployed in the United States or in the region in attack and ballistic missile submarines. These missiles would be ready to rapidly respond with multiple warheads were China to launch its missiles against U.S. forces. Because of China’s weak ballistic missile defense capabilities, Beijing would face an enormous cost in dealing with the new risk to its leadership and strategic structure posed by these U.S. warheads. 

This writer’s book shows that China’s recent assertiveness in disputed territory is a serious problem for the United States but not (yet) a fundamental challenge to continued U.S. leadership in the Asia-Pacific. Thus, the options listed above and others like them, focused on Chinese vulnerabilities should be used carefully and in proportion to the threat in proportion to the threat Chinese actions pose to U.S. interests. Nevertheless, the bottom line is that the threat to U.S. interests has now reached a point where the above options – and others – warrant serious consideration.

Robert Sutter is a professor at George Washington University. This article first appeared in CSIS:PACNET here

Image: U.S. Navy Flickr. 

TopicsSecurity RegionsChina

The Ultimate Guide to the SA-11 Gadfly

The Buzz

Editor’s NoteHarry Kazianis, Managing Editor of The National Interest, spoke with Ivan Oelrich, a former vice president of the Strategic Security Program at the Federation of American Scientists, and presently an adjunct professor of international affairs at George Washington University concerning the SA-11 Gadfly.

Kazianis: To begin, if you could, please describe in general terms the SA-11 Gadfly system. What it its primary role? How effective is it? What countries operate it? In general terms, does it have a good reputation in terms of combat capabilities compared to the competition?

Oelrich: The 11 is a mobile surface-to-air missile SYSTEM. The emphasis is to say that it is not a rocket, it is a radar for finding targets at a distance, a command vehicle, a launch vehicle that carries the rocket and a tracking radar. So normally the big radar would detect potential targets at a distance and then assign the target to one of a few launch vehicles. The tracking radar is not as powerful so it is helped by instructions from the surveillance radar, telling it where to look. Now it is far from the preferred approach but the launch vehicle can operate autonomously, using its radar for both surveillance and tracking.

It is a Soviet system so some ex-Warsaw Pact countries still have it but it was widely exported. The 11 is fairly old now. Most of the upgrades in air defense systems would be better resistance to jamming and other electronic countermeasures. The 11 would probably not be very effective against modern air forces, the US, Britain, France, and a few others but airliners don't have radar jamming equipment, even radar warning alarms, they fly straight and level at constant speed so even an old radar will be perfectly capable against such an easy target.

Kazianis: How much more capable is this system as opposed to, say, a shoulder-fired weapons, or a MANPAD?

Oelrich: There are two major differences. First, by definition, MANPADS have to be light enough for a person to carry. This limits fuel and, hence, range and altitude. No MANPADS could reach the cruising altitude of an airliner. Second, MANPADS are not as tightly linked into an air defense net as an 11 should be but, in this case, probably was not.

KazianisIn terms of air defense systems, there are other more advanced systems like the S-300 or S-400. What is the difference between the SA-11 and say the S-300?

Oelrich: There are a lot of systems more advanced than the 11. The Russians have upgraded the 11 to a more modern 17. The 300, and its latest version, the 400, are more sophisticated still and, again, a system. The 300/400, for example, combines missiles of different ranges, so some are optimized for long-range attack but, if the attacker gets though that line of defense, it is engaged with smaller missiles optimized for close in defense.

Kazianis: There is also a updated version of the SA-11, the SA-17. What are the main differences between them?

Oelrich: Slight changes in the rocket. But the rocket is the easy part. Mostly, the difference is in more sophisticated radars and electronics to make the missile less vulnerable to radar jamming and other countermeasures. Very important on a modern battlefield, but moot when shooting down helpless civilian airliners.

Kazianis: In your own estimate, how long would it take for a crew to become proficient to use the SA-11 or SA-17? Could someone with, say, just a week’s or a month’s training be able to use such a system?

Oelrich: Ah, that is the point! Remember, this is just part of a system. It takes many months of training for the system to work. Central command centers with long-range radars get information on incoming attackers, they have to alert local surveillance radars, these guys have to find, and identify, potential targets, distinguish friend from foe and then pass that information on to launchers and assign them targets. They have to maintain very strict discipline with use of the radar. Every second the radar is on, the ground crew is broadcasting a message to every enemy airplane within hundreds of miles saying, "Please come bomb me!" The launch teams have to find the targets assigned to them, and no others, and engage them. For all that to work smoothly, everybody has to do a perfect job with extremely fast reaction times (remember that enemy aircraft may be approaching at greater than the speed of sound and their very first priority will be attacking the air-defense network, so thinking about it for a while is not an option) and it would take many months, years, to get all the crews trained up and operating seamlessly. In fact, only the most highly trained militaries can do it well at all. But your question is misleading. Obviously, based on the results, this crew was NOT proficient. For example, they apparently did not know how to operate the IFF equipment, or didn't care enough to bother. I am guessing here, but it might be possible that a crew could be taught to use the system badly, very badly indeed in this case, in just several hours.

Kazianis: There has been much speculation that the SA-11 or SA-17 was involved in the tragic incident involving MH17. Much has been made of the radar system of the SA-11 and that the operators of the system may have been firing blindly if the radar system attached was poor. Are there different variations of radar systems in each variant of these weapons? How would the operator of the system know if a potential target was civilian or military?

Oelrich: See above. The radar on the tracker would not normally be used alone but it can be. Even so, I do not know specifically, but would be astonished if the radar on the launcher did not have an IFF interrogator. If you want to learn more than you ever thought you needed to know about IFF systems, you can read my OTA report on friendly fire.

TopicsDefense RegionsUkraine

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