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US Slams China for 'Great Wall of Sand' in South China Sea

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China’s assertive maritime claims featured prominently in a speech from U.S. Pacific Fleet commander Admiral Harry B. Harris to the #FSFleet dinner this week.

In noting that overlapping maritime claims in the South China Sea heightened prospects for miscalculation, Harris drew attention to China’s land reclamation activities in the Spratly Islands which have “now created over four square kilometers of artificial landmass, roughly the size of Canberra’s Black Mountain Nature Reserve.” Harris commented on China’s creation of a “great wall of sand,” and noted that the “scope and pace of building man-made islands raise serious questions about Chinese intentions.” (See here for satellite images clearly showing China’s efforts, as published by the CSIS’ Asia Maritime Transparency Initiative.)

On how to address the threat, the Admiral urged all states to respect the ASEAN–China Declaration on the Conduct of Parties in the South China Sea and international rules and norms in the maritime domain.

Beyond the South China Sea, Harris also had two messages for Australia: “the rebalance is for real and we’ve got the Marines to prove it,” and “the future of RAN needs to be decided soon.” On the rebalance, Harris underscored the “powerful synergy’ between Australian forces and U.S. Marines training together in amphibious operations.

On future surface fleet matters, Harris warned:

… beyond the new Canberra- and Hobart-class ships—and even the SEA 5000 project which is the subject of this conference—plans for the Royal Australian Navy of the latter half of the 21st century must be conceived soon. These are strategic decisions that only you can make; choices that will have ripple effects in the coming decades; choices that will define your nation’s place in the middle and latter half of this naval century.

While he chose different words, Harris’ speech echoed similar themes to one delivered to the conference earlier in the day by Rear Admiral Christopher J. Paul, Deputy Commander of U.S. Naval Surface Force, as well as to a speech delivered by Admiral Jonathan Greenert, U.S. Chief of Naval Operations, to an audience at the ANU in February.

Harris pulled no punches in his speech at the Australian War Memorial; his comments on China surely rank among the most forthright from a senior American figure. The Admiral turned in a clear assessment of the myriad strategic challenges present in the Indo-Asia-Pacific, and he didn’t shy away from questioning China’s assertive behavior and the need to resolve with priority questions of Australia’s future maritime requirements.

His remarks will likely be well received in both Australia and in the broader Asia–Pacific, though less so in China. The Australian government is keen to support continued American primacy in the region by deepening and broadening cooperation with fellow U.S. allies and partners, as the Obama administration has occasionally requested. In part, this reflects an Australian desire to sustain a positive contribution to preserving good order in the Asia–Pacific and the broader international system. It also shows an understanding of the U.S. rebalance being materially underway but with the perception of being politically underpowered. Australia needs to do its part and Harris’ request that Australia play not just a “large role in global security affairs” but instead a “leading role.” should serve to deepen resolve in Canberra.

Harris’ frank appreciation of Chinese strategy will be welcomed across the region. As China’s coercive and assertive behaviors have unfolded and ramped-up over recent years, Asia–Pacific states have increasingly questioned American resolve in the region. Harris’ words will reassure states across the region that American commitment remains strong.

At an ASPI dinner last year, Harris spoke of China’s dangerous unilateral declaration of an Air Defence Identification Zone over the East China Sea. This year he focused on China’s maritime actions in the South China Sea. The light guiding both speeches, however, was the U.S.–Australia alliance, and its role as an ever-relevant and never-more-important contribution to peace and stability in the Asia–Pacific.

Natalie Sambhi is an analyst at ASPI and managing editor of The Strategist. David Lang is an analyst at ASPI and editor of The Strategist. This article originally appeared on The Strategist, here.

Image: U.S. Navy

TopicsSecurity RegionsAsia

Full Text: U.S. Statement on Iran Nuclear Deal

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Parameters for a Joint Comprehensive Plan of Action Regarding the Islamic Republic of Iran's Nuclear Program

Below are the key parameters of a Joint Comprehensive Plan of Action (JCPOA) regarding the Islamic Republic of Iran’s nuclear program that were decided in Lausanne, Switzerland. These elements form the foundation upon which the final text of the JCPOA will be written between now and June 30, and reflect the significant progress that has been made in discussions between the P5+1, the European Union, and Iran. Important implementation details are still subject to negotiation, and nothing is agreed until everything is agreed. We will work to conclude the JCPOA based on these parameters over the coming months.


  • Iran has agreed to reduce by approximately two-thirds its installed centrifuges. Iran will go from having about 19,000 installed today to 6,104 installed under the deal, with only 5,060 of these enriching uranium for 10 years. All 6,104 centrifuges will be IR-1s, Iran’s first-generation centrifuge.

  • Iran has agreed to not enrich uranium over 3.67 percent for at least 15 years.

  • Iran has agreed to reduce its current stockpile of about 10,000 kg of low-enriched uranium (LEU) to 300 kg of 3.67 percent LEU for 15 years.

  • All excess centrifuges and enrichment infrastructure will be placed in IAEA monitored storage and will be used only as replacements for operating centrifuges and equipment.

  • Iran has agreed to not build any new facilities for the purpose of enriching uranium for 15 years.

  • Iran’s breakout timeline – the time that it would take for Iran to acquire enough fissile material for one weapon – is currently assessed to be 2 to 3 months. That timeline will be extended to at least one year, for a duration of at least ten years, under this framework.

Iran will convert its facility at Fordow so that it is no longer used to enrich uranium

  • Iran has agreed to not enrich uranium at its Fordow facility for at least 15 years.

  • Iran has agreed to convert its Fordow facility so that it is used for peaceful purposes only – into a nuclear, physics, technology, research center.

  • Iran has agreed to not conduct research and development associated with uranium enrichment at Fordow for 15 years.

  • Iran will not have any fissile material at Fordow for 15 years.

  • Almost two-thirds of Fordow’s centrifuges and infrastructure will be removed. The remaining centrifuges will not enrich uranium. All centrifuges and related infrastructure will be placed under IAEA monitoring.

Iran will only enrich uranium at the Natanz facility, with only 5,060 IR-1 first-generation centrifuges for ten years.

• Iran has agreed to only enrich uranium using its first generation (IR-1 models) centrifuges at Natanz for ten years, removing its more advanced centrifuges.

• Iran will remove the 1,000 IR-2M centrifuges currently installed at Natanz and place them in IAEA monitored storage for ten years.

• Iran will not use its IR-2, IR-4, IR-5, IR-6, or IR-8 models to produce enriched uranium for at least ten years. Iran will engage in limited research and development with its advanced centrifuges, according to a schedule and parameters which have been agreed to by the P5+1.

• For ten years, enrichment and enrichment research and development will be limited to ensure a breakout timeline of at least 1 year. Beyond 10 years, Iran will abide by its enrichment and enrichment R&D plan submitted to the IAEA, and pursuant to the JCPOA, under the Additional Protocol resulting in certain limitations on enrichment capacity.

Inspections and Transparency

• The IAEA will have regular access to all of Iran’s nuclear facilities, including to Iran’s enrichment facility at Natanz and its former enrichment facility at Fordow, and including the use of the most up-to-date, modern monitoring technologies.

• Inspectors will have access to the supply chain that supports Iran’s nuclear program. The new transparency and inspections mechanisms will closely monitor materials and/or components to prevent diversion to a secret program.

• Inspectors will have access to uranium mines and continuous surveillance at uranium mills, where Iran produces yellowcake, for 25 years.

• Inspectors will have continuous surveillance of Iran’s centrifuge rotors and bellows production and storage facilities for 20 years. Iran’s centrifuge manufacturing base will be frozen and under continuous surveillance.

• All centrifuges and enrichment infrastructure removed from Fordow and Natanz will be placed under continuous monitoring by the IAEA.

• A dedicated procurement channel for Iran’s nuclear program will be established to monitor and approve, on a case by case basis, the supply, sale, or transfer to Iran of certain nuclear-related and dual use materials and technology – an additional transparency measure.

• Iran has agreed to implement the Additional Protocol of the IAEA, providing the IAEA much greater access and information regarding Iran’s nuclear program, including both declared and undeclared facilities.

• Iran will be required to grant access to the IAEA to investigate suspicious sites or allegations of a covert enrichment facility, conversion facility, centrifuge production facility, or yellowcake production facility anywhere in the country.

• Iran has agreed to implement Modified Code 3.1 requiring early notification of construction of new facilities.

• Iran will implement an agreed set of measures to address the IAEA’s concerns regarding the Possible Military Dimensions (PMD) of its program.

Reactors and Reprocessing

• Iran has agreed to redesign and rebuild a heavy water research reactor in Arak, based on a design that is agreed to by the P5+1, which will not produce weapons grade plutonium, and which will support peaceful nuclear research and radioisotope production.

• The original core of the reactor, which would have enabled the production of significant quantities of weapons-grade plutonium, will be destroyed or removed from the country.

• Iran will ship all of its spent fuel from the reactor out of the country for the reactor’s lifetime.

• Iran has committed indefinitely to not conduct reprocessing or reprocessing research and development on spent nuclear fuel.

• Iran will not accumulate heavy water in excess of the needs of the modified Arak reactor, and will sell any remaining heavy water on the international market for 15 years.

• Iran will not build any additional heavy water reactors for 15 years.


• Iran will receive sanctions relief, if it verifiably abides by its commitments.

• U.S. and E.U. nuclear-related sanctions will be suspended after the IAEA has verified that Iran has taken all of its key nuclear-related steps. If at any time Iran fails to fulfill its commitments, these sanctions will snap back into place.

• The architecture of U.S. nuclear-related sanctions on Iran will be retained for much of the duration of the deal and allow for snap-back of sanctions in the event of significant non-performance.

• All past UN Security Council resolutions on the Iran nuclear issue will be lifted simultaneous with the completion, by Iran, of nuclear-related actions addressing all key concerns (enrichment, Fordow, Arak, PMD, and transparency).

• However, core provisions in the UN Security Council resolutions – those that deal with transfers of sensitive technologies and activities – will be re-established by a new UN Security Council resolution that will endorse the JCPOA and urge its full implementation. It will also create the procurement channel mentioned above, which will serve as a key transparency measure. Important restrictions on conventional arms and ballistic missiles, as well as provisions that allow for related cargo inspections and asset freezes, will also be incorporated by this new resolution.

• A dispute resolution process will be specified, which enables any JCPOA participant, to seek to resolve disagreements about the performance of JCPOA commitments.

• If an issue of significant non-performance cannot be resolved through that process, then all previous UN sanctions could be re-imposed.

• U.S. sanctions on Iran for terrorism, human rights abuses, and ballistic missiles will remain in place under the deal.


• For ten years, Iran will limit domestic enrichment capacity and research and development – ensuring a breakout timeline of at least one year. Beyond that, Iran will be bound by its longer-term enrichment and enrichment research and development plan it shared with the P5+1.

• For fifteen years, Iran will limit additional elements of its program. For instance, Iran will not build new enrichment facilities or heavy water reactors and will limit its stockpile of enriched uranium and accept enhanced transparency procedures.

• Important inspections and transparency measures will continue well beyond 15 years. Iran’s adherence to the Additional Protocol of the IAEA is permanent, including its significant access and transparency obligations. The robust inspections of Iran’s uranium supply chain will last for 25 years.

• Even after the period of the most stringent limitations on Iran’s nuclear program, Iran will remain a party to the Nuclear Non-Proliferation Treaty (NPT), which prohibits Iran’s development or acquisition of nuclear weapons and requires IAEA safeguards on its nuclear program.


Congress Not Required: Here's How to Make an Iran Deal Stick

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In 1979, President Jimmy Carter signed the SALT II arms-limitation agreement with his Soviet counterpart Leonid Brezhnev. Owing to the Soviet Union’s invasion of Afghanistan later that year, the treaty was never ratified by the U.S. senate. Even so, the provisions laid out in SALT II were respected by Carter and by his successor Ronald Reagan. The episode thus gives some insight into how and why any possible deal with Iran might be allowed to succeed, despite congressional antipathy towards its contents.

The Strategic Arms Limitation Talks represented a high-water mark for détente, the Nixon-Kissinger strategy of easing tensions with the Soviet Union in order to allow for the pursuit of mutually beneficial cooperation between the superpowers. During the late 1960s and 1970s, it was assumed that both the United States and the Soviet Union had a self-interest in halting the costly nuclear arms race between them. Although this assumption was broadly accurate, negotiations on strategic arms control proved to be extremely torturous to conclude—not least of all because of domestic opposition within both countries (in the United States, for example, right-wing hawks regarded compromise with the Soviet Union as dangerously naïve, while many on the left believed that arms control was inimical to the ultimate goal of nuclear disarmament).

Nixon initiated the SALT process in 1969; all told, it took a decade to complete and resulted in two sets of agreements. SALT I was signed and ratified in 1972, comprising an anti-ballistic missile treaty and an interim agreement to freeze numbers of nuclear weapons possessed by each side. Discussions on SALT II would continue long after Nixon left office: although Gerald Ford came close to bringing the talks to fruition at Vladivostok in 1974, it would be five more years until the terms of SALT II were finalized by Carter and Brezhnev. The agreement represented the first-ever superpower compact to scale back aspects of their nuclear-weapons arsenals.

With Soviet tanks rolling across the border into Afghanistan, however, the Carter administration asked members of the senate to hold off with ratification. This was hardly the time for the White House to be seen entering into an historic arms-control agreement with Moscow. Furthermore, with the idea of détente comprehensively discredited by a clear instance of Soviet aggression, SALT II might easily have been defeated, had senators been allowed to vote on ratification. Counterintuitively, in fact, Carter’s decision not to ask for ratification of SALT II actually kept hopes alive that the terms of the agreement would be implemented.

Despite the war in Afghanistan, both Carter and the Soviet leadership realized that adherence to SALT II remained in the self-interest of both countries. Renewing the nuclear arms race served the cause of neither side. Even the famously hawkish Reagan administration, which made no secret of its abhorrence for détente, refrained from abrogating the terms of SALT II—even though there were no international or domestic legal obligations to do so. This voluntary acquiescence in arms control incensed GOP lawmakers like Jesse Helms, John East and Steve Symms, who regarded abidance by SALT II as a serious abdication of the president’s responsibility to prioritize the national interest over inoperative international agreements.

The same logic that kept SALT II relevant, despite its nonratification, offers an important lifeline for President Obama’s deeply unpopular (even if still unfinished!) deal with Iran. SALT II was what political scientists call a self-enforcing agreement—that is, an arrangement that all parties have a rational self-interest in adhering to (at least for as long as they can expect reciprocity). If Obama’s deal with Iran is structured to be similarly self-enforcing—if it is carefully arranged such that neither the United States, nor Iran stands to benefit from abrogating the agreement—then it has every chance of having tangible and lasting effects, whether or not Congress gives the deal its blessing.

Certain caveats are in order, of course. Namely, it is undeniable that bipartisan support for a deal in Congress would make it much easier for any U.S. president to convey strategic resolve to the Iranians. Conversely, if lawmakers are absolutely bent on spoiling an agreement with Iran, then it is possible that they will find ways to do so.

But the point remains: if the bargain concocted in Lausanne turns out to be truly in the self-interest of both the United States and Iran—that is, if the deal makes both countries better off than they would be absent any agreement—then logic and history would suggest that the initiative will have a chance of success. Most indications are that the two governments do possess strong incentives to make a deal work. Structuring the terms of the deal to be truly self-enforcing over the long term, though, will be no mean feat.


Extreme Stealth: Does America Need Super Advanced Drones?

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The Navy’s Unmanned Carrier Launched Surveillance and Strike (UCLASS) aircraft should be at the heart of a comprehensive debate about the future of unmanned technology and related concept of operations. Unfortunately, the current debate is narrowly focused on how advanced, large, and expensive to make the UCLASS.

On one side of this debate, advocates for large, exquisite strike platforms imagine a future where unmanned aircraft replicate the capabilities of the latest advanced, multimission aircraft. In the middle of the spectrum, the U.S. Navy’s current UCLASS requirements outline a modestly stealthy platform emphasizing intelligence, surveillance, and reconnaissance (ISR) missions and operating in a lightly contested environment; strike is a secondary mission within the current Navy plan. On the other side of this much-needed debate are those who see a world where the large and the few are overtaken by the small and the many. It does not strain the imagination to contemplate the advancements in miniaturization, sensors, and weapons technology that will continue the trends ushered in with precision weapons—hiding from detection will become increasingly difficult; dispersion of forces and capability is more and more important; and massing military capability will increase the probability and cost of combat losses.

Initial UCLASS fielding is projected seven to eight years from now in 2022-3 and we will be a decade closer to the rise of the small and the many. While it is not an either/or proposition, over-investment in unmanned platforms that are large, complex, and limited in numbers (because of exorbitant cost) will significantly disadvantage the United States in a major conflict ten to twenty years from now when the UCLASS and its descendants fly into combat.

Congress and the aircraft industry seem to want all eggs in an exquisite and expensive basket. Recently, Senator John McCain (R-AZ), chairman of the Senate Armed Services Committee (SASC) raised concerns about the survivability and weapons payload capability of the current UCLASS requirements and pressed for a strike aircraft capable of operating in a medium to high-threat environment with broadband stealth, 4,000 pounds of internal weapons payload, and in-air refueling capability. In effect, Senator McCain is calling for an unmanned F-35C Joint Strike Fighter.

The SASC Chairman’s desire for an advanced strike aircraft echoes a similar call in February from Representative Randy Forbes (R-VA 4), the House Armed Services Seapower Subcommittee Chairman. Congressman Forbes places a premium on aerial refueling, survivability, lethality, and payload. Lockheed Martin has stated that the UCLASS requires fifth-generation capability (stealth and other advanced multimission functions). A recent analysis in the March issue of Aerospace America, titled “The Manned-Unmanned Debate,” projects that next generation fighters are likely to be produced in manned and unmanned variants.

It should be self-evident that this focus on survivability in unmanned aircraft is almost a non sequitur, forfeiting a prime value of unmanned systems. Because there are no humans on board, unmanned systems can conduct more risky missions and are, almost by definition, expendable—unless they cost $50 million dollars a copy. At what price point do unmanned systems become non-expendable and require even more investment in survivability?

Advocates for large, costly, and few unmanned aircraft (not to mention manned aircraft) offer a vision of future air combat that is a continuation of today, where, as RAND scientist Martin Libicki writes, “Aircraft are optimized—at great expense—to win one-on-one (or one-on-not-too-many) duels against other aircraft and antiaircraft ground units.” According to Libicki, however, “The fate of fifty million dollars’ worth of aircraft contesting fifty million dollars’ worth of [many small] sensors, emitters and micro-munitions may be far less satisfying.”

Libicki was one of the first to predict that stealth will lose the battle against detection and that the future battles will not be won by hiding from advanced sensors and weapons systems but by overwhelming them with numbers. In 2010 John Arquilla, the swarm warfare visionary, provided recommendations to make conflict cheaper, smaller, and smarter. Arquilla argued that, “The United States is spending huge amounts of money in ways that are actually making Americans less secure… against smart countries building different sorts of militaries.”

In a similar vein, Wayne Hughes, the naval strategist, recommends that U.S. Navy ships should be simpler, less expensive, fielded in greater quantity, and that we should resist the tendency to create broad multimission platforms, concentrating vast capability into single platforms whose loss could be devastating. His arguments apply to air platforms as well. Numbers matter; we should increase quantity while diversifying the risk of combat losses.

Supporting an expensive and exquisite UCLASS, Senator McCain told the U.S. Navy that anything less would “operationally and strategically misguided.” However, failing to examine the alternatives to large, expensive, and numerically limited fifth and sixth-generation aviation (both manned and unmanned) is truly misguided—operationally, strategically,and fiscally. The small and the many is the way of the future; the United States can lead the advance or fly an exquisite, expensive, and small air force into the teeth of a future enemy’s swarm.

Captain Robert A. Newson is a Naval Special Warfare (SEAL) officer who spent twenty-two months in command of Special Operations Command (SOC)—Forward Yemen. He recently led strategy and concept development for the Naval Special Warfare Command. Previously, he  served as director of the Joint Interagency Task Force—Counter Terrorism. Newson is a graduate of the University of Kansas and the Naval Postgraduate School (with distinction.) He is a PhD candidate at the University of San Diego. The conclusions and opinions expressed are his own and do not reflect the official position of the U.S. government.

This piece originally appeared on CFR's Defense in Depth blog, here.


Watch Out, India: China to Sell Pakistan 8 Submarines

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A couple of weeks ago, after a visit to India, I wrote an op-ed for the Indian weekly Open with my impressions of the Indian strategic debate. The biggest take-away was how openly suspicious the Indians are about China and its intentions in the Indian Ocean.

That suspicion got another boost yesterday, with Islamabad announcing that it has approved, in principle, the purchase of eight Chinese submarines for the Pakistani navy.

This is big news for a number of reasons. First, it's a large order for a navy that currently only operates five submarines. Second, it will be the first time China has exported its submarines, which says something about the improvements in its military technology (granted, Pakistan is probably buying on price as well as capability, but this is a navy that has previously bought advanced European submarines, so its not an undiscerning customer).

And third, it represents a fairly blunt Chinese statement about its willingness to cooperate with Pakistan to challenge Indian maritime power. Of course China has sold arms to Pakistan before, and in fact it helped Pakistan develop its nuclear and ballistic missile programs. China has also sold surface ships to the Pakistan Navy in the past. But in the maritime domain, it is fair to say that this is a step-change in China's involvement with the Pakistan military.

Things are likely to get even more discomfiting for India soon, with Xi Jinping set to visit Pakistan from April 10, where he will address parliament. The newspaper Dawn writes:

Sources say that during the visit, over two dozen memoranda of understanding (MOUs) regarding nuclear power, the Gwadar Port, the Pak-China Economic Corridor (PCEC), energy, trade and investment will be signed by Pakistan and China.

It will be interesting to hear what is announced on the Chinese-developed Gwadar Port, which has been cited in India as an example of Beijing's attempt to encircle India with naval bases, and also as a way for China to avoid maritime choke points in the Indian and Pacific oceans by moving Persian Gulf oil and gas over land from Gwadar to China. This theory has been debunked in the past, partly on the grounds that the port is not supported by sufficient road and rail infrastructure, but this might be set to change.

Sam Roggeveen is editor of the Lowy Interpreter, where this article originally appeared here.


Pakistan's Looming Disaster in Yemen

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The possibility of Pakistan, a non-Arab South Asian country becoming embroiled in Yemen’s civil war is very high, as Saudi Arabia has been leaning heavily on Pakistan to join its military coalition there.

Pakistani involvement could include the deployment of land forces. There are already hundreds of Pakistani troops in Saudi Arabia conducting joint exercises with Saudi forces and Pakistan has voiced support for Saudi airstrikes in Yemen.

Explicit Pakistani involvement in Yemen could be dangerous for it, both militarily and politically. Although Pakistan’s population is majority Sunni, unlike Saudi Arabia or Iran, Pakistan was not founded on the basis of any particular understanding of Islam. Rather, Pakistan was founded on the more general basis of Islam as a whole, in order to serve as a homeland for South Asia’s Muslims, whether Sunni or Shia. Around a fifth of Pakistan’s population, or some 30-40 million people, are Shia, giving it (or neighboring India) the second largest Shiite population in the world outside of Iran.

(Recommended: If India and Pakistan Went to War: 5 Weapons Pakistan Should Fear)

If Pakistan were to get involved in Yemen, its involvement could inflame tensions between Sunni and Shia at home in Pakistan as its involvement could be interpreted as a sign of the state leaning explicitly toward Sunni Islam, despite many of its important figures, including its founder, Muhammad Ali Jinnah, being Shia.

As it is, the situation for religious minorities in Pakistan is already getting worse and Sunni militant groups frequently carry out attacks against Shia, Ahmadis, Hindus, Sikhs, and Christians with impunity.

Furthermore, Pakistani involvement in Yemen could squarely place it in the Saudi-led Sunni camp of Muslim countries arrayed against Iran.

Although the conflict between Iran and Saudi Arabia originated as a contest for supremacy in the Middle East, both sides have used sectarianism to their advantage. This could inflame Pakistan-Iranian tensions and get Pakistan involved in a broader Sunni-Shia conflict.

(Recommended: Pakistan’s New Missile Disrupts Nuclear Stability in South Asia)

Joining a coalition designed to combat Iranian influence would be against Pakistan’s interests and its traditional policy of balancing between Tehran and Riyadh. After all, Pakistan shares a border with Iran and not Saudi Arabia. A prominent opposition politician in Pakistan said that  “given our close ties to both Saudi Arabia and Iran and our own internal sectarian terrorism, Pakistan simply cannot afford to get embroiled in any Shia-Sunni conflict in the Gulf and Middle East regions. Pakistan must stay strictly neutral.”

From a military point of view, Pakistani involvement in Yemen could also be disastrous, or it could at least bogged down in a country where it has no direct interests. Iran has said that Yemen will be a graveyard for Saudi agents and certainly, its long, bloody history proves that it is “near impossible to govern.” Yemen’s highlands, like those of Afghanistan, are hard to control and attempts by the Ottomans, British, and Egyptians to intervene there were all unsuccessful. Pakistani involvement in Yemen could also bring it into confrontation with the Islamic State; Pakistan really doesn’t need another militant group to fight. At home, Pakistan’s military is already overstretched fighting the Taliban and being vigilant against India, which Pakistan’s military establishment delusionally thinks is out to destroy their state.

(Recommended: Pakistan Wants 'Battlefield' Nukes to Use against Indian Troops)

Yet despite these all these risks, Pakistan could very well still intervene in Yemen. The reason is because Pakistan is heavily—many would say unduly—influenced by Saudi Arabia.

Pakistan’s Prime Minister, Nawaz Sharif, and other senior figures headed to Saudi Arabia on Tuesday for consultations with Saudi Arabia’s King Salman. Although Pakistan has not yet promised to intervene in Yemen, it has guaranteed Saudi Arabia’s security and territorial integrity should the Houthis (or presumably the Islamic State, Iran, or whoever else) invade Saudi Arabia.

Sharif’s office said in a statement on Tuesday that “Pakistan holds Saudi Arabia in very high esteem and considers the security of the holy land of utmost importance….Any violation of the territorial integrity and sovereignty of Saudi Arabia would evoke a strong reaction from Pakistan.” Nawaz Sharif is widely believed to be beholden to Saudi Arabia, which offered him sanctuary after he was overthrown in a 1999 coup by General Pervez Musharraf.

But Saudi Arabia’s influence on Pakistan isn’t just about its power over its Prime Minister. Saudi Arabia has been cultivating Pakistan for a long time, in preparation for a time that it would need it and its military, considered one of the most professional and well-trained in the Muslim world. Saudi Arabia has come to Pakistan’s aid multiple times: for example, it gave oil to Pakistan in 1998 to help it weather international sanctions because of its nuclear tests. Saudi Arabia also allegedly helped fund Pakistan’s nuclear program in order to have the option of buying a Pakistani nuke off the shelf whenever needed. Saudi Arabia has deeply invested in Pakistan’s institutions and public sphere, withholding funding and payments from parties in Pakistan that it perceived as being too Iran friendly. Saudi Arabia has also begun to influence Pakistani Islam by setting up madrassas and other Islamic educational institutions.

Despite a host of strategic reasons and domestic opposition, Pakistan may very well cast its lot with Saudi Arabia soon. Its relation with Saudi Arabia is too beneficial to snub, while Pakistan does not reap anywhere near the same level of benefits from Iran that it does from Saudi Arabia. This would make it difficult for Pakistan to remain neutral for long in Yemen. Changing geopolitical arrangements in the region could push Pakistan to shore up one relation it can count on. A direct Saudi intervention in Yemen, presumably with Pakistani and Egyptian military forces would plunge several of the region’s powers into all out war, after which there would be no turning back. For Pakistan, such a decision would be the crossing of a Rubicon: it would be hard to turn back. Despite these risks, Pakistan is increasingly making it more likely that it will intervene in Yemen and do Saudi Arabia’s bidding, as it is already sending more troops to Saudi Arabia.  


Asia's Coming Nuclear Nightmare

The Buzz

While the world focuses on the dangers that a nuclear-armed Iran could present in the Middle East, a potentially more dangerous and unstable nuclear proliferation is occurring in the Indian Ocean.

In the coming years India, Pakistan, and perhaps China will likely deploy a significant number of nuclear weapons at sea in the Indian Ocean. This could further destabilize already unstable nuclear relationships, creating a real risk of a sea-based exchange of nuclear weapons.

Observers have long seen India-Pakistan nuclear rivalry as the most unstable in the world, and South Asia as the most likely location of nuclear conflict. This is not just academic speculation. Foreign diplomats have been evacuated from Islamabad on several occasions from fears of an impending nuclear exchange with India.

(Recommended: The Most Dangerous Nuclear Threat No One Is Talking About)

India has a “no first use” (NFU) nuclear-weapons policy of sorts, although it is increasingly subject to caveats and exceptions. But Islamabad refuses to adopt an NFU policy and indeed has announced a long list of actions that it claims would justify a nuclear response against India. Pakistan is also busy miniaturizing its nuclear weapons for tactical use, thus reducing the threshold for Pakistani nuclear action.

Importantly, Pakistan sees its nuclear arsenal not only as a deterrent but also as an enabler,  providing an umbrella under which it can sponsor sub-conventional attacks against India. In the face of terrorist attacks such as those in Mumbai in 2008, Delhi has found its options constrained by concerns about a possible Pakistani nuclear response. But few are confident that India's restraint can be maintained in the face of another serious cross-border attack that is proved to have been sponsored by Pakistan.

Both India and Pakistan are now in the process of moving their nuclear weapons capabilities into the maritime realm.

India is the furthest down this track, having launched its first indigenous nuclear-powered ballistic missile submarine INS Arihant in 2009 (expected to be commissioned this year); it is also in the process of building two more so-called SSBNs. Further, India is developing nuclear-tipped Dhanush short range ballistic missiles for deployment on offshore patrol vessels. India has leased a nuclear-powered hunter-killer submarine and has plans to construct up to six more SSNs (unlike SSBNs, SSNs are not armed with nuclear ballistic missiles). Pakistan is following India's lead, having recently established a Naval Strategic Force Command Headquarters with the declared intention of developing a sea-based deterrent. This may involve nuclear-armed conventional submarines supplied by China, rather than SSBNs.

(Recommended: The World’s Most Dangerous Rivalry: China and Japan)

Some nuclear weapons states have created a nuclear “triad” in order to have an assured second strike capability. While such an assured capability can help stabilize a nuclear relationship, according to a recent Carnegie report, taking the India-Pakistan nuclear dynamic into the maritime realm may in fact create greater instability.

One issue is an ambiguous mix of conventional and nuclear capabilities at sea, including the deployment of nuclear missiles on Pakistani conventional submarines and on Indian missile boats. Uncertainty over whether a platform is carrying nuclear weapons creates a risk of an inadvertent but highly escalatory attack on an opponent's nuclear capability. Another concern is that maritime nuclear capabilities could lower Pakistan's already low nuclear threshold. Islamabad may be tempted to conduct a demonstration nuclear attack at sea, believing it will not be escalated on land. A further problem is Pakistan's reported propensity to delegate nuclear authority to field commanders, which could create considerable risks if submarine communications are interrupted.

(Recommended: The Real Nuclear Nightmare When It Comes to U.S.-Russian Ties)

China is also a major player in the nuclearization of the Indian Ocean. China's role in creating a nuclear-armed Pakistan is a big factor in the distrust that characterizes the India-China security relationship. In the 1980s, China supplied Pakistan with weapon plans along with fissile material, and facilitated the supply of missile technology. Any further moves by China to develop Pakistan's maritime nuclear capability will only cement India's threat perceptions about China.

The India-China nuclear relationship is itself relatively unstable and is now also moving into the Indian Ocean. This is because India's land-based nuclear deterrent currently suffers from considerable geographical and technological disadvantages compared with China. China is able to deploy its nuclear missiles in sparsely populated territory close to India's border, providing it with nuclear missile coverage of the entire subcontinent. In comparison, India fields much shorter range missiles that can barely reach major population centers in eastern China.  

This gives India good reason to establish an assured second strike capability on SSBNs that could potentially be forward deployed into the western Pacific. Alternatively, India may deploy its SSBNs in a well-protected “bastion” in the Bay of Bengal, although this may require further development of Indian missile technology.

There have been increasing detections of Chinese SSNs in the Indian Ocean in recent years, including the deployment of a Chinese SSN to the western Indian Ocean between last December and February, nominally as part of its anti-piracy deployment. According to Indian sources, these deployments are part of hydrographic “profiling” of the region and will likely increase in frequency. But Beijing has less reason to deploy its SSBNs in the Indian Ocean; instead, they will likely be primarily deployed in the western Pacific, targeted at the United States. This could create its own risks: the detection of an unusual transit of a Chinese SSBN into the Indian Ocean or an Indian SSBN into the Pacific could be seen as an escalation at times of tension.

The United States also has a potentially significant role in facilitating nuclear stability in the Indian Ocean. In the 1980s, Washington helped construct India's only facility for communications with submerged nuclear submarines and the U.S. might again support India's maritime nuclear capabilities. It might even be in Washington's interests to help Pakistan. The establishment of reliable communications links with Pakistan's nuclear-armed submarines could, for example, be critical in stabilizing the India-Pakistan nuclear dynamic.

Despite concerns about superpower competition in the Indian Ocean during the latter half of the Cold War, there was relatively little nuclear competition in that theatre. The three-party nuclear rivalry we will soon see in the Indian Ocean is likely to be more unstable, and potentially far more dangerous.

Dr. David Brewster is with the Strategic and Defence Studies Centre at the Australian National University, where he specializes in South Asian and Indian Ocean strategic affairs.  He is also a Senior Maritime Security Fellow at the Indian Council on Global Relations, Mumbai, and a Fellow with the Australia India Institute.

This article originally appeared on the Lowy Interpreter.

Image: Wikimedia/Ajai Shukla


Is China's Economy Doomed?

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There has been much fretting about China's growth over the past five years. One special focus for hand-wringing has been the Chinese financial system and its non-banking component—the shadow banking system—in particular.

Financial growth in China has certainly been rapid since 2007, a classic warning of impending trouble. In the decade before 2007, credit grew only a little faster than GDP, reaching 187 percent of GDP, which is about normal for an emerging economy.

Then China applied a huge stimulus in 2009 in response to the global financial crisis, mainly in the form of easing the constraints on credit expansion. As a result, China sailed through the crisis with double-digit growth. But by 2014 the credit to GDP ratio had risen to 282 percent, a bit more than Australia or the US and much more than is normal in emerging economies. The shadow banking component led the expansion, growing at 37 percent annually since 2007.

This issue received special attention in the recent McKinsey Global Institute report on global debt. The Fung Institute in Hong Kong has also recently produced a couple of excellent papers on the topic.

The shadow banking sector is harder to delineate than the core banking system because its precise size is confused by fuzzy definitions, double counting of some institutions and under-reporting of others. Based on Chinese central bank data, the Fung Institute puts shadow banking assets a little over 50 percent of GDP, or less than one-third the size of bank credit. McKinsey estimates that the sector is a bit larger.

This is much smaller than the American shadow banking sector, and the Chinese institutions are much less complex.

In China, as in most countries, the expansion of shadow banking is the result of controls and distortions on the core banking sector which prevent banks from meeting the needs of savers and borrowers. They take their unsatisfied financing requirements to the informal financial sector, which expands to meet these needs. Depositors left the banking system because government controls made the interest return unattractive for savers. Borrowers went to the shadow banking systems because banks would not give them loans, or offered only unattractive short-term funding.

With this in mind, the rapid expansion of the shadow banking system should be seen as a phase in the ongoing development of China's finances. There are benefits as well as dangers.

The answer is not to shut it down, but to develop the benefits and minimise the dangers. In the pre-2007 world, much of China's enormous savings ended up funding the expansion of state-owned enterprises, with this investment (or over-investment) becoming less and less efficient over time. Private sector enterprise (the dynamic element in the economy) was starved of funds, receiving only 20 percent of bank credit.

The growth of the shadow banking sector is the transitional means for correcting this—imperfect, but a step towards a better financial system.

An efficient financial system provides finance across the full range of risks, offering safety for risk-averse depositors while also offering high-risk funding for the most dynamic entrepreneurs. The shadow banking sector's proclivity for excess and mindlessly low credit standards (also demonstrated in America and Europe in the period leading up to the 2008 crisis) needs to be reined in while at the same time retaining the dynamism and flexibility. Finding the right balance for the less-regulated non-bank institutions is a challenge for financial policy-makers everywhere, not just China.

So is this a worry?

China's central government has the resources and administrative capacity to prevent a serious macro-economic financial crisis. The central government starts with modest debt levels—27 percent of GDP. Even if it had to absorb the losses envisaged in McKinsey's most extreme disaster scenario, this would take official debt up to around 75 percent of GDP—less than in most advanced economies. Many borrowers also have substantial deposits to offset against their liabilities. While there are substantial credit risks in the housing industry (property developers and builders), most homeowners have little or no debt.

China's huge foreign reserves are not available in any substantive way for domestic financial problems. But these reserves (and the current-account surplus) ensure that China cannot be affected by the flight of foreign money that made the 1997-98 Asian crisis so disastrous.

All that said, it is quite possible, even likely, that there will be numerous bankruptcies (a property crash would be serious, as McKinsey estimates that housing-related credit accounts for 40-45 percent of lending). The central government would have to bail out some local governments (it has already begun taking over small amounts of their debt). As well, the links between shadow banking and the mainstream banks would precipitate balance sheet strains for the banking system.

Financial history tells us that countries that undergo financial deregulation always experience a crisis, to a greater or lesser degree. In China, the deregulation is taking place in a carefully staged fashion. But policy-makers can make mistakes. Markets can lose confidence and growth can be knocked off trend. China's low official debt, substantial government ownership of banks and enterprises, and enormous foreign reserves don't give it immunity from financial troubles, but they do mean that when things go wrong, they can be fixed with less disruption and quicker bounce-back. A Chinese 'Lehman moment' still seems unlikely.

Stephen Grenville is a Visiting Fellow at the Lowy Institute for International Policy and works as a consultant on financial sector issues in East Asia. This article originally appeared on the Lowy Interpreter, here.

Image: Flickr/Stuck in Customs

TopicsEconomics RegionsAsia

Pakistan’s New Missile Disrupts Nuclear Stability in South Asia

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Pakistan recently test-fired a surface-to-surface ballistic missile, Shaheen III. Capable of carrying a nuclear warhead, the missile is estimated to have a maximum range of 2750 km. While it has been claimed to provide a boost to Pakistan’s strategic depth and to deterrence stability in South Asia, a careful examination of how Shaheen III impacts the deterrence equation between India and Pakistan captures the latest Pakistani missile to be instead counter-productive.

Shaheen III is the latest addition in the Shaheen series. The previously developed and successfully tested missile, Shaheen II, is estimated to have a range of around 2500 km. The range of Shaheen II continues to remain a rough estimate. For instance, right after Pakistan tested Shaheen II in March 2004, Pakistan’s National Engineering and Science Commission (NESCOM) chairman, Samar Mubarakmand, was quoted saying that “the full range of the missile was 2,500 km although it was tested only to 2,000 km, the edge of Pakistan’s sea limits.” Another ISPR press statement issued on April 18, 2008, after the second successful test of the Shaheen II missile, however, confirmed the missile to have a range of 2000 km. But leading Pakistani newspapers claim Shaheen II to have a range of 1500 km. Based on an estimated range of 2000 km, a map has been made by C SIS that depicts the area (marked with blue dotted lines) that Pakistan could target using Shaheen II ballistic missile. This is critical to note as we question what new capabilities Shaheen III brings to the table.

Right after the launch of Shaheen III, Shahid Latif, retired commander of Pakistan’s air force was quoted as saying that “India doesn’t have its safe havens anymore.” With the ability to reach India’s extreme eastern frontiers, Director General of the Strategic Plans Division, Lieutenant General Zubair Mahmood Hayat, called Shaheen III “a major step towards strengthening Pakistan’s deterrence capability” vis-à-vis India. However, despite all the claims made by strategic experts and military leaders in Pakistan, there remains question on whether Shaheen III enhances the deterrence stability or is rather counter-productive.

From India’s perspective, Shaheen III does not really change the situation much as far as the credibility of Pakistan’s deterrent is concerned. Looking purely from a strategic point of view, Pakistan has had the ability to target all of India’s major population centers with Shaheen II, whose maximum range (2500 km) is estimated to be shorter than that of Shaheen III by only 250 km. Even if we go by the estimated range of Shaheen II at 2000 km which has been successfully tested by Pakistan and confirmed by ISPR, the missile would only miss the extreme eastern tips of India. Thus, when it comes down to “deterrence capability,” Shaheen II can deliver a nuclear warhead to almost all of the strategic sites of India to make the preexisting deterrent credible.

Shaheen III could offer Pakistan the ability to target Indian naval vessels in the Bay of Bengal, but for that Pakistan would need a highly effective and accurate terminal guidance system which could help a missile trace the targeted vessel’s movement and adjust its trajectory accordingly after flying across the entire Indian mainland. Another asset which would make Shaheen III stand out could be the multiple independently targetable re-entry vehicle (MIRV) capabilities, but Pakistan could use these payloads on Shaheen II as well, if it is able to develop or acquire them.

The purpose that Shaheen III could serve best, however, is to give Pakistan the ability to target Andaman and Nicobar islands in the Bay of Bengal. This, as has been argued by General Khalid Kidwai, former head of the Strategic Plans Division (SPD) and advisor to Pakistan’s National Command Authority in a conversation at the 2015 Carnegie International Nuclear Policy Conference, is the “sole purpose for the development of Shaheen III.” However, in the same conversation, he also added that by covering the islands of Andaman and Nicobar, Pakistan aims to take away India’s second-strike capability. But that goes far off from making Shaheen III a strategic deterrent, which Pakistan claims it to be. Instead of strengthening the concept of mutually-assured destruction (MAD), which Gen. Kidwai argues to be critical for South Asia, attempts to take away India’s second-strike capability will further destabilize the deterrence equation. It will push India to further cooperate with its global partners on its Ballistic Missile Defence Programme which will definitely be counter-productive for Pakistan.

Thus, while much has been stated and claimed about Shaheen III from the Indian perspective, it really does not bring anything new to the tableas far as deterrence stability is concerned. On the other hand, if Pakistan aims to take-away India’s second-strike capability, as Gen. Kidwai argues the purpose to be, it will only push India to further enhance its BMD systems. Indian doctrine of credible minimum deterrence is solely based on having a nuclear force that is capable of surviving a nuclear first-strike and launching a second strike which can inflict massive damage to the opponent to make the deterrent credible. Retention of second-strike capability is therefore a vital for stability in South Asia and development of Shaheen III by Pakistan with the aim of taking away India’s second-strike capability will only prove to be counter-productive for the former.

Arka Biswas is a SAV Visiting Fellow at the Stimson Center. This article originally appeared on South Asian Voices, here.