25 January 2014

Refocus on Defence and Diplomacy

By Arvind Gupta
Published: 23rd January 2014

Due to a close link between the security and foreign policies of a country, there are many intersection points between defence and diplomacy. In India’s history, the defence-diplomacy interface has been and remains intense. In 1947, the war in Kashmir at once brought to fore the role of diplomacy when India decided to take the Pakistani aggression issue to the UN. The consequences of the fateful step are still with us.

In 1962, a better interface between defence and diplomatic establishments would have helped read the Chinese intentions better. In 1965, India did better on the military front but failed to prevail on the diplomatic front at Tashkent, constrained by the stalemated position. In 1971, the brilliant diplomatic effort before the Bangladesh liberation war and the mobilisation of international opinion helped India withstand the combined pressure of the US, China and Pakistan. But again, on the diplomatic front India could not clinch the final solution of the Kashmir problem despite holding nearly 93,000 Pakistani POWs. At Kargil, as India was pursuing a peace initiative with Pakistan, the latter’s army was planning the intrusion. The lack of co-ordination between defence and diplomacy was apparent.

In all these years, the nuclear factor had been playing out at the international level. India’s inability to test the nuclear weapon after the Chinese test in 1964 and the so-called peaceful nuclear explosion of 1974 kept India out of the emerging nuclear order which had a major impact on our security. After India’s nuclear tests of 1998, defence and diplomacy have become even more closely tied with each other. Diplomacy has brought India back in the international mainstream without being a member of the NPT regime. But, a new factor has arisen—the ability of Pakistan to wage sub-conventional war against India under a nuclear overhang. Diplomatically, India is trying to engage with nuclear non-proliferation regime in innovative fashion while the Indian military is faced with the task of fashioning new doctrines for war fighting incorporating sub-conventional, asymmetric warfare, cyber warfare and so on.

The changing regional and global security environment has led to new challenges demanding an even closer interface between defence and diplomacy. A few examples can be given.

International terrorism: At the diplomatic level, new counterterrorism partnerships are being forged. At the domestic level, the Indian forces, including our paramilitaries and law enforcement agencies, have to craft new counterterrorism doctrines in consistency with international standards and conventions.

Dear Taliban: I See What You’re Trying To Do, But It’s Not Working

JANUARY 23, 2014

When you cover conflict zones as a reporter, you come to expect occasional spasms of violence as a matter of course, and you take them in stride. We don't have the capacity to lament every person in every incident that passes during war, so one of the residual tragedies is that people rarely get the memorials they deserve. Even if we just picked the innocent ones, there would still just be too many.

But I'm still getting emails and text messages about this past weekend's attack on La Taverna du Liban; friends and relatives I haven't heard from in months are checking in to make sure I'm OK, which has made it hard to not keep thinking about it. And I'm still seeing the images of bodies under chairs that a friend sent me. People shot while they were trying to hide, as if the wicker chairs could stop bullets, but such is the blizzard of adrenaline, blinding you when someone is trying to shoot you. Those pictures are evidence of what is beginning to feel like a trend with the Taliban: These days, they seem only interested in shooting at people who can't shoot back.

Another thing about the pictures: They graft neatly onto my own memories from the restaurant -- the chairs and tables, the pattern on the floor. It's as if I'm reminiscing about an evening I spent there, except that there is a part of it I've only just remembered, the part where I stepped out to take a call or go to the washroom and came back to find my friends all dying under the furniture.

Part of the special impact of this attack is, I have to concede, that the people who died looked like me. Were like me. The Taliban calls itself an Islamic Emirate, but usually they kill mostly Muslims.

But there was something else too, which took me a few days to understand.

As a rule, I don't make generalizations about Afghanistan. There is such a diversity of experience here that there's just not much you can say that would be true for more than a minority of the people, with one exception. There's one cliché you may have heard about this place, and that has been borne out again and again in my experiences. It's that all Afghans -- regardless of ethnicity, religious sect, or province -- regard hospitality like it's something sacred. I have been invited, taken almost by force, to be a guest at lunch in the homes of people fasting for Ramadan, but who insist that I eat because to them, my comfort is more important than their own.

I've been given alcohol by people who have never, and would never, let a drop pass their lips, not even cough medicine. Our faiths are different, but usually they don't care; if I'm happy, then to them, it's a duty fulfilled. The feeling I often have when I meet Afghans is that as a foreigner, I'm the most important thing in the world to them. 

Obama’s Choice in Afghanistan

Max Boot01.22.2014

If the Wall Street Journal is to be believed, U.S. military commanders are telling President Obama that he should leave either 10,000 U.S. troops in Afghanistan after 2014 or none at all. This seems like wise advice given the president’s proven predilection for splitting the difference–and for providing only the barest of bare bones necessary to carry out a strategy. For example, when he ordered the initial surge of forces into Afghanistan in 2009, he sent 30,000 troops, not the 40,000 that Gen. Stanley McChrystal had asked for, and imposed a time limit that hindered their mission.

For months, the White House has been leaking that no more than 8,000 U.S. troops would remain in Afghanistan past 2014–and possibly quite a few fewer. The military is right to warn that at a certain level, U.S. forces cannot sustain or defend themselves or their colleagues in the State Department and intelligence agencies. A handful of commandos cannot drop out of the sky and operate successfully–they need an infrastructure in place to support them. Same goes for military trainers, advisers, diplomats, and spies. 

So to that extent the military’s advice is on the money–although it is certain to be unwelcome in the White House which has long had a neuralgic reaction to leaks of force recommendations which Obama believes (perhaps rightly) are an attempt to “box him in” by the armed forces. 

But for an outside analyst what is troubling about the Journal report is not the troop figure recommendation. It is, rather, that the military is supposedly telling Obama, as a sweetener, that the entire force can be withdrawn by the time he leaves office–i.e., by early 2017. 

It is hard to imagine how any responsible commander could so recommend at this point–i.e., in early 2014–so perhaps the report is inaccurate. I hope so, because it is simply impossible to know now what Afghanistan will look like in 2017. Perhaps Afghan forces will have made so much progress by then that they will no longer need much American support. That is certainly what everyone, including me, hopes. But it’s not likely to happen given the extreme poverty of Afghanistan and the size of the security challenge it faces from an undefeated Taliban insurgency.

If history has taught anything, it is that premature pullouts of U.S. forces can sacrifice all that they have fought so hard to achieve. See, most recently, Iraq. Or before that, Haiti, Somalia, Vietnam, post-World War I Europe… the list is a long one of squandered opportunities. Whereas if U.S. forces stay for the long-term, near-miraculous progress is possible. See Germany, Japan, Italy, the former Yugoslavia, South Korea, and other examples.

It is certainly possible, even probable, that U.S. forces in Afghanistan will be able to responsibly draw down over the years. But any such withdrawal should be based on realities on the ground–not on an artificial desire to give President Obama a political coup by announcing the “end” of the Afghan War before the end of his term of office. We’ve seen in Iraq that a similar impulse led to more war, not less. The same danger looms in Afghanistan.

Afghanistan in 2014: Importance to Stretch Well Past Borders



Transatlantic relations may well be another long-term victim of the war in Afghanistan.

As the U.S. exit from Afghanistan nears, we can expect to hear steadily more about the lessons we should have learned since international intervention in the country back in 2001. But one dimension of the Afghan effort that might get overlooked next year is this: how has the Afghan conflict impacted transatlantic solidarity?

The short answer is that transatlantic relations may well be another long-term victim of the war in Afghanistan.

The Afghan operation started as a spectacular demonstration of the solidity of the transatlantic alliance in the aftermath of September 11, 2001, when NATO activated Article V of its collective defense clause for the first time in its history. But the limits of cooperation were quickly demonstrated, eroding the foundations of transatlantic solidarity. Whether they can be fully restored remains to be seen.

Afghanistan has been a story of frustration on both sides of the Atlantic. One of the early disagreements was over the relative importance of military operations versus a broader political approach – while the United States tended to focus on the former, European states emphasized the latter. The resources that each side was capable and willing to engage in Afghanistan played a role in this initial difference, but this doesn’t explain everything. Europeans had a genuine problem with the U.S. approach, which, over the years, kept focusing on security at the expense of politics and a sustained effort at national cohesion. As a result, all Afghan political institutions were created in a way that reflected Washington’s desire for expediency rather than a need to ensure the political system’s sustainability.

Torn between their willingness to demonstrate solidarity with Washington after 9/11 and their perception that the goals of the mission, as defined by Washington, were unachievable, many European countries limited their investment to the minimum and sought instead to bring their troops home. Others, in particular the closest American allies, decided to stick to U.S. strategy even when they knew it was bound to fail. These allies paid a heavy human, financial and political price, but seemed to take some absurd comfort in the fact that the failure would be a collective responsibility.

In parallel, the temptation in Washington to blame the Europeans for the coalition failures in Afghanistan grew as it became increasingly clear that, despite the official rhetoric, the United States had achieved none of its objectives. If al Qaeda has been weakened, none of its local affiliates has been eradicated and its reemergence remains a possibility in 2014 and beyond – the reality is that the Afghan state that is emerging from the reconstruction effort is in no position to prevent this happening on its own once U.S. forces have withdrawn next year.

Pakistan Ceases Cross-Border Movement With India After Drug Bust

Pakistan’s response to an Indian drug bust highlights the weak foundations of bilateral trade talks.
January 24, 2014

Tensions rose between India and Pakistan less than a week after the two South Asian neighbors agreed to reduce barriers to cross-border trade. Reuters reports that Indian police “seized more than 100 kg (220 lb) of heroin concealed in a truck full of nuts coming from the Pakistan side.” In response to the seizure, Pakistan stopped all cross-border trade and bus travel across the Kashmir border and New Delhi summoned Pakistan’s acting envoy to lodge a formal protest.

The row over the drug bust highlights the fragility of India-Pakistan negotiations. While the overall situation appeared to be improving after the Director Generals of Military Operations (DGMOs) of both countries met in late December and the trade ministers agreed to liberalize trade last week, bilateral ties remain subject to acute flare-ups. In 2013, a series of border skirmishes undermined diplomacy and resulted in a stagnant state of affairs in the broader India-Pakistan peace process.

A spokesman for the Indian External Affairs Ministry, Syed Akbaruddin, said ”It is indeed surprising that Pakistan chose to hold hostage trans-LoC trade and travel bringing immense humanitarian benefits to the people of Jammu and Kashmir, for the sake of persons indulging in drug trafficking.”

According to Reuters, the drug bust took place on Friday – one day before the trade ministers agreed to expand cross-border trade. Indian police impounded a truck that was India-bound from Chakoti on the Pakistani side and discovered 114 packets of heroin totaling 100 kg in among a cargo of almonds. Indian Deputy Police Inspector General J. P. Singh places the bust as the largest contraband seizure since cross-border trade started taking place across the militarized Line of Control in 2008.

“We have followed the procedures. We have seized contraband, we have registered a case and when you register a case you have to arrest the driver who was carrying it, according to our laws,” Singh said. He added that it was wrong of Pakistan to cease all movement across the Kashmir border.

Is Freedom Really Retreating Around the World?

An anti-government protester holds up a picture of Thai King Bhumibol Adulyadej during a celebration of his 86th birthday on Dec. 5, 2013 in Bangkok.

Freedom House is out with its annual Freedom in the World report for 2014 today, which classifies every country in the world as “free,” “partly free,” or “not free” based on both political rights and civil liberties. As has been the case for the past eight years, Freedom House found freedom to be in retreat around the world:

The number of countries designated by Freedom in the World as Free in 2013 stood at 88, representing 45 percent of the world’s 195 polities and 40 percent of the global population. The number of Free countries decreased by two from the previous year’s report.

The number of countries qualifying as Partly Free stood at 59, or 30 percent of all countries assessed, and they were home to 25 percent of the world’s population. The number of Partly Free countries increased by one from the previous year.

A total of 48 countries were deemed Not Free, representing 25 percent of the world’s polities. The number of people living under Not Free conditions stood at 35 percent of the global population, though China accounts for more than half of this figure. The number of Not Free countries increased by one from 2012.

The number of electoral democracies rose by four to 122, with Honduras, Kenya, Nepal, and Pakistan acquiring the designation.

One country rose from Not Free to Partly Free: Mali. Sierra Leone and Indonesia dropped from Free to Partly Free, while the Central African Republic and Egypt fell from Partly Free to Not Free.

(In case you’re curious—as I was—Indonesia’s drop in status was due to “the adoption of a law that restricts the activities of nongovernmental organizations, increases bureaucratic oversight of such groups, and requires them to support the national ideology of Pancasila—including its explicitly monotheist component.”)

But is freedom really marching backward? Political scientist Jay Ulfelder takes a skeptical look at the notion of a “democratic recession,” noting that most of the declines in scores we’ve seen over the last eight years have happened in the Middle East and the former Soviet Union, regions that were not exactly bastions of democracy to begin with, so what we’re seeing is “not primarily the result of more and more democracies slipping into authoritarianism; instead, it’s more that many existing autocracies keep tightening the screws.”

China loses its allure

Life is getting tougher for foreign companies. Those that want to stay will have to adjust
Jan 25th 2014

ACCORDING to the late Roberto Goizueta, a former boss of The Coca-Cola Company, April 15th 1981 was “one of the most important days…in the history of the world.” That date marked the opening of the first Coke bottling plant to be built in China since the Communist revolution.

The claim was over the top, but not absurd. Mao Zedong’s disastrous policies had left the economy in tatters. The height of popular aspiration was the “four things that go round”: bicycles, sewing machines, fans and watches. The welcome that Deng Xiaoping, China’s then leader, gave to foreign firms was part of a series of changes that turned China into one of the biggest and fastest-growing markets in the world.

For the past three decades, multinationals have poured in. After the financial crisis, many companies looked to China for salvation. Now it looks as though the gold rush may be over.

More pain, less gain

In some ways, China’s market is still the world’s most enticing. Although it accounts for only around 8% of private consumption in the world, it contributed more than any other country to the growth of consumption in 2011-13. Firms like GM and Apple have made fat profits there.

But for many foreign companies, things are getting harder. That is partly because growth is flagging (see article), while costs are rising. Talented young workers are getting harder to find, and pay is soaring.

China’s government has always made life difficult for firms in some sectors—it has restricted market access for foreign banks and brokerage houses and blocked internet firms, including Facebook and Twitter—but the tough treatment seems to be spreading. Hardware firms such as Cisco, IBM and Qualcomm are facing a post-Snowden backlash; GlaxoSmithKline, a drugmaker, is ensnared in a corruption probe; Apple was forced into a humiliating apology last year for offering inadequate warranties; and Starbucks has been accused by state media of price-gouging. A sweeping consumer-protection law will come into force in March, possibly providing a fresh line of attack on multinationals. And the government’s crackdown on extravagant spending by officials is hitting the foreign firms that peddle luxuries (see article).

Competition is heating up. China was already the world’s fiercest battleground for global brands but local firms, long laggards in quality, are joining the fray. Many now have overseas experience, and some are developing inventive products. Xiaomi and Huawei have come up with world-class smartphones, and Sany’s excellent diggers are taking on costlier ones made by Hitachi and Caterpillar. Consumers will no longer pay a hefty premium just because a brand is foreign. Their internet savvy and lack of brand loyalty makes them the world’s most demanding customers (see article).

China To Build World's Largest Marine Surveillance Ship

China plans to build a 10,000 ton marine surveillance vessel, passing Japan’s Shikishima for the title of world’s largest

January 24, 2014

The Chinese-language newspaper Beijing Dailyreported this week that China Shipbuilding Industry Corporation (CSIC) has signed contracts to build a 10,000 ton marine surveillance ship, which would be the largest such vessel in the world. The ship will be built by the CSIC’s “704 Research Institute,” along with another 4,000 ton vessel. English language sites Global Times and South China Morning Post also picked up on the story.

Notably, the current owner of the world’s largest marine surveillance ship is Japan, China’s rival in a bitter territorial dispute over the Diaoyu/Senkaku Islands. Japan’s Shikishima, which was commissioned in 1992,displaces 7,175 tons. Japan recently added a second Shikishima-class patrol ship, dubbed Akitsushima, which launched in July 2012 and was officially commissioned in November 2013. According to Navy Recognition, both ships are 150 meters long and are equipped with Oerlikon 35 mm twin cannons and two M61 Vulcan cannons, with the latter being used as part of a remote weapons system.

China’s new marine surveillance ship is one more piece of the tit-for-tat escalation in the East China Sea. As of now, China’s largest surveillance vessel, the Haijian-50 (“haijian” literally meaning “marine surveillance”), displaces around 4,000 tons. The new marine surveillance vessel would dwarf that, while also responding to Japan’s recent construction of a new Shikishima-class ship. Given that the Haijian-50 is often assigned to patrol the East China Sea, we can assume the new 10,000 ton ship will be patrolling the same waters. Still, there’s no detail yet as to what sort of weaponry will be outfitted aboard the new Chinese patrol ships.

The plans for a new maritime surveillance vessel are part of larger build up of China’s fleet. Back in 2012,Xinhua reported that China was planning to add 36 patrol vessels to the China Marine Surveillance fleet by mid-2014. In the period from 1999 to 2011, according to Xinhua, China added 13 new 1,000 ton patrol ships and five helicopters to the same fleet.

North Africa: Back to the Future?

JANUARY 10, 2014


Regional problems from the past have whipped up tensions just as North Africa needs urgent security coordination and political cooperation.

After a brief historical interlude of revolutionary fervour and democratic aspirations, the mood in North Africa has turned sour. During 2013, the Islamist moment was aborted in Egypt and put on the ropes in Tunisia. Chaos beckons in Libya while Algeria remains in limbo, waiting for deliverance from political paralysis and economic stagnation. Even in Morocco, where the monarchy skilfully navigated the treacherous whirlwinds of the Arab revolts, popular dissatisfaction with economic inequalities are causes of concern. Where the region goes from here is uncertain. Comeback beckons for the old authoritarian order as political Islam struggles to deliver on its promises and the secular alternative remains woefully inadequate. The security outlook also remains clouded, as governments learn to deal with the new Salafist surge and the transmutation of transnational terrorism in and around North Africa.

Regional problems from the past have whipped up tensions just as North Africa needs urgent security coordination and political cooperation. The Western Sahara dispute remains a sore in the geopolitics of the region, with Morocco and Algeria battling each other for influence in the Maghreb and Western Africa. The geo-economic and strategic considerations of international actors, including Gulf countries, also complicate the outlook for the region. The excessive focus on religious extremism as the primary threat to democratic transitions and Western security has diverted scarce international resources and attention from the main economic drivers of popular discontent and radical Salafist growth.


The great exuberance that the Arab uprisings provoked in North Africa faded as quickly as it came. The democratic moment took its protagonists and outside observers into a roller-coaster ride of hope and expectations. But as in other waves of democratic transitions, the process of political change has been tortuous and punctuated by violence, squandered opportunities and dramatic setbacks. Attributing the transition difficulties in North Africa to cultural particularism or illiberal religious traditions is, however, misguided.

Those in Europe or North Africa itself who have given up on the region’s dysfunctional politics not only ignore that political transitions are messy, but they also disregard the corrosive legacy of authoritarianism. The far side of social conflict, violence and volatility in much of North Africa today is the direct result of the culture of mistrust and fear that authoritarian governments perniciously fostered.

Towards a Culture of Pluralism in the Arab World



Both Islamist and secular forces should work together to guarantee the right of others to operate in a democratic system, even if they don’t agree with the other’s views.

“No culture, no society can prosper without a culture of diversity,” said Carnegie’s Marwan Muasher, “and yet, that is not what we have seen, or are seeing, today [in the Middle East].” Speaking to Voice of America’s Press Conference USA about his new book, The Second Arab Awakening and the Battle for Pluralism, Muasher said the region has not been living in a culture of democracy and diversity, and therefore, it did not have institutions capable of filling the void and vacuum that appeared as a result of the revolutions.

Muasher contended that the Middle East is seeing exclusionary forces, both Islamist and secular, engaging in a winner-take-all strategy in the Arab world. “As long as this remains a zero-sum game between Islamists and the secular elements in society, I’ve argued that the sum with be zero,” he said. He maintained that both forces should work to guarantee the right for others to operate in such a system, even if they don’t agree with their views—until that is done, Muasher said, the Arab world will be mired in conflicts, without putting in the necessary foundations for democracy.

100 Squadron: The Israeli Air Force’s Super Secret PHOTINT Surveillance Squadron

January 24, 2014
Israeli Intelligence Would Be Helpless Without Its Squadron Of ‘Flying Camels’ 
David Cenciotti
The Aviationist
January 23, 2014

100 Squadron is not only the oldest Israeli Air Force unit.

The Squadron of the “Flying Camels” is also IAF’s most active one in terms of flying hours.

It has taken part in each war fought by Israel since 1948 War of Independence, and its spy planes almost constantly fly over the Israel-Lebanon border, near Gaza, or wherever they are requested to collect imagery, observe ground targets and detect any Hamas or Hezbollah activity.

In fact, its task is to provide visual intelligence and targeting to make Israel’s air strikessurgical (and effective).

The squadron is equipped with the “Tzufit”, a highly modified Beech 200 Super King Air that has been packed with advanced (and mostly secret) electro-optic surveillance systems that acts as a spy plane as well as an airborne command post.

During its routine surveillance flights, the aircraft gathers data that is used to build up and update a database of ground targets: if a suspect activity or an actual rocket attack is reported inside the Gaza Strip, one of the aircraft is promptly scrambled to spot the target (if not already flying in the vicinity), identify and select it, “clean it” (confirming that there are no civilians nearby), and then live broadcast the images of the terrorists to a wide variety of “customers”, attack planes, helicopter, drones, ground patrols, that will have the task to actually destroy it.

In other words, the modified, seemingly harmless twin-turboprop plane is pivotal to the entire process that goes from the selection to the destruction of the target.

100 Sqn commander, Lt. Col. Yoav (last name was not released) was recently interviewed by the Jerusalem Post at the unit headquarters at Sde Dov airport in Tel Aviv.

What he said is interesting under several points of view.

First of all, he explained that the Beech aircraft of his squadron support army forces in Judea and Samaria, on the Gaza border, and have also flown abroad, when they have taken part to a joint exercise with the Hellenic Air Force in Crete.

Then, he highlighted the importance of manned intelligence platforms versus drones, unveiling a subtle competition with UAV (Unmanned Aerial Vehicle) crews: piloted planes can observe ground targets from a greater distances, and from higher altitudes, staying out of the envelope of surface-to-air missiles. Furthermore, the “Tzufit” turboprop are faster than drones (hence it can quickly be diverted to follow a “target of opportunity”) and is less affected by bad weather.

Once the target has been handed over to an attack platform, the subsequent strike can be called off even when a missile is already in the air on its way to the target.

“We are connected to everything happening in the Middle East,” Yoav said to the JP. “If something happens, we get involved,” and we can understand the reason.

Russia’s Carrot-and-Stick Battle for Ukraine



Integrating Ukraine would have been a terrible deal for Russia. On the other hand, if the EU were to help Ukraine become more modern, Russia would be a net beneficiary.

Russia has put heavy pressure on Ukraine to join a Russian-led customs union, instead of signing a far-reaching EU-Ukraine pact.

As the Russian and Ukrainian presidents meet again on Tuesday, the director of the Carnegie Moscow Center, Dmitri Trenin, examines Russia's strategy towards its traditional southern partner.

For Russia's President Vladimir Putin international relations are first and foremost about competition, which is intensifying. His approach towards Ukraine reflects that basic philosophy.

The key themes were reiterated in his State of the Nation address to parliament last week. The principal competitors are "large geopolitical units": the US, China and Europe - though the latter is still not a full-fledged strategic player.

In this context, Russia is one of very few major independent actors. To compete more successfully, Russia must expand its power base by creating an economic, political and military union in Eurasia.

Russia, according to Mr Putin, is not only a strategic unit, but also possesses a separate civilisation, which it shares with several other countries, such as Ukraine and Belarus. That civilisation is both Christian and European, but it is not a simple extension of Western Europe, or the European Union. Rather, it seeks to become the EU's peer.


The global financial crisis pushed Mr Putin to relaunch a long-delayed project of Eurasian economic integration.

In 2009, Moscow began to work in earnest on a customs union with Belarus and Kazakhstan. By 2012, the customs union had been deepened, putting the three countries into a single economic space. The goal now is to inaugurate the Eurasian Economic Union in 2015.

Two other ex-Soviet states, Armenia and Kyrgyzstan, have applied to join the Eurasian integration process. However, it is Ukraine, with its 46 million inhabitants and the second largest economy in the region (after Russia's), which would really make the difference and provide the project with the critical mass which Mr Putin seeks.

Converging Economic Destinies



The economic convergence of large parts of the developing world with the advanced nations is the great story of the modern era.

The economic convergence of large parts of the developing world with the advanced nations is the great story of our time. Sixty years ago, Singapore was an impoverished, malaria-infested island whose future absolute ruler, Lee Kuan Yew, admired the prosperity and civilization of the United Kingdom, where he had been educated. Singapore’s per capita income has since surpassed that of the UK and the rest of Europe by a wide margin and, more recently, that of the United States. Today, one in six households in Singapore has more than $1 million in disposable assets. And as its extraordinarily rapid economic development progressed, Singapore converged with the advanced nations in other ways: by rooting out endemic corruption, adopting strict environmental standards, and making progress toward a more pluralistic and democratic society.

Singapore and its fellow “Asian Tigers” (Hong Kong, Taiwan, and South Korea) are emblematic of rapid development, but they represent just a speck in the world’s economic ocean. In a momentous turn, around the mid-1980s, income acceleration took hold in the giant nations of China and India and several of their Asian neighbors, which together account for about half the world’s population.

Convergence today is no longer confined to Asia. The phenomenon spread to Central and Eastern Europe with the collapse of communism. It has also reached large parts of Latin America, the Middle East, and most recently, Africa. These regions have benefited from the surge of commodity prices induced by the acceleration of world growth.


The roots of the convergence phenomenon are buried deep in the economic history of the past 500 years. It can be understood as “payback” for more than two and a half centuries during which developing countries fell behind, while European nations and some of their sparsely populated Western offshoots—such as today’s United States— adopted the techniques and market institutions known as the Industrial Revolution. Although colonization of distant lands by Europeans had spread since at least the sixteenth century, the Industrial Revolution enabled imperial rule across territories that were home to most of the world’s people.

Japan, which was not colonized, became the first non-Western nation to systematically adopt techniques from the Europeans and Americans in the second half of the nineteenth century, and subsequently saw unprecedented growth rates. Whether or not the relationship is strictly causal, it likely is not an accident that the acceleration of growth in the developing world began shortly after decolonization in the wake of World War II was largely complete. (control and extraction of wealth by foreigners are obviously not conducive to the promotion of a market-driven globally competitive economy.)

Although some of the forces that have propelled growth in poor countries in recent years may prove temporary or sporadic—notably surging commodity prices—the increasing weight of developing nations in global economic activity results from deep economic trends that will not easily be diverted. According to the United Nations Population Division, over the next 40 years the world’s labor force will grow by more than one third, with most of the growth occur - ring in developing countries still early in their transition from high birth and death rates to low birth and death rates (China is a notable exception). Another factor is investment in infrastructure, machines, and housing, which is much larger in proportion to the initial stock of capital in the latecomers than in advanced countries.

Three Myths About Global Poverty

January 21, 2014

By almost any measure the world is better off now than ever before, in part thanks to foreign aid. By 2035, they predict there will be almost no poor countries.

So why do so many people seem to think things are getting worse?

Much of the reason is that all too many people are in the grip of three deeply damaging myths about global poverty and development.

Don't get taken in by them.

MYTH ONE: Poor countries are doomed to stay poor.

They're really not. Incomes and other measures of human welfare are rising almost everywhere - including Africa.

Take Mexico City, for instance. In 1987, when we first visited, most homes lacked running water, and we often saw people trekking on foot to fill up water jugs. It reminded us of rural Africa. The guy who ran Microsoft's Mexico City office would send his kids back to the US for check-ups to make sure the smog wasn't making them sick.

Today, Mexico City is mind-blowingly different, boasting high-rise buildings, cleaner air, new roads and modern bridges. You still find pockets of poverty, but when we visit now, we think, "Wow - most people here are middle-class. What a miracle". You can see a similar transformation in Nairobi, New Delhi, Shanghai and many more cities around the world.

In our lifetime, the global picture of poverty has been completely redrawn. Per-person incomes in Turkey and Chile are where the US was in 1960. Malaysia is nearly there. So is Gabon. Since 1960, China's real income per person has gone up eightfold. India's has quadrupled, Brazil's has almost quintupled, and tiny Botswana, with shrewd management of its mineral resources, has seen a 30-fold increase. A new class of middle-income nations that barely existed 50 years ago now includes more than half the world's population.

This holds true even in Africa. Income per person in Africa has climbed by two-thirds since 1998 from just over $1300 to nearly $2200 today. Seven of the 10 fastest-growing economies of the past half-decade are in Africa.

Here's our prediction: by 2035, there will be almost no poor countries left in the world. A few unhappy countries will be held back by war, political realities (such as North Korea) or geography (such as landlocked states in central Africa). But every country in South America, Asia and Central America (except perhaps Haiti) and most in coastal Africa will have become middle-income nations. More than 70 per cent of countries will have a higher per-person income than China does today.

MYTH TWO: Foreign aid is a big waste.

Actually, it is a phenomenal investment. Foreign aid doesn't just save lives; it also lays the groundwork for lasting, long-term economic progress.

Many people think that foreign aid is a large part of the budgets of rich countries. In fact, it is less than 1 per cent. (Even Norway, the most generous nation in the world, spends less than 3 per cent.)

One common complaint about foreign aid is that some of it gets wasted on corruption and of course, some of it does. But the horror stories you hear - where aid just helps a dictator build new palaces - mostly come from a time when aid was designed to win allies for the Cold War rather than to improve people's lives.

The problem today is much smaller. Small-scale corruption, like a government official who puts in for phony travel expenses, is an inefficiency that amounts to a tax on aid. We should try to reduce it, but we can't eliminate it, any more than we can eliminate waste from every government program - or from every business, for that matter. Suppose small-scale corruption amounts to a 2 per cent tax on the cost of saving a life. We should try to cut that. But if we can't, should we stop trying to save those lives?

A Practical Approach to EU-Russian Relations


Russia is demanding to be treated as an equal partner in its relationship with the EU, but Brussels had long ignored this shift, and EU-Russian relations have stagnated as a result. It is time for a fundamental rethink of the EU’s Russia policy.

Russia has come to see itself as a more important player on the international stage, and it is demanding to be treated as an equal partner in its relationship with the European Union. But Brussels had long ignored this shift, and EU-Russian relations have stagnated as a result. It is time for a fundamental rethink of the EU’s Russia policy.

EU-Russian relations are becoming more competitive.

@DMITRITRENINOver the last five years, as the European Union was focused on its internal crisis, its biggest neighbor fundamentally transformed its approach to foreign policy in general and to the EU in particular. Russia has come to see itself as a more important player on the international stage, and it is demanding to be treated as an equal partner in its relationship with the European Union. The Kremlin has also rebalanced its foreign policy, placing more emphasis on the Asia-Pacific region and particularly on post-Soviet Eurasia.

But Brussels long ignored this shift, and EU-Russian relations stagnated as a result. The relationship degenerated into a transactional one, boasting a fair amount of trade but punctuated by constant bickering over energy, visas, and human rights. At the same time, the EU proceeded with a policy toward Russia’s neighbors that was wholly separate from its Russia policy—until Brussels and Moscow suddenly collided over Ukraine in late 2013.

It is time for a fundamental rethink of the EU’s Russia policy. Brussels needs to take Moscow’s Eurasian project seriously, and it must decide what kind of relationship it wants with Russia in the short and longer term as well as whether—and how—this is achievable. Leadership changes at the top levels of several EU bodies later this year will provide an opportune moment to engage in serious thinking about these matters.


The EU and Russia laid out the original framework for their political, economic, and diplomatic relations in the Partnership and Cooperation Agreement, which was signed in 1994. It expired in 2007 and has yet to be replaced by a new agreement.

The relationship was initially structured as a loose association in which the EU was the driving element. It was based on a widely held assumption in Brussels that Russia would become progressively more European—that is, more like the EU member states—as it modernized.

But Russia has proved this assumption wrong. It has stopped viewing the EU as a mentor or even a model. Instead of being the EU’s follower, it has come to understand itself as a co-equal partner and a competitor of the EU.

This reversal did not happen overnight. The transformation of Russia’s foreign policy began almost a decade ago. An early indication of this shift was Moscow’s refusal to be included in the EU’s European Neighborhood Policy, a foreign relations tool first outlined in 2003 to increase cooperation with countries to the east and south of the union. Russia opted not to participate in the project—which lumped together all elements of the EU’s neighborhood, from Morocco to Moscow—because it wanted to be treated as an equal partner.

As a result, Russia and the EU agreed to create four “common spaces” to improve cooperation in the areas of economics; freedom, security, and justice; external security; and research, education, and culture. This “space-building” exercise, begun a decade ago, is now presumed defunct.

Japan’s Nemesis Threatens Europe

Bank of Japan, Tokyo
As Japan struggles to contain deflation, the eurozone may see prices begin to fall.
January 23, 2014

Japan may finally be starting to show progress against deflation after a 15-year fight that has divided economic opinion. But now the International Monetary Fund (IMF) has warned the dreaded malaise could hit Europe, too.

Announcing Tuesday the first increase in its global growth forecast for nearly two years, the IMF said in an update to its World Economic Outlook that the world economy would expand by 3.7 percent this year, up from 3 percent in 2013, picking up speed to 3.9 percent average growth in 2015.

The forecasts exceeded the 3.2 percent and 3.4 percent rises in world economic growth recently tipped by the World Bank for this year and next, although the IMF had a similar rationale for its increased optimism.

“The basic reason behind the stronger recovery is that the brakes to the recovery are progressively being loosened,” Olivier Blanchard, the IMF’s chief economist and director of its Research Department, said in a statement.

“The drag from fiscal consolidation is diminishing. The financial system is slowly healing,” he added.

The IMF said global activity had strengthened in the second half of 2013, helped by improved demand in advanced economies, which are expected to see higher growth in 2014. It kept its forecasts unchanged for developing economies, which despite higher exports are facing generally subdued domestic demand.

Yet despite the rosier picture, the IMF warned of new risks from very low inflation in advanced economies, principally the eurozone.

“Inflation is projected to remain below target for some time. If people’s expectations of future inflation drift down in response, actual inflation could turn out even lower than projected. That would increase real debt burdens and raise real interest rates, hampering growth,” the organization said.

Asia’s Mixed Picture

The report painted a mixed picture for the Asia-Pacific region, with Japan expected to slow while developing Asia picks up speed.

Boosted by Abenomics, Japan is expected to maintain last year’s 1.7 percent GDP growth rate in 2014. However, the IMF cut 0.2 percentage point from its forecast for 2015, predicting a deceleration to just 1 percent growth next year as this April’s consumption tax hike weighs on consumer spending.

The IMF’s Blanchard said at a press conference that Japan’s growth had come from fiscal stimulus and exports, but consumption and investment needed to start contributing.

“Investment so far has been weak. And the Japanese government will continue to face the challenge of achieving enough fiscal consolidation to reassure debt holders while not slowing down the recovery…that’s going to be for many years to come a difficult challenge,” he said.

America an Unreliable Partner

Posted on January 24, 2014

If there’s one attribute about the United States that makes partnering it risky, it is its unreliability. Washington initiates conflict as suits its momentary interest without caring about the possible ramifications for the countries, including allies, in the vicinity and effect on the prevailing order, which may not be to its liking but manifests stability. It is unscrupulous about the means it uses and, when the situation gets hot and body bags and fatigue take their toll, it thinks nothing about precipitously departing the scene leaving its regional partners holding the can. The absence of grit, stamina, and the will to absorb losses and to stay the course, is America’s major strategic failing that countries expecting the US to bail them out in strategic crises need to ponder.

Consider the recent record. The US intervened controversially in Iraq in 2001 to remove Saddam Hussein leading to a revival of the old Shia-Sunni schism, endless sectarian violence and consolidation of Islamist militancy in the beleaguered country. Thirteen years on, Washington decided to decamp with the “democracy” it has installed in Baghdad showing few signs of enduring. So infirm is its commitment that a few weeks ago it turned down prime minister Nouri al-Maliki’s plea for help militarily to oust the militant Sunni group with known connections to the Al-Qaeda occupying the cities of Fallujah and Ramadi in the Anbar province.

Elsewhere, after a decade of hard fighting in Afghanistan the Americans, longtime experts in “cut and run” tactics, are allowing a condominium of Afghan and Pakistani Taliban—the latter headed by the enigmatic Mullah Fazlullah operating out of the North Waziristan mountains—to displace in slow stages the legally elected government in Kabul and, simultaneously, to create sustained turmoil and dissension inside Pakistan in a bid to take over an already fragile nuclear armed state—everyone’s worst nightmare. Of course, Washington originally seeded this problem which is turning out to be catastrophic for South Asia. It exploited religion to rile the Afghans into fighting the Soviet Union-supported communist regime in Kabul, armed and motivated the Afghan mujahideen who, post-Russian withdrawal, in their new avatar as the Taliban spawned extremist outfits drawing disgruntled Muslims from everywhere, especially Central Asia and as far away as Chechnya. They are creating havoc in Pakistan and Indian Kashmir, and spurring Sunni radicalism in the Islamic crescent from the Maghreb to Indonesia.

Dempsey's Wise Words on the Military Profession

January 23, 2014

Gen. Martin Dempsey

Last week, Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey delivered a speech at the National Defense University where he spoke about the current strategic environment, the military instrument and the military profession. On the current strategic environment he stated that:

Rising powers, non-state actors, criminal organizations, religious groups and a handful of ideological agitators, all with strategy to simply change the way the world does business. They don't collectively agree on what they want, only on what they don't want.

As the architect of the status quo, the United States, therefore responds when North Korea enters one of its provocation cycles. We surge when Iran makes threatening gestures. We anguish over conflicts in Syria and South Sudan. Threats have changed, not revolutionary maybe, but more evolutionary and have become somewhat of a devolution of high technology. So you've got this really interesting nexus of high-tech and low-tech and this disparate threat that makes it very hard to pin down exactly the approach. We on the other hand have gone from being … a force oriented early in my career on high-end, high-intensity deterrence, to a far more flexible and expeditionary force and we better be thinking now about the "what comes next" because there is always something that has to come next.

On the U.S. military instrument, he argued that today "in some ways it's more often used to prod, to test the waters, to see what shakes out, to change the dynamic." But he warned that the notion that our increased capabilities for the application of precision in the use of force do not mean that we can exert control, particularly over foreign populaces. "We don't deal in Newtonian terms of equal and opposite reactions, we work in a quantum world where a tactical judgment can have a butterfly effect on a strategic relationship," he noted.

Just as was the case with Europe after the Second World War, the transition to democracy can be messy and requires patience. He fears such patience may be waning today. He stated, "What I've come to understand over 40 years, it's not just about the people gaining control, it's about wrestling control away from centralized power and redistributing it, often to those unprepared to manage it."

He told the assembled officers and civil servants that uncertainties of both the strategic landscape and of the budgetary variety would require a recalibration of risk. Dempsey stated that: