27 January 2015

Anti-Americanism is dead

Dhruva Jaishankar
January 27, 2015 

In the two days since US President Barack Obama has arrived in India, we have witnessed a multitude of memorable photo opportunities: Obama and Prime Minister Narendra Modi hugging, them having tea at Hyderabad House, and Obama’s appearance at the Republic Day parade. But what is this visit all about? What is it meant to achieve? There are three ways of evaluating Obama’s second — and most likely final — visit to India as president.

The most obvious is through a purely symbolic lens: the significance of having a US president as chief guest at India’s Republic Day. This alone ensures that it is no ordinary visit but an implicit acknowledgement and celebration by the US of India’s constitutional democracy, its diversity and role as a responsible military power. Additionally, between his two visits, Obama will have spent almost a week of his eight-year presidency in India, a not-insignificant amount of time, given his priorities at home and abroad with respect to West Asia, Afghanistan/ Pakistan, Russia and China.

Obama was also greeted warmly in the Indian capital this week, at a time when US relations with several other major countries — Russia and China, and even allies such as Germany, Japan, Turkey and Israel — are relatively poor or frosty. Despite the tyranny of routine crisis management, both sides have shown that they can take the time to invest further in a mutually beneficial partnership. By this measure, Obama’s very presence at Republic Day already makes this visit a success.


27 January 2015

Indian defence sector is set to embark on a significant growth path in the near future as the new initiatives announced by the government in promoting defence equipments manufacturing has begun to gain traction among global investors, a top M&M executive said. “I attended seminars organised on India specific issues at the WEF Annual Meeting.

“It is quite apparent that recent major initiatives by the government in promoting defence equipment manufacturing including by way of increasing FDI cap are beginning to gain traction and importance of the action is beginning to be understood by the global community,” Mahindra and Mahindra group’s defence business chief and overall group strategy head Shriprakash Shukla told the news agency in an interview. “The sector should be on a superior growth path in the near future,” he added.

Shukla said investors across the sectors made enquiries here about potential collaborations and there was an upbeat mood about India at the WEF Annual Meeting. “I’ve personally received several enquiries from potential collaborators in technology and business to invest with Mahindra in India. By investors across the spectrum for working with Mahindra group.

India hopes Modi has Midas touch

Mohan Guruswamy
Jan 27, 2015

Modi is playing the diplomatic game adroitly by building strong ties with the US, China and Japan. Just as the US can’t sacrifice its interests in Pak, India can’t sacrifice its interests just to placate any of its three main partners.

The Obama visit and the gains, real and imaginary, mark a sort of coming out for Narendra Modi. If comparisons have to be made I can’t think of anything better than Eliza Doolittle at the grand ball being led out to the dance floor by the visiting Prince of Transylvania. Unlike Eliza Doolittle, Narendra Modi had no Professor Henry Higgins to turn him from a humble chaiwala to a leader who calls the most powerful man in the world by his first name. He is a self-made and what he is, warts and all, is to his credit. Today he scored big for himself. As far as Indo-US relations go, Prime Minister Narendra Modi has done well for India. He has shown us a Modi touch that we now hope will turn into a Midas touch!

He has got the long-stalled Indian bid to generate 63,000 megawatt of power in 2032 from nuclear energy back on track. He has managed to create a climate favourable for foreign direct investment (FDI) which will create a bigger manufacturing base. Also, rather than mainly being an exporter of primary goods, it will make more exports of value added goods possible. Lest we get carried away by visions of huge flows of mother and apple pie American cash, most of the FDI which comes into countries like India and China are funds held by their own nationals. That more than 60 per cent of our FDI comes from Mauritius should make this obvious. India has to woo Indians as hard as it has to woo foreigners to invest in India.

Day after the summit

January 27, 2015 

The visit of an incumbent US president twice, and as chief guest on India’s Republic Day for the first time ever, is in and of itself significant. Anyone with even a nodding acquaintance of foreign and security policy will know that bilateral relations with the US constitute one of the more important, if not the most important, bilateral relationships for India. Only the uninitiated or those who habitually make assessments based on flawed assumptions and a profound misreading of where the world is headed would suggest otherwise. The visit was important not only for the elevation of Indo-US ties for their own sake but also for the efforts at seeking convergence in areas other than bilateral, those relating to stability and security in the Asia-Pacific and Indian Ocean regions, particularly as reflected in the US-India joint strategic vision document.

As the world’s two largest democracies, India and the US have worked over the last two decades to develop relations that have evolved steadily. There are nearly 40 dialogue mechanisms in place, demonstrating both the wide canvas and depth of the relationship. It is useful to set aside the hype that usually accompanies summit-level interactions of this kind and seek a clinical perspective. This necessarily requires ignoring commentators who are pathologically anti-US and those who salivate too easily at the prospect of doing business with the US.

The US is the world’s largest economy with a GDP of $18 trillion or more, twice the size of the Chinese economy and nearly 10 times the Indian economy, which has a GDP of less than $2 trillion. Less than a year ago, as a chief minister in election mode, Narendra Modi had to be persuaded to receive the then US ambassador under instructions from Washington to signal a change of attitude when it became clear that the chief minister, subject to a visa denial for over a decade, would be the next prime minister of India. Managing bilateral relations has not been easy. The relationship has been accident prone. Ever so often, it comes to be viewed as being transactional rather than the strategic partnership it is billed to be.

A visit and outcomes in superlatives

Rakesh Sood
January 27, 2015

The centrepiece of the Obama visit has been the ‘nuclear deal’, whose sticking points were a U.S requirement of keeping track of all U.S.-supplied nuclear equipment and materials at all times which India was reluctant to accept, and certain aspects of the liability law which suppliers found ambiguous. The U.S. now appears to have moderated its demand

Everybody was confident that U.S. President Barack Obama’s visit would be a good and successful one. There was enough in terms of symbolism to ensure that the following would have ensured a “good visit” — the first U.S. President to be the chief guest at the Republic Day; the first U.S. President to visit India twice during his tenure; the ceremony of the Republic Day parade notwithstanding the inclement weather; the excitement about the menu at the banquet the previous day; the buzz surrounding First Lady Michelle Obama’s outfits. The question was whether it would be a great visit, and a historic visit. Clearly, Prime Minister Narendra Modi wanted it that way and he has successfully put his imprint on India-U.S. relations.

The fact that he has done so in less than a year of his becoming Prime Minister provides us an insight into his thinking. His pragmatism was evident when he put the decade-long “visa ban” issue behind him and readily accepted Mr. Obama’s invitation to visit Washington in September last year. The U.S. too was signalling that the India-U.S. file had regained importance after the general election and that it was departing from the norm that bilateral visits did not normally take place when leaders were visiting New York for the U.N. General Assembly. It was evident that the two leaders connected. Mr. Modi was able to convince Mr. Obama about his vision for India and his belief that it needed a strong partnership with the U.S. which he could deliver on.

N-deal logjam cleared: Modi, Obama agree not to dilute liability law

Suhasini Haidar
January 26, 2015 

It will almost definitely mean a higher cost to any nuclear deal concluded with U.S. companies than was earlier anticipated

Negotiations between the nuclear contact group over the past two months paid off on Sunday, and Prime Minister Modi and President Obama announced a “breakthrough understanding” that would allow the commercialization of the Indo-US civilian nuclear deal launched in 2005.

The breakthrough also signaled a significant diplomatic victory for India’s stand that it would not dilute its liability law, although it will almost definitely mean a higher cost to any nuclear deal concluded with US companies than was earlier anticipated.

In effect, Indian officials were able to convince US officials to clear the logjam by transferring the “risk assessment” to the commercial operators and suppliers, i.e. GE-Hitachi and Westinghouse.

For the last few years, talks on the civilian nuclear deal’s “administrative arrangements” had been stalled after the US raised objections to India’s Compensation for Nuclear Liability and Damages law of 2010. The law included two sections, 17(b) and 46, which the US felt would indemnify companies supplying nuclear reactors and parts to India beyond what was required by international law or Convention on Supplementary Compensation (CSC).


By Archana Arul
Source Link

The visit of US President Barack Obama to India as chief guest for the Republic Day celebrations should be seen much beyond the context of India showing off its military wares and cultural depth.

It gives the occasion to reflect on India-United States relations on a people-to-people basis and in the extent to which people from India have contributed to America and vice versa. It has never been a one way street.

The fact that as many as three million Indians call themselves Indian Americans or just “Americans” is reflective enough of the melting pot that is the United States. The Indian diaspora for that matter is said to be around 25 million spread far and wide in the world, especially in the Asia Pacific and Africa. The people of Indian origin have made it politically in the Indian Ocean states as also in the West Indies as the rich collection of this year’s Pravasi Bharatiya Divas would show.

But the Indian Americans in the United States are an example of the successful immigration, their assimilation and their contributions to social change of America. More than 100,000 students from India register in institutions of higher learning every year in the United States making the country the first in the list of foreign students in America.


Source Link

PRIME MINISTER MODI: Mr. President, and members of the media, it is a great pleasure and privilege to welcome back President Obama and the First Lady in India.

Mr. President, we are honored that you accepted our invitation to be the chief guest of our Republic Day. And I know how busy you are. It is special because on this day we celebrate the values shared by the world’s two largest democracies. You are also the first United States President to visit India twice in office. It reflects the transformation in our relationship. It shows your deep personal commitment to this partnership. It tells us that our two nations are prepared to step forward firmly to accept the responsibility of this global partnership for our two countries and toward shaping the character of this century.

The promise and potential of this relationship had never been in doubt. This is a natural global partnership. It has become even more relevant in the digital age. It is needed even more in our world for far-reaching changes and widespread turmoil. The success of this partnership is important for our progress and for advancing peace, stability and prosperity around the world.

From the turn of the century we had begun transforming our relationship, but we have to convert a good start into lasting progress. This requires translating our vision into sustained action and concrete achievements.


By Amit Dasgupta

Tweeting that President Barack Obama would be visiting during the Republic Day celebrations was a foreign policy coup by Prime Minister Narendra Modi.

Amid fears that the visit would be only remembered as a logistics and security nightmare, and a series of touristy photo-ops, some advocate the need to temper expectations. In short, keep the visit as a symbolic one. After all, they argue, getting Obama to visit India is in itself a major achievement.

While symbolism matters, substantive achievements could be a policy game changer for both countries. But for this to happen, good intentions and personal rapport needs to translate into visible timelines and reforms.
Nuclear Cooperation

The Indo-US civil nuclear deal was a monumental shift in the way the two countries had perceived each other for decades. But, after signing of the deal, cooperation ceased on account of India’s tough Civil Nuclear Liability Act holding suppliers directly liable in case of an accident. US companies argue that this is against global norms. Washington, similarly, insisted that, as per domestic legislation, nuclear material supplies needed to be tracked to ascertain its whereabouts. Delhi has protested that this is intrusive, as International Atomic Energy Agency (IAEA) safeguards are in place.

Narendra Modi dismisses calls for India to match China's climate goal


The United States and India sought to put a contentious history behind them Sunday by declaring a new partnership on climate change, security and economic issues, but Prime Minister Narendra Modi rejected calls for India to match China’s commitment to reducing greenhouse gas emissions.

As President Obama opened a three-day visit to New Delhi aimed at underscoring the two democracies’ shared ideals, Modi’s blunt dismissal of a sweeping climate agreement reflected the limits of Washington’s assiduous courtship of the popular new prime minister.

Even as Obama announced “a breakthrough understanding” that could clear the way for U.S. companies to build nuclear power plants in India — potentially reducing India’s heavy reliance on fossil fuels — Modi said he felt “no pressure” from any other country to curtail the South Asian nation’s carbon emissions.

Instead, the U.S. said it would cooperate with India in clean-energy initiatives such as expanding solar power, reducing the most toxic greenhouse gases and making air-conditioners more efficient — without demanding that it slow the rapid growth of its coal industry.

“India is a sovereign country,” Modi said during a joint news conference with Obama. “There is no pressure on us from any country or any person, but there is pressure when we think about the future generations and what kind of world we want to give them.”

Why India Is Still Hedging Its Bets on US

Melissa S. Hersh, Ajey Lele
January 26, 2015

Obama’s official state visit to India this week is unique due to the U.S. president’s place as “chief guest” during Delhi’s Republic Day celebrations, a role never previously bestowed on an American president. The visit comes on the coattails of several highly publicized, official state visits from China and Russia, both shortly before and after Prime Minister Modi’s visit to the U.S. in late 2014.

Many Indians are likely to view Mr. Obama’s presence at the Indian Republic Day celebration as a sign of India’s increased global importance and influence. Still, challenges—on both sides—threaten the sunny relationship. There is a pressing need to share both the benefits and risks bi-directionally across a number of areas, including foreign direct investments; technology co-creation; security and defense trade and cooperation; and energy and environment matters. If the U.S. can wrap its head around the fact that India will be India, inevitably trading with Russia and China and not always agreeing or siding with the U.S., then there is some hope for a positive set of outcomes this week. Likewise, India has challenges as well, with the need to manage liability, create more transparent procurement processes, and understand that Buy American can conditionally work with Make in India. Moreover, both countries need to come to terms with policies vis-à-vis Pakistan that can actually enable South Asia to be stable and peaceful. 

What will be on the agenda this week has been largely kept under wraps, fueling cross-border, Indian-Pakistani media antagonism. The tit-for-tat media volley has New Delhi claiming that inside sources in Washington told Islamabad to clamp down on cross-border terrorism during Obama’s visit. Islamabad has dismissed these allegations aspropaganda. If the allegations are true, they would be tacit confirmation that India faces an unwieldy “Pakistan problem” in which Washington would not likely interfere either before or after the U.S. visit. Moreover, Indian perceptions that the America’s lack of condemnation through actions—such as using aid as a bargaining tool—only adds insult to injury to those worried about the alleged condition for Obama’s visit. Secretary of State John Kerry’s most recent visit to Pakistan, where he offered $250 million in emergency aid, did not go unnoticed in New Delhi. 

Unity in Difference: Overcoming the U.S.-India Divide

Ashley J. Tellis 
JANUARY 21, 2015 

U.S. President Barack Obama’s return to India in January 2015 carries the hope that Washington and New Delhi may succeed in placing their cooperation on firmer foundations.

U.S. President Barack Obama’s return to India in January 2015 carries the hope that Washington and New Delhi may succeed in placing their cooperation on firmer foundations. Achieving this objective will require reconciling American expectations of exchange-based relations with the Indian desire for a no-obligations partnership. This challenge is best handled through a set of complementary policies in Washington and New Delhi that together are most aptly characterized as “unity in difference.”
Key Themes

India and the United States are still some distance away from realizing their objective of cementing a strong geopolitical affiliation that advances each other’s vital interests.

Bilateral ties were at their best during the Cold War when Washington pursued unstinting policies toward New Delhi despite the latter’s inability or unwillingness to reciprocate.

In the post–Cold War period, the willingness of a few American presidents to extend exceptional support to India and the appreciation in New Delhi of the durable strategic partnership with Washington opened the door to transformed bilateral relations.

Achieving a genuine strategic partnership between the United States and India is challenging, but it will be a worthwhile investment in the long-term security and relative power positions of both India and the United States. 
Recommendations for the United States and India

India-U.S. BIT: not a done deal yet

BY Rajrishi Singhal
23 JANUARY 2015

India is revising the model draft agreement of its existing bilateral investment treaties. Some of the new clauses are unlikely to be accepted by either U.S. negotiators or U.S. corporations without substantial dilution 

U.S. President Barack Obama’s second visit to India has resurrected hopes that the two countries will revive talks on the dormant but in-progress Bilateral Investment Treaty (BIT). A BIT is being eagerly sought by both sides—from the U.S., to provide comfort to American companies that they will not be treated unfairly, and from India in the belief that it will help increase foreign investment inflows into India.

But negotiating the many tripwires of the BIT will take time and effort. It may therefore be wise to rein in the optimism that is usually generated by high-profile state visits and the associated optics. More so because every significant India-U.S. bilateral visit in recent times—by Prime Minister Narendra Modi to Washington DC in September 2014, by U.S. Secretary of State John Kerry to India in June 2014 and January 2015, and by U.S. Trade representative Michael Froman in November 2014—has rekindled expectations about the abandoned BIT.

Talks on a BIT between the two countries have been on hold since February 2014. [1] Preparations to restart the conversation resumed in the backrooms soon after Modi’s swearing-in on 26 May 2014. Kerry discussed the pending BIT agreement with Modi on the sidelines of the Vibrant Gujarat Summit earlier in January. Diane Farrell, acting president of the U.S. Indian Business Council, confirmed this in a press statement. [2]

Transition in Afghanistan: Losing the Forgotten War?

JAN 26, 2015 

The Burke Chair circulated a report in early January on Transition in Afghanistan. We have since received extensive comments and the revised edition is being circulated in final draft form before becoming a CSIS E-book. This report is entitled Transition in Afghanistan: Losing the Forgotten War? It is available on the CSIS web site athttp://csis.org/files/publication/150126_Losing_Forgotten_War.pdf

The report focuses on the lessons that need to be learned from of the US experience in Afghanistan to date, and the problems Afghanistan faces now that most US and allied combat forces have left. It builds on more than a decade’s worth of reporting and analysis of the Afghan war. It examines the recent trends and problems in Afghan governance, the trends in the fighting, progress in the Afghan security forces, and what may be a growing crisis in the Afghan economy.

The report asks serious questions about the problems that are arising from the lack of political unity of the country and the problems in the effectiveness of its government. It provides a detailed analysis of the problems resulting from the recent election, a growing Afghan budget crisis, and critical problems with power brokers and corruption.

The report indicates that the military situation is far worse than the US Department of Defense and ISAF have reported, and provides detailed graphs and maps showing the real risks in the current security situation. It also provides a detailed analysis of the problems in the Afghan National Security Forces (ANSF) and the limits in their capability, as well as the weaknesses in past and planned US and allied force development and training efforts.

The report suggests that President Obama’s insistence on rapid cuts in the US advisory presence and its near elimination by the end of 2016 could cripple the Transition effort, and that a large and longer conditions-based effort may be critical to success.

FLAWED CAMPAIGNS: A General’s Apology for Iraq & Afghanistan


Both a soldier and a scholar, Gen. Daniel Bolger seems ideally equipped to hash out what went wrong in Iraq and Afghanistan, but even his expertise and honesty are not enough. 

Taken together, the title and subtitle of Daniel Bolger’s Why We Lost: A General’s Inside Account of the Iraq and Afghanistan Wars suggest it’s either another contribution to an increasingly crowded genre—a memoir from an American soldier who has served his country on the forlorn battlefields of our current wars in the greater Middle East—or a strategic analysis of those wars. In fact, Why We Lost turns out to be much more of a conventional narrative history than a personal account or a strategic study. While drawing on his experiences in the field—the author served two tours in Iraq and one in Afghanistan—he relies heavily on primary and secondary sources in framing and fleshing out this story. General Bolger, it turns out, is not just a soldier, but a professional historian, with a Ph.D. in that subject from the illustrious University of Chicago. He has taught at West Point. 

This is a serious book about a vexed and divisive subject. The author dutifully surveys the origin and context of these two grueling, protracted struggles, at home and abroad, and goes on to explore in some detail the evolution of U.S. military culture, and civil-military relations, since the Persian Gulf War of 1990-1991. He provides balanced thumbnail biographies of the major players on both sides of the conflict, and well-observed sketches of ordinary soldiers, sailors, and Marines doing quite extraordinary things. 


As the leaders of the world’s two largest democracies that bridge the Asia-Pacific and Indian Ocean region and reflecting our agreement that a closer partnership between the United States and India is indispensable to promoting peace, prosperity and stability in those regions, we have agreed on a Joint Strategic Vision for the region.

India and the United States are important drivers of regional and global growth. From Africa to East Asia, we will build on our partnership to support sustainable, inclusive development, and increased regional connectivity by collaborating with other interested partners to address poverty and support broad-based prosperity.

To support regional economic integration, we will promote accelerated infrastructure connectivity and economic development in a manner that links South, Southeast and Central Asia, including by enhancing energy transmission and encouraging free trade and greater people-to-people linkages.

Regional prosperity depends on security. We affirm the importance of safeguarding maritime security and ensuring freedom of navigation and over flight throughout the region, especially in the South China Sea.

We call on all parties to avoid the threat or use of force and pursue resolution of territorial and maritime disputes through all peaceful means, in accordance with universally recognized principles of international law, including the United Nations Convention on the Law of the Sea.

We will oppose terrorism, piracy, and the proliferation of weapons of mass destruction within or from the region.


January 26, 2015

“This has to be about you. This has to be your campaign plan.” This is what the Chairman of the Joint Chiefs of Staff,General Martin Dempsey said to Iraqi leaders when he visited the country in the fall of 2014. General Dempsey delivered his most extensive public remarks on efforts to counter the Islamic State in Iraq and the Levant (ISIL) at November’s Defense One Summit. Rather than seizing control of an entire country and gradually transitioning it back to the host government as its capacity grows, as the United States did in Afghanistan in 2001 and Iraq in 2003, General Dempsey explained that, this time, the U.S. is leaving Iraqi forces in control and only augmenting them where absolutely necessary. The method starts and ends with Iraqi ownership of Iraqi security. This highlights a significant change in the U.S. approach to Iraq (and instability elsewhere), the import of which might easily be missed.

One of the vexing questions in Washington, D.C. for the last several months regarding the counter-ISIL campaign runs something like this: “We had over 100,000 troops in Iraq, and nearly a decade to train and equip the Iraqi Security Forces. If the result was a force that fled in the face of a much smaller non-state actor, how can we possibly train an Iraqi force now that will perform differently, especially without the leverage a large occupying force provides?”

Part of the answer lies with new Iraqi leaders who have a different mindset. General Dempsey compared the new prime minister, Haider al-Abadi, and his team to their predecessors and concluded, “The new leaders are more thoughtful and have an instinct toward inclusivity.” Mr. Abadi recently described his approach to governance: “Exclusion breeds extremism, so our new government includes Sunnis, Shiites and Kurds, as well as

A Game Changer for China and India in Sri Lanka?

By Kabir Taneja
January 25, 2015

On January 18, a Reuters reported claimed that Sri Lanka’s now former president, Mahinda Rajapaksa, had expelled the station chief of India’s intelligence agency in Colombo after accusing him of working against his government and supporting the opposition.

India denied the claim, but the report serves as an example of Rajapaksa’s thorny attitude towards New Delhi, irrespective of the face presented by public diplomacy.

The docking last September of a Chinese naval submarine in Colombo turned heads in New Delhi, just as the new government led by Prime Minister Narendra Modi was still getting up to speed. The event underlined the magnitude of Chinese influence in Sri Lanka under Rajapaksa, despite assurances from Beijing that the docking was a routine stopover to re-stock on supplies before heading to the Gulf of Aden to participate in anti-piracy operations.

A month later in October, the Indian government quietly launched an inter-ministerial review exercise to revisit India’s policies for the Indian Ocean. This followed on the heels of China’s proclaimed Maritime Silk Road, its growing influence around the Bay of Bengal, and the development of the Pakistani port of Gwadar, which is to be operated exclusively by Beijing. Glimpses of this exercise were seen the same month when Modi visited Myanmar, Australia and Fiji. China is the biggest foreign investor in Australia, and has liberally provided economic aid, loans and investments to Myanmar and Fiji. A few weeks later, China docked two of its submarines again in Sri Lanka.

China: Top Anti-Graft Body Faces Historic Challenge

By Bob Lee
January 25, 2015

It is very rare for an annual plenary session of the Central Commission for Discipline Inspection (CCDI), the nation’s top anti-graft body, to be held two months earlier than usual. Presiding over the meeting last week, Chinese President Xi Jinping vowed to keep up the intensity of his sweeping anti-corruption initiative. The Central Military Commission closely toed the party line the next day, pledging “absolute loyalty” to Xi in beefing up the corruption crackdown.

China Daily subsequently ran an article revealing that former security chief Zhou Yongkang and one-time high-flier Bo Xilai had formed a clique in preparation for “a big game” – hinting that the two had harbored nefarious intentions of trying to topple Xi at some point in his first term.

There are growing indications that Xi’s campaign is not going to die down, yet it is getting “arduous and complicated,” as Xi himself claimed, and of course it is also getting more interesting. It looks almost certain that Xi is now ready to point his cannon at some in the innermost circle of the Chinese Communist Party (CCP) who were once considered “too big to fall.” In 2015, we may well witness a showdown with one or more “super tigers” that could lead to a “defining victory”- a term increasingly used in the state media’s rhetoric.

In the process, cliques and factions affiliated with big bosses, like the Petroleum Gang, the Shanxi Gang, and the Shanghai Gang would crumble one by one. A statement released by the ruling Politburo after its final meeting of 2014 claimed that “organizing cliques within the party to run personal businesses is absolutely not tolerated.”

China’s “Server Sinification” Campaign for Import Substitution: Strategy and Snowden (Part 2)

January 23, 2015 

Since 2009, the Chinese government, in cooperation with state-run and private firms, has conducted an import substitution campaign in its computer server market, which is currently dominated by U.S. information technology (IT) companies IBM, Oracle and Hewlett-Packard (HP). China’s policy objective has been to reduce its reliance on the United States in server equipment, which it believes constitutes a threat to Chinese information security and imposes excessive costs on its domestic industry.

This article details the impact of external events on China’s import substitution program; most notably the effect of disclosures made by former National Security Agency (NSA) IT contractor, Edward Snowden, beginning in June 2013, which have proven useful to China in justifying import substitution on national security concerns. China also appears to be accelerating its activities in this area following diplomatic disputes with the United States, most notably in retaliation against the indictment of five alleged Chinese military officers on cyber espionage charges by the U.S. Department of Justice in May 2014.

Piling on Snowden

Beginning in June 2013, various world newspapers published leaked information from Snowden exposing extensive global monitoring systems operated by the United States in conjunction with several key allies, including the United Kingdom and Canada. Information from Snowden led to the public acknowledgement of the PRISM program, which allows the NSA and the Federal Bureau of Investigation (FBI) to monitor the private emails and conversation records of the U.S. public and foreign targets operating outside the United States. It is also claimed that the intelligence capabilities of the U.S. government have been enhanced with the support of a plethora of large U.S. IT companies, including Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube and Apple. The Beijing Morning Postalso reported claims that Cisco Systems had participated in the PRISM project directed against the Chinese government, customs service, postal service, finance, railroads, civil aviation, medical services, military and police (Beijing Morning Post, June 19, 2013). A recurring criticism appearing in Chinese media is that prior to Snowden, relatively few restrictions had been imposed on U.S. IT and telecommunications companies in China; yet the United States had regularly impeded the activities of Chinese firms, such as the Chinese telecommunications giants Huawei and ZTE, in the U.S. market on national security grounds (Beijing Morning Post, June 19, 2013).

The Impact of SOE Reform On Chinese Overseas Investment

January 23, 2015 

Wu Yibing, director for China of Temasek, Singapore's state-owned investment company and a model for foreign investment in Chinese companies.

Chinese President Xi Jinping’s new round of state-owned enterprise (SOE) reform and his anti-corruption campaign will dramatically change the preferences and performance of SOEs’ overseas economic expansion. The economic and political initiatives undertaken by Xi meet in the state sector, as the Chinese government is tightening its control over assets and overall strategy at the macro-level, while loosening control over corporate governance at the micro-level. The increasing role of private stakeholders in SOEs will improve their management skills at the executive level and improve the transparency of the decision-making process. However, the introduction of private capital will not reduce the state’s control. In the short run, Chinese SOEs will be more prudential in acquiring foreign assets, with increasing awareness of risk control and profitability analysis. Vital to China’s national interests, the energy sector is still at the top of Beijing’s agenda for overseas investment and acquisition, together with an increasing appetite for the cultural, high-technology, healthcare and food industries. To create more investment opportunities for Chinese companies, the Chinese government will also accelerate its negotiations with major trading partners on bilateral or multilateral investment agreements.

When the Chinese government under then-President Jiang Zemin announced the “going-out” strategy to nurture national champions in the global market two decades ago, Chinese SOEs were the first and biggest movers to invest abroad. In 2013, SOEs represented 63.4 percent of China’s overall non-financial overseas direct investment (21st Century Business, January 17). Beyond government initiatives, Chinese companies have diversified their investments into foreign markets in response to diminishing returns at home and to acquire human capital abroad—upgrading their supply chain, improving management capability and acquiring high-tech intellectual property rights (IPR)—as well as to gain access to more mature markets.

“Ruling the Internet According to Law”: Chinese Internet Governance in 2014 and Beyond

January 23, 2015 

The Chinese government is known for its heavy-handed censorship of the country’s Internet, now with a user base of about 665 million. After the blockage or shut down of a series of social media accounts, commercial websites, text messaging applications, online libraries and cloud computing services, 2014 ended with the total blockage of Gmail, inaccessible without recourse to a Virtual Private Network (VPN). [1]

In February 2014 three months after creating and presiding over a powerful National Security Commission, which is responsible for cyber security issues, Chinese President Xi Jinping moved to head up a new government body, the Central Internet Security and Informatization Leading Group (CISILG). During the first meeting of the group, Xi called for “the proper management of public opinions on the Internet” (Xinhua, February 27, 2014). Making sure the Internet is under its control is now one of the most pressing strategic concerns for the Chinese Communist Party (CCP).

In October, the CCP held its Fourth Plenum of the 18th Party Congress. The decision document that emerged from the conference outlined an array of reforms under the theme of “ruling the country according to law” (yifa zhiguo), including “regulating Internet activities according to law” (see China Brief, November 20, 2014; Xinhua, October 28, 2014). The phrase “ruling the Internet according to law” (yifa zhiwang) has since been popularized. “The Party’s Fourth Plenum spirit of law should be vigorously applied to the Internet to ensure regulators and online users behave within the limits of law,” said Lu Wei. Lu, dubbed “China’s Internet Czar” by Western media, is the director of the State Internet Information Office (SIIO), China’s leading Internet regulatory body (Xinhua, October 27, 2014).

Energy Security, Geopolitics and the China-Russia Gas Deals

January 23, 2015

During the November 2014 Asia-Pacific Economic Cooperation (APEC) summit, Beijing was not only an impressive host, but also a generous financial supporter of a number of China-centered initiatives. The largest economic package during the APEC summit went to the second China-Russia mega deal of the year: Moscow and Beijing reached a non-binding memorandum that will see top Russian gas producer Gazprom ship 30 billion cubic meters (bcm) of gas annually to China over 30 years. This is just slightly less than the $400 billion accord the two countries signed in May 2014 for Russia to supply China with 38 bcm a year by 2018. The two gas deals, sealed only six months apart, have profound implications on China’s quest for energy security, the volatile global energy market, China-Russia relations and broader geopolitical movements worldwide.

China’s Quest for Energy Security

While the world media and expert opinions have focused mainly on the significance of these deals for Russian President Vladimir Putin and his confrontation with the West over the Ukrainian crisis in recent months, Beijing sees them primarily as a part of its long-term search for energy security and diversification of supply sources. The timing simply gave China the final breakthrough.

When China became a net importer of oil in the early 1990s, it already had begun to talk to Moscow about large-scale imports of Russian oil and gas, including gas pipelines from both eastern and western Siberia (Reuters, November 10, 2014). Over the past two decades, China’s dependence on imported oil has grown to 60 percent, with suppliers mostly from the Middle East and Africa.

Jinglue Haiyang: The Naval Implications of Xi Jinping’s New Strategic Concept

Admiral Wu Shengli, a member of the Central Military Commission and commander of the PLA Navy, has spoken about jinglue haiyang.

In studies of Chinese expansion in the near seas of East Asia, one topic that has been almost entirely ignored is the concept of jinglue haiyang, recently endorsed by the Party-state as a facet of China’s maritime power strategy. The word jinglue is not in common usage; indeed, most dictionaries do not define it. It is a verb combiningjing, the character for manage or administer, with lue, the character for strategy or stratagem. According to the 1979 edition of theCihai Dictionary, it means “handling an issue on the basis of prior planning.” A useable translation might be “strategically manage,” with the full phrase rendered as “strategic management of the sea.”

Chinese official and quasi-official sources, the naval press in particular, now regularly cite this new concept, often identifying it as a cornerstone of Chinese President and Commander-in-Chief Xi Jinping’s strategic thought. Given the exoticism of the term and its obvious importance for understanding Chinese maritime strategy, it is worth examining in greater detail. A close reading of Chinese texts suggests that the concept favors an expansive view on the use of sea power in peacetime, perhaps shedding light on the current leadership’s apparent preference for a more active and systematic pursuit of maritime dominance, especially in the waters of the South China Sea.

The Path to Endorsement

The notion of strategic management of the sea is in fact not novel. In a paper published in the Pacific Journal (Taipingyang Xuebao) in 1996, Luo Ruyu, a retired People’s Liberation Army (PLA) Navy Senior Captain and Director of the State Oceanic Administration (SOA), advocated for the concept to sit at the core of China’s maritime strategy. Luo’s understanding of the term, now nearly 20 years old, remains valid:


By Tuva Julie, Engebrethsen Smith

Social media is being increasingly used as a tool of propaganda by terrorists, with platforms such as Twitter, Facebook, Instagram and YouTube becoming critical outlets for dissemination of information. There is an upsurge of an online information war, which groups like the Islamic State (IS) seem to be winning. Social media can be perceived as the oxygen of publicity, and seemingly serves the IS´ agenda well with regard to the recruitment of individuals and indoctrination of impressionable youth. Due to the instant upload of materials, the IS has been able to demonstrate the fear-factor as well as illustrate its sophisticated ability to get messages out to a worldwide audience. What challenges lie ahead in this online information war?

As demonstrated last year, the IS has, rather successfully, built and deployed an army of radical extremists. It has been incredibly deft in using social media as a tool for recruiting foreign fighters, while at the same time intimidating rival powers. The influence of the IS has become far-reaching and its audience is not restricted to Muslims alone. With IS-videos being broadcasted on Western television, in addition to its Instagram, Facebook and Twitter accounts, the group has literally been able to perform on the world stage and capture the attention of sympathisers, journalists and adversaries alike.

Iranian Intervention in Iraq against the Islamic State: Strategy, Tactics and Impact

January 23, 2015

A deliberately gory June 2014 report on the Shi’a Ahl al-Bayt website, no doubt intended to arouse emotions, shows a photo of the bloodied face of Alireza Moshajari. It describes him as the first of Iran’s Revolutionary Guard Corps (IRGC) to have become a “martyr” in defense of the sacred shrine of Karbala against the then Islamic State of Iraq and Syria, now the Islamic State. Karbala, one of the most important Shi’a holy sites, is the battlefield where Hussein, the grandson of the Prophet, fought and died a martyr’s death (Ahl al-Bayat, June 16, 2014). The site also shows other photos of Moshajari posing for a camera in a western Iranian province, apparently preparing to depart for Iraq.

A month later, in July 2014, reports of the death of another member of the IRGC, Kamal Shirkhani in Samarra, further indicated an Iranian troop presence deep inside in Iraq (Basijpress, July 8, 2014). More significant, however, was the December 2014 news of the death of Iranian Brigadier General Hamid Taqavi, while he was on an “advisory” mission in Iraq (Mehr News, December 29, 2014; Fars News, December 29, 2014). He was the highest-ranking Iranian officer to be killed in Iraq since the 1980-1988 war. Taqavi had reportedly been assassinated by the Islamic State in Samarra (Fars News, January 5).

While Iran has continuously and publicly denied having a formal troop presence in Iraq, with IRGC officials saying that Iran has no need to have an army in its neighboring country, the evidence suggests a growing trend of Iranian military activities in certain regions of Iraq deemed critical to Tehran and are related to Iran’s efforts to contain the Islamic State (Fars News, September 22, 2014). However, this trend, which apparently has been growing since summer 2014, is less about expanding Iran’s power and is more a defensive strategic attempt to prevent the Islamic State from undermining two of Iran’s two core interests in Iraq: the security of its borders and the protection of Shi’a shrines there. Unlike Iran’s strategy in Syria, which is primarily about preserving the Assad regime even at the expense of fostering sectarianism, Tehran is keen to prevent its Shi’a-dominated neighbor from developing a sectarian mindset that could potentially have wider negative implications for Iran in the region.

"Iran's ISIS Policy"

Dina Esfandiary, Ariane Tabatabai
January 2015

This article assesses Iran's strategy in dealing with the threat of the Islamic State in Iraq and Syria (ISIS). It examines the implications of the rise of ISIS in Iran's immediate neighbourhood for Tehran's policies in Syria and Iraq and investigates how each of these countries affects Iranian national interests. It provides an overview of the major events marking Iran and Iraq's relations in the past few decades and discusses the strategic importance of Iraq for Iran, by looking at the two countries' energy, economic and religious ties. It also considers Iran's involvement in Syria since the beginning of the Syrian conflict. The article sheds light on the unilateral action taken by Tehran to counter ISIS, the adjustments it may have to make to its involvement in Syria, and the potential areas for tactical cooperation between Iran and the United States, as well as other key regional states such as Saudi Arabia. The article investigates three likely scenarios affecting the developments in Iraq and Iran's possible response to them as the events in the Middle East unfold.

Full text of this publication is available at:

Succession in Saudi Arabia: Salman's Ascension Promises Continuity at a Time of Regional Crisis

Bruce Riedel
January 22, 2015 

Salman, born on December 31, 1935, is also defense minister and has been chairing cabinet meetings for several months and handling almost all foreign travel responsibilities for the monarchy since he became the heir in 2012. He has visited China, Japan, India, Pakistan, the Maldives and France since becoming crown prince after the death of his predecessor, Prince Nayif.

Salman was governor of Riyadh province for 48 years. When he became governor in 1963, Riyadh had 200,000 inhabitants — today it has more than seven million. Salman presided over this remarkable transformation with a record for good governance and a lack of corruption. Since most of the royal princes and princesses live in Riyadh, he was also the family sheriff, ensuring any transgressions were dealt with smoothly and quietly, with no publicity.

Salman also oversaw the collection of private funds to support the Afghan mujahedeen in the 1980s, working very closely with the Kingdom's Wahhabi clerical establishment. In the early years of the war —before the U.S. and the Kingdom ramped up their secret financial support for the anti-Soviet insurgency — this private Saudi funding was critical to the war effort. At its peak, Salman was providing $25 million a month to the mujahedeen. He was also active in raising money for the Bosnian Muslims in the war with Serbia.

The 1990 World Development Report: How Poverty Looks 25 Years Later

Lyn Squire
January 22, 2015

If a genie had popped out of my coffee cup early one morning just after I had been invited to lead the 1990 World Development Report on Poverty and offered me one wish, what would I have asked for? My answer will seem obvious once it is recalled that as we set about our task all we had at our disposal was information on levels of poverty and their changes over time in barely a dozen countries. What was so desperately needed, and what I would have requested, was vastly more knowledge about the poor and how their well-being was, or was not, improving. The genie did not disappoint. He did not solve my immediate problem, but over the next 25 years the statistical foundation for understanding poverty as reported by the World Bank’s PovcalNet has been utterly transformed—with coverage now extending to 128 developing countries and including over 1,000 household surveys, an outcome not even dreamed of in 1990. This is not measurement for measurement’s sake, however. Thanks to these efforts, our grasp of the growth-inequality-poverty interplay and our appreciation of the factors—income and non-income, internal and external—affecting the well-being of poor households have taken giant steps forward.

A second, major advance is the proliferation of innovative, micro-interventions that are proving effective in reaching and benefitting the poor. Over the last two decades, safety nets, workfare programs, conditional cash transfers, microfinance and similar programs have sprung up in many guises in all parts of the developing world. Research has followed suit, and, in doing so, has demonstrated that concern about equity-efficiency trade-offs can often be overcome by careful consideration of the market imperfections that trap the poor. Measuring the benefits of these interventions has profited enormously from the emergence of rigorous impact evaluation, a development that could be so much more valuable for policy if it paid equal attention to costs, since benefits without costs is like, well, Little without Mirrlees.

America Upgrades Its Biggest Bomb


If diplomatic efforts to halt Iran’s nuclear program fail, the country’s underground nuclear facilities could expect a surprise package delivery from Uncle Sam and his stealthy B-2 bomber.

Last year, while the White House was negotiating a settlement to curb Iran’s nuclear ambitions, the U.S. military was upgrading a terrifying weapon that could smash Supreme Leader Ali Khamenei’s thinly-veiled nuclear weapons program, albeit at great risk of sparking a shooting war.

We’re talking about the 15-ton Massive Ordnance Penetrator, the world’s most powerful non-nuclear bomb, which Boeing and the Pentagon have tailored for punching deep into the ground to destroy buried targets including nuclear, chemical or biological weapons facilities.

In mid-January, the Pentagon’s top weapons tester confirmed in a report that flight testing of an enhanced version of the MOP went ahead in late 2014, and one live-fire test was planned.

According to Pentagon documents, that test was panned for December at White Sands Missile Range, New Mexico. The military had previously dropped a MOP from a B-2 under test conditions at White Sands in October 2012.

That earlier test also involved an RQ-170 stealth drone that apparently assessed the bomb damage—a possible model for how America could deploy the giant munition in a real-life crisis.

The older B-52 bomber has also dropped MOPs in tests, but doesn’t routinely carry the weapon.