Since announcing its arrival as a global force in June 2014 with the declaration of a caliphate on territory captured in Iraq and Syria, the jihadist group Islamic State has shocked the world with its brutality.

Its seemingly sudden prominence has led to much speculation about the group’s origins: how do we account for forces and events that paved the way for the emergence of Islamic State? In the final article of our series examining this question, Greg Barton shows the role recent Western intervention in the Middle East played in the group’s inexorable rise.

---

Despite precious little certainty in the “what ifs” of history, it’s clear the rise of Islamic State (IS) wouldn’t have been possible without the 2003 invasion and occupation of Iraq. Without these Western interventions, al-Qaeda would never have gained the foothold it did, and IS would not have emerged to take charge of northern Iraq.

Whether or not the Arab Spring, and the consequent civil war in Syria, would still have occurred is much less clear.

But even if war hadn’t broken out in Syria, it’s unlikely an al-Qaeda spin-off such as IS would have become such a decisive actor without launching an insurgency in Iraq. For an opportunistic infection to take hold so comprehensively, as IS clearly has, requires a severely weakened body politic and a profoundly compromised immune system.

Such were the conditions in Goodluck Jonathan’s Nigeria from 2010 to 2015 and in conflict-riven Somalia after the fall of the Barre regime in 1991. And it was so in Afghanistan for the four decades after conflict broke out in 1978 and in Pakistan after General Zia-ul-Haq declared martial law in 1977.

Sadly, but even more clearly, such are the circumstances in Iraq and Syria today. And that’s the reason around 80% of all deaths due to terrorist attacks in recent years have occurred in five of the six countries discussed here, where such conditions still prevail.

An unique opportunity

The myth of modern international terrorist movements, and particularly of al-Qaeda and its outgrowths such as IS (which really is a third-generation al-Qaeda movement), is that they’re inherently potent and have a natural power of attraction.

The reality is that while modern terrorist groups can and do operate all around the globe to the point where no country can consider itself completely safe, they can only build a base when local issues attract on-the-ground support.

Consider al-Qaeda, which is in the business of global struggle. It wants to unite a transnational ummah to take on far-off enemies. But it has only ever really enjoyed substantial success when it has happened across conducive local circumstances.

The Soviet occupation of Afghanistan in the 1980s provided an opportunity uniquely suited to the rise of al-Qaeda and associated movements. It provided plausible justification for a defensive jihad – a just war – that garnered broad international support and allowed the group to coalesce in 1989 out of the Arab fighters who had rallied to support the Afghans in their fight against the Soviets.

Further opportunities emerged in the Northern Caucasus, where local ethno-national grievances were eventually transformed into the basis for a more global struggle.

The declaration of independence by Chechnya in 1991 led to all-out war with the Soviet military between 1994 and 1996, when tens of thousands were killed. After a short, uneasy peace, a decade-long second civil war started in 1999 following the invasion of neighbouring Dagestan by the International Islamic Brigade.

The second civil war began with an intense campaign to seize control of the Chechen capital, Grozny. But it became dominated by years of fighting jihadi and other insurgents in the Caucus mountains and dealing with related terrorist attacks in Russia.

In Nigeria and Somalia, Boko Haram and al-Shabaab now share many of the key attributes of al-Qaeda, with whom they have forged nascent links. But they too emerged primarily because of the failure of governance and the persistence of deep-seated local grievances.

Even in Afghanistan, al-Qaeda struggled to transform itself into a convincing champion of local interests in the 1990s. After becoming increasingly isolated following the September 11 attacks on the US, it failed to gain support from the Afghan Taliban for its global struggle.

But something new happened in Iraq beginning in 2003. The Jordanian street thug Musab al-Zarqawi correctly intuited that the impending Western invasion and occupation of Iraq would provide the perfect conditions for the emergence of insurgencies.

Al-Zarqawi positioned himself in Iraq ahead of the invasion and deftly rode a wave of anger and despair to initiate and grow an insurgency that in time came to dominate the broken nation.

Initially, al-Zarqawi was only one of many insurgent leaders intent on destabilising Iraq. But, in October 2004, after years of uneasy relations with the al-Qaeda leader during two tours in Afghanistan, he finally yielded to Osama bin Laden’s request that he swear on oath of loyalty (bayat) to him. And so al-Zarqawi’s notorious network of insurgents became known as al-Qaeda in Iraq (AQI).

From the ashes

Iraq’s de-Ba’athification process of May 2003 to June 2004, during which senior technocrats and military officers linked to the Ba’ath party (the vehicle of the Saddam Hussein regime) were removed from office, set the stage for many to join counter-occupation insurgent groups – including AQI.

Without the sacking of a large portion of Iraq’s military and security leaders, its technocrats and productive middle-class professionals, it’s not clear whether this group would have come to dominate so comprehensively. These alienated Sunni professionals gave AQI, as well as IS, much of its core military and strategic competency.

But even with the windfall opportunity presented to al-Zarqawi by the wilful frustration of Sunni interests by Nouri al-Maliki’s Shia-dominated government from 2006 to 2014, which deprived them of any immediate hope for the future and confidence in protecting their families and communities, AQI was almost totally destroyed after the Sunni awakening began in 2006.

The Sunni awakening forces, or “Sons of Iraq”, began with tribal leaders in Anbar province forming an alliance with the US military. For almost three years, tens of thousands of Sunni tribesmen were paid directly to fight AQI, but the Maliki government refused to incorporate them into the regular Iraqi Security Force. And, after October 2008 – when management of these forces was handed over by the US military – he refused to support them.

The death of al-Zarqawi in June 2006 contributed to the profound weakening of the strongest of all post-invasion insurgent groups. AQI’s force strength was reduced to several hundred fighters and it lost the capacity to dominate the insurgency.

Then, in 2010 and 2011, circumstances combined to blow oxygen onto the smouldering coals.

In 2010, the greatly underestimated Abu Bakr al-Baghdadi, a local Iraqi cleric with serious religious scholarly credentials, took charge of AQI and began working to a sophisticated long-term plan.

Elements of the strategy went by the name “breaking the walls”. In the 12 months to July 2013, this entailed the movement literally breaking down the prison walls in compounds around Baghdad that held hundreds of hardcore al-Qaeda fighters.

Islamic State, as the group now called itself, also benefited from the inflow of former Iraqi intelligence officers and senior military leaders. This had begun with de-Ba’athification in 2003 and continued after the collapse of the Sunni awakening and the increasingly overt sectarianism of the Maliki government.

Together, they developed tactics based on vehicle-borne improvised explosive devices and the strategic use of suicide bombers. These were deployed not in the passionate but often undirected fashion of al-Qaeda but much more like smart bombs in the hands of a modern army.

And the US military withdrawal from Iraq in late 2011, well telegraphed ahead of time, provided an excellent opportunity for the struggling insurgency to rebuild. As did the outbreak of civil war in Syria.

A helping hand

Al-Baghdadi initially dispatched his trusted Syrian lieutenant, Abu Mohammad al-Julani, to form a separate organisation in Syria: the al-Nusra front.

Jabhat al-Nusra quickly established itself in northern Syria. But when al-Julani refused to fold his organisation in under his command, al-Baghdadi rebranded AQI (or Islamic State in Iraq) Islamic State in Iraq and al-Sham/the Levant (ISIS/ISIL).

Then, a series of events turned IS from an insurgency employing terrorist methods to becoming a nascent rogue state. These included the occupation of Raqqa on the Syrian Euphrates in December 2013; the taking of Ramadi a month later; consolidation of IS control throughout Iraq’s western Anbar province; and, finally, a sudden surge down the river Tigris in June 2014 that took Mosul and most of the towns and cities along the river north of Baghdad within less than a week.

IS’s declaration of the caliphate on June 29, 2014, was a watershed moment that is only now being properly understood.

In its ground operations, including the governing of aggrieved Sunni communities, IS moved well beyond being simply a terrorist movement. It came to function as a nascent rogue state ruling over around 5 million people in the northern cities of the Euphrates and the Tigris, and defending its territory through conventional military means.

At the same time, it skilfully exploited the internet and social media in ways the old al-Qaeda could not do – and that its second-generation offshoot, al-Qaeda in Arabian Peninsula (AQAP), had only partially achieved.

This allowed IS to draw in tens of thousands of foreign fighters. Most came from the Middle East and Northern Africa, but as many as 5000 came from Europe, with thousands more from the Caucusus and from Asia.

Unlike the case in Afghanistan in the 1980s, these foreign fighters have played a key role in providing sufficient strength to take and hold territory while also building a global network of support.

But without the perfect-storm conditions of post-invasion insurgency, this most potent expression of al-Qaedaism yet would never have risen to dominate both the region and the world in the way that it does.

Even in its wildest dreams, al-Qaeda could never have imagined that Western miscalculations post-9/11 could have led to such foolhardy engagements – not just in Afghanistan but also in Iraq.

Were it not for these miscalculations, 9/11 might well have precipitated the decline of al-Qaeda. Instead, with our help, it spawned a global jihadi movement with a territorial base far more powerful than al-Qaeda ever had.

Greg Barton is Chair in Global Islamic Politics, Alfred Deakin Institute for Citizenship and Globalisation; Co-Director, Australian Intervention Support Hub, Deakin University. This article first appeared in The Conversation on 3 March, 2016.

Part 3: Implications: a more efficient and less risky approach

Introduction

The purpose of this three-part article is not to question the government’s requirement for advanced submarine capability but rather to explore some of the technological, economic and financial issues, and the associated risks, around the programme by which the government is seeking to deliver this capability. After all, it is not the new submarines themselves that constitute the objective of this major programme, but rather the capability they will deliver. If this capability could be provided more efficiently and at less risk, there would be clear benefits for the community.

First of all, in this final part of the article, the White Paper’s proposal for the FSM is evaluated in the light of the previous discussion of technological and economic risks. Secondly, I propose an alternative approach to providing the desired submarine capability at less cost and with lower risk.

Implications for the White Paper approach

Defence has determined that its requirements for future submarine capability can only be delivered by acquiring a large, conventional submarine with a very long range. No such submarine is available in the global market place. Australia’s requirement is unique.

Parent navy responsibilities can come at a high cost, particularly when there are no other purchasers of the equipment. Most of the problems and risks with the proposed acquisition relate to the insistence that Australia’s requirement for submarine capability demands a unique solution. The identical view led to the acquisition of a unique submarine last time around, the Collins class. While the Collins’ record has by no means been totally negative, overall the experience has not been a happy one. According to a former Prime Minister and his first Defence Minister, the Collins class has a “fragile capability”.

Turning to the roles required of the future submarine (FSM), we have seen in Part One of this report that a conventional boat would face substantial risks of destruction were it to operate in a reconnaissance and interdiction role in any conflict in contested waters far from base, particularly the South China Sea. First of all, even by the 2020s, let alone on delivery in the 2030s, the FSM will not be the ‘regionally superior’ submarine promised in the White Paper. By that time, China, Russia and India will be capable of operating modern hunter-killer SSNs in those waters. Secondly, detection technologies will have advanced to a degree that will make force projection in contested waters by a SSK unacceptably dangerous for its crew. The FSM’s large size will also act against it in terms of its sonar footprint and acoustic signature. Crucially, while the FSM will have air-independent propulsion or much better batteries than the Collins and therefore a significantly lower indiscretion rate, it would not be able to make a high-speed exit if detected.

On the other hand, the large size of the FSM, presumably required to provide greater fuel bunkerage and better habitability on lengthy operations, will reduce its effectiveness in other roles, such as reconnaissance, intelligence gathering and sea denial operations in the approaches to Australia and its littoral zone. The desirability of nimbleness and a modest footprint in these roles goes a long way to explain why there is no requirement globally, other than in Australia, for a large SSK.

Turning to the economic and financial issues and risks, the requirement to design and build twelve unique submarines for Australia has a profoundly negative impact on the outcomes projected by Defence. The effects on cost, delivery and the likelihood of a capability gap are of great concern.

First, the currently projected cost of each FSM at over US$3 billion is excessive. The capability that will be delivered by the FSM in no way justifies a higher cost than that of a much larger and immeasurably more capable Virginia class nuclear submarine (SSN). In terms of conventional submarines (SSK)s, the FSM will in no imaginable way be more than five times more capable than the current Soryu class, as the cost differential implies. Add to this the risk that the cost will blow out during the detailed design and construction process, as generally occurs with new acquisitions, and the economics of the project totally fail to stack up. The projected cost is simply unacceptable for the capability it will deliver.

Secondly, as has been pointed out extensively since the White Paper was published, the timeline for the project is far too long. The strategic situation described in the White Paper appears to require an advanced Australian submarine capability if not now at least by the early 2020s. Unless no alternative is available, delivering the first of the FSMs in the early 2030s (or later, given the history of defence projects) is an unacceptable response to the current threat.

Thirdly, if it were attempted, the cost of the proposal to undertake a significant upgrade to Collins in order to bridge the capability gap into the mid-2030s should be added to the already unacceptable cost of the FSM acquisition. But in the absence of further detail, the proposal is not credible. The White Paper provides no detail about how the upgrade will be achieved, other than by modernising the sonar.

As suggested in Part Two of this report, apart from a myriad of other barriers to upgrading the Collins class to contemporary standards, the fact that new diesels and air-independent propulsion cannot be installed means there is a high probability that the submarines will not be able to be sent on operations beyond the early 2020s. Upgrading the systems, while beneficial in itself, would also boost the power requirement and, therefore, increase the indiscretion rate. The probability of a complete gap in Australia’s submarine capability over a period of at least a decade is too high for this approach to be acceptable.

The conclusion must be that the proposal in the White Paper for providing a ‘regionally superior’ capability in submarines is highly likely to be neither efficient nor effective. Further, particularly if a local build were stipulated, the risks are all on the downside. In short, the proposal is unacceptable.

An alternative approach

An alternative approach requires the government to accept that substantial changes are required in its current proposal for procuring the submarine capability that Australia needs. The government would need to recognise that:

• The cost and timelines proposed for the FSM in the White Paper are unacceptable.
• There is a high risk that the proposal to upgrade Collins to contemporary standards so as to bridge the capability gap will not be cost-effective or even feasible.
• Given the level of threat identified in the White Paper and due to the obsolescence of the Collins class, a modern submarine capability is required in the early 2020s, not ten years later.
• Australia does not have a unique requirement for submarines but may need more than one type of submarine to provide the full scope of the capability described in the White Paper.
• Entirely satisfactory military off the shelf solutions are available to provide the capability that Defence requires from submarines in different roles.

In order to provide the capability required by Defence in an efficient and effective way and with the least possible risk to their crews, however, two types of submarine are required.

First, a modern conventional submarine, available off the shelf, would be suitable for discharging the critical role of sea denial in the waters around Australia. With a range of around 12,000 kms and the ability to operate submerged for extended periods of time, it could also undertake reconnaissance, intelligence gathering and covert operations in the waters to Australia’s north.

Secondly, a nuclear powered submarine would be required to undertake the force projection role in the South China Sea that, in the future, could not safely be discharged by a SSK. If Australia were unwilling or unable to acquire SSNs, then the RAN should no longer undertake submarine operations in contested waters far from base such as the South China Sea. This role should be left to the United States Navy or to other suitably equipped allies, at a considerable saving to Australia’s defence budget.

Acquiring SSNs may not be easy. Presently, the US opposes the acquisition of nuclear submarines by Australia. To turn this around, the government’s negotiating position would be based on the advantages to the US of Australia undertaking our share of the ‘heavy lifting’ in the Asia Pacific. As a loyal ally, no doubt Australia would note the US supply of a nuclear propulsion plant to the UK to support its first SSN acquisition nearly 60 years ago. In the face of the acquisition of SSNs by China and other countries, Australia would also emphasise the RAN’s unwillingness to undertake reconnaissance and force projection operations in the South China Sea in a conventional submarine.

The following approach is therefore suggested. Over the next year, the Australian government should:

• Initiate negotiations with the US administration to acquire four SSNs so that the RAN could undertake force projection operations in contested waters. These SSNs, preferably of the Virginia class so as to maximise inter-operability with the US Navy, would be sustained in Australia by the American supplier working with ASC in Adelaide.
• Order four leading edge conventional submarines to be delivered in the early 2020s when the Collins class would be decommissioned. They would not be built in Australia and would be supplied from a shipyard in France, Germany or Japan. These submarines would be off the shelf purchases with the exception that they would be configured to deploy a US combat system and the Mk48 Mod7 heavyweight torpedo specified by Defence. Ideally, they would incorporate lithium-ion battery technology rather than AIP.

The advantages of this approach include the acquisition of eight submarines that would provide a capability exceeding that of the 12 proposed by Defence, and delivered in the 2020s rather than 2032-50. There would be no capability gap and because they would be purchased off the shelf, with no Australian build, the submarine capability would be provided at a cost of around half the estimate in the White Paper (less than $30 billion).

If Australia were unable (or unwilling) to acquire nuclear submarines, then the force projection role in contested waters should be abandoned. A total of six new conventional submarines should then be acquired to undertake the other important roles identified in the White Paper. The cost of this approach should be under $10 billion.

Conclusion

The White Paper proposal to acquire 12 conventional submarines between the early 2030s and 2050 is not acceptable. At over $50 billion the cost would be highly excessive, delivery far too late and the risk of a capability gap extremely high.

In addition, a SSK, because it could not meet the White Paper’s benchmark of ‘regional superiority’, would be unable in the future safely to deliver force projection capability in waters contested by SSNs and characterised by advanced detection technologies. In order to undertake this activity with greater security for its personnel, the RAN would need a nuclear submarine. If the government is unable or unwilling to acquire SSNs, then it should not undertake the force projection role in the South China Sea.

Australia does not have a unique capability requirement for its submarine force. Because of the risks involved in waiting until the 2030s to deploy the new submarine, advanced conventional submarines should be ordered off the shelf and as soon as possible (within one year) for deployment in the early 2020s. At the same time, negotiations with the US should be initiated around the acquisition of four SSNs.

There are negligible benefits to be derived from building submarines in Australia but the associated risks are very high. Unless the conventional submarines were built under a fixed price contract to an existing design and with a guarantee of similar cost and delivery to imported boats, a local build should not be considered.

Finally, this is a massive investment with very high risks, rivalling the Gorgon LNG project in Western Australia in terms of capital expenditure. It is not at all clear that the proposal has been exposed to the very detailed investment appraisal process that any such substantial capital project in the private sector would undergo. With its single line appropriation, Defence can escape the scrutiny to which significant capital projects in other portfolios, such as Health and Education, routinely would be subject in the budget process. Both the ADF and the Australian taxpayer would benefit if in the future major Defence investments were subject to detailed evaluation by the Department of Finance.

Jon Stanford is a Director of Insight Economics. He had a significant career as an economist in the Australian Public Service, ultimately in the Department of Prime Minister and Cabinet.  He has worked extensively on economic and policy issues around defence procurement and naval shipbuilding.

 

Part 2: Economic and financial risks

Introduction

The first part of this article considered the technological risks involved in the decision, as set out in the 2016 Defence White Paper, to procure twelve new submarines at an acquisition cost of at least $50 billion. The economic and financial risks of this project are discussed here in Part Two of the article.

There is a considerable literature on the economics of defence procurement but the fundamental principles of economics, including corporate financial analysis, can readily be applied to military programs. Any major investment program to acquire a new or updated defence asset should be subject to the same rigorous appraisal that a new investment in, say, a coal mine or a tourism resort would demand in the private sector. Of course, the defence asset is different in that it gives rise to a largely intangible pay-off and doesn’t produce cash flows, but the benefits of the project can still be assessed and set against the costs. Importantly, the risks around both the projected benefits and the costs need to figure prominently in the analysis.

The Defence department should be as well equipped as anybody to assess the technological options and trade-offs around the acquisition of a new military capability. Yet it is far from clear that Defence possesses the economic and financial skills required to undertake sophisticated investment appraisal and cost-benefit analysis. This may well be a major shortcoming of the Defence acquisition process. At the heart of the submarine acquisition process is the determination by Defence that the RAN has a unique requirement for submarines. This view, which is contested in Part Three of this article, means that a military off the shelf solution is not feasible. By itself, the implications of this for the cost of the project, its delivery date and particularly the associated risks are very substantial.

The effects of the decision to design and build a unique submarine are profound. Three issues should be considered, namely the cost of the new capability, the timing of its delivery and the need to address the capability gap that would otherwise exist before the new submarines come on stream.

Cost

First of all, the projected cost of the future submarine (FSM) appears to be excessive, perhaps unacceptably so. The acquisition cost, excluding weapons, for each FSM is estimated at around $4.25 billion (approximately US$3.15 billion in March 2016). By comparison, the successful Japanese Soryu class submarine, a contemporary SSK which may well be the basis for the FSM, is far less expensive, with the most recent boat, commissioned in 2015, estimated to cost US$540 million.[1] The cost in FY 2016 of a state-of-the-art Virginia class nuclear attack submarine, nearly twice the size of the FSM and much more capable, is US$2.688 billion.[2] The differential between the cost of the Soryu class SSK and the Virginia class nuclear submarine (SSN) seems entirely justified by the difference in capability. On the other hand, the projected cost of the future submarine cannot in any way be justified on the basis of relative capability. Indeed, on that basis the FSM should cost little more than a Soryu.

The projected cost of the FSM is clearly very high. Yet any rigorous financial modelling evaluation would conclude that the risks of that cost blowing out over a 17-22 year acquisition period (see below) are high, if not very high. We do not yet have an agreed design for the FSM. During the detailed design process, in response to technological progress, which is constant, the specifications could easily change on the upside. Inevitably, the integration of new systems can develop into a financial sinkhole. Unless built to a fixed price contract, there may be substantial unforeseen problems in the manufacturing process for a new and unique submarine. There are significant risks that these costs, which I believe are already unacceptably high, could blow out further, perhaps substantially.

Timeline

The second issue is delivery timelines. The tone of the White Paper is that because of the strategic situation in Australia’s region, the new FSM capability is required sooner rather than later. Yet because of the requirement for a unique Australian submarine, the timetable for its delivery extends from the early 2030s to 2050. But even this may be optimistic. According to Andrew Davies and Mark Thomson of ASPI, this schedule is based on the Defence estimate that it takes between 17 and 22 years to design and build a new submarine. On this basis, ASPI estimated in 2012 that the best case delivery date for a submarine ordered in that year was 2029 and the worst case 2034 (see Table 3 below). Presumably, on the heroic assumption that the submarine would be ordered in 2016, those estimates have now blown out to 2033 and 2038 respectively (Table 3).

Table 3: Delivery timelines for the FSM (based on 2012 order)[3]

Assumption	First delivery date
Defence best-case date	2020
Defence worst-case date	2034
Collins-like program	2028
Off-the-shelf design from overseas	Seven years from contract signature
Off-the-shelf design built locally	Nine years from contract signature

By contrast, six years elapsed between the order being delivered for the very large and complex first of class USS Virginia and its commissioning ceremony. It took four years to commission each of the first six submarines of the Soryu class after the keel was laid. These two production lines are still operating and will be for some time to come.

The risks to the timeline are similar to those identified above in regard to cost. They are material.

Capability gap

The reason why the new capability is required sooner rather than later is not only because of the naval build-up in the Asia Pacific. It also reflects the fact that the Collins class submarines are now obsolescent if not, indeed, obsolete. Admittedly the maintenance situation and crew availability have improved markedly, with five of the six boats available from mid-2016. Yet as former Prime Minister Abbott said recently (supported by the former Defence Minister), the Collins class exhibits a “fragile capability”.

The White Paper acknowledges that an updated submarine capability is required in the period before the FSM begins to come on stream. Its solution to this is to bridge the capability gap by undertaking a significant upgrade of the Collins class. The details and cost of this are not specified in the White Paper documentation beyond $100 – $200 million for new sonar equipment. More importantly, there is no discussion at all about the feasibility of such an upgrade and how a credible capability can be sustained on the Collins platform out to perhaps 2040, when only three or four of the new submarines will have been delivered. This is not only a major omission, but, given public disquiet about the Collins class, it is also quite unacceptable.

In particular, Defence needs to respond to an alternative and arguably far more realistic view that it is not feasible to upgrade Collins to anywhere near the extent required to maintain a credible capability. On this view, within about five years the boats will be obsolete and should no longer be deployed on operations. Attempting to restore their capability would be unsuccessful, would involve throwing good money after bad and would place the crews at significant risk.

James Harrap, a retired naval officer who has commanded two Collins class submarines and served on others, identifies fundamental problems with the Collins platform, including:

“Much of the existing equipment is bespoke (and often obsolete), the need for upgrades is increasing but the cost of acquiring and retrofitting equipment is high. … The Collins class has many components that we are simply stuck with for the life of the platform. For example the diesel generators fit into this category because of their size; unfortunately they are quite possibly the least reliable diesel engines ever built. They have been problematic throughout the life of the class and, despite some design modifications and improvements, are only kept running by ingenuity and sheer determination of the crews at sea and supporting contractors alongside. Because of components and immutable design issues such as these, Collins has a finite service life.” [4]

Apart from driving the submarine on the surface and while snorting, the diesel engines act as generators for the electric motors, which drive the vessel while submerged. A failure of one or both diesels while on patrol would be quite catastrophic. Yet they cannot in reality be replaced, since because of their size this would mean cutting a large hole in the pressure hull of the submarine.

Writing in 2012, Harrap goes on to note that since the Collins boats were built:

“Numerous advances have occurred in batteries, electric motors, air-independent propulsion, sonars and electro-optics – all of which have revolutionised submarine design even further. These changes have been significant and whilst it may be possible (though very costly) to keep Collins operational for another decade or more, most advances can’t be retrofitted and the boat will most likely be so technically obsolete by 2022 that the credibility of the capability it offers will be seriously eroded. … An inability to keep up with rapid technological change, coupled with high materiel failure rates has aged the boats prematurely, adding cost and complexity to through-life support. The boats must be sustained in the short term, but I do not believe a service life extension for Collins is even possible, much less recommended.”[5]

A major issue here is the absence of air-independent propulsion (AIP) in the Collins class which cannot be retrofitted. Because of the improvement in detection technology, AIP is increasingly regarded as being indispensable for conventional submarines (SSK)s operating in hostile waters because of its substantial impact on reducing the indiscretion rate while on patrol. While new electronic systems could no doubt be added to the submarines, this would likely involve higher power consumption, require more frequent snorting and therefore increase the boats’ indiscretion rate above its already significant level.

It is difficult to dispute Harrap’s conclusion that the Collins class will be obsolete by 2022 and cannot be upgraded to the degree required to sustain a credible capability. This implies that on the basis of the current timeline for delivery of the FSM, unless the RAN leases boats from overseas Australia will be left with no submarine capability for a period of about 15 years. The lease option may not be possible because of a lack of availability of suitable submarines.

A ten to fifteen year capability gap in submarine capability would have a major negative impact not only on Australia’s force structure and strategic positioning, but also on the Navy’s ability to maintain both a cadre of experienced and highly trained submariners as well as a constantly evolving naval doctrine for submarine warfare.

Unfortunately, Australian governments have form in delaying ordering new Defence assets and then having to undertake costly and risky upgrades in order to bridge the resulting capability gap. The most recent example concerns the delay in ordering the air warfare destroyers. These were originally conceived as a replacement for the RAN’s three Perth class destroyers, which were decommissioned in 1998-2001, twenty years before the AWDs will be available. To fill the air defence gap in the interim, it was decided to upgrade Australia’s six Adelaide class frigates (FFGs), a possibility the parent US Navy considered and rejected for its own ships. The program came in late, way over budget and with many lingering technical problems relating to integrating the new systems. Eventually, only four ships were conditionally accepted and the other two scrapped. The first of the upgraded FFGs (HMAS Sydney) was also decommissioned last year, leaving just three FFGs. Fifteen years after HMAS Brisbane was decommissioned, a capability gap in area air defence for the fleet still exists.

On the basis of this analysis, the risk of a capability gap, where Australia will not be able to deploy any submarines in operational areas over a period of around fifteen years, is extremely high.

Made in Australia?

One major issue that remains unclear is whether the submarines will be built in Australia. While the White Paper includes a commitment to build the new frigates in Adelaide, it temporises to some degree over the FSM: “the Government has already committed to maximising Australian industry involvement in the submarine program, without compromising cost, capability, schedule or risk.”[6]

Based on the AWD project, a local build programme would certainly compromise three of these four elements of the programme, namely cost, schedule and risk. ASC last delivered a submarine over a decade ago. It has no corporate memory of how to build one. By the time the first FSM keel was laid, there would likely be no survivors of the Collins programme either on the shop floor or in management.

In addition, there are negligible economic benefits in local construction. You don’t need to build a defence asset in order to maintain it efficiently, as was shown in the case of the Oberon class submarines and numerous aircraft and helicopters. Unless local industry can build ships to the same cost and timeline as overseas players, it imposes a burden on the Australian community. Indeed, if overseas governments see fit to subsidise the construction of warships for Australia, so much the better for us. The car industry required a much lower level of protection than naval shipbuilding and yet the Abbott government showed it the door. To treat naval shipbuilding differently would suggest that the era of corporate entitlement was still alive and well and that industry policy was characterised by windy rhetoric.

Nevertheless, there clearly is a possibility that a current or future Australian government could determine that the FSM should be built here. This would increase the risk to already unacceptable cost and delivery schedules to a degree that is difficult to contemplate.

Jon Stanford is a Director of Insight Economics. He had a significant career as an economist in the Australian Public Service, ultimately in the Department of Prime Minister and Cabinet.  He has worked extensively on economic and policy issues around defence procurement and naval shipbuilding.

[1] Wikipedia, https://en.wikipedia.org/wiki/Sōryū-class_submarine, retrieved 12 March 2016.

[2] Wikipedia, https://en.wikipedia.org/wiki/Virginia-class_submarine, retrieved 12 March 2016.

[3] Andrew Davies and Mark Thomson (2016), “New subs – not so fast”, The Strategist, Australian Strategic Policy Institute, 3 March, http://www.aspistrategist.org.au/new-subs-not-so-fast/

[4] James Harrap (2012), “Reflections of a Collins submarine captain”, Asia Pacific Defence Reporter, 3 May, http://www.asiapacificdefencereporter.com/articles/226/Reflections-of-a-Collins-Submarine-Captain

[5] Ibid.

[6] Australian Government (2016), Defence White Paper, Integrated investment program”, Canberra, February, page 83.

Australia’s flawed position on the South China Sea

Australia’s 2016 Defence White Paper says a lot about the South China Sea, both directly and indirectly. It expresses concern about land reclamation and construction activities by claimants in the sea and about the possible use of artificial structures for military purpose. It also makes much of the importance of a rules-based global order to Australia’s security, with a clear message that some countries are not following these rules.

While the White Paper does not name China, that’s how most commentators — and China itself — have interpreted these statements. As Benjamin Schreer has claimed, the White Paper ‘reflects the reality in maritime East Asia that China has moved to re-write the rules to fit its strategic preferences and historical narratives’. But what rules are we talking about?

Despite the White Paper’s references to a rule-based global order, the reality is not quite that simple. For one, other countries besides China also don’t follow the rules. Australia’s major security partner, the United States, is not party to many important international conventions, including the 1982 UN Convention on the Law of the Sea (UNCLOS). Admiral Harry Harris, Commander of US forces in the Pacific, has said for example that, ‘We must continue to operate in the South China Sea to demonstrate that water space and the air above it is international’. But such statements ignore the carefully balanced regime of exclusive economic zones (EEZ) established by UNCLOS.

The South China Sea is not international water space. It is comprised of the EEZs of littoral countries, which have significant rights and duties in that water space. Other nations operating in that space must do so with due regard to those rights and duties.

Australia itself can also be accused of not conforming to the rules-based global order.One Australian commentary, which claims that China is trashing the rules-based order by refusing to recognise international arbitration over disputed islands in the South China Sea, conveniently overlooks the fact that Australia is taking a similar position to China in its maritime boundary dispute with Timor-Leste.

The White Paper seems to make a subtle swipe at China when it observes that Australia opposes the use of artificial structures in the South China Sea for military purposes. But this further begs the question of who is militarising the South China Sea. The short answer is: everyone. China and the United States accuse each other of ‘militarising’ the South China Sea, but in reality both are guilty.

Who you consider to be militarising the South China Sea largely depends on what you mean by ‘militarisation’. China’s construction of defensive military facilities is not the same as the militarisation implicit in increased military activity by the United States. China acknowledges that its reclaimed features have a military purpose, but describes the measures it has taken as ‘limited and necessary self-defence facilities’ consistent with ‘the right to self-protection’ afforded under international law.

In contrast, the United States has also raised the military ante with its provocative freedom of navigation (FON) operations, increased naval exercises and its military support for the Southeast Asian claimants in the South China Sea. Such initiatives are seen by China as an attempt to contain it.

China’s assertive actions in the South China Sea are cast as a growing threat to American interests, particularly by the Pentagon and the US Navy. But, conversely, instability in the South China Sea helps the Navy justify its budget, particularly as it’s the minor partner of the American Army and Air Force in both Syria and the Ukraine. For example, The South China Sea has become a major theatre of operations for the US Navy.

Demilitarising the South China Sea should be a genuine objective of all stakeholders. To this end, China should clarify its claims in the South China Sea and refrain from activities that will be seen as assertive or aggressive. The US should step back from its current naval initiatives in the region, including its provocative FON operations. A bit of ‘give and take’ is required on both sides.

Australia would do well to take a balanced approach. But in making a big play of the South China Sea, the White Paper falls in line with what Greg Austin has called ‘The Pentagon’s Big Lie about the South China Sea’. For Austin, the lie is the claim that China’s actions in the South China Sea threaten commercial shipping.

The White Paper replays this sentiment. To justify Australia’s concerns, it notes that ‘nearly two-thirds of Australia’s exports pass through the South China Sea, including our major coal, iron ore and liquefied natural gas exports’. This figure is incorrect. The accurate figure is a little over 20 per cent and most of this is trade with China. The White Paper actually disproves its own estimate with the map in Figure 2 showing that most of Australia’s sea freight does not pass through the South China Sea. Nor does the map does show the busy trade route between eastern Australia, Japan and South Korea that passes to the east of the Philippines, rather than the South China Sea.

There is much to like in the White Paper, particularly its focus on increased international defence engagement including with China. But policymakers need to be cautious of the White Papers’ exaggerations about how much China threatens Australian trade and security interests in the South China Sea.

Sam Bateman is an adviser to the Maritime Security Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.

This article was first posted in ANU East Asia Forum.

Strategically timid.

 

In his final book, which was too little noticed, Malcolm Fraser declared that we must reassess the strategic dependence which has determined our defence policy throughout settler Australian history. ‘We need the United States for defence’, he wrote in Dangerous Allies (2014), ‘but we only need defence because of the United States’. It is the ANZUS alliance, presented as guaranteeing our security, that poses the greatest threat to Australia, he concluded.

The reason most Australians in the security establishment held their noses, rolled their eyes, and looked the other way was that Fraser had said the unsayable. If any of them had suggested that the United States is a declining power and is unable or unwilling to defend Australia, their careers would no longer flourish. The reputation of ANZUS, as unilaterally invoked and extended by John Howard in 2001, remains like that of Caesar’s wife, beyond suspicion.

The very freedom we praise our armed forces for defending is not exercised in the security industry. Officials, academics, and mainstream media columnists are too timid to tell the unpalatable truth, face the facts, and sort out the consequences for something as vital as Australia’s defence.

The 2016 Defence White Paper was delayed for years, as political leaders and defence ministers came and went. But this cannot be the only reason it took so long. As the fundamental planning document for future defence budgets, activities, equipment, training and recruitment, it should prepare us appropriately for decades ahead by correctly reflecting changes affecting Australia since the last White Paper. Foremost among these changes are two: the further rise of China and the stationing of US troops in bases in Northern Australia.

American and Australian responses to China’s rise are ambivalent. On the one hand, consultations and exchanges of many kinds take place, and even exercises for military confidence-building. China ‘owns’ much of American debt, and Chinese corporations own the port of Darwin and Cubby Station. China is Australia’s largest trading partner, and its saviour from the worst of the Global Financial Crisis. China is a massive sponsor, through student fees, of Australian higher education. China, Australia and the US regularly consult with our neighbours in the East Asia Forum.

On the other hand, China threatens to surpass the US as the world’s largest economy, and is testing American resolve in the South China Sea. Containment of China is the unspoken purpose of President Obama’s 2011 ‘pivot to Asia’, which Australia welcomed. Successive ministers have claimed Australia ‘does not have to choose’ between the US and China in the event of conflict in our region: but the fact is by offering northern Australia as an expanding base for US surveillance, troops, and now bombers, we have chosen already, and against our best interests. Australia is now implicated in any war the US wages in the region, and beyond.

The White Paper foresees US hegemony for the next 20-30 years, as a dependent ally must. But the United States, Obama admits, has neither the will nor the capacity to wage a land war in Asia, and is seeking to enlist Japan and Australia as its proxy combatants against China. Pushing back against China in the South China Sea, and risking a confrontation, could result in Japan changing its anti-war Constitution and both Japan and Australia breaching the terms of the Treaty of Amity and Cooperation in Southeast Asia, involving us in a war which would be unlikely to attract an endorsing resolution of the UN Security Council, and whose outcome might briefly benefit the US or China but not Australia or Japan.

Australians may be concerned about a well-armed China, but a declining United States which still owns weapons of mass destruction in massive numbers should raise equal anxieties. An overreaction from either of the rival superpowers of the future could be catastrophic. With such a prospect, an independent, self-interested Australia had an opportunity with this White Paper to seek a more sophisticated resolution of our ambiguity than ‘we don’t have to choose’. We have chosen, but in 2016 we were too strategically timid to admit it.

As a result of this White Paper – one which the ALP could itself equally have written – Australia has become even more strategically dependent on the United States and has postponed even further the prospect of regaining some form of sovereign control of our defence and foreign policy. Extending the usual spheres of security (land, sea, and air) to include space and cyber is a further exercise in sycophancy to the US and a further abandonment of independence.

Australia is less well prepared for this century than we were before the White Paper’s belated release. In spite of what some have claimed, the 21^st century is not America’s, but the Asian Century. Yet without question, we now accept that answers to differences with our neighbours will be militarised, and that those disputes will be mediated by the United States. We are forgetting that under Howard, with a UN mandate, and without US boots on the ground, we managed a reasonably peaceful transfer of power in East Timor. Before Howard, we did the same in Cambodia. Now, we are forgetting our international obligation to refrain from threat or use of force against other countries.

We seem to have forgotten too, that in another White Paper, on Australia in the Asian Century (2011), China and Indonesia were among five countries to which Australia was urged to give priority status in broadening and extending relationships. Australians at all levels in government, academia, and business were exhorted to become ‘Asia-capable’, not just the young, but people who had been in their positions of influence for decades. Authors Ken Henry and Allan Gyngell offered a resolution to our ambiguity: but the Gillard government didn’t fund it and the rest is history.

Until the contradictory propositions of the 2016 Defence White Paper and the Asian Century White Paper are reconciled, Australia will continue to flounder between its defence alliance and its economic interests, its history and geography, and two superpowers.

Alison Broinowski was formerly a senior officer in the Department of Foreign Affairs and Director of the Australia Japan Foundation.  She is a Visiting Fellow at the ANU. 

The Defence White Paper 2016 has now been published. An engaging, critical, analysis of it has been offered by Professor Hugh White, ANU, (Pearls and Irritations March 10^th ).

Rightly, the purpose of the White Paper is to outline how Australia’s security can be assured in the current and expected environment.

A central assertion of the paper, with respect to that assurance, can be found at page 121, in paragraph 5.20.

“ Only the nuclear and conventional military capabilities of the United States can offer effective deterrence against the possibility of nuclear threats against Australia. The presence of United States military forces plays a vital role in ensuring security across the Indo-Pacific and the global strategic and economic weight of the United States will be essential to the continued effective functioning of the rules-based global order.”

This assertion about the US role in assuring the security of Australia, would make sense to the many Australians who have absorbed the notion that Australia’s security requires what Prime Minister Menzies declared, in 1955, “a great and powerful friend”.

Consequently, candidates for election to our national Parliament, from both major parties have demonstrated, for years, their belief that they would ignore Menzies’ doctrine at their electoral peril.

This stance has led Australia to support the United States in all of its wars, from Vietnam to Iraq and Syria.

In this light, Paragraph 5.20, deserves analysis.

First, it posits the existence of possible nuclear weapons based threats to Australia. Given the existence of nuclear weapons able to strike Australia, that can be seen to make sense, even be prudent. But, there needs to be an assessment of the likelihood of their use. This is complex, involving strategic motivations of others, the costs and benefits of the use of nuclear weapons and, above all, the notion and mechanics of nuclear deterrence.

It also engages “the security dilemma”; the notion that the act of arming to appear to be of superior strength to a perceived adversary, simply brings about an increase in their armament directed at you, thus increasing the danger and probably beginning an arms race.

We have sought to avoid a nuclear security dilemma by eschewing nuclear weapons of our own. The Gorton Government dallied with nuclear weapons in 1969, delaying our accession to the Treaty on the Non-Proliferation of nuclear weapons (NPT), but a decision on acquisition was not supported and we joined NPT.

It is generally calculated that nuclear weapons would not be used on states that do not possess them and, nuclear weapon States have given assurances to that effect. But, Australia’s continuing participation in US nuclear strategy could be taken as invoking the security dilemma. Specifically, that Australia has on its soil US nuclear control and Command systems can be seen not only as facilitating a US nuclear threat to others but also as making more likely the use of nuclear weapons against Australia, in the event of a nuclear crisis, say, between the US and China.

Secondly, the fundamental assertion that the US would act to defend Australia against a nuclear threat, including through the use of its nuclear weapons, needs to be questioned. The US can be expected, as a rational actor, to consider the full implications of any such use or threat of use. This would obviously engage far wider considerations than the security of Australia.

In the past, a simplistic, perhaps crude way of posing this question has taken the form of asking; “ Would the US, in reality, be prepared to trade Los Angeles for Sydney, if those were the alternatives in a nuclear crisis?” The answer seems obvious, unless of course the bases in Australia had to be saved in order to ensure the US’ wider ability to conduct nuclear war.

As already noted, this is all very complex, but all that can be said of it accurately, is that paragraph 5.20, represents an act of faith.

Thirdly, the assertion is also made that what is at stake in all of this is not simply Australia’s security, but something possibly even more fundamental; “ the continued effective functioning of the rules-based global order”.

It is on this notion, that the White Paper reveals its glaringly blind eye.

There is a rules-based global order. It is the one set forth in the Charter of the United Nations and derived solemn agreements, not least the NPT.

The central point to be made about that order, is that it has come to be routinely ignored and abused, particularly by those powers intended to be its main guardians: the five permanent members of the UN Security Council.

Outstanding results of this have been; the emergence of DAESH, following the illegal invasion of Iraq by two such permanent members, US and UK, in which Australia participated (consistent with its record from Vietnam onwards), the failure of the Council for 4 years to agree on action on the Syrian civil war, and the western attack upon Libya, engineered by Secretary of State Hillary Clinton (see the NY Times’ analysis of Clinton and Libya, February 28^th, 2016 ).

That action in Libya exceeded the Security Council mandate to afford protection to Libyans from its government and moved on to regime change, an event never authorized and for which no replacement Government was seriously planned. This resulted in the chaos now seen not only in Libya, but across northern and western Africa and added to the conflicts already underway in Iraq and Syria.

The massive humanitarian and refugee crises in the region are the profound outcome of these failures of the rules-based order; and, they are beginning to threaten another deeply important rules-based system, the EU.

In addition to these disasters, the US and Russia have resumed the development of new nuclear weapons, in violation of their NPT obligations.

There seems to have emerged a preference amongst key States to return to power and interest as the determinants of policy not the compact agreed at the end of the Second World War and Colonialism, as set forth in the UN Charter and the Universal Declaration of Human Rights. (see my; Nuclear North Korea, Pearls and Irritations, November 1^st 2015).

Is this “rules- based order”, now in disarray, the one of which Australia’s Defence Department speaks?

Clearly not. What it manifestly has in mind is the US version of order, presumably because it represents “our side”.

The problem with this is that so many others in the world, West and East, not just obvious adversaries or actors with whom we have little or no sympathy, but also friends, do not look comfortably upon what the White Paper declares to be “US leadership”. How could they, when the US has declared itself to be the “exceptional country”, meaning that it does not have to obey the rules that they say all others must keep?

And now, the US election campaign is revealing that there is a widespread notion, in the US electorate, that the US has been abused and exploited, by the rest of the world.

Whether the ever more grotesque Trump or the proven to be bellicose Clinton prevails, we cannot expect any diminution in the militarization of US foreign policy.

Indeed President Trump may break new ground in revealing how disturbing it can be to be obligated to an Alliance that is shaped by the forces and psychology of US domestic politics

The White Paper, inevitably deals in detail with force structure, equipment, military resources. But, a major resource Australia has at its disposal, for the protection of its security, is its skilled diplomacy. It needs to exercise much more of it, especially in its region. For example, as I have argued previously, (Pearls and Irritations, An Independent Australian Foreign Policy, May 13^th, 2015), we must not accept that our relations with both China and the US are an either/or proposition, in which we must make a choice. We can maintain constructive and principled relations with both.

And, we must reassess with a clear, not a blind eye, and not simply as a matter of faith, our alliance relationship with the US.

Finally,we should also strive, with others, to restore authority to the only valid rules-based system in existence, the Charter of the UN, and seek a new dispensation in the constituency and decision making methodology of the Security Council.

An overwhelming majority exists in the General Assembly of the UN in support of major reform of the Security Council. This must be pursued, because surely the point about rules is that they will only attract faith in them, be followed, if they are applied equally to all.

Richard Butler AC is a former Australian Ambassador to the United Nations.

In a paper distributed by the ANU East Asia Forum, Professor Hugh White has pointed out that the Defence White Paper makes two invalid assumptions: the post-Cold War US-led international order will be maintained and that it must be. He is right on both counts and I will not repeat his views here except to say I agree with them.

The so-called “rules based” order is based on Western concepts and dominated by Western countries. Many other countries simply don’t accept the rules. Even some UN rules, including those we would like to keep, are open to question by some countries especially if you consider “interpretation”. Indeed, we and others break the rules when it suits us; the Coalition of the Willing is just one example of the preachers breaking the rules and we can find countless others. Australia, like the US and Western Europe, sees democracy as an article of faith and condemns as evil infidels anyone who questions the one true political faith. Not everyone agrees with our approach and in an increasingly multipolar world do we have the capacity or need to impose our values on others so long as they don’t try to impose theirs on us?

America’s Gibbon will not appear for some time to come but US power is increasingly limited and its attempts to impose its will on others is weakening. Russians see the world differently and so do Chinese and US attempts to dictate policy to these countries are not succeeding. As Hugh White points out, nobody is going to invade the USA because the Americans would win such a war but America’s limited military actions have a poor record of success. This is mostly because they were poorly planned, lacked clear objectives, were based on bad intelligence and sometimes had a heavy ideological basis. Backing the losing side in a civil war is not good policy.

Any threat assessment is based on capacity and motive. The only country with the capacity to invade Australia is the USA which is hardly likely to do so and nobody has the motive except perhaps in our capacity as a US ally.

Our naval hardware can deter people smugglers and illegal fishing boats but is not able to do much else by itself except perhaps to defeat weak countries who are not likely to pose a threat to our interests. Without a carrier based task force we would not last very long outside the range of our land based aircraft in an action against a major power. All our major military actions since WW2 have been as adjuncts to the US, either legally (Korea and the first Gulf War) or illegally (Vietnam, Iraq, Syria and Afghanistan). However worthy, Timor and the Solomons were hardly serious military exercises. From the tone of the White Paper and public statements by the relevant ministers,it would appear that our future military actions will be proposed in Washington; we will theoretically be able to accept or reject participation but our track record so far suggests we will go along. Looking at the wars the US has led us into in the past, we can not be confident that future ones will be any better.

The argument about supporting countries which share our values is a dubious one and we have to ask which values? Donald Trump’s or Ted Cruz’s religious fundamentalism? The USA is a very diverse country with many different values and a complex governmental process. Its decisions are based on the perceived interests of the US and the rhetoric is created to to suit. We might also meditate on that old but true saying that countries don’t have friends, only interests.

It is clear that we are closely integrated into the US military and our public support for the US has not led others to see us a truly independent actor in military matters. As US proposals for basing bombers near Darwin show, the US takes it for granted that Australia will go along with US decisions which are based on US interests. Certainly, some regional countries want the US as a balance to  China but, on the other hand, US facilities in Australia and the perception that we are part of the US team could be the cause of attacks on Australia rather than a source of defence. If we were not a US ally, why would anyone want to attack us? If we had not got involved in the Middle East, why would Islamic extremists threaten us? Our military hardware and increased personnel are no defence against terrorism. We might also consider the Costa Rican approach. They disbanded their armed forces on the grounds that they couldn’t beat anyone else and if they had no armed forces nobody could accuse them of being a threat or see them as one. This is probably not a realistic option for Australia but it does make the point that action to build up military capacity invites a reaction.

​The White Paper does not spell out who is the enemy but it can only be China. The US and China both want to be number one in the region and Australia has clearly backed the USA.  India has a significant and growing blue water navy. It will be an important factor in our considerations, especially in the Indian Ocean. Australia talks about not taking sides between the US and China but walks with the US. We began by doing what we had always done without making a fuss but there is growing pressure on us to send ships or planes through the disputed area purely for the sake of doing so. Does this serve our interests? The US confrontation with China, as with Russia, is not about principle but about great power rivalry. The freedom of navigation issue is probably not what it is all about but is a peg on which to hang competition for influence between two great powers.

To sum up, the White Paper identifies China as a potential threat and the USA as our dominant ally. The structure of our forces suggests that they are designed to operate with a major ally which is the USA and this is confirmed by the extent to which we are integrated with the US armed forces. The USA is not the Great Satan but nor is it God. It is a country like any other which sometimes gets things right and sometimes not but which acts in accordance with its own perceived interests which may or may not coincide with Australia’s. An anti-American stance on our part would be stupid but a much greater degree of independence in word and deed that showed a clearer understanding of Australian long term interests does not emerge from the White Paper. We can of course ask what real influence the White Paper will have on policy? Perhaps not much?

Cavan Hogue was formerly Australian Ambassador to USSR and Russia, and Ambassador to Thailand and Mexico, and High Commissioner to Malaysia.

My clear response is ‘No!’

China, as a major trading nation, now has the same rights as the US to protect its maritime and air approaches to its mainland.  Australia should avoid provocative statements and actions at sea or in the air.

When we talk about the need to support ‘a rules-based global order’, we overlook the fact that this order was framed mainly by the US after World War II.

The world has changed greatly over the last 50 years and rising countries such as China, India, Indonesia, Russia and Brazil will want to be involved in reshaping an updated international and regional order.  We should be involved in cooperative discussions with the US, the above five and all countries in the Asian region.

The Australian Government and the ALP – and the factions in both major parties – need to acknowledge this or Australia will be left behind.

Richard Woolcott was Australian Ambassador to Indonesia and the Phillipines and the High Commissioner to Malaysia, Ghana and Singapore. He was the Australian Ambassador to the UN and President of the UN Security Council. He was Secretary of the Department of Foreign Affairs and Trade from 1988 to 1992.

 

In considering the Defence White paper, it is important as Hugh White has pointed out, that we consider carefully the growing power of China and its determination to be accepted as a strong regional and global power. In this article (reposted from 27 April 2015) by Kishore Mahbubani, he describes the likely consequences of China becoming the ‘number one’ regional and possibly world power in the decades ahead. Our Defence White paper discounts the significance of growing Chinese power and the need to accommodate it.  John Menadue

 

ALBERT H. GORDON LECTURE BY DEAN KISHORE MAHBUBANI[1]
AT THE GREEN ROOM, KENNEDY SCHOOL OF GOVERNMENT,CAMBRIDGE, MASSACHUSETTS, 8^TH APRIL 2015

In introducing this lecture, the Harvard Kennedy School said that for the first time in more than 200 years, a non-Western power, China, will have the largest economy in the world. China’s emergence will change our world order. To understand how China will behave when it becomes number one, this lecture by Kishore Mahbubani will introduce several questions: What are the priorities of the Chinese leaders? What impact have American policies had on China? Will China behave as America does when China becomes number one?

 It is truly a great honour to be invited to deliver the Albert H. Gordon lecture this year. The hardest part is deciding how to start. Asians always start with an apology. Americans always start with a joke. Sadly, I could not find a good joke, certainly not one as good as the joke that Richard Fisher started with when he delivered this lecture in February 2009.

This is what he said: “Yesterday morning, as I got on the plane to fly up here, I turned to Nancy and said, “In your wildest dreams did you ever envision me following in the footsteps of Mikhail Gorbachev, George H. W. Bush, David Rockefeller and Ban Ki-moon in giving the Gordon Lecture at the Kennedy School?” And she replied, “I hate to let you down, Richard, but after 35 years of marriage, you rarely appear in my wildest dreams.” My wife Anne and I recently celebrated our 30th wedding anniversary in Greece just before coming here. I am sure she would say the same as Nancy. Anyway, as a good Asian, let me apologise for the fact that I have no joke.

It is also no joke that we are probably living through the greatest transformation in human history we have seen. This was the underlying theme of my two most recent books, “The New Asian Hemisphere” and “The Great Convergence”. However, to illustrate this point more clearly, let me cite three spectacular recent developments whose profound implications have not been adequately noticed. In the spirit of the Albert H. Gordon Lecture series, let me pick three examples from the financial sector.

We all know that the world experienced a global financial crisis in 2008-09. We also know that the Fed launched a series of unorthodox monetary policy measures, most notably quantitative easing (QE), to avert a deep recession. What few noticed was what the Fed’s decision meant for Beijing.

Until the onset of the crisis, Chinese leaders were happy that the US and China had settled into a comfortable pattern of mutual dependence. China relied on the US markets to generate exports and jobs. The US relied on China to buy US Treasury Bills to fund US deficit spending. Tom Friedman, in his usual brilliant way, captured this interdependence with a simple metaphor. He said, “We are Siamese twins, but most unlikely ones – joined at the hip, but not identical.”

This Chinese belief that the US government depended on China was further reinforced when President Bush sent an envoy to Beijing in late 2008 to request Beijing not to stop buying US Treasury Bills to avoid rattling the markets further. The Chinese leaders readily agreed and probably felt very smug as this confirmed that the US was also dependent on China.

This smugness was shattered when the US Fed announced the first round of QE measures in November 2008. The Fed’s actions demonstrated that the US did not have to rely on China to buy US treasury bills. The Fed could create its own money to do so. This decision had profound implications for the world. Axel Merk, the president of the investment advisory firm Merk Investments said, “The US is no longer focusing on the quality of its Treasuries. In the past, Washington sought to promote a strong dollar through sound fiscal management. Today, however, policymakers are simply printing greenbacks.” Merk said that by relying on the Federal Reserve’s printing press, the US has effectively told other nations that ‘it’s our dollar – it’s your problem’.

It was clearly a mistake for the Chinese leaders to believe that they had created a relationship of mutual dependence. When China decided to buy almost a trillion dollars of US Treasury bills, it had to do so from export revenues earned from the toil and sweat of Chinese workers. However, if the US wanted to repay this trillion dollars, all the Fed had to do was to increase the size of its balance sheet. This is why several leading economists have said that the US enjoys an “exorbitant privilege” in being able to repay its debts by increasing money supply. The term was coined by Valery Giscard d’Estaing and the French economist Jacques Rueff explained its workings. Barry Eichengreen famously wrote a book on the topic in 2010.

Let me quickly mention the two other developments whose implications have not been fully noted. It is well known that in recent years, the US has prosecuted several foreign banks, including HSBC, RBS, UBS, Credit Suisse, and Standard Chartered. For example, Standard Chartered Bank was fined 340 million dollars for making payments to Iran. Most Americans reacted with equanimity to the fine paid by Standard Chartered Bank and thought it was just that the Bank was fined for dealing with the “evil” Iranian regime. However, few Americans noticed that Standard Chartered Bank, domiciled in the UK, had broken no British laws. Nor had they violated any mandatory sanctions imposed by the United Nations Security Council. However, since almost all international payments have to go through the United States payment mechanism, the Standard Chartered Bank was fined for violating American laws.

To put it simply, what the US was doing in this case was to say that American laws applied to non-American citizens and non-American corporations operating outside America. This is called extra-territorial application of domestic laws.

The third development was the threat of the US to deny countries access to the SWIFT system. Since all international payments have to go through the SWIFT system, any country denied access to the SWIFT is thrown into a black hole and denied access to any kind of international trading and investment. In a recent column, Fareed Zakaria described well the Russian reaction to the possibility of being denied access to the SWIFT system. In Western media commentaries, Putin is often portrayed as the bad guy and his successor as well as predecessor, Medvedev, is portrayed as the good guy. Yet, it was the “good guy” who went ballistic when he was told of this threat. This is what Medvedev said, “Russian response – economically and otherwise – will know no limits.”

I begin with these stories for a simple reason. Events such as these will have a deep impact in determining the answer to the biggest question of our time: what happens when China becomes number one in the world? Clearly, the answer to this question will determine significantly the course of the 21st century. Hence, we should study this question carefully.

Let me begin with what I hope you will agree are three incontrovertible facts. First, China will become the number one economic power in the world. Second, most Americans, like most Westerners, view China’s rise with great foreboding. Third, the role that China will play as the number one economic power has not been cast in stone. How the world, especially America, reacts to China’s rise will help to influence China’s behaviour in the future. If we make the right decisions now, China could well emerge as a benign great power (even though most Americans find this virtually inconceivable).

This is why it is timely to address the topic of what happens when China becomes number one. It is always better to prepare for the inevitable than to pretend that it will not happen. So far, on balance, America has reacted wisely to China’s rise. However, it is always easier to be wise when a power assumes that it will be number one forever. When the reality sinks in that the number one power is about to become the number two power, it is conceivable that fear may replace wisdom as the dominant driving force in American policy towards China. It would be perfectly normal for this to happen. My goal in this lecture is to try to persuade my American friends to continue to react wisely to China’s rise.

To achieve this goal, I will make a three-part argument. First, I will try to explain what I think are the goals and ambitions of China’s leaders as China emerges as number one. Secondly, I will explain how several wise American policies have so far managed to allow the relatively peaceful emergence of a new great power. Thirdly, I would like to conclude by recommending that America can protect its long-term interests by reacting even more wisely to China’s rise.

Let me begin with the first question: what are the goals and ambitions of China’s leaders as China emerges as number one? Since China is still run by the Chinese Communist Party (CCP), it is conceivable that the goal of China’s leaders could be the same as the leaders of the Soviet Communist Party (like Lenin, Stalin and Khrushchev): to prove the superiority of the Soviet Communist System. As Khrushchev famously said on November 18, 1956, “Whether you like it or not, history is on our side. We will bury you”.

One of the biggest sources of misunderstanding between America and China arises from China’s decision to retain the term “Communist” in the name of its party. This may clearly signify a commitment to Communist ideology. Yet, even a brief survey of China’s deeds rather than China’s words will show that China has effectively walked away from Communist ideology. Deng Xiaoping encapsulated this shift with his famous remark, “It doesn’t matter whether a cat is black and white. If it catches mice, it is a good cat.” Effectively, Deng was saying: “It doesn’t matter if the ideology is communism or capitalism. If it helps us, we will use it.” Effectively, China behaves more as a capitalist country rather than as a Communist country, but for complicated internal political reasons, it cannot abandon the term “Communist”.

So if the Chinese leaders are not defending or promoting Communist ideology, what cause are they trying to achieve? The answer is simple and direct: they would like to revive Chinese civilization. If there is one thing that motivates China’s leaders, it is their memory of the many humiliations that China has suffered over the past 150 years. If there is a credo that drives them, it is a simple one: “No more humiliation”. This is why they want to make China a great and powerful nation again. Xi Jinping explained this goal well in his address to UNESCO on March 27, 2014. He said, “The Chinese people are striving to fulfil the Chinese dream of the great renewal of the Chinese nation. The Chinese dream is about prosperity of the country, rejuvenation of the nation, and happiness of the people. It reflects both the ideal of the Chinese people today and our time-honoured tradition to seek constant progress. The Chinese dream will be realized through balanced development and mutual reinforcement of material and cultural progress. Without the continuation and development of civilization or the promotion and prosperity of culture, the Chinese dream will not come true.”

The revival of the great Chinese civilization is something we should welcome. If the CCP could change its name to ‘Chinese Civilisation Party’, it would do a lot to assuage Western concerns. It has already transformed itself into a meritocratic talent-seeking mechanism that is constantly searching for the best leaders to rule China. Despite the many ups and downs in the history of the CCP, this is what the CCP has become. If the Chinese have finally succeeded in finding the right mechanism to revive Chinese civilization, we should, in theory, welcome this development.

In practice, it is a fact that the West will not rest easy till China transforms itself into a liberal democracy. The Economist, a leading Western magazine, reflects these views. The Economist said in its issue of September 20-26, 2014 that Xi “has become the most powerful Chinese ruler certainly since Deng, and possibly since Mao.” It then calls on Xi to use this enormous power for the greater good and change the system.

The Economist assumes, as most Westerners do, that if China’s system is changed and a Western-style democracy emerges in China, this will be an unmitigated good. This is a dangerous assumption to make. A more democratic China is likely to be a more nationalist China. A more nationalist China could well be a more assertive and aggressive China. Such a China would launch a “popular” war against Japan and act in a far more belligerent fashion over territorial disputes, like those in the South China Sea.

In this sense, the CCP is delivering a major global public good by restraining nationalist forces and voices in China. From time to time, it has to allow some of these forces to be expressed; it has to allow its people to vent nationalist sentiments. However, the CCP also knows when to draw back from volatile situations, as it did with Japan, India, the Philippines and Vietnam in recent years. The West should be careful about wishing for early democracy in China. Its dream could become a nightmare.

At the same time, the West must recognise and respect that China is different; that it is not going to become “Western”. Therefore, the wisest course for the West to adopt would be to allow the present system to continue and to allow it to evolve and change at its own pace.

This brings me to the second part of my argument. As I said earlier, wise American policies have allowed China to emerge peacefully. Some of this wisdom arose out of historical necessity. At the height of the Cold War, when America genuinely feared Soviet expansionism, it reached out to China to balance the Soviet Union. Indeed, America reached out to China when China had emerged out of one of its most brutal phases. Human rights was not a factor in American policy towards China then. This paved the way for Deng to use America as an example to persuade Chinese people to switch away from central planning to free market economies.

In the 1990s, official US-China relations went through a series of ups and downs. Despite the efforts of President George H.W. Bush to keep the relationship on an even keel, the Tiananmen Square episode on June 4, 1989 assaulted American sensibilities and constrained his ability to improve relations. Tiananmen could have derailed US-China relations. When President Clinton took office in January 1993, after having described the leaders of China as the “butchers of Beijing”, one could easily have predicted a far bumpier road. Fortunately, Bill Clinton reacted wisely. I was present at the first Asia-Pacific Economic Cooperation (APEC) leaders meeting at Blake Island in November 1993 and saw with my own eyes how Bill Clinton and Jiang Zemin made an enormous effort to reach out to each other. By the end of the day, their mutual wariness was replaced by a significant degree of personal bonhomie. This episode demonstrated that the United States had been wise in welcoming China into the APEC in 1991. Such a move not only garnered the US diplomatic goodwill but also ensured that China adopted the membership of yet another international forum whose rules and regulations it agreed to abide by. Later, the US also worked with China in the East Asia Summit. In addition, the US and China collaborate daily in the UN Security Council to manage the “hot issues” of the day.

The tragedy of 9/11 further solidified US-China cooperation. Apprehensions about the rise of China were replaced by a focus on the War on Terror. East Asia stopped being a priority for the United States for several years. This allowed China to rise peacefully and for the two countries to avoid the “Thucydides trap”.

America made several wise decisions during this time. Firstly, America proceeded to admit China into the World Trade Organisation (WTO) in 2001. Although the admission was made on the basis of stiff conditions, these conditions ironically benefited China and forced it to open up to world trade – leading to its current pre-eminent position as the largest economy in the world in PPP terms.

Another judicious call was to pay attention to China’s sensitivities on Taiwan. China had always regarded Washington’s policy towards Taiwan with suspicion, as they feared that the US could use the Taiwan issue as a means to destabilise China. Instead, America reacted wisely when in late 2003, the Taiwanese President Chen Shui-bian suggested that a referendum be held to assess the views of the Taiwanese people on independence. In response, President George W. Bush made it clear that the United States did not approve of his move. He said: “The comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally to change the status quo, which we oppose.” This was wise statesmanship, even if it was partly the result of Washington’s dependence on Beijing’s support for other more pressing issues, such as Iraq and North Korea.

Some of these wise policies emerged out of America’s selfish interests, especially during the Cold War. However, it is possible that few Americans are actually aware how wise America has been. And even fewer Americans understand that it is in America’s national interest to continue these wise policies towards China. For example, since Deng Xiaoping opened up China in 1978 American universities have educated hundreds of thousands of Chinese students. In the years 2005 to 2012 alone, 788,882 Chinese students studied in American universities. This number has risen steadily – in the 2013-2014 academic year, 275,000 Chinese students were enrolled at American universities . This is an enormous gift from America to China. Future historians will be puzzled by this massive act of generosity as many of these students then return to China to build up the Chinese economy and to create innovations in many different spheres of science and technology that propel China forward in areas ranging from space exploration to defence.

China has also contributed to the maintenance of friendly relations between the two countries. Firstly, China has “swallowed bitter humiliation” time and again and has reacted prudently to America’s mistakes. These mistakes included the bombing of the Chinese embassy in Belgrade in 1999 and the downing of a US spy plane in Hainan Island in China in April 2001. The tact and restraint demonstrated by China in both situations averted military action between the two countries.

I have described these events in some detail as they help to explain a contemporary geopolitical miracle. Normally, when the world’s largest emerging power is about to pass the world’s greatest power, we should be seeing a rising level of tensions between the two (with the historical exception of one Anglo-Saxon power, the US, replacing another Anglo-Saxon power, the UK). It would therefore be perfectly normal to see rising tensions between the US and China today. Instead, we see the exact opposite: perfectly normal and calm relations between the US and China. This is a miracle.

However, miracles are by definition historical aberrations. They don’t last. Soon, we will revert to the historical norm and competition and tension could rise between America and China. To prevent this from happening, both sides will have to make a special effort to continue on their extraordinarily wise courses.

On the part of China, this means that it will have to learn lessons from the mistakes it has made in recent years in its dealings with its neighbours, especially Japan and Southeast Asia. For example, it completely mishandled an episode in which a Chinese fishing boat collided with Japanese Coast Guard patrols near the disputed Senkaku Islands on September 7, 2010. China unwisely demanded an apology from Japan after having publicly humiliated Japan into releasing the fishing boat. Similarly, China also mishandled the Korean crisis of 2010 by not condemning North Korea’s shelling of the South Korean island of Yeongpyeong. China also made aggressive statements and adopted more aggressive positions on the South China Sea in 2010 and 2011. When China submitted to the UN Commission on the Limits of the Continental Shelf a map including the nine-dotted-line territorial claim in the South China Sea on May 7, 2009, the Philippines lodged a diplomatic protest against China. Vietnam and Malaysia followed. Indonesia also registered a protest, although it had no claims on the South China Sea. In the face of this opposition, Chinese officials refused to back down.

China has also made mistakes vis-à-vis its relations with ASEAN as a whole. The lowest point in China-ASEAN relations occurred in July 2012 at the ASEAN Foreign Ministers’ Meeting. Until then, for every year since August 1967, ASEAN had always succeeded in issuing an agreed joint communiqué after each Foreign Ministers’ meeting. However, in July 2012, for the first time in forty five years, ASEAN failed to do so. They failed because they could not agree on the paragraph referring to South China Sea. Nine of the ten countries agreed that ASEAN should reiterate the previously-agreed paragraph on this issue. However, the host country, Cambodia, refused to do so. It later emerged that Cambodia had come under heavy pressure from Chinese officials not to agree to these previously-agreed paragraphs on South China Sea. Clearly, China’s rise had made some Chinese officials arrogant.

While China should learn from the mistakes it has made, America should study its own recent deeds through a simple lens: would it like China to replicate these deeds when China becomes number one? The reason for using this lens is that when China clearly becomes number one, it is likely to replicate abroad America’s deeds, not its words.

Bill Clinton saw this coming long before any other American did. In a significant speech at Yale in 2003, he said the following:

“If you believe that maintaining power and control and absolute freedom of movement and sovereignty is important to your country’s future, there’s nothing inconsistent in that [the US continuing to behaving unilaterally]. [The US is] the biggest, most powerful country in the world now. We’ve got the juice and we’re going to use it. . . . But if you believe that we should be trying to create a world with rules and partnerships and habits of behaviour that we would like to live in when we’re no longer the military political economic superpower in the world, then you wouldn’t do that. It just depends on what you believe.”

Actually, as I document in The Great Convergence, Bill Clinton wanted to prepare his fellow Americans for the day when America becomes number two and China becomes number one while he was President. However, all his advisers firmly told him it would be politically suicidal for any sitting American President to talk of America becoming number two. Hence, he could only speak about it after he left office. Sadly, he has not said more on this issue after raising it in Yale. Hence, I fear that Americans are not psychologically prepared for the day when America will become number two.

All this brings me back to the three stories that I began the lecture with. America was able to and could threaten to act unilaterally in all three cases because it is clear that America is still the reigning Emperor of the global financial system. Indeed, like many strong ruling monarchs, it enjoys absolute sovereignty in these areas and is not subject to any checks and balances.

It unilaterally controls the global reserve currency, the US dollar. In theory, the US dollar is a global public good, but in practice, it is an instrument of American domestic and foreign policies. As former Treasury Secretary John Connally said in 1971, “It’s our currency but your problem”. Clearly, global interests are not taken into consideration when the US manages the US dollar. This is why many countries, besides China, were troubled by the QE measures.

Similarly, America acted unilaterally when it applied its domestic laws in an extraterritorial fashion to foreign banks. Its threat to use SWIFT, another global public good, to unilaterally punish Russia could have had even more devastating consequences for the global order.

And what would the devastating consequences be?

To understand this, I hope you will look at my latest book The Great Convergence. One reason why the world has been remarkably stable and peaceful over the past few decades is that the rest of the world, especially Asians, who have been passive for almost two centuries, had agreed to accept and work with the Western-created family of global institutions, including the UN, IMF, and the World Bank. They agreed to do so because they believed that these institutions were serving global interests, not Western interests.

This is therefore the big danger of the US using global public goods, like the US dollar, international banking transactions, and the SWIFT system, for unilateral purposes and ends. It will encourage the world, especially China, to work towards creating an alternative global order. If that happens, the world will become a far messier place.

This is why I was happy to deliver this lecture at this time. We stand at one of the most important forks in human history. I hope America will continue its wise policies of strengthening a global order that serves global interests, not just American interests. If America does this, China will do the same. If this happens, nothing will change fundamentally when China becomes number one. We will continue to live in a safe and predictable world.

Therefore the final question I need to answer is, “Will China emerge as a responsible stakeholder?” – to use the famous words of Bob Zoellick. My simple answer is this “China could emerge as a stakeholder that is as responsible as the United States”. Since America is still the number one power in the world, the big question that America should ask itself is a simple one: would it feel comfortable living in a world where China behaves just as America did when it was the sole superpower?

Dean Kishore Mahbubani is Professor in the Practice of Public Policy, Lee Kuan Yew School of Public Policy, National University of Singapore.

[1] Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, is the author of “The Great Convergence: Asia, the West and the Logic of One World.”

Any defence policy is ultimately based on a view of the international system and how it is expected to evolve over coming decades. These are the judgments that most fundamentally influence the nature and scale of armed conflict that a country’s forces must be prepared to fight. Australia’s new Defence White Paper makes two central judgments about this. First, that the post-Cold War, US-led international orderwill be maintained; and second, that it must be maintained.

Are these judgments correct? Let’s take them one at a time. First, will the ‘rules-based global order’ — as the White Paper calls it — survive over the next few decades, especially in Asia? The White Paper argues that it will, because the United States will remain ‘the pre-eminent global military power’ and ‘the world will continue to look to the United States for leadership’.

Many accepted this view in the 1990s, when America’s unchallengeable global primacy seemed to have created a unipolar order that marked the ‘end of history’. But it is much harder to believe this now, when the United States faces serious challenges in at least three key regions — the Middle East, Eastern Europe and Asia. In each of these regions, important players directly challenge US leadership.

And in each of these regions, US military power has so far proved insufficient to overcome these challenges. While no country can match the United States’ capacity to project force anywhere on the globe, the US has been unable to defeat major regional powers or even ill-armed insurgents on their own turf.

This is most obviously true in the Middle East and Eastern Europe, where America’s traditionally weak land forces offer no viable military options against regional adversaries. But it is also true in Asia, where the United States’ traditional mastery at sea is being very seriously challenged by China’s growing capacity for sea denial.

This is what makes the contest in the South China Sea so important. China’s stark defiance of US concerns about its conduct there, its willingness to militarise the confrontation and America’s inability to effectively respond indicate that US military power is no longer sufficient to resist the major challenge to the ‘rules-based global order’ in our region.

As I have argued elsewhere, China likely regards US and allied threats to use force in the South China Sea as bluffing. If so, there is no reason to hope that China will back off from its challenge or that the US-led regional order will be preserved.

Now that US primacy is no longer uncontested, the questions are what will replace the US-led order and how will this new order emerge.

The answers to these questions depend a great deal on how the United States and its allies, including Australia, respond to China’s challenge. This brings us to the second judgment in the White Paper — that the old order must be preserved.

The White Paper promotes a vision of the ‘rules-based global order’ as a seamless and indivisible whole that must be either preserved unaltered or surrendered in its entirety. And it sends a clear message that Australia should be willing to join a war against China to preserve it unaltered.

This is plainly wrong. There are many parts of the current international order. Some really are essential, like the prohibition on outright interstate aggression embodied in the UN Charter. Others are much less important, like the rules governing occupation of low tide elevations and the extent of territorial sea claims that they can support embodied in UN Convention on the Law of the Sea. To see them all as equally non-negotiable is absurd. The essential must be distinguished from the negotiable.

Australia has to decide whether leadership of the international order is essential or negotiable. This is what is really at stake in Asia today. Are we willing to concede to China a larger share of regional leadership? Or must we preserve sole US leadership at any price — even at the price of a major war? Anyone who reflects on the likely scale and nature of a US–China war will quickly conclude that it would be better to concede at least a share of regional leadership to China, frightening and difficult though that might be.

The more we are determined to preserve the current regional order unchanged, the more likely it is that it will be replaced not by a new, stable and peaceful order but by a protracted and catastrophic rivalry, and probably by conflict.

So what are the implications of the White Paper’s views of regional order for the defence policy it presents? The blithe assumption at the White Paper’s heart is that we can preserve the current rules-based order without serious military confrontation, because China will back down in the face of our threats. Consequently, it maintains that Australia needs no major changes to its defence policy. And for all the talk of a maritime build up and massive new funding, the government plans no major new capacities and no major funding commitments beyond those already laid down.

This may prove a big mistake. Over the next few decades, Australia will face a new order in Asia in which the United States will play a lesser role, and may even play no substantial strategic role at all.

If that happens, Australia’s forces would have to do much more independently, or with allies, than it has had to contemplate over the past four decades of uncontested US regional leadership. This is the challenge that Australia’s defence policy must address and which the White Paper has ignored.

Hugh White is Professor of Strategic Studies at the Strategic and Defence Studies Centre at The Australian National University. This article was first published in ANU East Asia Forum on 8 March 2016.

Earlier this month, Foreign Minister Julie Bishop visited Tokyo, where she outlined an increasing emphasis on security cooperation between Japan and Australia. The next day she was in Beijing, where she reportedly received a frosty reception. The two are not unrelated — Beijing is not thrilled about Australia’s growing security ties with Japan.

Because Australia is concerned about China’s increasing assertiveness in the region, but at the same time benefits from China economically, we find ourselves in somewhat of a foreign policy pickle. In this very complex situation, it is critical that Australian policymakers respond with both immediate and long-term outcomes in mind. To understand the long-term implications for Australia’s interests of policies drawing Japan and Australia closer together, we need to understand how Chinese policymakers view the world and China’s role within it.

Opinions of Sino–Australian relations in Australia are ambivalent and often sceptical. The 2015 Lowy Institute Poll clearly shows Australia’s ambivalence towards China. While most Australian trust the United States, they are far less certain about China. Australians have conflicting views about what China’s intentions are and what they mean for Australia. Of the respondents, 61 per cent felt that China wants to dominate Asia, and just over half thought that China’s growth into an important global power does not make the world more stable.

At the same time, 67 per cent felt that the Chinese government aims ‘to create a better life for Chinese people’, and, compared to 2014, fewer Australians in 2015 felt that China is likely to pose a direct military threat to Australia in the next 20 years.

Despite, or perhaps because of, these uncertainties, Australians appear eager to hedge their bets and play it safe with China. 73 per cent agreed that ‘Australia should develop closer relations with China as it grows in influence’. Fifty-two per cent believed that Australia should not join with other countries to limit China’s influence.

The Poll suggests that Australians are not sure what the consequences of China’s growing global influence will be. All the same, there is a strong sense that Australia would be wise to be on good terms with China as it becomes more powerful. This was a view that underpinned Australia’s decision to become a founding member of the Asian Infrastructure Investment Bank, despite US disapproval.

In comparison to China, Australians view relations with Japan more positively. In a thermometer measuring warmth of feelings towards other countries, Japan rated 68 degrees, to China’s lukewarm 58 degrees. While an overwhelming majority of 84 per cent said that Australia should remain neutral in the case of a ‘military conflict between China and Japan’, 11 per cent said Australia should support Japan, and only 3 per cent said it would be better to support China. This relative warmth towards Japan is reflected in Australia’s deepening security ties with Japan, as shown in its signing in February 2016 of an agreement on new joint maritime security and surveillance operations in the Pacific.

China does not react positively to these growing Australia-Japan security linkages. Future security agreements between Australia and Japan need to take the worldviews of China’s policymakers into consideration. Failing to acknowledge how Chinese policymakers themselves see the world, and how China fits into it, can lead to policies that are ineffective, if not counter-productive, in the longer term.

Several worldviews within which Chinese policymakers operate are particularly relevant to Chinese understandings of its place in the world, namely: the century of humiliation, a conception of national cultural characteristics as inherent and unchanging, the idea of history as destiny, and notions of filial piety and familial obligation that apply both inside China and to its neighbours. These four ideas add up to a foreign policy paradigm that assumes China will resume the central role it once played in regional and global affairs.

Many Chinese policymakers feel that the United States and its allies are holding China back from its rightful leadership, and from the global benefits such leadership would bring. As such, rather than providing a disincentive from further ‘bad behaviour’, this kind of security cooperation creates the serious risk of further entrenching China’s sense of exceptionalism and exclusion from — and irrelevance of — the prevailing international order. China’s disapproval is in itself counterproductive, and serves to reiterate the uncertainty and tension that led to Australia and Japan seeking closer security cooperation.

This negative cycle of mistrust is already having consequences for the security of the region. The call to understand Chinese perspectives when determining foreign and security policy is not an argument for simply accepting China’s view of the world as correct, or appeasing China. Rather, it is about clearly surveying the reality of the regional security situation, and taking long-term goals into consideration when making policy choices now. We should be aware that what may seem to be effective deterrence policy today may be creating more complicated security dilemmas in the future.

Dr Merriden Varrall is the Director of the East Asia Program at the Lowy Institute. This article was first published in ANU East Asia Forum on 4 March 2016.

 

After WWII many people, including me, believed that Emperor Hirohito should bear considerable blame for his complicity in Japan’s wars of the 1930s in China and in the Pacific in the 1940s.

There is no doubt that the late Emperor Hirohito was traumatized, as was his nation, by the disasters of WWII. But perhaps that experience of war is the reason why Emperor Hirohito, his son the current Emperor Akihito and his grandson, Crown Prince Naruhito are standing as firm bulwarks against the revisionist tide of history in Japan.

I have written many earlier articles about this and the revisionist tide that Prime Minister Abe is pushing. In many respects he wants to deny the worst aspects of Japanese militarism – the Nanjing massacre and the abuse of ‘comfort women’. He adds vague qualifiers to previously expressed Japanese remorse for the war. Prime Minister Abe keeps the Education Ministry under continual pressure to ensure that its history books are more ‘patriotic’ and minimize Japan’s complicity in WWII. He wants the Japanese people to ignore the fact that 35 m Chinese were killed or wounded as a result of the Japanese occupation of China.

Prime Minister Abe also has a personal agenda. His grandfather, Nobusuke Kishi, and later Prime Minister, was an accused Class A war criminal. He was arrested but released without trial.

The Japanese media, including the public broadcaster NHK, are under great pressure to comply with Prime Minister Abe’s view of history. He is succeeding in the harassment of the media with only the Asahi Shimbun standing out against him.

But the lightening rod has been Yasukuni Shrine which includes the remains of the Japanese war dead, but also the secretly enshrined remains of Class A war criminals. Before he became Prime Minister Abe regularly attended ceremonies at Yasukuni Shrine. He is now more diplomatic but many of his ministers continue to pay their respects at Yasukuni in a way that causes concern to the Chinese and the South Koreans.

But the royal family has stood firm against Yasukuni Shrine.

After the enshrinement of 14 Class A war criminals Emperor Hirohito made a decision never to visit Yasukuni again. No emperor, including the current Emperor Akihito has visited the shrine.

The Crown Prince Naruhito has been even more explicit. At a news conference in February 2015 the Crown Prince and heir to the throne was asked for his views about the 70^th anniversary of the end of WWII. He replied

‘I myself did not experience the war … but I think that it is important today, when memories of the war are fading, to look back humbly on the past and correctly pass on the tragic experiences and history Japan pursued from the generation which experienced the war to those without direct knowledge.’ 

It was strong language for a Crown Prince.

A year later, in February this year on the occasion of his 55^th birthday the Crown Prince restated what he had said 12 months earlier about learning correctly from the mistakes of the past. He added that Japan was enjoying peace and prosperity after it was built with the Japanese Constitution as the cornerstone. It is that Japanese Constitution and cornerstone that Prime Minister Abe is trying to change. The Crown Prince continued on his 55^th birthday

‘I hope this year will be an opportunity to take the preciousness of peace to heart and renew our determination to pursue peace’.

The only major Japanese language newspaper that carried these comments from the Crown Prince was the Asahi Shimbun. All the others under the heavy influence of Prime Minister Abe refused to carry the story about the Crown Prince’s plea for peace.

In parallel to rising nationalism, the damaging tide of war revision is running strongly in Japan.

The Japanese royal family is proving a strong and steadfast bulwark against this revisionism. Even the Japan Communist Party is impressed. It used to boycott the ceremonial opening of Parliament by the Emperor because of the earlier behaviour of Japanese Emperors.. Recently they decided to attend the opening of Parliament.

Major elements in Japan led by Prime Minister Abe however continue to  properly acknowledge the disastrous policies of Japan in the 1930s and 1940s.

How different Japan’s response is to that of Germany after the end of WWII.