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The US has asked New Zealand to provide special operations troops to the anti-Daesh coalition. The government has said that it will consider the request but both the Prime Minister and the Defence Minister have qualified the response by stating that they do not think that NZ will increase its contribution beyond the company sized infantry training complement currently deployed at Camp Taji outside of Baghdad.

The Ministers’ caution has more to do with domestic political concerns than the practical or diplomatic necessities of the conflict itself. With a thin majority thanks to Winston Peter’s by-election victory in Northland, National cannot risk parliamentary defeat on the issue. But Opposition leader Andrew Little has signaled that Labour is willing to consider sending SAS troops to the fight, so the ground is clearing for authorization of a new phase of the NZDF mission.

This was predictable from the moment the NZDF first deployed to Iraq last May. It was clear then and it is now that training Iraqi soldiers is not enough to turn the tide against Daesh. The training is good and the troops that graduate have improved professional skills, but according to a report prepared by the US Defense Department immediately before Mr. Key travelled to Taji in October for his meet-and-greet photo op with the troops, they were no better in battle than they were before the training mission began.

The problem lies with the Iraqi Army leadership. Iraqi field rank officers are not included in the training program and are unwilling or unable to demonstrate the type of leadership skills under fire that are required to make best use of the training received by their soldiers from the NZDF and its allies.

That is where special operations troops like the NZSAS are useful. Among many other roles they serve as leadership advisors on the battlefield. Because of their exceptional skills and hardened discipline, SAS teams serve as force multipliers by adding tactical acumen, physical resilience and steadfastness of purpose to the fight. They lead by example.

NZ’s major allies already have special operations troops on the ground in Iraq, Libya and Syria. Although all of the nationally-badged SAS units roam the region, the Australian SAS is heavily involved in Iraq (and is present at Camp Taji). Not only do Australian SAS troops serve as forward spotters for RAAF FA-18s undertaking ground attack missions in Iraq. They have fought alongside Iraqi troops attempting to re-take the city of Ramadi, provincial capital of the Sunni heartland that is Anbar Province (119 kilometers from Camp Taji and 90 kilometres from Baghdad). The Australian role is considered to have been essential in the initial re-occupation of Ramadi, in which NZDF trained Iraqi troops participated. US, UK and Canadian special operators are currently conducting advisory, forward targeting, search and destroy and long-range intelligence missions against Daesh in north and western Iraq in conjunction with Kurdish and Iraqi forces. Russian, Iranian and Turkish special operators are on the ground in Iraq and Syria as well, and the contested spaces in which Western special forces are now actively involved in the Middle East extends to Libya, Saharan and Sub-Saharan Africa.

The Anglophone special forces are the allies that the NZSAS trains with regularly and works the closest with when on foreign missions. Like its counterparts, NZSAS tend to spend much time in or near overseas conflict zones whether that is publicized or not, usually following the typical military rotation pattern of threes: a third overseas, a third preparing for deployment, and a third on home duty after deployment. It is fair to assume that their attention when overseas has recently been focused on Iraq, Syria and perhaps other conflict zones in the Middle East.

The PM has hinted as much, stating that the NZSAS could be involved in roles other than combat. Since one of its primary missions is long-range patrol and intelligence gathering (rather than active engagement of the enemy), it could well be that the NZSAS is already playing a part in the targeting of Daesh assets.

With around 130 SAS troops in A and B Squadrons (Air, Boat, Mountain), that leaves a minimum of two troops’ or a platoon sized group (30-40 soldiers excluding officers) available for foreign deployment at any given time. Since the NZSAS operates in squads of 3 to 6 men depending on the nature of the mission (4-5 squads per troop), this leaves plenty of room for tactical flexibility, operational decentralization and role diversification.

Reports dating back to early 2015 already put the NZSAS in theater in small numbers, something the government does not deny. They may not be based in Iraq (which gives the government plausible deniability when asked if there are NZSAS troops on the ground in Iraq), but the main focus of their mission certainly is. Given the logistics involved it would be unusual if the NZSAS has not been working behind the scenes for their eventual participation in more active combat roles beyond what it may already be engaged in.

It will be odd if NZ refuses to send its most elite soldiers when asked for them by its major allies in a UN sanctioned multinational military coalition. Troops like the NZSAS need regular combat experience to sharpen and maintain their skills and they cannot do that at home. Since part of their specialness is versatility in a wide range of combat environments, the NZSAS would be keen to test its troops in the mixed urban/desert, conventional and unconventional battlefields of Iraq, Libya and Syria. The kinetic environment in the fight against Daesh is highly complex and multi-faceted so it stands to reason that our elite soldiers would want exposure to it.

Leaving the NZSAS in NZ is akin to leaving a Bugatti in the garage. Much has been invested in their combat readiness. They are trained to fight autonomously and lead others in combat (such as during the anti-terrorist mission in Afghanistan). To keep their specialist skills they need to experience live hostile fire. It would therefore be counterproductive for them to be idling in Papakura when there is a just cause to be fought against real enemies of humanity who commit atrocities and wreak misery on those they subjugate.

Whether one likes it or not, thanks to the Wellington and Washington Agreements NZ is once again a first tier military partner of the US, standing alongside Australia, Canada and the UK in that regard. Most of NZ’s major diplomatic partners are members of the anti-Daesh coalition and some, like Norway and Denmark, have also contributed special operations troops to it. NZ ‘s major trade partners in the Middle East are part of the coalition. As a temporary member of the UN Security Council, NZ has been vocal in its condemnation of Daesh and in calling for a united diplomatic and military response against it. It consequently has no real option but to accede to the request for the NZSAS to join the fight. It may be mission creep but this was mission creep that was foreseeable (and arguably has been planned for and implemented in spite of the government’s obfuscations).

Critics will say that NZ has no dog in this fight, that it is neo-imperialist foreign intervention on behest of corporate interests that only serves to show how subservient governments like National’s are when it comes to pleasing the US. If so, then there are 59 other countries in that category, to which can be added Iran (and its proxies in Iraq, Syria and Lebanon), Russia and the newly formed (if at this stage only on paper) Sunni Muslim anti-terrorism coalition that includes Malaysia, Indonesia and Pakistan. Critics will also point out that NZ is being selective about when and where it chooses to join foreign military adventures, and they would be right in that regard. But given its military resources, NZ pretty much has to be selective every time that it deploys troops, especially in combat roles. So there is nothing new, unusual or unethical in doing so.

Pacifists will say that the conflict with Daesh cannot be resolved by military means. It is true that military force alone is not sufficient to defeat Daesh, but removing it from the territory it occupies in Iraq, Libya and Syria is essential to that project. Not only is Daesh not prone to negotiating with its adversaries or sitting down with those that it disagrees with in order to settle differences. The very nature of its rule is based on coercion and imposition–of its puritanical values, of its medieval authority, of its rape and sex slave culture and of its harsh discriminatory treatment towards all who are not Sunni Arab men (and even the latter are not immune from its violence). Its removal is therefore justified on humanitarian grounds although disputed opinion polls claim that it enjoys some measure of public support in Anbar Province and Mosul. Yet even if the polls are correct–and that is very much questionable given the environment in which they are conducted–the hard fact is that there is no objective measure to gauge whether Daesh enjoys the informed consent of those that it governs, and until it does its reign is illegitimate because rule without majority consent is tyranny. Add to that the innumerable crimes against humanity Daesh has committed and its exportation and exhortation of terrorism across the globe, and the case against the use of force loses foundation.

Re-taking the ground lost to Daesh removes the main areas in which its leadership is located, from which it profits from oil production and where it trains jihadists from all over the world (some of whom return to commit acts of violence in their home countries). That in turn will lessen its appeal to prospective recruits. Thus the first step in rolling back Daesh as a international irregular warfare actor is to win the war of territorial re-occupation in the greater Levant.

The military objective in Iraq is to push Daesh out of Anbar Province and the Nineveh Governorate in which Mosul is located and force it to retreat back into Syria. At that point it can be subjected to a pincer movement in which the European/Arab/Antipodean/North American anti-Daesh coalition presses from the South and East while Russian, Iranian, Turkish and Syrian forces press from the North and West. The endgame will involve four milestones: first the capture of Ramadi, then the re-taking of Falluja, followed by the freeing of Mosul, and finally the seizure of the northern Syrian city of al-Raqqah, the capital of Daesh’s self-proclaimed caliphate.

Arab states will need to contribute more to the fight, including ground forces. Resolving the impasse over what to do with Assad is critical to establishing a united front between his military, Russia’s, Iran’s, Turkey and the anti-Daesh coalition. Both requirements are fraught and need to be the subject of delicate negotiations made all the more complicated by the Saudi-Iranian confrontation occasioned by the Saudi execution of a Shiia cleric. But for the negotiations to advance, much less to succeed, there needs to be battlefield gains against Daesh in Iraq that reverse its march towards Baghdad and which break the strategic stalemate currently in place. Once the prospect of victory over Daesh becomes possible, more countries will feel comfortable putting additional resources into the campaign against it.

There is room to be optimistic in that regard. In 2015 Daesh lost approximately 30-40 percent (+/- 5000 square miles) of the territory that it controlled in Iraq and Syria. Most of these losses were to Kurdish Peshmerga forces working in concert with Western special operations units. Significantly aided by its coalition partners and tribal militias, the Iraq Army has re-taken Tikrit (November) and the oil refinery town of Baiji (October) and is in the process of clearing the last pockets of Daesh resistance in Ramadi. Preparations for the re-taking of Falluja are well underway, and the battle for Mosul–Daesh’s biggest conquest in Iraq–is scheduled to begin within months. Key Daesh supply lines between Iraq and Syria are under near-constant aerial attack. In sum, the tide of Deash victories may not have completely turned but it does appear to have ebbed.

John Key does not do anything out of moral or ethical conviction, much less altruism. Instead he relies on polling and self-interest to drive policy. His polling may be telling him that it is getting politically less difficult to sell the NZSAS deployment to domestic audiences. But even if not, he has in the past ignored public opinion when it suits him (e.g. asset sales and the TPPA). With Labour warming to the idea of an NZSAS deployment, his political risk is reduced considerably regardless of public opinion. It is therefore likely that, weasel words notwithstanding, the train has been set in motion for that to occur.

Once the deployment is announced it is likely that the NZ public will support the decision and wish the troops Godspeed and success in fulfilling their mission. But even if the majority do not, the diplomatic and military pressure to contribute more to the war effort against Daesh will be enough to convince the government that it is in NZ’s best interests to agree to the request. In a non-election year and with Labour support it is also a politically safe thing to do.

What is certain is that the mission will be very dangerous for the troops involved. It will raise NZ’s target profile amongst Islamicists and could invite attack at home. But given the position NZ finds itself in, it is a necessary and ultimately justified thing to do for several reasons, not the least of which is upholding NZ’s reputation as an international actor.

A short version of this essay appears in the New Zealand Herald, January 7, 2016 (the comments are quite entertaining).

Threat Distortion as Fear Manipulation.

datePosted on 12:40, December 9th, 2015 by Pablo

The Directors of the GCSB (Acting) and SIS appeared before the Parliamentary Select Committee on Intelligence and Security (SCIS) to deliver their respective annual reports. Those reports include national threat assessments. I was not at the meeting but here is what I gleaned from the media coverage of the event:

Did the SIS Director focus on the hundreds of gang members who see violence as a way of life, to include sexual assaults, drug dealing, gun running, property crime and assorted acts of physical mayhem that result in death and injury and whose collective behaviour intimidate and terrorise sectors of the communities in which they inhabit?  Answer: No.

Did the SIS Director mention the dozens of white supremacists with track records of violence against minorities and who openly call for a race war and ethnic cleansing in NZ? Answer: No.

Did the SIS Director address the infiltration of transnational organised crime into NZ and its use of business fronts, corruption, extortion, and intimidation to extend its reach in NZ and beyond? Answer: No.

Did the Director comment on the presence of foreign espionage networks in NZ seeking to obtain sensitive corporate, diplomatic, political and security information. Answer: No.

Instead, according to the media coverage, the Director focused her remarks on the handful of NZ women who are believed to have left the country in order to join Daesh in Syria and Iraq. The Director was not sure if they left to marry or to fight (or both), and wondered about the effect the experience may have on them should they decide to return. That is interesting since few of the foreign women who have left to marry into or fight with Daesh return to their homelands, most being killed in conflict zones or while trying to escape the not-so-paradisical life of a Daesh concubine. The lucky few who have managed to get back to their homelands have not committed any acts of violence after their return.

Perhaps Director Kitteridge wanted to capitalise on the recent mass shooting in the US where one of the perpetrators was a so-called “jihadi bride” in order to focus public attention on the potential threat such women pose to NZ. But the woman in San Bernadino did not surreptitiously travel to a conflict zone, marry a Daesh fighter, then return to her homeland. Instead, she was a citizen of one US ally (Pakistan) and came from another (Saudi Arabia), who appears to have deliberately married a US citizen with the explicit intent of gaining entry to the US in order to carry out acts of politically motivated violence. Similarly, the woman who was an accomplice to the Paris mass murderers had never been to Syria and was unmarried. Neither is in any way comparable to NZ women marrying quickly and heading off to the Middle East.

That these women–again, less than a dozen by the Director’s own admission–chose to do so is certainly a tragedy for their families. It is also a small social problem in that it shows the depth of alienation and desperation of some women in NZ who see life with Daesh as a better alternative to life in Aotearoa. It can be considered to be a mental health issue because, to put it bluntly, one has to be a bit unhinged to think that life under Daesh in the killing grounds of al-Raqqa and elsewhere is an attractive proposition.

One thing is even clearer: it is not a pressing national security issue and should not have been the focus of the Director’s remarks or of the press coverage given to them.

So why so much attention given to the subject? Is this not public fear-manipulation via threat distortion? Was it the Director who was playing this game or was it the media doing so in their coverage of her remarks? Again, I was not there and only saw the coverage, but either way someone IS playing games when it comes to national threat assessments.

There is one more oddity about the mention of NZ “jihadi brides.” Western women who have travelled to join Daesh are known to be more likely than male foreign fighters to try and maintain contact with their families and/or friends back at home. They are known to be more likely than men to use social media applications as well as cell phones to communicate from Daesh-controlled territory (which speaks to the strategic, tactical and technological limitations of Daesh). This makes them a highly exploitable resource for intelligence agencies seeking to establish their locations, track their movements and those of their associates as well as get a sense of life under Daesh.

So why on earth would the Director jeopardize the ability of the SIS and GCSB to do so by publicly outing the fact that these women are being “monitored” as much as possible? This is especially perplexing given that these women are undoubtably included in the 30-40 people that the Director and PM have already said are being watched because of their Daesh sympathies, so there was no compelling reason to provide a gender breakdown of the approximately one in four who are female and who may have decided to travel in order to join Daesh.

A cynic would say that the comments by both Director Kitteridge and Acting GCSB Director Una Jagose were designed to prepare public sentiment for forthcoming security legislation allowing more intrusive powers of surveillance. The PM has now repeated his concerns about the “dark web” and spoken of the problems of decoding encrypted terrorist communications. So perhaps the stage is being set for that.

We must remember that the technologies involved in encryption and decryption, including the temporary “snapshot” encrypted communications that Western security authorities claim that terrorists are now using, all originate from military and intelligence agencies themselves. Thus the cycle of encryption/decryption, much like the previous cycles of code-making and code-breaking, has been well in progress for some time and will continue to be so for the foreseeable future. In this cycle it is security agencies who have the lead, not private sector application manufacturers.

In any event, jihadi brides are unlikely to be at the leading edge of this cycle so using them, however obliquely, as the foil for extending communications security legislation is a bridge too far.

Confronting executive branch excess.

datePosted on 12:16, October 14th, 2015 by Pablo

Recent court victories by Jane Kelsey and Jon Stephenson have vindicated those who have long complained about the culture of excess that permeates the National government’s cabinet. Excess and abuse of authority preceded the current government but this one has taken the practice to art form. It has resulted in allegations of corruption and behaviour such as that outlined in Nicky Hager’s Dirty Politics, and it has compromised the integrity of the DPMC, GCSB, NZDF, Ombudsman and SIS in doing so. If it did not openly encourage, at a minimum it facilitated managerial excess in agencies “overseen” by a variety of ministerial portfolios. The combination of ministerial and managerial excess–executive excess, to re-coin the phrase–is malignant in a liberal democracy.

Apparently the courts, or perhaps better said, two High Court judges, have caught on to the problem. Although the reasoning of the judge that forced the Stephenson settlement has not been made public, the judge in the Kelsey versus Groser case made abundantly clear that the “unlawful” behaviour exhibited by Groser and his staff included the Office of the Ombudsman as well as abuse of process. Likewise, the settlement of the Stephenson case involved not only a payment but a retraction and statement of regret by the NZDF as an institution, rather than by the command officer who was the subject of the defamation lawsuit. That suggests that more than one individual and branch of government may have had a hand in slandering Mr. Stephenson. Yet no independent review of their actions has been done.

There are other instances where the independence and integrity of reviewing agencies have come into question. Think of the Police Complaints Authority and the skepticism with which its findings are held. Think of past findings (such as during the Zaoui case) by the Inspector General of Intelligence and Security. Think of the way Crown Law has behaved in several high profile politically charged cases. Although adjustments have been made to some oversight agencies like the IGSI and not all oversight agencies are uniformly compromised, there appears to be a necrosis spreading across the system of institutional checks and balances in Aotearoa.

Those who regularly submit Official Information Act (OIA) requests will already know that the process is routinely abused, especially but not exclusively by security services. Delays beyond the mandated time frame for response are common. Censoring of material prior to release is common. So is the Ombudsman’s practice of upholding decisions to withhold or censor material on broadly defined national security grounds. Cynics might say that is a case of one hand washing the other. Others might go further and say that the problem is systemic rather than random and occasional. However skepticism is voiced, there is a sense that when it comes to the Ombudsman and other oversight agencies, they are more about whitewashing than honest scrutiny.

This again raises the issue of politically neutral, independent and transparent oversight. I have written a fair bit on the need for independent oversight of intelligence agencies above and beyond the Inspector General of Intelligence and Security, Commissioner of Warrants and current Select Committee on Intelligence and Security. I have not written about the problems with the Office of the Ombudsman and treatment of OIAs. But it should be clear by now that when it comes to democratic oversight of executive departments and those that lead them, New Zealand is hollow at its core.

Readers may recall that I have written about horizontal and vertical accountability in the democratic state. This academic concept finds real meaning in this case. Beyond the problem of vertical accountability in a country where electoral preferences are the subject of poll-driven media manipulation by government PR agents, elite cronyism is the norm and where civil society organisations are weak in the face of that, there is a serious lack of horizontal accountability in New Zealand. Agencies such as the Ombudsman that are entrusted with overseeing the behaviour of politicians and senior state managers  are seemingly subordinate (or at least submissive) to them. With some notable exceptions, when it comes to executive excess even the courts appear to have become as much instruments as they are arbiters of government policy and behaviour.

The first question that has to be asked is when does ministerial skirting or manipulation of the rules rise to the level of criminal offence? Is the complicity of more than one government entity (say, MFAT and the Ombudsman) in circumventing or obstructing OIA requests a trigger for a criminal investigation?  If not, what is? If so, who prosecutes the offence given current institutional arrangements?

There are a number of reviews and investigations of government agencies already underway. There are Royal Commissions on matters of policy. Private prosecutions are possible. Constitutional experts may know the answer, but I wonder if there also is an overarching investigatory body or process with legal authority that can look into the system of institutional (horizontal)  accountability and oversight mechanisms currently operative in the country. I ask because from where I sit the system looks broken.

Some questions about the Stephenson case.

datePosted on 13:53, October 3rd, 2015 by Pablo

Although it has been shamefully underreported by major media outlets in NZ, war correspondent Jon Stephenson has won his defamation case against the NZDF by forcing a settlement that involves significant compensation and an admission by the military that its defamatory statements about Mr. Stephenson were indeed untrue. It remains to be seen if the Prime Minister will do the same, since he opined at the time the controversy erupted over Mr. Stephenson’s internationally recognised article “Eyes Wide Shut” in Metro Magazine (May 2011) that Mr. Stephenson was, to paraphrase closely, “unstable” as well as “unreliable.” That has been proven to be false and Mr. Key knew at the time he uttered his comments that they were untrue. Let us be clear: Mr. Stephenson may be driven, but unlike his main accusers when it comes to reporting on the NZDF he is by no means unreliable or a liar.

I wrote the following as a comment over at The Standard but feel that it is worth sharing here:

“I suspect that we have only seen the tip of the iceberg when it comes to the unethical behaviour of the NZDF and political leadership in this affair. Remember that there is a MoD involved and the respective ministers then and now (Coleman and Brownlee). There are more officers involved than retired generals Rhys Jones and Mateparae, some who currently hold senior positions within the NZDF. There is the behaviour of Crown Law to consider. There is the slander on Jon’s character uttered by the PM.

I can only hope that the terms of the settlement do not prevent Jon from publishing more details of his case, including the way in which the legal process unfolded, the obstacles to discovery encountered, and the extra-curriculars surrounding them.

Whatever happens, for once in a long time one of the genuine good guys won. Were it that other members of the press corps (Nicky Hager excepted) had the integrity and courage exhibited by Jon both in the field as well as on the home front.

Kia kaha Jon!”

Beyond what I have written above, there are some other questions that arise from this saga.

For example, in 2013 Nicky Hager revealed that the NZDF electronically spied on Mr. Stephenson in 2012 using NSA, GCSB and SIS assets while he was in Afghanistan. At the same time an internal Defense manual was leaked to the media that identified “certain investigative journalists” as hostile subversion threats requiring counteraction because they might obtain politically sensitive information (one does not have to have much imagination in order to figure out who they are referring to). In parallel, reports emerged that NZDF officials were sharing their views of Mr. Stephenson with Afghan counterparts, referring to him in the same derogatory terms and implying that his work was traitorous or treasonous.

Taken together, both the spying on Mr. Stephenson and the characterisation of him passed on to NZDF Afghan allies can be seen as a means of counteracting his reporting. But if so, what national security threat did he really pose? Is politically sensitive information necessarily a threat to national security or is merely a threat to the political actors being reported on? Is intimidation part of what the NZDF considers to be proper counteraction when it comes to journalists plying their trade in a war zone? And since any counteraction or counter-intelligence operations had to be cleared and authorised by the NZDF and political leadership, were both of the types used against Mr. Stephenson authorised by then NZDF Chief Lieutenant General Richard Rhys Jones and/or Mr. Key? They deny doing so but if that is true, who did and how was it passed down the chain of command to the field commanders in Afghanistan (because, at a minimum, the order to “counter” Mr. Stephenson could be construed as illegal and therefore challengeable–but it never was).

Leaving aside the legitimate role of independent journalism in a democracy in holding policy makers–including military leaders–to account, what does it say about the NZDF that it sees such work as subversive? More alarmingly, if the reports are true, what exactly did the NZDF leadership hope to accomplish by telling Afghans, while Mr. Stephenson was in Afghanistan, that he was a threat to them?

Then there is the issue of the lie. General Rhys Jones claimed that, contrary to what was written in his story, Mr. Stephenson never visited the base in which the Crisis Response Unit (to which NZ SAS were attached) was located and did not talk to its commander. That was a direct challenge to Mr. Stephenson’s journalistic integrity. Mr. Stephenson sued for defamation and during the first trial (which bizarrely ended in a hung jury) the NZDF and Rhys Jones himself admitted that Mr. Stephenson’s version was true.

So why didn’t the trial stop right there? The moment the truth of Mr. Stephenson’s story was admitted by Rhys Jones, it was supposed to be game, set and match to the journalist. But instead the Crown spent hundreds of thousands of taxpayer dollars continuing to litigate in that trial and then the follow-up court process that was ended by the recently announced settlement. Why so?

The answer to the last questions seems to be that, like in the Zaoui and Urewera 18 case, the Crown prefers to bleed its adversaries emotionally and financially even when it knows that it can not win. This death by a thousand cuts approach, courtesy of the taxpayers largesse, is as unethical as it is cynical and undermines the belief that justice in New Zealand is blind and universal.

There are many other questions that need to be answered about the treatment of Mr. Stephenson. Is it true that media outlets were pressured to not accept his work on penalty of getting the cold shoulder from the government? Did NZDF officials physically threaten Mr. Stephenson in New Zealand? Did the intelligence services spy on Mr. Stephenson above and beyond what was reported by Mr. Hager, both at home and abroad, and are they doing so now, and on what grounds if so? Did NZDF and/or MoD and/or PMDC and/or Crown Law officials conspire, either solely or together,  to cover up, obstruct, alter, destroy or otherwise impede the release of evidence to Mr. Stephenson’s lawyers at any point in the legal proceedings?

My sincere hope is that the settlement agreed to by Mr. Stephenson and NZDF does not preclude the former from writing about his experiences with the NZDF, both in Afghanistan and during the trials. Hopefully he will be able to answer some of the questions I have posed above. I say this because something stinks about the way this affair has been handled at the highest levels of government, which is not only a stain on the individuals involved but a direct affront to basic tenets of liberal democracy.

Trading with the Mullahs

datePosted on 18:45, September 17th, 2015 by Pablo

I was a replacement panelist invited by the New Zealand Institute of International Affairs to join a discussion in Wellington on the Iranian nuclear agreement. It was a a pleasant event that addressed the pros and cons of the deal. I was impressed with some of the speakers, particularly Dr. Parsi from Lund University (speaking via Skype). I was less impressed with the Israeli discussant and the statements (not question) by an official from the Iranian embassy who was in the audience.  All in all, it was an engaging affair and I encourage the Institute to continue with such public outreach efforts.

I spoke a bit about how the deal can be viewed on two analytic levels: as a First Image (interstate) issue and as a Second Image (domestic sources of foreign policy) matter. I mentioned that a way to conceptualise the agreement is as part of a “nested game” (to use a game theoretic term): the deal is part of a series of interlocked interactions (or “games’) that can be seen much as those iconic Russian dolls are (one inside the other) or as building blocks towards a larger whole. I noted that the core of the agreement was to exchange trade for recognition and security–in other words, Iran gets more trade and recognition of its legitimate interests and stature as a regional power by putting the brakes on its nuclear weapons development program with an eye to cancelling the weapons program altogether should the agreement prove beneficial for all sides. They main lever is another trade-off: dropping of international sanctions against Iran in exchange for a rigorous international (IAEA-managed) inspections regime.

For those who are not familiar with the agreement, it is not a bilateral US-Iran affair although they are the major players in it. Instead, the treaty was negotiated by the P5+ 1 parties and Iran, the P5+1 being the permanent UN Security Council members (the US, UK, France, China and Russia) plus Germany. For those interested in the details of the deal, the official US government position is outlined here (which includes the text of the full Agreement itself). A US translation of the Iranian interpretation can be found here. The fact that the P5 agreed to the deal is remarkable given their history of disagreement and subterfuge on matters of international security.

There was an interesting sidebar about “breakout time” introduced by the Israeli, who waxed hysterical about the apocalyptic implications of the deal. Dr Parsi noted that “breakout” refers to the time needed to enrich uranium to weapons grade, in response to the Israeli claim that the deal gave the Iranians a breakout potential of one year. Prior to the deal, that enrichment breakout threshold was two weeks. The point is that “breakout” time refers to the time needed to begin enriching uranium to weapons grade rather than the time needed to build a bomb.

Dr. Parsi noted that “breaking out” on enrichment is not the same as putting nukes on missiles. I said nothing at the time but here I actually know a bit without being a nuclear scientist ( I studied nuclear strategy under one of the original strategists behind the nuclear bombing of Japan and so-called MAD theory. He grappled with the moral dilemmas involved in front of me and my student cohort at the University of Chicago (home of the Manhattan Project) and later changed his mind with regard to MAD). The notion that Iran can start enriching uranium or reprocessing plutonium to weapons grade in a short period of time and then quickly build a missile launched nuclear warhead is simply mistaken.

From a technical viewpoint beyond the specifics of Iran’s enrichment and reprocessing programs, the problem of weaponising nuclear material is simple. Unlike the multi-ton “dumb” bombs that were dropped on Hiroshima or Nagasaki using concentrated high explosives as triggers focused on the nuclear material, the bulk of testing then and now consists of reducing the nuclear payload to a size that can be carried in the nose cone of an (increasingly small and light) intermediate range or intercontinental missile (IRBM or ICBM). The smaller the size of the delivery vehicle, the better its chances of avoiding surface to air or air to air interception. Given that requirement and the need for accuracy, nuclear payloads share very tight space with guidance systems. All of which is to say that given the weight constraints on a high velocity long range projectile, the “bomb” has to be miniaturised for maximum bang for the buck. Doing so requires downsizing the trigger mechanism from focused high explosives to something else. Laser triggers are one option. There are others.  All of them are off limits to the Iranians irrespective of the deal. So not only is the fear of “breakthrough” unfounded and exaggerated for political purposes, but the real concern regarding mounting nukes on missiles is subject to  both contractual and non-contractual enforcement.

My general view is that the agreement is worth doing. Other speakers and I commented on the downside, which mostly involves the reaction of Israel and the Sunni Arab oligarchies as well as domestic opponents in Iran and the US. I noted that there are disloyal hardliners in both the US and Iran that have potential veto power over the deal in the future should governments change, and that it was imperative for the soft liners or pragmatists to accrue tangible benefits from the deal in order to resist the sabotage efforts of hardliners who have vested interests in keeping tensions alive between the two countries. I made the point that Iran is more akin to Cuba than North Korea, and can be brought into the community of nations so long as it was recognised as a regional power with legitimate interests.

Speaker’s times were very limited (7 minutes each), so I was unable to fully address what I had intended to say. So let me do so here.

The lifting of sanctions on Iran as part of the quid pro quo at the heart of the deal opens a window of trade opportunity for New Zealand exporters and importers (more so the former than the latter). Coincidentally,  Foreign Minster Murray McCully has announced that in a few weeks he will be leading a trade mission over to Iran to discuss those opportunities. This is in advance of the implementation of the accord (which goes into effect at the start of next year) and is, as far as I can tell, the first official Western government led trade mission to Iran in the wake of the signing of the agreement.

But let us be clear on what that mission needs to entail. Although Iran’s human rights record needs to be mentioned, however pro forma by McCully, to his Iranian counterparts, the point that must be emphasised is that New Zealand’s opening of trade relations with Iran is absolutely, explicitly contingent upon Iran adhering to its part of the bargain. Should Iran in any way shape or form renege on the letter or the spirit of the agreement and the inspections regime that it authorises, then McCully needs to make clear that New Zealand will terminate or at least suspend until Iran complies all imports and exports to the Persian giant.

I say this because under McCully and Tim Groser MFAT has turned into the Ministry for Trade with Anyone for Trade’s sake. Human rights and non-proliferation are not part of the Groser/McCully negotiating agenda. But in this instance both need to be and the latter has to be. The profit margins of New Zealand exporters and importers and the tax revenues derived thereof must not and cannot supersede New Zealand’s commitment to upholding the terms of this non-proliferation agreement in the event of violations. Those involve re-imposing sanctions, and the bottom line of private interests must not come before the commitment to non-proliferation, especially given New Zealand’s long held diplomatic stance on the matter.

McCully also needs to explain to New Zealand importers and exporters that any contracts they let in Iran are contingent and externally enforceable. That is, they are contingent on Iranian compliance with the inspections regime and the overall thrust of the Agreement (which is to reduce the prospect of weaponising its nuclear program); and they are subject to outright cancellation or suspension by the New Zealand government under penalty of law in the event Iran reneges or violates its side of the bargain. There are opportunity costs and risks involved, and these need to be outlined to interested parties in advance of the mission.

From announcements so far, it does not appear that the National government is interested in making such demands of the Iranians or its market partners. Instead, it appears that it is opportunistically jumping to the head of the cue of potential trade partners and will let the private sector lead the charge into trading with Iran. That is curious because McCully speaks of “not getting offside” with the P5+1, but the very fact that he mentions the possibility of “getting offside” indicates that he and his MFAT minions are considering the costs and benefits of doing so.

The Iran deal hinges on two things: verification and enforcement. There are instruments in place to verify that Iran is upholding its part of the deal. The sanctions will begin to be lifted on January 1, 2016. But it is enforcement of the terms that is the most uncertain aspect of the Agreement. If New Zealand does not explicitly tie its renewed trade with Iran to the latter’s compliance with the terms and be prepared to halt trade with Iran in the event that it does not comply, then it will begin the slippery slope of undermining the deal. For a Security Council member that depends more on reputation than power for its influence, and which has a past record of leadership on non-proliferation, that is a hypocritical and ultimately vulnerable position to be in.

Is there a Kiwi word for “mission creep?”

datePosted on 16:51, September 11th, 2015 by Pablo

Well, it was bound to happen. After all the hemming and hawing and the kerfuffle that led to the announcement that New Zealand was sending 143 troops to Iraq as trainers and their force protection, the Prime Minister has now said the he would consider eventually sending to Syria a Provincial Reconstruction Team (PRT) such as those previously deployed in Afghanistan. He said as well that he was open to the idea of deploying NZSAS in Syria as target selectors for anti-Daesh air-strikes. So much for his previous ironclad assurances that the training mission was the extent to which the NZDF would get involved in the anti-Daesh fight.

What is interesting about his statement is that he has the order of engagement reversed. For the PRT (which deploy about the same number of personnel as those currently stationed in Iraq) to be tasked in Syria Daesh will have to be pushed out of it, or at least significant portions of it. Even then, the mission will be difficult as the experience in Bamiyan attests (six of the nine NZDF combat dead came from the Bamiyan PRT, and Bamiyan was considered one of the safer Afghan provinces). However, for an eventual PRT deployment in Syria to happen, the conflict against Daesh will have to be ramped up exponentially, which is something the European members of the coalition and Australia are currently in the process of doing. The UK has started to use lethal drones against Daesh targets (primarily British citizens), and the French and Australians have decided to increase the number of air strikes they will fly against Daesh in Syria as well as Iraq.

Part of the air battle against Daesh in both Iraq and Syria is the use of UK, Australian and US special forces as target finders. US Army special forces are now fighting alongside Kurdish peshmerga in northern Syria, and it is widely believed that UK and Australian SAS are doing a bit more than just finding targets for air strikes, to include nighttime raids on Daesh facilities and troop formations in Iraq as well as Syria.

The New Zealand government denies that the NZSAS is in the conflict theatre, but it would be naive to take that assertion at face value given the close working ties between the NZSAS and the afore-mentioned special operators already there. If for no other reason, that scenario is possible because deploying of SAS assets in Syria in any role requires a fair bit of lead-in time, something that has now grown short as the migrant crisis deepens. There is some urgency to finding a front and back-end solution to the crisis: addressing the refugee flows on the back-end in Europe but upping the ante on the front-end (the Syrian/Iraqi conflict zone) so as to stop the refugee flows from continuing.

That is going to take some doing. The Iraq armed forces are no closer to re-taking Ramadi than they were before the NZDF “advisors” arrived in May. The oil refinery town of Baiji, north of Camp Taji where the NZDF troops are stationed, is still surrounded by Daesh fighters and at risk of falling to them. Mosul remains in Daesh hands. In Syria the Russians have decided to put skin into the game by sending the 1000-strong 810th Marine Brigade to Latakia (where Russia maintains an electronics signals intercept station) while reinforcing its naval base at Tartus. US intelligence has reported hearing Russian voices on Syrian armoured communications, which is not surprising given that Russian crews fought in Syrian tanks in the 1967 and 1973 wars with Israel.

Russian involvement should be seen as a potentially positive development as it has indicated that it is open to joining the coalition against Daesh. It differs on the question of what to do with Assad, but the hard fact is that no solution to the Syrian civil war will come without Russia at the negotiating table (and Iran, for that matter). Sending combat troops to bolster Assad gives the Russians increased leverage as well as a greater stake than what they already have (which is considerable given that over 100,000 Russian citizens live in Syria and the Assad regime is its closest ally in the Middle East). Most importantly, it takes pressure off the West to solely shoulder the burden of rolling back Daesh. With the Russians and Iranian-backed shiia militias (including Hezbollah) on board in both Syria and Iraq and air strikes on Syria added to the coalition target list, a simultaneous pincer movement on Daesh in Iraq and Daesh in Syria can begin. Cutting off cross-border re-supply routes will be a priority and once that is accomplished, the squeeze can be placed on places like Mosul and Raqqa (the de facto capital of the Islamic State).

There is much more to the scenario and it will inevitably be ugly. Turkey is now involved but spending more time trying to kill Kurdish PKK fighters than those of Daesh (and the PKK obliges the Turks by turning its guns on Turkish targets) That will have to change, or at least Turkey’s security priorities will have to be reversed–Daesh first and then the PKK. Iran and the West will need to find an accommodation with regard to the former’s armed proxies in Iraq and Syria (something that has tacitly occurred in Iraq between Coalition forces and the al-Sadr Brigades). Other European and Middle Eastern nations will have to increase their military contributions to the fight. But it is clear that there is movement in these regards.

It appears that the refugee crisis has been the tipping point for that to occur, which is why the front- and back-end solution set is now being addressed and why John Key is being asked about what NZ proposes to do on both ends. If his recent waffling about the NZDF role is anything to go by, the process of mission creep could soon be underway and may well have started already.

Some thoughts on Syrian refugees.

datePosted on 16:57, September 4th, 2015 by Pablo

I must be getting soft, but the image of the drowned Syrian child haunts me. Perhaps it is because I have a two year old or perhaps I am just getting sentimental and weepy in my advancing age, but it is doing my head in. I am not going to be the same for having seen it.

I say this because I have watched and read the coverage of the crisis for a while now and like so many others have not only wondered why the EU cannot craft a viable humanitarian response, but have also been struck by the nasty attitude of so many commentators here in NZ as well as in Europe, most of them on the Right, when considering the plight of these godforsaken people. So let me outline my thoughts on the matter.

The Syrian civil war is a man-made humanitarian disaster. Had it been a natural disaster with the same human impact, I doubt that the response would be the same as it is today. It no longer matters who started it, who is involved, who is to blame and when it might end. The people who are fleeing the war are non-combatants whose hand has been forced by events beyond their control. Those who say they have a choice to stay or go are either fools or cynics. That is like saying that a person subject to domestic abuse has a choice to stay or go. Or that a person has a choice to stay or go in a fire. Sure, they could stay but is that really an option? Did that Syrian child and his family really have a choice? Did they deserve their fate for having “chosen” to seek refuge in a supposedly safe part of the world? (the mother and two boys, ages 3 and 5 died; the father survived and has returned back to Kobani to bury them).

When people up stakes, leave most of their material possessions behind and bring their children on perilous journeys to foreign lands to which they have no prior ties and which are culturally alien to them, they are not “migrants.” They are refugees fleeing catastrophe. It does not matter if the catastrophe is human or environmental in nature (and in Syria it has been both). The bottom line is that they have undertaken great risk–in fact, they are risking it all–to flee the country of origin because of a calamity that is no fault of their own. They are refugees seeking safe haven wherever they can find it (which means a place that is stable and economically viable), and any attempt to define them otherwise is not only wrong but viciously inhumane.

Many of those leaving are secular Muslims and Christians who have been targeted by either Assad’s forces, Daesh or both. Many are the bulk of the shopkeeping and white collar service classes whose livelihoods have been destroyed by four years of war. The majority are moderate in their beliefs and political orientation, which is why they (or at least the men) have chosen not to fight. Their children have no educational opportunity at home, much less future careers.  They do not seek passage to Europe to establish a caliphate or even Islamise it. To the contrary, they are fleeing exactly that possibility.

For those who say that they should have “chosen” to seek refuge in Gulf or North African Muslim states, be aware of two things: 1) they are refused at the borders; and 2) they are considered undesirables in any event given their relative secularisation and the fact that they are considered second-class Arabs (as are Palestinians) by many Gulf oligarchies (they very same that are funding and arming Daesh). So that possibility simply does not exist.

Refugees do not choose to leave or where to stay. They may have their preferences but they live at the mercy of others. But that is the operative term: mercy. Along with compassion and empathy, that is what distinguishes open societies from closed ones.  And yet Europe has shown itself closed-minded on the issue in spite of the ongoing tragedy unfolding on their beaches and doorsteps.

Unfortunately, in today’s polarised ideological climate those virtues are disappearing in the West. That includes New Zealand, where Islamophobia and the “greed is good” mantras of the so-called neo-liberal elite have combined to encourage xenophobic, “me first”  “f*** them” attitudes in the population. In spite of the fact that as far as I can tell no Syrian has ever done harm to New Zealand (and NZ has a small Syrian expat community), the National Party and its supporters do not want to increase the country’s refugee quota in the face of this humanitarian crisis. It apparently does not matter that NZ’s international reputation as a humane and open society rests in part on its attitude towards refugee issues. Nor does it apparently matter that as part of the UN Security Council, New Zealand has a diplomatic obligation to lead by example. Or that a broad reading of the Responsibility to Protect doctrine suggests that protection be awarded to those fleeing conflict as well as those immediately subject to it.

Say what you will, the Syrian exodus is a true humanitarian crisis. The people fleeing are refugees, not migrants. The world, or at least that part of it that is open and funded on notions of compassion, empathy and mercy, has a duty of care to them. It is therefore imperative, and a matter of pure humanity, for Europe and other open societies to step up and help the refugees as much as possible. We may ask ourselves why China, Russia and other nations do not heed the call of the desperate. But the fact is that it does not matter whether they do or not. The moral imperative is to ourselves as well as to those in need.

That is why it is despicable for the Key-led government to shirk its responsibilities on this matter. We have the room, the facilities and the community to support an increased refugee quota targeted at the displaced Syrians. The people we accept will be vetted and are highly unlikely to be interested in jihad or Islamisizing the country. If we can spend $28 million on a flag referendum and $42 million on a boat race challenge, then surely we can find some (considerably less) money to cover the costs of their assimilation. And who knows, we as well as they might be the better for it.

To not do something is a sorry indictment of what we have become as a society, and for those in the government that refused to act, their collective shame will last long after they have departed. The bottom line is clear: regardless of partisan orientation the time to act is NOW.

Go The Donald!

datePosted on 15:25, September 1st, 2015 by Pablo

I am lucky to be able to vote in the US as well as NZ, and very much relish the opportunity in both countries. In the US I am registered as a voter in Florida, which is a closed primary state. “Closed” primary states are those in which a voter has to declare a party preference prior to the primaries in order to vote in them. For years before and after I established a residence in Florida I listed my political affiliation as “Independent,” something that allowed me to choose a primary to vote in the “open” primary states where voting preferences did not have to be declared prior to primary season (they only have to be declared and ticked off on the day at the balloting station). In 2008 I decided to switch my declared affiliation to Democrat so that I could vote in the Florida Democratic Party primary given that not only were Obama and Hillary running for president, but there were races for the US House, Senate and local seats that needed to see Republicans defeated.

This year I am going to switch affiliation to Republican. Why? Because that way I can vote for Donald Trump in the Republican primary in the hope that he makes it to the GOP National Convention next July. It has been a very long time since either major party has had a brokered convention where several candidates are in the running for the presidential nomination, and should The Donald survive until then the craziness will be well and truly on. Since he is totally unqualified to be dog catcher much less president and unelectable in the general election, it is my sincere hope that he hangs in all the way to the convention and either becomes the GOP candidate, determines who is, or runs a third party candidacy after losing out in the convention to one of the others. The only thing better would be for Kanye to join that gaggle of fools and trolls but, alas, he is going to wait until 2020 to run.

Already The Donald has become to the GOP what Miley Cyrus is to pop muzak: a wrecking ball. The Republican National Committee must be choking on their Cohibas (illegal until the recent diplomatic reopening with Cuba) and dying a slow death every time he speaks or when they read the polls. Because let us be clear: Trump appeals to the stupidest, xenophobic, economically illiterate, racist, bigoted, misogynist, white cultural supremacist elements in US society. He follows in a long line of populist demagogues that extends back through Ross Perot to Pat Buchanan, George Wallace and Huey Long.  He may purport to speak unvarnished truth but in fact what he says is most often non-sensical rubbish that fails to address reality much less the intricacies of democratic governance with a division of powers: he is going to “do the deal” with whomever; most Mexicans are rapists and drug dealers; he will “build a wall and make Mexico pay for it” (along 1,900 miles of topographically challenging terrain that includes numerous sensitive ecological zones and wildlife corridors); he will deport “illegals ” and their “anchor babies,”  (all 14 million of them); he will simultaneously confront China, Iran and Russia; he will make the US military “great” again so that no one will “mess” with it (forgetting that the US spends more on defense than the next seven countries combined–US$610 billion or 20 percent of US federal spending and 3.7 percent of GDP–and still has people “messing” with it); he will provide better women’s health care in spite of gutting Planned Parenthood and removing health care for “alien” women because he “cherishes” women in general (ignoring the fact that two of his wives were not citizens when he married them). Everyone in politics but him are incompetent or idiots. His speeches are endless repeats of these and other inane mantras interspersed with self-congratulatory self-praise and personal insults directed at his rivals, all other politicians and anyone who disagrees with him.

The truth is that he has no plan, has no policy agenda, has no friggin’ clue what it is like to deal with the complex issues that confront the US. And that is why the rednecks and dimwits like him. He makes the hard seem easy.

What is great about this is that he is forcing the other GOP candidates to respond to him, and they have stepped up to the plate in predictable style. Among other gems, Ben Carson (the neurosurgeon) says homosexuality is a choice because men go to prison straight and come out gay; Scott Walker just suggested that building a 3,987 mile wall on the Canadian border is worth looking into; Jeb Bush wants to abolish Planned Parenthood and believes that the invasion of Iraq “turned out well;” Ted Cruz and Marco Rubio want walls and deportations even though they are children of recent immigrants who were legally documented after, not before their arrivals. They all claim that the US military and its veterans have been crippled by Obama even though it was Bush 43 who ordered them into two simultaneous wars while cutting back veterans benefits as well as the budget for post-combat trauma rehabilitation. They all claim that ISIS is an Obama invention even though it was Dubya’s purge of Saddam’s army that provided the leadership material for what became ISIS’s fighting forces. They all oppose gun control and climate change science and all support hacking, fracking, drilling and spilling regardless of environmental consequence. They all oppose abortion and gay marriage even if some of their past records indicate otherwise. The list of idiocy goes on but should not surprising given that Rick Perry, Rich Santorum, Mike Huckabee and several snivelling weasels remain in contention.

As things stand now, the GOP primary is a circus. There may not be any juggling or animal acts, but there sure are a lot of clowns, and The Donald is the ringmaster. Even if the number of viable candidates drops to 2 or 3 by the time of the GOP convention, it will be Trump who sets the Right’s narrative for the general election. Yippee!

It looks like the US media has decided to sit back and watch the circus unfold. Fox News tried to undermine him in the first debate that it aired, but his nasty personal attacks on the female panelist only strengthened his support among the troglodyte crowd and has forced Fox to backtrack and give him coverage as the Party favourite. All other outlets are content to watch the train wreck proceed while offering the mediocre tedium that passes for informed analysis by the usual spectrum of pundits. As a result, the GOP favourite, Jeb Bush (or “Mr. Low Energy,” as The Donald calls him) has seen his coverage slip to the sidelines along with the other yokels. Likewise, for all of the Fox News chest beating, Hillary Clinton is getting a general pass by the press because her sins are run of the mill when it comes to DC politics and her campaign is about practicable policy, not theatrics.

The key to the outcome will be seen in January when the first GOP primaries are held. If The Donald does well in them he will be hard to stop. So the RNC has to find a way to do him in either before then or to go all out nuclear on him should he prevail in Iowa or New Hampshire. That is when the questions about his draft dodging, drug use, association with organised crime, commercial racism, trust fund baby status, adultery, academic record embellishment and a host of other peccadilloes and not-so-small sins will find their way into the mainstream media. But even then he may be too big a juggernaut to derail in time for the GOP to coalesce around another candidate who may stand a chance in the general election.

I cannot begin to express how delighted I am to watch this unfold. The Donald may well force the GOP to split into two, with the Tea Baggers on one side and the corporate sponsors on the other.

Either way, he is single-handedly killing the US Right as a unified political force.

For that I have one thing to say: Go The Donald!

The hall echoed with the sound of apathy.

datePosted on 16:50, August 7th, 2015 by Pablo

I attended the Auckland public meeting on the Intelligence Review organised by the NZ Council on Civil Liberties and a coalition of activist groups under the “Get Smart” banner. The idea was to encourage the public to join in submitting a “People’s Review” of the NZ intelligence community that would go beyond the rather narrow terms of reference of the formal Review undertaken by Michael Cullen and Patsy Reddy. The meeting was held in a inner suburb library hall at 6:30 on a Thursday night. It had the makings of a stirring call to popular participation and civic action.

Counting myself, a total of ten people showed up to listen to the speakers and debate issues relevant to the Review. The speakers spoke about the evils and sins of the CIA, GCSB and SIS at home and abroad, about the dangers of recent expansions of spy agencies powers and related legislation such as the hastily passed foreign fighters bill, and about the patently bogus questions asked on the public submission forms for the Review (such as asking if people felt that the government should protect them from terrorism). But truth be told, the empty hall echoed with the sound of apathy. Not so much from those of us who attended and spoke, but from those who did not.

In any event it was a pretty dreary and dispiriting affair. Nowhere to be seen were those who championed Kim Dotcom’s “Moment of Truth” or the voluminous clouds of conspiracy-mongering that went with it.  From what I could tell, there was no one from UNITE, MANA, Internet Party, GPJA or any other activist group other than the Communist League. The usual assortment of Left pundits and party progressives, from the bombastic to the erudite, were nowhere to be seen. It was so bad, even Penny Bright did not show up.

I was told that meetings in Christchurch and Wellington were better attended, but from the looks of the Auckland gathering the issue of how, why and when the NZ intelligence community does what it does is no longer of import to local chattering classes, much less the fair minded among them.

I sure hope that I am wrong. I suggested at the meeting that a two pronged approach to the Review needed to be undertaken. On the one hand, the broad questioning of the intelligence community outlined in the terms of the People’s Review is necessary for framing the larger counter-narrative to the official lines spun upon us about the value and benefits of NZ’s intelligence operations. On the other hand, detailed, sophisticated and technical submissions sharply focused on the terms of reference are needed to prevent Cullen and Reddy from claiming that no practicable or actionable information was obtained from the submissions. I offered some thoughts on the need for better intelligence oversight mechanisms and how they could pave the way for further reforms of the intelligence community and legal frameworks governing it.

My comments were preceded by those of a fellow who spoke of spying on Maori at TVNZ. I was followed by a fellow from the Communist League. At that point it was time to take my 18 year old cousin in law back to dinner because even his eyes were rolling in the back of his head.

If this meeting is symptomatic of the state of the NZ Left, then it is well and truly  screwed. Or perhaps it is just a Jafa thing.

Loansharking Greece and odious debt.

datePosted on 10:57, July 7th, 2015 by Pablo

I do not purport to be an economist nor would I ever want to be. Theirs is a world of implicit assumptions and pseudoscience that only a brave few have challenged from within. However, theirs is also a discipline that in theory and practice can shape the fate of millions, which is why I pay more than casual attention to them. Thus it is that I came to ponder the financial situation in Greece, a place that I lived in in 2010 at the start of its downward slope towards the current moment (my wife has researched and written on matters of Greek political economy and I have an interest in Greek civil-military relations, so our stay was mutually beneficial). Here is my non-expert view of things.

When lenders charge interest on principal loaned, they prefer to have the interest paid rather than the principal. This loan repayment rationale, which is true for states, firms and individuals, keeps the debtor beholden to the lender so long as the principal remains unpaid. Over time, the interest accrued can well exceed the amount lent, which is perfectly fine from the lenders point of view but keeps the debtor permanently saddled in a cycle of interest payment unless the debtor earns additional income (revenue) that can be directed towards paying down the principal. Short of a lottery win, a pay raise or new sources of revenue, debtors on relatively fixed incomes are locked into the cycle of debt.

Greece is in that situation. Until 2008 it was servicing the interest payments on its debt to international lenders (mostly the European Central Bank, various national banks and private investors). Then the international financial crisis of 2008-09 hit, which had nothing to do with Greece per se but which drove up interest rates. With a stagnant economy and flat tax revenues, Greece quickly found itself unable to make interest payments and, in a dramatic revelation, announced in 2010 that it had been systematically underestimating its fiscal deficit in order to maintain interest payments on its debt at a sustainable rate. At that point many private investors dumped their Greek debt holdings and the IMF assumed a significant portion of them as well as some of that accrued by European public banks.

The Greeks were subsequently offered two “bailout” loans that allowed them to continue to pay the interest on their debt, which together with the principal now amounts to nearly 250 billion Euros. With interest set at approximately 4 percent annually, the figure is set to reach the half trillion euro mark in a few years. Even if interest rates were capped at zero, it is estimated that it would take Greece 81 years to repay the amount currently owed.

There are several questions arising from the Greek debt. Why, since the interest paid is now more than the principal borrowed, does not the ECB and IMF put a cap on the debt? Why did investors continue to offer loans to Greece when it turned out that the Greeks were fiddling the books, and that neither the principal or the repayment loans ever trickled down to the general public in terms of public goods and services? Why does it expect the Greek population to pay via austerity for the risky borrowing of Greek elites and the even riskier lending of European banks?

Asking the Greek people to shoulder the burden of austerity–in a country with 30 percent general unemployment and 50 percent unemployment for those under 30, with a massive brain drain of educated professionals, porous borders and deep cuts to public sector salaries, pensions and basic services–is akin to forcing the children of crack addicts to starve and swab floors in order to pay for the rehab treatment of their parents. And the outcome is just as uncertain.

Let’s look at it this way. Capitalism is about assuming risk for higher reward. In the financial world, the riskier the investment the higher the interest paid on it. And just like quick finance and pawn shops are located in poor rather than rich neighbourhoods, high interest bonds are issued on “risky” countries with poor credit ratings and histories of financial instability. For “courageous” investors riding the line between high interest and junk bonds, the rewards for so-called bailouts are great. But the downside of a default is that they will have to wear losses, just as many ill-advised investors have to.

Greece is one such high risk place and those who lent to it knew this from the beginning.

With that in mind is is easy to see that the behaviour of the “troika” (the European Commission, European Central Bank and IMF) can be (and has been) likened to loansharking and needs to be treated as such. When people seek debt relief from loansharks, banks or credit card providers, they arrange to repay a capped sum and a payment schedule is established. The alternative is bankruptcy, which leaves the creditor with nothing. Although suboptimal from the lender’s point of view, the capped payment alternative is better than nothing.

When it comes to states, the decision to cap debt is a political decision, not a financial one. That is because the stability of states is more important than the returns on risky investment, especially when ample returns have already been received, many creditors are no longer at risk and demands for future returns put state stability at peril. In the case of Greece there is a twist, in that the referendum on whether to accept austerity was the first political iteration in a multi-step process. Now that the Greeks have refused more austerity, it is the turn of the EC to make a political decision of its own.

Let’s be clear: this is not a Greek crisis; it is a crisis of European finance capital. The demand for more Greek austerity is not about servicing the debt but about humiliation, punishment and deterrence of others who might dare to do the same.

The people who should seek answers are those who invested in the agencies that undertook the high risk lending strategies that have brought us to this moment. The people who are responsible for the crisis are not average Greeks but suits sitting in fancy offices in Athens, Brussels, Frankfurt and London. They are the ones who took the risk on Greece and they are the ones who need to be held to account.

This does not absolve Greeks from their own mistakes. Certainly the culture of entitlement and the pervasive corruption in Greek society needs to be addressed. But here again, this was well known to foreign creditors at the time they lent money to Greece, and for all the everyday petty corruption in Greece involving phantom war veterans and people faking disabilities, it is the Greek political-economic elite who elevated institutional corruption to an art form. Syriza proposes to confront them as well as the lower-level scams but in order to do so it must show that it can negotiate a debt payment agreement that puts the interests of average Greeks first.

There is a way out of the imbroglio that can leave Greece in the EU without undergoing more austerity punishment. In international law there is a concept known as “odious debt.” Odious debts are those that are incurred by governments that do not go to their stated purposes or are ill-gotten from the onset. Under international law, odious debts are the responsibility of the incurring parties and are not the responsibility of their successors. As such, they do not have to be serviced by others if the responsible parties cannot be made to pay.

One can argue that the debt incurred by pre-Syriza governments from 1999-2008 fall into the odious debt category and should be forgiven as such. If anything the political parties in government during the time the debts were incurred can be sued for repayment (these being the Panhellenic Socialist Party (PASOK) and New Democracy (ND)). Whatever happens, it is clear that Greece has not seen the purported benefits of the loans incurred by previous governments (to include the now abandoned or derelict Olympic facilities) but it has paid more than its fair share of interest on them. By any reasonable measure the remaining debt is now odious.

In the end this is a cautionary tale with minor and major sub-plots. The minor plot is about sustainable debt and the limits of debt relief. The major plot is about the perils of political union. The EU needs to understand that how it addresses the minor plot will determine the conclusion of the major one.

Bonus read: Although I do not agree with some of his observations, Brian Easton has a nice short piece on the Greek situation here.

 

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