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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.

 

Considering the Implausible.

datePosted on 18:24, July 2nd, 2015 by Pablo

From time to time I am invited to give public presentations on subjects within my areas of interest. Depending on the topic I sometimes offer ideas for the audience to consider. At a think tank gathering last year I offered the suggestion that parliament should consider the proposition that New Zealand be the first country to publicly and formally renounce the use of lethal drones at home and abroad. I pointed out that although security conservatives and military commanders would oppose the move because it limited NZDF (and perhaps in the future NZ Police) tactical options, it was worth debating on moral and legal as well as practical grounds given New Zealand’s unique political culture and international standing. Since 90 percent of what military drones do is non-lethal and the NZDF does not have a lethal drone capability as of yet, it seems worth a try.

That proposition went nowhere. Some left leaning commentators supported the motion (most notably No Right Turn and one of the authors at The Standard). But no a single political party, to include the Greens, Mana and the Internet Party, adopted it as a policy proposition and it was never brought up in parliament.

This year I was at another event that featured academicians, students, policy practitioners, journalists and diplomats (foreign and Kiwi) discussing New Zealand’s past, present and future foreign policy. I was matched with a representative of the New Zealand intelligence community and a security academic on a panel that addressed intelligence issues, specifically, New Zealand’s intelligence role in foreign policy.

As part of the discussion I suggested that Edward Snowden had done us a favour by exposing the extent to which NZ is a fully integrated member of the 5 Eyes signals intelligence network. The reason is that with the revelations that have come from the documents that he passed on to journalists, New Zealand has an opportunity to re-negotiate some of the terms of its participation in 5 Eyes. I noted that withdrawal from 5 Eyes was not an option–I said that it was like trying to leave the mafia. But the specific terms of what the GCSB does for 5 Eyes could be discussed given that New Zealand is by far the most vulnerable of the 5 Eyes partners to retaliation from the countries that it targets as part of the division of labour within Echelon. I specifically  mentioned that NZ might broach the subject of reducing its role in spying on China given how trade dependent NZ is on the Asian giant.

A couple of journalists in the room ran stories on the suggestion and the PM was asked about it at his weekly press conference. He rejected it out of hand and said that NZ would not modify its intelligence operations because of trade considerations because what it did in was in the national interest.

The Snowden documents suggest otherwise, but that argument can be left for another moment.

Let me explain why NZ has an opportunity to re-negotiate the terms of its agreement with the Anglophone powers even though it cannot withdraw from 5 Eyes entirely.

If NZ were to withdraw from 5 Eyes it would lose the substantial benefits, unique to a small country, that it accrues from being in an alliance with four bigger partners with global reach. The flow of intelligence within 5 Eyes is very much reciprocal but what NZ receives is far more than what it delivers to the network. It is tasked with using shared technological means located on or operated from NZ soil (including its diplomatic missions) to target  specific entities of common interest to the larger partners, and in exchange it receives global as well as more NZ-specific intelligence from those partners.

That is just one reason why withdrawal is unlikely. But think of the consequences if NZ unilaterally decided to opt out of Echelon. It is in possession of some of the most advanced signals interception technologies on the planet. The GCSB knows the processes, procedures, means, methods and protocols of the entire network. Fear that this knowledge and technologies (say, for example, X-Keyscore and Prism) could fall into hostile hands will inevitably prompt a negative response from NZ’s erstwhile intelligence allies, and that response will not be confined to the field of intelligence (I am aware of reports that some of the technologies and methods mentioned in the Snowden documents have been decrypted by Russian and Chinese intelligence but am not sure as to what extent this may have occurred).

Were NZ to try and establish an alternative signals intelligence network with other powers, the remaining 5 Eyes countries would likely move beyond defensive measures and into the field of offensive intelligence operations against NZ. In other words, the exit costs will be too high given the uncertain benefits received in the event of withdrawal.

That being said, the GCSB is integral to 5 Eyes operations. The partners cannot afford to alienate NZ on issues that are critical to NZ but marginal or less costly to them. Although they never thought that their operations would be exposed in the measure that they have, the 5 Eyes partners are now acutely aware, thanks to Snowden, that they rise and fall together when it comes to exposing how they go about signals intelligence acquisition and who they target. They can therefore ill afford to call NZ’s bluff on a matter that is of critical importance to the latter.

I would argue that bilateral trade with China is one such matter. Even if they have a pretty good idea of what the GCSB does for Echelon, public revelation of NZ having a lead role in spying on the Chinese at home and abroad will force the PRC to retaliate in some fashion, even if just to save face as an emerging great power with super power pretensions. It must show that it should not be disrespected and meddled in by small states no matter who those states are allied with. The means by which it can reach out and touch NZ in a bad way are myriad and not confined to diplomatic or economic relations.

The only reason that it would not do so is if it has counter-intelligence access to GCSB operations and wants to keep those “backdoor” channels open in spite of the publication of specifics about NZ espionage against it.

If NZ were to say to its partners that given its vulnerability to Chinese utu the GCSB would prefer not to take a major role in spying on the PRC, it is possible that the other partners will listen and consider the request. The GCSB can still spy on South Pacific, Latin American and other nations that do not have much leverage over it, as well as the UN, various NGOs and private firms as it is doing now. But it would give a pass to spying, at least in a major way outside of NZ territory, on the Chinese.

In my view, such a position would not prevent the GCSB (and SIS) from conducting counter-intelligence operations against Chinese espionage at home and abroad. Even if they know about these defensive measures the Chinese will likely not make an issue of them given that they instigated the back and forth. Where I would draw the line is on offensive operations against Chinese targets, especially when at the behest of the larger partners.

I am not surprised that John Key has no interest in this proposition. To do so requires political courage and a commitment to putting NZ national interests first. Neither is in his repertoire. Plus, even if he were to think about the dilemma posed by NZ’s increasingly counter-poised trade and security interests, any renegotiation along the lines I have posed would be done quietly and not publicly announced, much less at a press Q&A. But I doubt the latter is the case.

In any event, this is a potential moment of opportunity to redefine the terms and conditions of NZ’s involvement in 5 Eyes, however implausible that may seem at first glance. There is a supposed review of the NZ intelligence community now underway that could serve as a sounding board for opinions on the suggestion, and I am happy to add my two cents to the discussion should that be deemed worthwhile.

A hard rain is a’gonna fall.

datePosted on 14:16, May 22nd, 2015 by Pablo

Although I am loathe to prognosticate on fluid situations and current events, I have been thinking about how the conflict in Iraq has been going. Although I do not believe that the Islamic State (IS) is anywhere close to being the global threat that it is portrayed to be in the West, I do believe that it is an existential threat to Syria, Iraq and perhaps some of their Sunni neighbours. Unlike al-Qaeda, which has limited territorial objectives, IS is political-religious movement with serious territorial ambitions that uses a mix of conventional and unconventional land warfare to achieve them. Given that difference, below is an assessment of the situation in Iraq after the fall of Ramadi into IS hands.

Iraq’s Anbar Province, a Sunni stronghold, is now under IS control. Tikrit was occupied a few months ago, Falluja and Haditha fell some weeks ago and Ramadi was conquered a week ago. To the northeast, Mosul remains in IS hands, while Baiji (site of major oil processing facilities) and Samarra remain under siege. With dozens of smaller towns in Anbar and elsewhere under IS rule, to include a front extending south-southeast from Tikrit to the eastern Baghdad suburbs along the Tigris River basin, the advance on the capital appears inevitable. Or is it? In this post I attempt to outline the strategic situation that the NZDF has thrust itself into.

28D32BC000000578-3087517-image-a-9_1432030518818Map courtesy of the DailyMail Online (http://www.dailymail.co.uk).

First, let’s look at the positives (from the West’s perspective). There is no way that IS can physically take and occupy Baghdad. A city of nearly four million people, most of them Shiia, Baghdad is a fortress when compared to what IS has tackled so far. It has concentrated military forces, is the seat of national government and is the location of numerous foreign military and diplomatic missions. It is therefore a strategic asset that Iran, the West and Iraqi Shiites cannot afford to lose. Moreover, IS is stretched too thin on the ground in Iraq to have the numbers to engage effective urban warfare against a determined and concentrated enemy, has no air power and does not have enough Sunni support in Baghdad to make up for the lack of numbers on the ground (A digression here: IS has a Salafist ideology buttressed by Ba’athist political and military organisation. Much of its leadership is drawn from the ranks of displaced Sunni Ba’athist officials in the Saddam Hussein regime, and it enjoys considerable support in Sunni Iraq. This accounts in significant measure for its success in Anbar).

Although not located in Anbar, Mosul, Samarra and Tikrit also have Sunni majorities, so the trend has been for IS to target and conquer urban areas where its sectarian support is matched by demographic numbers. The question remains as to whether its military campaign can be equally successful in Shiia dominant areas to the east and south of Baghdad, where Iranian forces also have a presence. That appears unlikely.

On the negative side from the West’s perspective, IS appears to be engaging in a pincer movement designed to surround and isolate western and northern Baghdad from the rest of the country. If it able to control the land routes in those areas it can cut off not only supply lines between Baghdad and its allied forces in the north and west, including Camp Taji where the NZDF is supposed to be stationed (I say supposedly because I have read an unconfirmed report that the NZDF deployment are stuck in Baghdad because of the increase in IS hostilities), but it can also proceed to apply a chokehold on supplies entering Baghdad via the north and west. As part of this strategy IS will target the power grid that supplies Baghdad, the majority of which comes from its north (including the power plant at Baiji, now under siege) as well as water supplies drawn from reservoirs in the northwest and piped to Baghdad. This will not be fatal if the Baghdad government can keep its land lines of supply in the south and east open, but it certainly will hinder its ability to keep some (more than likely Sunni) neighbourhoods stocked with life essentials, which will only exacerbate their alienation from central authorities and perhaps contribute to their support for IS.

Moreover, if more difficult to achieve, IS does not need to control all of the territory to the east and south of Baghdad in order to choke it off. All it has to do is establish a thin mobile front that can gain and hold intercept points on the major highways surrounding the city (and relatively close to the city limits at that, which obviates the need to fight Shiias further afield). This includes targeting power and water supplies coming from the south and east.

In other words, IS does not have to achieve strategic depth in order to choke the arterial routes leading into the city from the south and east. Coalition airpower may be able to stave off this eventuality for a while but without ground control that allows unimpeded re-supply, Baghdad will be operating on a scarcity regime within a few months. Resupply by air, while significant, cannot substitute for land supply, and it is worth noting that Baghdad airport as well as the infamous Abu Ghraib prison (where many Sunni militants are held) lie west of Baghdad and have recently been the subject of IS attacks. In fact, in the last year both Abu Ghraib and the prison at Taji have been the scenes of major prisoner jailbreaks orchestrated by IS, with many of the escapees now thought to have joined its ranks in an effort to increase its knowledge of the local fighting terrain.

A microcosmic version of this scenario involves the city of Taji, location of Camp Taji, the huge military base that is the destination point for the NZDF contribution to the anti-IS coalition. Straddling national highway one 20 miles northwest of Baghdad west of the Tigris river, Taji is the last significant town on the run south into Baghdad. With the old Saddam-era and later US military base capable of housing a mix of 40,000 Iraqi and foreign troops (although in reality there are far less on base), and home to a 1700 meter runway and Iraqi’s armoured corps, it is now the focal point of foreign training of Iraqi troops. As such and because of its location, it is a major target for IS, which controls the territory immediately east of the Tigris (about 11 miles away from the base). Since Taji is only 30 miles from Falluja, the presumption is that IS will mass it’s force to the east, west and north of Taji, then launch offensives designed to gain control of the town and highway. That would leave the base cut off from land routes and force it to rely on air re-supply and/or fight its way out of containment. If that happens it is doubtful that the NZDF troops will hunker down “behind the wire” and do nothing else. Whatever the scenario, isolating Camp Taji from Baghdad is a primary IS objective in the next months and will be essential to any move to surround and squeeze the capital city. The good news, from the West’s perspective, is that in order to isolate the base and sever its land link to Baghdad, IS will have to mass significant numbers of fighters, artillery and armour, something that makes it vulnerable to coalition air strikes.

The bottom line is that a successful pincer movement will slowly strangle and starve Baghdad, something that it turn will force the Iraq government to seek a political settlement on terms favourable to IS. That will entail the ejection of foreign forces and partition of Iraq. IS will claim Sunni-dominant areas and merge them with the territory it holds in Syria (IS controls roughly half of Syria’s territory) to establish its caliphate. It has no real interest in Iraqi Kurdistan because it cannot defeat the Peshmerga and other than the oil facilities on its western flank, Kurdistan has no strategic assets. Likewise, Shiia dominant areas of Iraq are too large and populated for IS to occupy, plus any incursion into Iraqi Shiia border territory with Iran will invite a military response from the latter. But where IS is in control, it has already begun to provide the basic services that the Iraq and Syrian governments no longer can, which raises the possibility that partition is already a fait acompli. As stated in The Economist:

“The danger is that the IS caliphate is becoming a permanent part of the region. The frontiers will shift in the coming months. But with the Kurds governing themselves in the north-east, and the Shias in the south, Iraqis question the government’s resolve in reversing IS’s hold on the Sunni north-west. “Partition is already a reality,” sighs a Sunni politician in exile. “It just has yet to be mapped.” (“The caliphate strikes back,” The Economist, May 23. 2015 (http://www.economist.com/news/middle-east-and-africa/21651762-fall-ramadi-shows-islamic-state-still-business-caliphate-strikes-back, May 23, 2015).

Thanks to the Iraqi Army abandoning their positions and leaving their equipment behind, IS has captured significant amounts of modern US made weaponry, including the equivalent of several armoured columns. It now has anti-aircraft munitions that eventually will score hits on coalition aircraft. Its fighters are a mix of seasoned veterans and unprofessional jihadis, but IS field commanders have been judicious in their use of each (for example, employing  inexperienced foreign jihadists in first wave assaults or in suicide bombings using construction vehicles to breach enemy lines, followed by artillery fire and hardened ground forces). What that means is that IS has the realistic ability to cut off Baghdad’s land access to its near north and west, which will force the Iraq military and coalition partners to stage a counteroffensive to reclaim those lines of supply.

IS relies on mobility, manoeuvre and the selective application of mass force to achieve it ends. The fall of Ramadi was accomplished by rapidly surrounding it from the north and east and focusing firepower on one garrison in it. IS also has relatively unencumbered supply lines coming from Syria, and many suspect that supplies also come from Saudi Arabia and Turkey (Iraq has land borders with those states as well as Iran, Jordan and Kuwait. There is a strong belief–which could well be confirmed by the document retrieval made during the US Special Forces raid on a senior IS financier’s hideout in Syria– that the Saudis in particular are doing more than just financing IS as a hedge against Iran). The best check against its advances is demographic density in Shiia dominant parts of the country and the fact that any adventurous move in the east or south will be met by serious Shiia militia and Iranian military resistance (Sadr City, a bastion of Shiia militias, lies on the northeast of Baghdad and Basra, a major oil refining centre and home of the so-called (Shiia) marsh Arabs, is the capital of the south).

Sanctuary

Source: Institute for the Study of War, September 26, 2014.

For those who believe that coalition air power is enough to stem the tide of IS advances, let me simply point out that history has shown that air power alone cannot determine success in a territorial conflict, especially an irregular or unconventional one. Vietnam is a case in point. In the battle for Ramadi the coalition conducted 275 air strikes and still saw the city fall to IS in the space of days. Thousands of coalition air strikes have been launched against IS and while they slowed down many IS advances and were decisive in battles between Kurdish peshmurga and ISIS forces in Syria and northeastern Iraq, they have not proven so when the forces they are supporting are too few or lack the will to fight when things get ugly. Since IS prefers to move quickly between urban areas and stage assaults from within them, the fear of civilian casualties hampers the coalition’s ability strike surgically at them in urban settings. That leaves the coalition with the task of trying to target IS convoys and garrisons, something that has proven hard to do given the dispersed nature of their campaign outside of urban areas.

It would seem that the best way to counter IS advances is to pre-emptively launch counter-offensives using a mix of foreign and Iraq troops and militias. That involves accepting Iranian military participation in concert with Western forces and requires moving sooner rather than later to at least stall IS’s progress southward. But if we take standard basic training as a guideline, then the Iraqi Army forces that have begun to be trained by the coalition troops will not be ready to fight until mid July. That may be too late to stop IS before it reaches Taji and the western Baghdad suburbs. Thus the conundrum faced by the coalition is to commit group troops and accept Iranian military help now or wait and hope that IS will slow down its advance due to its own requirements, thereby allowing training provided to the Iraqi Army by foreigners like the NZDF enough time to strengthen it to the point that it can take back the fight to IS with only marginal foreign assistance.

At worst, the latter is a pipe dream. At best, it is a very big ask.

It was not me.

datePosted on 11:46, May 1st, 2015 by Pablo

Yesterday the Herald published an op ed that started out with the following:

“I was asking an American professor a complicated question about Anzus in a university lecture theatre when he started stroking my leg.

I could hardly believe what was happening. I was doing my work and expected to be taken seriously as a journalist. By contrast, his actions not only showed his belief that women’s bodies were his personal play thing – his behaviour also demonstrated his contempt for me in a work capacity. It was obvious he had not been listening to my question as his mind was focused on when the right moment would be to physically assault me.”

Now, I do not know if this incident is true, much less that it occurred at a NZ university. If it is true then it was abhorrent behaviour on the part of the academic involved. But I can state categorically for the record that I am not the “American professor” in question. Not only do I not recall the name of the person making the allegation but I have never been approached by anyone regarding ANZUS. Nor have I stroked anyone’s leg in a professional setting. So count me out of the list of likely suspects.

Readers may think it odd that I feel compelled to defend myself in this way. But as one of the very few (former) American professors in NZ who also lectured and writes about international relations, foreign policy and comparative politics, the light of suspicion has already been cast my way. Given that in the past I have been accused of being a racist, Islamophobe, Zionist and an assortment of other unsavoury things, I am therefore quick to defend my good name from any insinuations of misconduct, harassment or unethical behaviour.

That is the problem with non-specific allegations of wrong-doing–whatever the righteousness of the point being made, they tar the innocent as well as the guilty with the same brush.

Spy Fatigue.

datePosted on 11:20, April 9th, 2015 by Pablo

The slow drip feed of classified NSA material taken by Edward Snowden and published by journalists Glen Greenwald, Nicky Hager, David Fisher and others in outlets such as The Intercept and New Zealand Herald caused a stir when first published. Revelations of mass surveillance and bulk collection of telephone and email data of ordinary citizens in the 5 Eyes democracies and detailed accounts of how the NSA and its companion signals intelligence agencies in Australia, Canada, New Zealand and the UK spy on friend and foe alike, including trade partners and the personal telephones of the German prime minister and Indonesian president, caused both popular and diplomatic uproars. In New Zealand the outrage was accentuated by revelations about the illegal GCSB spying on Kim Dotcom and the government’s extension of its spying powers even after it was found to have operated outside its legal charter in other instances as well.

But now it seems that public interest in the issue has faded rather than grown. Revelations that the GCSB spies on Pacific island states such as Fiji, Samoa and Tonga as well as Pacific French territories, followed by news that it spied on candidates for the World Trade Organisation presidency on behalf of Trade Minister Tim Groser (himself a candidate), has been met not with street demonstrations and popular protests but by a collective yawn by the public at large.

Why is this so?

It appears that the New Zealand public is weary of the death by a thousand cuts approach used by Mr. Hager and his investigative colleagues. Beyond the usual array of diversions presented by popular culture and media, the reason for this disinterest seems to lie in the fact that the information released to date is seen as trivial, uncontroversial and tediously never-ending. Take for example the reaction to the news that the UK spied on Argentina after the Falklands/Malvinas War and carried on until 2011. Numerous pundits asked whether that is surprising. What is the UK expected to do when Argentina remains hostile to it and has never renounced its territorial claims over the islands? Similarly, others have pointed out that since New Zealand is utterly trade dependent, why not try to advance Mr. Groser’s candidacy for the WTO job using surreptitious as well as diplomatic means? Likewise, is it news that Australia and New Zealand spy on small Pacific neighbours who depend on them for a significant amount of foreign aid and are being courted by the Chinese? Why not given the levels of corruption and intrigue present in the region?

This does not mean that there are no constitutional, diplomatic, security and trade concerns raised by the Snowden leaks coming into the public domain. My belief is that there is much to be alarmed about in the Snowden files and they should serve as a catalyst or window of opportunity for a thorough review of the NZ intelligence community and perhaps even a renegotiation of the terms and conditions of its participation in Anglophone intelligence networks.

But the way in which it has been presented to New Zealand audiences has induced fatigue rather than fervour. Add to that the government’s strategy of obfuscation, denial and attacking the motives, ethics and character of the journalistic messengers, and the result is a jaded public with little interest in spies or what they do and whom they do it to. Cast against a backdrop in which personal data and private information is already bulk accessed by private firms and a host of social media platforms with profit-maximising in mind, the general attitude seems to be one of unconcern about what the guardians of the public interest are doing in that regard. In such a climate the old Nazi refrain “you have nothing to fear if you have nothing to hide” resonates quite well.

Unless Mr. Greenwald, Mr. Hager and their colleagues have bombshells that they have yet to drop, it appears that like Mr. Dotcom’s much-hyped “Moment of Truth” last year, their efforts have fizzled rather than fired. For the sake of their credibility as well as the public good, it is time for them to stand up and deliver something of significance that transcends the Wellington beltway or if not, to walk away.

Should Mr. Hager and company opt to deliver a bombshell, they need to consider one more thing: what good purpose is served by revealing the foreign espionage activities of New Zealand and its closest intelligence partners? Even if it uncovers myriad spying efforts that have nothing to do with national security (and terrorism, that old canard), will it advance the cause of transparency and selectivity in intelligence operations and make some governments more responsive to public concerns about privacy? Will it curtail spying by the 5 Eyes partners or any other nation? Will it encourage whistleblowing on illegal government surveillance? Will it advance New Zealand’s interests in the world or force a reconsideration of its relationship with its security partners?

Or will it simply damage New Zealand’s reputation and relations with the countries that have been spied on?  Given that New Zealand is the most vulnerable of the 5 Eyes partners and is, indeed, almost totally trade dependent, the negative consequences of any potential backlash or retaliation by aggrieved states could be significant.

That is why the issue is important. The thrust of the most recent revelations have moved beyond domestic mass surveillance and into the realm of traditional inter-state espionage, which is not confined to the activities of the 5 Eyes partners and is an integral, if unspoken necessary evil of international relations. Given that the focus of the Snowden material is solely on 5 Eyes spying and not on its counterespionage efforts or the intelligence operations of other states, could it not seem to the general public to be a bit one-sided and deliberately injurious to continue to unveil only what NZ and its partners undertake by way of signals intelligence collection (as some in government and supportive of it have insinuated)?

In the end, will ongoing revelations about New Zealand foreign espionage serve the public interest and common good? Or will it have the opposite effect?

And will average Kiwis care either way?

 

A short version of this essay appeared in the New Zealand Herald, April 10, 2015.

So much for intelligence community reform.

datePosted on 18:36, February 17th, 2015 by Pablo

It turns out that nearly 5 months after getting re-elected, the government has decided on the composition of the Intelligence and Security Committee (ISC). Besides himself as Chair of the ISC, the Prime Minister gets to select two members from the government parties and the Opposition Leader gets to select one member from opposition parties.  In both cases the respective Leaders are expected under Section 7 (1) (c,d) of the 1996 Intelligence and Security Committee Act to consult with the other parties on their side of the aisle before selecting the remaining members of the committee. The language of the Act is quite specific: “c) 2 members of the House of Representatives nominated for the purpose by the Prime Minister following consultation with the leader of each party in Government: (d) 1 member of the House of Representatives nominated for the purpose by the Leader of the Opposition, with the agreement of the Prime Minister, following consultation with the leader of each party that is not in Government or in coalition with a Government party.” (1996 ISCA, pp. 6-7).

Not surprisingly the government has nominated two National MPs, Attorney General Chris Finlayson and Justice Minister Amy Adams, for membership on the ISC. It is not clear if ACT, the Maori Party and United Future were consulted before their selection. What is more surprising is that Andrew Little nominated David Shearer and did not consult with opposition parties before making his selection. While Shearer is a person with considerable international experience and has been a consumer of intelligence (as opposed to a practitioner) during his career, Mr. Little has been neither. In fact, it can be argued that Mr. Little has the least experience of all the proposed members when it comes to issues of intelligence and security, which means that he will have to lean very heavily on Mr. Shearer if he is not not be overmatched within the ISC.

Moreover, in past years Russell Norman, Peter Dunne and Winston Peters have been on the ISC, so the move to re-centralise parliamentary oversight in the two major parties represents a regression away from the democratisation of representation in that oversight role. Since these two parties have been in government during some of the more egregious acts of recent intelligence agency misbehaviour (for example, the Zaoui case, where intelligence was manipulated by the SIS to build a case against him at the behest of or in collusion with the 5th Labour government, and the case of the illegal surveillance of Kim Dotcom and his associates by the GCSB in collusion or at the behest of the US government under National, to say nothing of the ongoing data mining obtained via mass electronic trawling under both governments), this does not portend well for the upcoming review of the New Zealand intelligence community that this ISC is charged with undertaking.

The Greens have expressed their disgust at being excluded and have, righty in my opinion, pointed out that they are the only past members of the ISC that have taken a critical look at the way intelligence is obtained, analysed and used in New Zealand. But that appears to be exactly why they were excluded. According to John Key,  Labour’s decision was “the right call” and he “totally supports it.” More tellingly, Mr. Key said the following: “A range of opposition voices from the minor parties could railroad the process. I don’t think the committee was terribly constructive over the last few years, I think it was used less as a way of constructing the right outcomes for legislation, and more as a sort of political battleground” (my emphasis added).

In other words, Russell Norman took his membership on the ISC seriously and did not just follow along and play ball when it came to expanding state powers of search and surveillance under the Search and Surveillance Act of 2012 and GCSB Act of 2014.

That is a very big concern. Mr. Key believes that the “right” outcomes (which have had the effect of expanding state espionage powers while limiting its accountability or the institutional checks imposed on it) need to be produced by the ISC when it comes to the legal framework governing the intelligence community. Those who would oppose such outcomes are not suitable for membership, a view with which Andrew Little seems to agree.

This is so profoundly an undemocratic view on how intelligence oversight should work that I am at a loss for words to  explain how it could come from the mouth of a Prime Minister in a liberal democracy and be tacitly seconded by the Leader of the Opposition–unless they have genuine contempt for democracy. That is a trait that W. Bush, Tony Blair and John Howard shared as well, but what does that say about the state of New Zealand democracy?

Mr. Little has given his reason to exclude Metiria Turei of the Greens from ISC membership as being due to the fact the Mr. Norman is stepping down in May and Mr. Little wanted “skills, understanding and experience” in that ISC position. Besides insulting Ms. Turei (who has been in parliament for a fair while and co-Leader of the Greens for 5 years), he also gave the flick to Mr. Peters, presumably because that old dog does not heel too well. As for Mr. Dunne, well, loose lips have sunk his ship when it comes to such matters.

The bottom line is that Mr. Little supports Mr. Key’s undemocratic approach to intelligence oversight. Worse yet, it is these two men who will lead the review of the NZ intelligence community and propose reform to it, presumably in light of the debacles of the last few years and the eventual revelations about NZ espionage derived from the Snowden files.

As I said last year in the built-up to the vote on the GCSB Amendment Act,  I doubted very much that for all its rhetorical calls for an honest and thorough review process that led to significant reform, Labour would in fact do very little to change the system as given because when it is in government it pretty much acts very similar to National when it comes to intelligence and security. If anything, the differences between the two parties in this field are more stylistic than substantive.

What I could not have foreseen was that Labour would drop all pretence of bringing a critical mindset to the review and instead join National in a move to limit the amount of internal debate allowable within the ISC at a time when it finally had an important task to undertake (in the form of the intelligence community review).

As a result, no matter how many public submissions are made, or how many experts, interest groups and laypeople appear before the ISC hearings, and how much media coverage is given to them, I fear that the end result will be more of the same: some cosmetic changes along the margins, some organisational shuffles and regroupings in the name of streamlining information flows, reducing waste and eliminating duplication of functions in order to promote bureaucratic efficiency, and very little in the way of real change in the NZ intelligence community, especially in the areas of oversight and accountability.

From now on it is all about going through the motions and giving the appearance of undertaking a serious review within the ISC. For lack of a better word, let’s call this the PRISM approach to intelligence community reform.

LINK: The Intelligence and Security Committee Act 1996.

Media Link: To the point on NZ and IS.

datePosted on 10:59, February 4th, 2015 by Pablo

We already know that John Key dissembles and misleads, especially on matters of security and intelligence. NZ is soon to put troops into Iraq as part of the effort to roll the Islamic Sate (Isis is an Arabic girl’s name) out of that country. For whatever reason Mr. Key will not admit to this even after the British Foreign Secretary mentioned that the NZ contribution will be a company sized (“100 odd” in his words) detachment.

The evidence of military preparation is very clear, with an especially selected infantry company training for desert warfare at Waiouru over the past few months and a detachment of SAS soldiers rumored to be already in theatre. The US and other anti-IS coalition partners have announced preparations for a Northern spring offensive against IS, centred around taking back Mosul from the jihadists.  The decision to launch the offensive and the division of labor involving participating ground forces was made at the working meeting of coalition military chiefs in Washington DC last October (the chief of the NZDF attended the meeting although at the time Mr. Key said no decision had been made to send troops). Since the NZDF cannot contribute combat aircraft, armour or even heavy lift assets, it is left for the infantry to join the fray, most likely with a fair share of combat medics and engineers.

With his misrepresentations  John Key only obscures the real issue. New Zealand has no option but to join the anti-IS coalition (which he has said is the price for being in “the club”) given the international commitments it has already made.

There are three specific reasons why NZ has to join the fight, two practical and one principled.

The practical reasons are simple: First, NZ’s major security allies, the US, UK and Australia, are all involved as are France, Germany and others. After the signing of the Wellington and Washington security agreements, NZ became a first tier security partner of the US, and as is known, it is an integral member of the 5 Eyes signals intelligence network. It therefore cannot renege on its security alliance commitments without a serious loss of credibility and trust from the countries upon which it is most dependent for its own security.

Secondly, most of New Zealand’s primary diplomatic and trading partners, including those in the Middle East, are involved in the anti-IS coalition. Having just secured a UN Security Council temporary seat at a time when the UN has repeatedly issued condemnations of IS, and having campaigned in part on breaking the logjam in the UNSC caused by repeated use of the veto by the 5 permanent members on issues on which they disagree (such as the civil war in Syria), NZ must back up its rhetoric and reinforce its diplomatic and trade relations by committing to the multinational effort to defeat IS. Refusing to do so in the face of requests from these partners jeopardises the non-military relationships with them.

The third reason is a matter of principle and it is surprising that the government has not made more of it as a justification for involvement. After the Rwandan genocide an international doctrine known as the “Responsibility to Protect” (R2P) was agreed by UN convention to prevent future horrors of that sort. It basically states that if a defenceless population is being subject to the depredations of its own government, or if the home government cannot defend the population from the depredations of others, then the international community is compelled to use whatever means, including armed force, to prevent ongoing atrocities from occurring. There can be no doubt that is the situation in parts of Iraq and Syria at the moment. Neither the Assad regime or the Iraqi government can defend minority communities such as Kurds or Yazidis, or even non-compliant Sunnis, from the wrath of IS.

That, more than any other reason, is why NZ must join the fight. As an international good citizen that has signed up to the R2P, NZ is committed in principle to the defense of vulnerable others.

So why have the Greens, NZ First and Labour (or at least Andrew Little) opposed the move?

The Greens are true to form with their pacifist and non-interventionist stance, but they are ignoring the matter of international principle at stake. NZ First is its usual isolationist self, acting blissfully unaware of the interlocking web of international networks and commitments that allow NZ to maintain its standard of living and international reputation (in spite of having Ron Mark to speak to military issues).

Most of all, why has Andrew Little run his mouth about reneging on the NZDF contribution to the anti-IS coalition (which involves formal and time-constrained commitments)? Little has previous form in displaying ignorance of international affairs, but this level of hypocrisy takes the cake. Does he not remember that the 5th Labour government started the rapprochement with the US after 9/11, and that it was the 5th Labour government that initially deceived and misled about the real nature of the SAS role in Afghanistan as well as  the true nature of the mission in Southern Iraq (which is widely believed to have involved more than a company of military engineers). Is he not aware that a responsible country does not walk away from the security alliance, diplomatic and trade commitments mentioned above? Did he not consult with Helen Clark, Phil Goff or David Shearer before this brain fart (or did they gave him the rope on which to hang himself)? Does he really believe, or expect the informed public to believe, that on defense, security and intelligence issues Labour in 2015 is really that different from National? If so, it is he, not us, who is deluded.

All this shows is that Labour is still unfit to govern, or at least Little is not. If he does not understand the core principles governing international relations and foreign affairs, or if he chooses to ignore them in favour of scoring cheap political points, then he simply is unsuited to lead NZ before the international community. There is a big difference between being a political party leader and being a statesman. It is clear that John Key is no statesman, but his glib and jocular nature gives him the benefit of international respect so long as he backs up his talk with the appropriate walk. By comparison, Andrew Little comes off as some provincial rube who cannot see further than the nearest bend in the road.

Whether we like it or not–and there are plenty of things not to like about getting involved in what could become another military morass in the Middle East–NZ has an obligation to get involved in the fight against IS. The obligation stems not just from the particular disposition of this National government but from years of carefully crafted international ties under successive governments that give practical as well as principled reasons for involvement. Andrew Little should know that, and the Greens and NZ First need to understand that this is not about belonging to some exclusive “club” but about being a responsible global citizen responding to the multinational call for help in the face of a clear and present danger to the international community. Because if IS is not a clearly identifiable evil, then there is no such thing.

In any event the fight against IS is dangerous but cannot be avoided.

 

This week I attended a talk by Kiwi journalist Yasmine Ryan, currently based in Tunis. Yasmine previously worked for al-Jazeera and now freelances from her Tunisian base. Her talk was about the state of affairs in the Arab world, and more specifically, North Africa.

She had many interesting things to say but I garnered three main points from her talk. First, the the so-called Arab Spring has failed to open Arab politics in any meaningful way. Second, levels of corruption in the Arab world are so high and so pervasive that reform is virtually impossible, especially when foreign interests back the entrenched power elites. Third, state capacity (measured by public infrastructural development, enforcement of norms beyond simple repression and provision of goods and services) is woefully lacking throughout the region, something that contributes to pervasive discontent amongst disempowered groups.

Her bottom line was that although Tunisia is touted as an Arab Spring success story, it is in fact not and yet is the best of a sorry lot of post-dictatorial regimes now governing in North Africa.

As Yasmine spoke, I found myself pondering her use of words. She referred to the Tunisian “revolution” and to the “democratisation” of Arab politics. Her use of these terms reflects standard journalistic practice although she knows well that nothing of the sort has happened in North Africa. Let me explain why.

“Revolutions” properly conceived are popular uprisings that lead to the armed overthrow of the state and the imposition of a paradigmatic change on society under a new political regime in the wake of the overthrow. The first key to revolutionary success is victory over the repressive apparatus, either as a result of combat or because the repressive apparatus switches its allegiances to the new sovereign contenders. The second key to revolutionary success is the scope of paradigmatic change covering political society, civil society and the economic structure of the nation-state. Needless to say, none of this happened as a result of the so-called Arab Spring.

So what did happen? Well, if revolution does not eventuate and democracy does not obtain, then other outcomes are possible. The regime being challenged can use its repressive superiority to reassert its authority and crack down on dissent, thereby quashing the seeds of popular uprising. This occurred in Bahrain, although it took Saudi Arabian troops to help repress the mostly Shiia uprising against the Sunni elite in that country. To a lesser extent it occurred in the 2009-10 election protests and the 2011-12 Arab Spring-inspired “Day of Rage” protests in Iran.

Another alternative outcome is a civil war where the challenged regime is forced into an armed struggle with rebel groups or in which the old regime is overthrown but new power contenders fight each other in order to establish their claim to being the new sovereign. The former is happening in Syria and the latter is happening in Libya.  Iraq is a variation on this, with foreign intervention rather than popular unrest being the gateway (if not cause) for post-authoritarian internecine violence marshalled along sectarian lines.

A third option is for the authoritarian regime being challenged to engage in what is known as a “passive revolution.” “Passive revolution” is where the regime elite adopts cosmetic changes and engages in reform-mongering to appease popular discontent but does not fundamentally alter the power elite or the institutional bases of their power.  One of the cosmetic changes is electioneering rather than democratisation (which involves more than elections and encompasses institutional, social and economic life). This, sadly, is what has happened in Tunisia after the fall of Zine El Abidine Ben Ali and in Egypt after the respective ousters of Hosni Mubarak and Mohamed Morsi. In both cases the power elite underpinning the ousted authoritarian leaders regrouped under an electoral facade that allowed them to cloak their rule in a mantle of “democratic” legitimacy. In Egypt’s case the scenario had a twist in that Morsi was allowed to become the first freely elected president in Egyptian history, but when his Muslim Brotherhood government pushed its Islamicist-backed constitutional project and Morsi granted himself unlimited executive powers not subject to judicial or parliamentary review, they were deposed in a military coup. The leader of the coup and then head of the Egyptian military, Abdel Fattah el-Sisi, is now president of Egypt.

However, for a passive revolution to work it must, along with continuing to selectively repress dissent, deliver goods otherwise not obtained by the discontented masses. Be it as a short term or longer term strategy, the passive revolutionary approach is more than political window dressing because it hinges on giving the appearance of progressive change by providing public goods and services, and material benefits, that previously were unavailable. Yet, in Egypt as well as Tunisia, none of that has occurred because of rampant corruption, lack of state capacity, and an absence of economic opportunity under the power elites that ruled before the regime changes and who continue to rule today. What has occurred is the resumption of repression of those who wish to push for a further and more substantive political opening.

This means that the root causes of popular discontent remain unaddressed, which makes the passive revolutionary approach inherently weak. It is akin to putting a sticking plaster on an arterial bleed–it may staunch some short term dissent but it cannot contain the surge of discontent over the long term.

But there is a twist to the story. It turns out that Tunisia has supplied the largest contingent of foreign fighters to the Islamic State. Egypt also has proved to be a fertile recruiting ground for jihadists, and Libya is overrun with them fighting to overthrow the central government in Tripoli. Why would alienated individuals in Tunisia and Egypt opt to join a foreign war rather than continue to fight for progressive political change at home?

I believe the answer is that those who choose to leave to fight for IS or al-Qaeda see the results of the Arab Spring for what they really are: a reassertion of the traditional status quo under different guise. Understanding the impossibility of affecting significant political, social and economic change at home, these disaffected fighters migrate to foreign conflicts in which the enemy is clear (be it the West, Israel, Iran or Shiia Islam in general) and in which their skills in the management of organised violence can be honed for future use at home should they survive combat. Should they not, they will have died for what they believe to be a good cause.

That is the crux of the “returning jihadi” problem. They pose no existential threat to the West or even stable authoritarian regimes (barring an overreaction by the state and society that makes it appear as if there is in fact a “war” between Islam as a whole and the non-Islamic world). They do not pose an existential threat to stable Muslim dominant societies such as Indonesia and Malaysia. But they do pose a potential existential threat to the passive revolutionary regimes in North Africa as well as in failing or failed states such as Yemen, Somalia and/or those in which civil war is occurring (to include Nigeria even if Boko Harum is comprised of indigenous fighters who for the most part have not traveled abroad).

That is why I see al-Qaeda  and the Islamic State as regional rather than global problems–they may have a world wide impact given the decentralised nature of terrorist tactics outside of the Middle East, but their real strategic impact stems from the existential threat they pose to the Middle East itself. After all, even if they use the US, the West, Israel and/or Iran as foils for their violent ambitions, al-Qaeda and IS have their eyes focused squarely on the Gulf petrolarchies as much if not more than they do on any other territorial and political objective.

In the end, it has been the failure of the Arab Spring to deliver on its theoretical promise and popular expectations for real change that has led to the rise of IS and the spreading wave of violent unrest throughout the Arab world. After a moment that promised a thawing of old political structures and the germination of new ideas about the relationship between state and society, the region has proven yet again to be barren ground for peaceful, progressive and lasting social change.

PS: Here is something I wrote in 2011 about Tunisia and other Middle Eastern transitions. Although I do not claim any particular expertise on the Middle East or Arab world, I think that by and large my observations of four years ago have stood the test of time.

Perhaps not yet a Cuba Libre, but an opening nevertheless.

datePosted on 14:55, December 19th, 2014 by Pablo

In a previous life one of the US government roles I played was as co-team leader of the OSD/JCS Cuba Task Force. That was a combined team of officials and officers from the US Office of the Secretary of Defense (OSD) and Joint Chiefs of Staff (JCS) tasked with exploring contingency scenarios for Cuba, including refugee flows (then ongoing) as well as possible civil unrest and regime transition scenarios in the wake of the withdrawal of Soviet aid to the island nation and the increasingly geriatric nature of its original leadership. My co-team leader was a Cuban American political appointee, with the idea being that my academic experience studying authoritarian regime transitions and knowledge of the Cuban approach to irregular conflict would be balanced by his sensitivity to the domestic political implications of  any moves we proposed to undertake.

Although I cannot reveal much of what we did, I can say a few things about the process that has now led to a normalisation of diplomatic relations between the US and Cuba.

First, almost everyone in the US government realised that the embargo was a failure. However, the Cuban lobby is on a par with the gun and Israel lobbies when it comes to single issue fixation and willingness to spend money for the cause. This made Cuba a thorny political problem for any US government trying to improve relations with it, as the usual suspects would (and still do) immediately hurl the “soft on communism” and “appeasing dictators” invective as part of their negative electoral campaigning. This placed the issue in the “too hard” basket as far as most politicians were concerned, especially given the myriad of other issues at play and the trade-offs they involved. As a foreign diplomat said in my presence when asked about the US approach to Cuba: “That is a domestic matter, not a diplomatic one.”

Secondly, from the 1980s to the present day, every former Chairman of the Joint Chiefs of Staff and the US Chamber of Commerce have repeatedly called for an end to the embargo and resumption of full diplomatic relations. One would have thought that the weight of conservative military leaders and the leading business organisation in the US would hold some sway, but in fact their views were trumped by the lobbying efforts described above. Episodic attempts have been made to launch US business initiatives in Cuba (for example, in agricultural machinery), but the legal and monetary costs of circumventing the embargo by using off-shore subsidiaries, etc. simply proved too much given the limited nature of the potential returns.

Third, as of the early 1990s the Castro brothers increasingly delegated authority to second generation leaders, who now have been replaced in large measure by third generation revolutionary cadres (people in their 40s and 50s). In fact, both the Cuban exile community as well as the revolutionary leadership have seen the physical decline of the so-called “dinosaurios” (dinosaurs) and their replacement with younger, often more moderate leaders who were not present during the revolution and who therefore do not all have personal scores to settle stemming from it. My co-team leader was second generation and not fuelled by the rabid thirst for revenge exhibited by many of his parent’s generation (some of whom I got the dubious pleasure of meeting). Now that second generation’s children are coming to the fore. This has opened the door for initiatives focused on normalising relations.

But the issue remains complex. The end of the Cold War and fall of the USSR actually reinforced the view in some US policy circles that an embargo could, given the withdrawal of Soviet aid to Cuba, bring the Castro regime to its knees.  On the other hand, the increase in non-US foreign investment in Cuba after the Cold War (mostly but not exclusively in tourism) was seen by some in the US as making the embargo counter-productive when it came to promoting US business interests in its near abroad. Overlying these views was a persistent belief that Cuba continued to logistically and intellectually support Marxist-Leninist guerrilla groups in Latin America (including those that drug trafficked) as well as rogue regimes such as North Korea, Libya, Syria and Iran (to say nothing of Nicaragua and Venezuela). As a result, foreign policy opinion in the US after the Cold War remained very divided on the question of what to do with Cuba given the embargo and rudimentary diplomatic relations.

Yet given the demographic changes mentioned earlier, the question about Cuba the last twenty years has mostly been one of political timing: when is the opportune moment to make the move towards restoring normality to the bilateral relationship? Conventional wisdom on US presidential politics states that only during second terms can presidents get away with bold foreign policy initiatives, and even then they have to be popular and presiding over a strong economy in order to do so (since voters tend to ignore foreign policy issues when their pockets and bellies are full). However, owing to the perverse ideological evolution of the Republican Party, only Democrats would even contemplate doing so after 1990, which meant that it was left to Clinton or Obama to be bold (recall that Nixon opened the relationship with China and Reagan encouraged glasnost and perestroika, even if both Republican presidents did so for self-interested reasons).

I have little doubt that Clinton would have normalised relations with Cuba in his second term if he had not been hamstrung by the Lewinsky scandal, which helped turn the Elian Gonzalez saga into a Republican battle cry (Elian Gonzalez was a little Cuban boy who washed up on US shores in a raft in which his mother died. After weeks of to- and fro-ing between the US government and exiled members of the boy’s family, he was forcibly repatriated to Cuba to live with his divorced father. Sensing that Clinton was wounded by the Starr investigation into Cigargate, the GOP turned the boy’s ordeal into an anti-communist political circus, which effectively ended the quiet efforts Clinton’s administration had initiated with an eye towards opening up the Cuban relationship).

Now it appears that Obama has seized the moment to undertake a little glasnost of his own, perhaps because he senses that he has little to lose given the disloyal nature of the opposition (which will rant and rail at anything he does), perhaps because the US economy is doing well enough for him to feel immune on some aspects of foreign policy even after the adverse results of the midterm elections, and perhaps because, like gay marriage and medical marijuana, the US public has simply changed its views on Cuba over the years.  In fact, it is likely a little bit of each, as the GOP and Fake News blowhards may not want to waste political capital on a dead issue that will gain the GOP no electoral traction. As it turns out, with the exception of some posturing clowns like Marco Rubio and the braying jackasses on conservative media outlets, the reaction from the political Right has been fairly muted.

It will be interesting to see what happens in the next few years. Back when I was dealing with Cuba, the word from their side was that everything was negotiable except for two pillars of the revolution: health and education. That is to say, the vaunted Cuban health and educational systems were sacrosanct and could not be touched in any post-Castro environment. Beyond that, market forces could dictate how Cuba would re-insert itself in the global economy. With an extremely literate, healthy and underemployed work force, it would seem that Cuba would be ideal for any number of value-added export commodity production ventures (textiles and pharmaceuticals have already become targets of foreign investor interest).

The other issue, left unresolved during my time working that beat, was the role of the Communist Party. It is clear that the Cuban political elite have been watching the transitions in the former socialist world, be it the USSR, China, Vietnam or Eastern Europe. They have also watched the experiments in indigenous socialism in Venezuela, Ecuador and Bolivia. It is pretty clear that they would prefer to do a China-style transition to state capitalism under one party rule.

The trouble with that preferred picture is that it is only a partial transition, with the political regime remaining largely the same while the economy changes. That may be possible in a huge country like China but is problematic in a small country like Cuba, especially when it is so proximate to a formerly adversarial super power and has a number of expatriates with ideas about Cuba’s future that do not include a dominant role for the Communist Party, much less its continued sole rule.

Thus the conundrum for the second and third generation Cuban Communist Party leadership is whether to embark on a sequential transition (first changing the economy then the political system, or, less likely, vice versa), or  to go all in and mount a simultaneous transition of the economic and political systems. From the standpoint of keeping things peaceful and orderly, the best hope scenario is a sequential transition in which economic change precedes political change. Opening Cuba for business will present a formidable challenge for the Communist Patry, and the social and cultural influences that will come with diplomatic normalisation and economic opening will be hard to contain, much less stop. So whether by design or by the forced pace of change, it is likely that the Cuban political system will open up as a result of the economic transition and its superstructural ramifications.

The key is for the Cuban political elite to realise that the Chinese transition model is not possible for them given the circumstances, and that the days of one party rule will either come to a natural end or be overturned by force. In that light the best thing to do is to prepare a timetable leading up to multiparty competitive elections somewhere down the road, with appropriate guarantees put in place to preserve key revolutionary gains and to safeguard the institutional position of entities like the Revolutionary Armed Forces (FAR).  That will take some doing, and could well take a fair bit of time given the current makeup of the Communist Party leadership (in which Fidelistas still hold significant influence along with Raulistas).

The question remains as to what will happen with the two pillars of the revolution in a market-driven economy. It also remains to be seen as to how Cuban society will respond to the introduction of full market logics on the island. Things like the elimination of food subsidies and introduction of merit-based employment criteria in and outside the public serve could prove painful for Cuban society. It could also lead to  criminal opportunism in what some observers have already characterized as an increasingly amoral and feral civil society no longer wedded to the revolutionary ethos of the original 26th of July movement. If one thinks of where Cuba is spatially located in relation to drug trafficking corridors, the downside possibilities should be obvious.

Even so, the resumption of full diplomatic relations is a welcome development and hopefully followed by a formal end to the US embargo (not a certain thing, given opposition by GOP majorities in both the Senate and the House of Representatives). There still will be many hard days ahead as Cuba comes to grip with its post-revolutionary future, but at least the range of potential outcomes will be expanded relative to those extant up until a few days ago. As for the US, it demonstrates that sometimes diplomatic face-saving on foreign policy is a waste of energy and the better self-interested choice is to admit mistakes and move on. As the old Korean saying goes: a rich uncle can afford to be generous.

Whatever its motivations, Uncle Sam just was.

 

Getting real about the NZDF mission in Iraq.

datePosted on 14:25, November 13th, 2014 by Pablo

When John Key insists that any New Zealand military contribution to the anti-Islamic State coalition will be “behind the wire” in non-combat training roles, he is following a script written by the senior partners in that coalition–the US, UK, Australia, Canada and Germany. The governments of all of these liberal democracies have sworn off ground combat troops while simultaneously sending air power and significant numbers of ground-based military “advisors” to attack the Islamic State forces directly from the air and help train the Iraqi Army to fight rather than run from the Islamicists on the ground. The US already has a brigade’s (3000 troops) worth of advisors in Iraq and has asked Australia to up its contribution from the 200 Special Forces already deployed there.  The UK, Canada, Germany, France and other European states are contributing special operators as well, but always in a ”training” rather than combat role.

There are reasons to believe that the definition of the mission as “non-combat” is specious at best and a deliberate misrepresentation at worst. Here is why.

Consider this: The Prime Minister has said that he might send the SAS to help guard the bases in which conventional NZDF advisors will help train the Iraqi Army. That is akin to using a Lamborghini  to haul rubbish to the local tip.

SAS personnel are highly skilled, extremely well trained and acutely specialised in operating in hostile theatres and behind enemy lines. They are a precious military resource that takes a long time to develop into hardened professional soldiers. It costs much more to produce an SAS trooper than it does the average infantry soldier, airman or naval rating. Standing them on guard duty squanders their talents, especially when conventional NZDF personnel are quite capable of standing sentry duty while deployed (as they did in Afghanistan during the decade-long deployment to the Provincial Reconstruction Team located in Bamiyan Province).

The last time the SAS was in a publicly acknowledge training role they were serving as mentors to the Afghan Crisis Response Unit, the elite counter-terrorism squad in that country. In their capacity as “mentors” the SAS wound up leading the CRU into several battles and lost two troopers as a result. Even in the face of those deaths the National government insisted that the SAS was not engaged in combat, so perhaps it has a different understanding of kinetic environments than do most people–most importantly those who have felt the impact of hot lead during “non combat” operations.

Military deployments of any sort require time and preparation, a process that takes months. Even rapid response units like the SAS need time to get ready to deploy, and to do so they need to pre-position assets on the way and in the theater to which they are going. Yet given the circumstances, the fight against the Islamic State is an immediate concern, one that the US and other coalition partners say needs a response in a few weeks, not months.

It is not credible to assert that sending a few military planners over to Iraq twelve days ago will allow them to assess within a few weeks what the NZDF contribution should be—unless that has already been decided and it is the logistics of the deployment that are being worked out. Yet the Prime Minister says that he will wait until their return to decide what the NZDF role will be. That seems to be stretching the truth.

Beyond the possibility that Mr. Key is unaware of the role of different military units and the preparations required to deploy them abroad, the fiction of a non-combat ground role for all coalition partners is made evident by where they are going. Two thirds of Iraq and all of Syria are active conflict zones. This includes most of the North and Western provinces of Iraq well as the outskirts of Baghdad. The Islamic State continues to mount offensive operations throughout the North and West of Iraq, and controls Mosul, Kirkuk (including its oil fields) and Ramadi (the capital of Anbar Province).  Islamic State forces are laying siege to Fallujah, the scene of the most intense battle between US forces and Sunni militias during the Iraq occupation.  Although they have been slowed by coalition air strikes and suffered a few tactical defeats, the larger picture is that at present the Islamic State has momentum and is nowhere close to retreat in the areas that it controls.

That means that any coalition ground forces sent to train the Iraqi military will be based in active conflict zones and become primary targets wherever they are located. Knowing this, coalition military commanders operate with the expectation of being attacked. Coalition personnel are and will be armed at all times and confined to base or will have their freedom of movement greatly restricted while in theatre. They will travel in armed convoys or by air when moving between locations. Leave will be minimal.

These are the operational rules governing troop deployments in active war zones.

The only way to ease the combat conditions in which New Zealand troops will operate is to prepare and launch counter-offensives against the Islamic State that forces it to retreat from territory it now occupies or has infiltrated. That is a big task and not a short-term affair. Since the Iraqi Army has shown appalling lack of discipline and courage in the face of the Islamic State offensive, it is wishful to think that sending in a few thousand advisors and giving it a few weeks training is going to turn the tide. Instead, the up skilling of the Iraqi Army will be a protracted effort and will require coalition military leadership under fire. Even that does not guarantee that Iraqi troops will be willing to fight.

The reason that the Western liberal democracies are holding to the fiction of non-combat roles is that their respective electorates are weary of war and generally opposed to more of it. This is, after all, a fight amongst Sunni Arabs first and foremost, and then Sunni versus Shiia in the second instance. Although the weakness of Assad’s Alawite regime in Syria gave them their strategic opportunity, the Islamic State’s primary targets are the pro-Western Sunni Arab oligarchies. Its second target is Persian Iran and its Shiia co-religionists and proxies in the Arab world (including the Assad regime). The West (and Israel) are convenient foils for its ambitions, as the Western media plays up the atrocities perpetrated against Europeans and North Americans and the involvement of Western extremists in committing them. This allows the Islamic State to draw the West into the fight, thereby making the conflict more inter-religious and civilisational than it really is.

Although primordial in nature and capable of spawning small cell and lone-wolf attacks in the West, the Islamic State is a regional rather than global threat. It cannot project sustained force and control territory outside of Sunni-inhabited terrain in Syria and Iraq, and will have trouble defeating established professional militaries such as those of Egypt, Jordan or Turkey should it try to push further afield. It has not been able to make significant advances in Shiia and Kurdish-controlled territory. Yet media coverage and the rush of Western governments to emphasize the threat of Islamic State-inspired home grown jihadis and returning foreign fighters have exaggerated its impact.

Even so, New Zealand has principled and pragmatic reasons to get involved in the anti-Islamic State fight. The anti-Islamic State coalition includes all of New Zealand’s Middle Eastern trade partners as well as its closest security and diplomatic allies. The responsibility to protect vulnerable populations such as the Iraqi Hazaris is a matter of international principle. New Zealand will soon sit on the UN Security Council. In light of these realities it can do nothing other than join the conflict even if it is not directly threatened by the Islamic State.

Now that New Zealand has committed to participate in the military coalition against the Islamic State, it is best for the government to be forthright about the true nature of the mission and the real threats involved. Anything less is an insult to both the intelligence of the pubic as well as the valor of those in uniform who are about to join the fight on its behalf.

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