Tag: Foreign policy/affairs

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Trading with the Mullahs

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.

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Is there a Kiwi word for “mission creep?”

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.

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Some thoughts on Syrian refugees.

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.

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Go The Donald!

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!

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Blog Link: Understanding institutional lag in foreign policy.

I have been working on a long term project that focuses on intelligence networks in the South Pacific. A number of off-shoots have stemmed from the central concern (mapping intelligence communities and alliances), including strands dedicated to the NZ intelligence community and the problems of threat assessments in general. In this piece I outline three undervalued concepts in the study of foreign policy and offer some observations as to the causes of Western intelligence failures to adequately adjust, forecast and assess the evolving post Cold War threat environment.

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Loansharking Greece and odious debt.

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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Considering the Implausible.

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.

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Crowdsourcing opportunity: The 5th Eye.

I had the opportunity some time go to be interviewed by the one of the director/producers of the documentary “Operation 8” for a forthcoming film about the GCSB and its role in the 5 Eyes signal intelligence network. These good people are part of the grassroots network that attempts to keep those in power accountable to the folk they supposedly serve, and while I may not agree with them on a number of issues I have no doubts about their sincerity, commitment and interest in the common good.

In order to finish the new documentary, titled “The 5th Eye,”  there is a crowdsourcing effort underway that is well worth supporting. The details are here. Besides information about donating, there is a short video trailer included on the page as well as updates and other valuable information. By all means check it out and help this film on its way to fruition.

If you support truly independent film-making in Aotearoa, this is an excellent opportunity to not only talk the talk, but to walk the walk.

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Guest Post by Kate: Human Rights are Universal.

On returning this week from his trade mission in the Middle East, John Key stated on Breakfast TV that countries such as Saudi Arabia have views of human rights that are “different” from our own, justifying the government’s decision to exclude human rights issues from any trade agreement that New Zealand is able to secure in the region. That is putting it rather mildly. Saudi Arabia has one of the consistently worst human records in the world. While the mainstream media is quick to focus in on a discriminatory gender regime that bans women from driving and requires them to be covered from head-to-toe, such problems pale in comparison to the treatment of the foreign workers who make up at least a third of the country’s population, or the torture, imprisonment, and death sentences handed down to Christian converts, human rights workers, activists, journalists, and other critics of the ruling elite. Unlike the distinctly Saudi approach to gender relations, it is difficult to see how the Saudis themselves could seriously attempt to justify such severe human rights abuses in religious or cultural terms.

What is especially surprising about the Prime Minister’s statement is that, if he genuinely believes that Saudi Arabian understandings of human rights are “different” rather than simply wrong, this would put him far over on the fringes of moral philosophy into the cultural relativist camp. This is a space occupied only by academic extremists who have followed the logics of social constructionism to their absolute and final conclusions (i.e. there is no such thing as truth, which makes it rather hard to speak truth to power as many of these theorists seem to want to do), or a small minority on the extreme right, which proposes that liberal values can only ever be achieved in supposedly superior Western cultures. Sticking to this line of argument means that anything whatsoever can be justified in cultural terms to the point where, essentially, nothing practised by any society at any point in history can be criticised at all. What strange company for a Mr. Moderate who usually tries to avoid coming to any conclusions that could undermine his apparently undying popularity to be found in.

Furthermore, this is not the generally shared understanding most reasonable people have of these issues. In fact, New Zealand, along with just about every other country in the world, is a signatory to the Universal Declaration of Human Rights, adopted in the wake of the horrors of World War Two and aimed at establishing a basic set of rights and liberties that countries should do their very best to uphold. Least it isn’t clear from the title of the Declaration, most of the world believes that human rights are universal, Mr. Key, not particular.

Saudi Arabia, by the way, does not accept these principles, rejecting the Declaration on the grounds that guaranteeing freedom of religion would be detrimental to the country’s own traditions, and that its own version of Islamic law supposedly upholds a higher threshold of human rights than this or any other international agreement. By far the more important point, however, is that New Zealand is itself a signatory to the Universal Declaration, which not only obligates us to ensuring that we uphold basic human rights within our own borders, but also to promote human rights abroad.

Yet when it comes to trade agreements, the explicit approach adopted by both recent centre-right and centre-left governments has been to exclude human rights from the negotiating agenda. This puts us at odds with the other members of the international “club” we belong to, to use another of the Prime Minister’s terms. Based on academic research, the World Trade Organization states that about 75 percent of contemporary trade agreements include human rights clauses, whether binding or non-binding, driven largely by the human rights promotion agenda of Canada, the European Union, and yes, the United States. It obviously cannot be assumed that these clauses always lead to substantive improvements in human rights outcomes, but they are a start.

The real reason behind both National and Labour’s exclusion of human rights concerns from the negotiation of trade deals is two-fold. Firstly, to state the obvious, New Zealand is very small in global terms, and thus cannot exercise much leverage over larger countries in the Asia and the Middle East. When countries are dependent on us for aid, absolutely do we try to influence human rights, most notably in the Pacific (which also occasionally invokes issues of culture and human rights that I don’t intend to get into here). Realistically, if we are to incorporate human rights concerns into our trade relations framework, this might more successful if done through multilateral arrangements—yet is it difficult to see human rights becoming a major concern of the kind of multilateral trade deals that New Zealand has wedded itself to, such as the Trans Pacific Partnership.

Secondly, the bipartisan approach reveals not only a deep ideological commitment to free trade that is not necessarily shared by other developed countries, in which the influence of large protectionist interest groups often moderates that stance, but a rather naïve belief that trade deals and trade relationships can be separated from everything else. Despite good empirical and historical evidence that trade cannot be viewed independently from other aspects of foreign policy, we do this with regard to our security relations, in which government officials cannot see the long-term problem emerging out of the contradiction between an Asia-oriented trade policy and a Five Eyes-oriented security one, and we also apparently do it when it comes to more noble causes.

So herein lies the hypocrisy not only of our current leadership, but all those sectors of our community who stress trade above all other national goals. We tend to have a rather rosy view of our country not only as an independent voice in the international arena, but as a progressive force in the big wide world. We ban nuclear ships and we save whales. We were the first to give women the vote and at least some of protested against the Springbok Tour. We think we deserve a seat on the Security Council because we are nice (alternatively, to carry on the theme, there are those who no doubt think it will help us out on the trade front). Not caring—or pretending not to care— about the worst instances of human rights abuses, however, not only threatens to undermine this aspect of our national identity, but undermines both our reputation and potential as a global player that punches above our weight on moral issues.

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Spy Fatigue.

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.