Saturday Morning Musings -times of turmoil

The last few years have been truly tumultuous. Drought was followed by fire and then covid and floods. Internationally, growing tensions with China were followed by the Ukraine War. The global rules based order established after the Second World War has progressively broken down. The integrated globalised trading and financial system that helped drive world economic growth lifting millions out of poverty has been fractured by the combination of covid restrictions with political and economic tensions including sanctions. The economic policy framework that emerged during the 1970s in many countries including Australia with its emphasis on freer trade, reduced government, deregulation and privatisation has been swept away as governments responded to global changes and to the need to respond at domestic level to the damage done by the covid epidemic and associated restrictions. And now we have the apparent re-emergence of 1970s style stagflation, the phenomenon that helped destroy the old concept of the welfare state.

In all this, Australia has been relatively lucky as it was during the Global Financial Crisis and for somewhat similar reasons. China's wolf diplomacy with its restrictions on Australian trade has had limited economic impact in part because other markets emerged, more because China itself has continued large scale purchases of iron ore. While our education exports have been badly hit by covid restrictions and by clumsy government policy responses, these losses have been offset by booming energy sales including coal. Our primary products have benefited from higher prices and from increased output as the big dry ended. While some shortages have emerged in supermarkets, while rising food prices have placed strains on household budgets,  Australia has been insulated from the food shortages appearing in some other parts of the world. While sometimes clumsy, Australian Government(s) policy responses have been generally effective in managing the rolling crises. 

As a policy analyst, I find it difficult to  determine the relative longer term importance of the changes that have been taking place. Like many Australians, I am a little shell-shocked by the pace of change, 

Each crisis has had different interacting elements that were seen as important at the time but were then somewhat overtaken by subsequent events. China, the drought, fires, covid, floods and the war in Ukraine were all dramatic events attracting saturation hour by hour, even minute by minute, coverage before being overtaken by the next drama. And then below the main headlines other important events were occurring that were effectively swamped, ignored. In all this, I think that we can say that a new world is emerging although the details are still unclear.      

Setting myself a challenge

I think that I have something like six part completed posts written over the last two months. I know that I should have finished them but events - personal and external - intervened. 

This morning in a an interview with the ABC's Fran Kelly, Federal Communications Minister Paul Fletcher made the point that the business of Government has to go on regardless of current controversies. I immediately said yes!

Like many Australians, I am disgusted by some of the allegations now coming out. Like many older males, events over the last few years have caused me to reflect on my own past. And yet I am very conscious and indeed confused about present change processes, some of which threaten this country's future.  

I have tried writing very short posts focused on one issue but find myself distracted.  I wonder if I can change this? We will see!            

Trying to understand foreign policy in a Trumpian and febrile environment

To say that I find President Trump unsettling is an understatement. It's not just what he does, but how he does it.

Since coming to office, he has launched trade wars that are now dragging the global economy down. He has launched a detente with North Korea whose effect appears to have been an entrenchment of the regime without any reduction in its arms program. He has begun and then partially withdrawn from attempts to bring peace to Afghanistan whose primary effect to this point has been a strengthening of the position of the Taliban. He announced that the US would develop a new circuit breaking deal between the Israelis and Palestinians while taking steps that would seem to preclude any such deal. He withdrew the US from the deal with Iran triggering a new round of sanctions and uncertainties. Now President Trump appears to have triggered the long planned invasion by Turkey of parts of Syria designed to break the power of the Kurds.

These various moves have taken place against a backdrop of a rapidly changing international scene and have added to the pace and uncertainty associated with those changes. They have been delivered with a mixture of bluster and blandishment expressed through tweets that I sometimes feel have been composed by a lonely man sitting alone at night seeking to establish relevance and satisfaction through the artificial sugar hits that come from twitter audience and responses. Others have responded, making twitter the dominant news mechanism of this new age. Who would have thought?

Millions of words have been written analysing the man, his policies and actions. I don't have a lot to add here, especially on immediate events  I agree that his approach is transactional. I agree that he has delivered on things he promised during his election campaign. I agree that US domestic political issues including the Muller Inquiry and the impeachment moves play into his responses. To my mind, none of this matters. We just have to wait it out.

The current international scene is as uncertain as I have seen it in my life time. To a degree at least, Europe and the UK are paralysed over the UK's departure from the EU as well as political divides within the UK and EU countries. Relations with Russia are uncertain as President Putin continues to push his own agenda. Fighting continues in the Ukraine.

The Middle East can only be described as a mess with both Syria and Yemen humanitarian disasters. Further west, war continues in Afghanistan, while the sub-continent is tense following Indian actions in Kashmir. China continues its expansion despite US trade actions, has become more authoritarian, is dealing with internal ethnic tensions and faces problems in Hong Kong and potentially Taiwan. South Korea and Japan, two key US allies, are at each other's throats.

Without going further, this simple list indicates the scale of global problems and uncertainties. Within this mix, President Trump has become a random wild card. As I said earlier, it's not just what he does, but also the way he does it.

I suppose that I could make guesses as to what might happen, but with so many cards in play it's perhaps better to wait on events, It must be creating nightmares for the planners and policy advisers in Canberra and other capitals.

From an Australian perspective, this is a time for caution. It is not clear to me that Australian Prime Minister Morrison is capable of exercising the caution and subtlety required to work through the shoal waters we face. I don't have a really solid evidence base to support this conclusion. It is based on his US trip, on his attacks on globalism, his arguments for the reshaping of the trade order, some of his responses to China.

To a degree, the Government seems locked in a time warp still driven by concepts such as the "war on terror", the need to propitiate and manage hard right ideas within the Liberal Party as well as sometimes xenophobic fears within the Australian community driven in part by the Government's own previous rhetoric, fears shared by those on the left as well as the right.

Managing all this requires a clear articulation based on a combination of principles and pragmatism, as well as the capacity not to say things, something that is very hard in Australia's sometimes febrile    political and media environment. It's not easy.

Postscript 13 October

In  a comment kvd wrote:

"Judges 15:16
Twitter is Trump's "jawbone" - in more than one way."

You will find the reference here. I had to laugh.

The BBC's Anthony Zurcher had a useful summary of the apparent confusion of the US position on the Kurds and Rurkey over the last week. Mr Trump's suggestion that he might mediate struck me (and I suspect the Turkish President) as very odd. Meantime, the roller-coaster continues with President Trump proclaiming that a phase one deal had been agreed with China on the trade war. We will have to wait and see what this actually means. 

 

Threads - Khashoggi murder, Wentworth by-election

It's been an interesting if chaotic few weeks in news terms, one that has quite out-run my ability to say anything useful. I don't like just reporting or joining in the often breathless commentary that passes for analysis in Australia and elsewhere for that matter. I write to clarify my own views and, hopefully, add some value to the public discussion. Because I have been writing for such a long time, I also like checking back to see what I have said before, to measure what I said then against later events. All this takes time, something that is in short supply given my focus on the need to draw some form of line under some of my historical research.

Against this background, this morning's short muse simply points to a few things that I think are important within the political swirl. Here the brutal murder of Saudi journalist Jamal Khashoggi provides a useful entry point.

Khashoggi Murder

I watched this story break on the news feeds with bemusement. It was like something out of a bad spy thriller. I took the initial leaks from the Turkish side with a high degree of caution, although it now seems clear that they were actually a fairly accurate description of what happened. The murder came at a somewhat chaotic time in Middle Eastern politics. 

Under the influence of Crown Prince Mohammed bin Salman, Saudi Arabia had adopted an activist foreign policy. This included the intervention in Yemen and the attempt to isolate Qatar. In Turkey, President Recep Tayyip Erdogan had taken actions following the coup attempt to assert his authority in ways that were widely seen as undemocratic. Turkey was also actively engaged in Syria, working in a sometimes uneasy relationship with Russia. 

Beyond the Middle East, President Trump had decided to move the US Embassy in Israel to Jerusalem and had withdrawn from the nuclear deal with Iran. So complexities piled on complexities. 

The murder of Mr Khashoggi appears to have been carried out for domestic reasons, but threw a major curve ball into the broader equation. In media terms, it has "rehabilitated" President Erdogan in ways that I had not expected. It has undermined Saudi involvement in Yemen, as well as the campaign against Qatar. It has also affected President Trump's approach to to the Middle East since the President is dependent in some ways upon the Saudis, among other things,  to make the Iranian sanctions, including those just announced, effective. 

I am moderately familiar with Middle Eastern history and politics, but have no idea how all this will work out. I have no basis for making a sensible judgement. However, from a narrow Australian perspective, I think two things are important. 

The first is the extent to which events are undermining US authority, an authority which has been central to Australian foreign policy. By authority I do not mean moral authority, although that's not insignificant. Rather, I am thinking of the capacity of the US to enforce its authority through global structures that are being weakened by its own actions.

Consider sanctions as an example. US Authority here depends upon its central position in global payments, a position that allows it to punish non-compliance. This position remains powerful as evidenced by the problems created for the EU which does not agree with the US position on Iran. However, US policy has created powerful incentives to develop new structures and processes that by-pass the US dominated payments system.

This type of process takes time. Looking back over some of my writing, I have sometimes over-estimated the pace of change, underestimated the stickiness in existing systems, underestimated the way extend to which other shocks can affect the change process. I had not expected, for example, that China would adopt such an aggressive foreign policy. To my mind, this has reduced China's ability to position itself at the centre of the global economic order, Belt and Road notwithstanding. However, if we take a ten year time horizon, it's not hard to see how new payment structures might emerge.              

These changes are important to Australia at two levels. As a relatively small rich country, we depend upon an open global trade and economic order. As a US ally, we are affected by changes that affect US power and authority. This brings me to my second point.

The Middle East is important to Australia, but it is not a core strategic concern. It is also not an area where we have or can have much strategic influence. For both reasons, it pays Australia to keep a lower profile. This segues neatly into the Wentworth by-election.

The Wentworth By-election

The Wentworth by-election was held on Saturday 20 October 2018 to select a replacement MP for Malcolm Turnbull who had resigned from Parliament for his loss of the PM role. It was seen as important because a loss would reduce the Government to a minority position in the House of Representatives, although this did not mean loss of Government given the number of cross-benchers, members not belonging to either Government or Opposition. The election was important, too, as a first test for new Prime Minister Morrison after the turmoil associated with Mr Turnbull's removal from power.

For the benefit of those outside Sydney, Wentworth covers the Sydney eastern suburbs that lie along the south shores of Sydney Harbour. All of Australia's electoral divisions have their own special features. In Wentworth's case it covers an area that is traditionally wealthy and conservative. It also has a relatively high proportion of Jewish voters, from memory around 13%.

The seat has been presented as blue ribbon Liberal. That's not quite true, although it is true that Labor has never won it.

Wentworth has been undergoing basic change along two dimensions, size and composition.

The number of Federal electorates is relatively fixed. Each seat must have a an equivalent number of electors within a defined bound, with boundaries adjusted at regular intervals in light of population change. In rural areas facing slow or declining population growth the outcome has been a massive expansion in the geographic size of electorates. These changes are less acute in urban areas, but even there boundaries have tended to expand while there have been constant boundary variations  Wentworth remains a geographically small electorate, the second smallest in the Federal Parliament, but it has added and sometimes subtracted areas with history and composition different from the original core.

The composition of the electorate has also been greatly affected by social, economic and demographic change. Its location close to the city, its proximity to beaches and parks, has attracted young professionals, many of whom rent the growing number of apartments; some 48% of the electorate now rents. For at least the last three decades, the seat has been seen as socially progressive while still conservative on economic issues. However, there has been something of a divide between the inner core of exclusive older suburbs and the surrounding areas that have moved in and out of the electorate. As we shall see in a moment, this division was reflected in the latest vote.

For those who are interested, Antony Green's overview of the seat provides more information on boundaries and composition of the electorate, while Wikipedia provides an overview of the vote in the seat since federation.

Malcolm Turnbull won the seat in 2004 after a bitter pre-selection battle with the sitting Liberal Member Peter King. There were concerns at the time about expansion in the Green vote. Mr King was seen as too conservative, while Mr Turnbull was a high profile candidate who combined wealth and corporate success with more progressive attitudes seen as better attuned to the majority view in Wentworth. Mr Turnbull won the seat with a 55.48% two party preferred vote, down from the 57.86% recorded by Mr King at the previous election.

Again for the benefit of international readers, many Australian jurisdictions operate a preferential vote system in which you vote 1 for your first preference and then number the other candidates in order of preference. Should no candidate receive a majority on the primary vote, the second preferences of the other candidates are distributed starting with the candidate with the lowest number of votes who is then eliminated. The process continues until a candidate achieves a a majority.

The term two part preferred, 2pp or TPP, is used to describe the vote between the top two candidates after distribution of preferences. While preferences are not formally distributed where a candidate achieves a majority on the primary vote, it has become practice to calculate the 2PP figure even in these cases.

In his first election with former member Peter King running as an independent, Mr Turnbull achieved 41.79% of the primary vote, 55.48% in 2PP terms. By the 2016 election, Mr Turnbull had increased his primary vote to 62.26%, his 2PP vote to 67.5%, making this a very safe Liberal seat. The question then became whether or not the dumping of Mr Turnbull as PM and his sudden resignation might change the equation.

A large field of candidates nominated, of which the four main ones were Dave Sharma (Liberal), Kerryn Phelps (Independent), Tim Murray (Labor) and Dominic Wy Kanak (Greens).

The Liberal party preselection campaign had been a little messy. It coincided with allegations of bullying and sexist discrimination in Federal Parliament. There were arguments that the Liberal party should endorse a woman, with the lead candidate for Liberal preselection withdrawing on the grounds that the Party should do just that. This opened the way for Mr Sharma, a former diplomat and ambassador to Israel, to win the nomination with Mr Turnbull's apparent endorsement.

Labor's Tim Murray, already preselected, began campaigning early and seemed to be attracting support if the enthusiasm of his campaign workers, including youngest. is any guide. The decision of Kerryn Phelps to run as an independent changed the equation. Dr Phelps is a former AMA president, a well known local doctor and a councilor of the City of Sydney. Phelps is also married to Jackie Stricker, a former primary school teacher, converted to Judaism after her marriage and is a well known campaigner for gay rights. With her nomination, the real contest became Sharma v Phelps. To a degree Labor and especially the Greens ran dead to maximize the chances of a Phelps victory. Both lost votes as a consequence.

The Liberals had a difficult and sometimes chaotic campaign in which the popular fault lines in Australian politics were clearly on display.

The environment is an important issue in Wentworth. Having just rejected Mr Turnbull's National Energy Guarantee, the Government went into the by-election without a really coherent environmental narrative. Difficulties here were compounded later in the campaign when Mr Turnbull's son entered the campaign to argue that the Liberal Party candidate must be defeated to deliver an environmental message to the Government. With Mr Turnbull refusing to be involved in the election on the grounds that he had left Parliament, this gathered a lot of media attention.

The campaign began against a backdrop of allegations about bullying and discrimination against women in the Federal Parliament. Then someone leaked the recommendations of the Ruddock inquiry into  the adequacy of legislative protection for religious freedom. This ignited a debate about existing provisions that might allow discrimination against gay students and teachers. The Government tried to hose this down, but this is another Wentworth hot button issue.

Then came the fiasco of the Government's apparent support subsequently withdrawn for Senator Hanson's it's ok to be white motion. At the very least, this suggested continued disorganisation within the Government at a time when it was trying to present a degree of coherence. To compound the problem further, the papers started carrying stories of a possible leadership challenge within the National Party apparently triggered by an interview with New England MP Barnaby Joyce in which he said that he wasn't seeking to regain the leadership but would accept it if he was drafted. While there is some dissatisfaction with Michael McCormack's leadership, I couldn't see a challenge as a real possibility and indeed the Party lined up behind the leader. However, the coverage certainly wasn't helpful to the Liberal campaign in Wentworth.  

Prime Minister Morrison then threw another curled ball, announcing that at the suggestion of Dave Sharma the Government was considering shifting the Australian embassy to Jerusalem. This was in fact part of a broader statement including apparent continuing recognition of East Jerusalem as capital of an independent Palestinian state and needs to be seen in that context, but the timing and the reference suggested an attempt to woo the Jewish vote. If so, that was a serious error of judgement at several levels. Wentworth includes many Liberal Jews who do not necessarily support the current Israeli Government position as well as many centre or centre left voters sympathetic to the Palestinian position.

With apparent defeat looming, the Liberals including former PM John Howard made last minute appeals to voters to vote for Mr Sharma to preserve stability in Government. You can imagine how that went down given the circumstances that had triggered the by-election in the first place!  It also exposed the Government to subsequent attack that since it had lost the by-election it could not, on its own words, guarantee stable government and should therefore call a general election.

By-election Results and Aftermath

Counting on election night quickly showed a strong swing against the Liberal Party with its vote down 24% at one stage to below 40%. This led ABC election analyst Antony Green to call the seat for Dr Phelps around 7.14pm. I went to bed reasonably early The results seemed quite clear-cut and I had become tired of talking heads pontificating about the scale of the loss, what a disaster it was for the Government and the reasons for the defeat.

I woke to similar commentary in the morning. Blame shifting had also begun, with some coalition MPs blaming the loss on Mr Turnbull's failure to campaign. I thought that was a bit rich in the circumstances. However, in the count itself, things were not quite what they seemed. Towards the end of the count on Saturday, counting of postal votes strongly favoured Mr Sharma. By Sunday night, there was an outside chance that Mr Sharma might still win. In the end, Dr Phelps won with 51.22% of the vote after preferences compared to 48.79% for Mr Sharma, a margin of 1.849 votes. In the primary vote, Mr Sharma received 43.08%  of the vote, down 19.10%, compared to Dr Phelp's 29.19%.

Looking at the full numbers, a few things stand out.

The first is the relative narrowness of Dr Phelp's final victory. If only 925 additional voters had voted Liberal 1 or Liberal 2 Mr Sharma would have won. I bolded the or because in this by-election with its likely protest vote against the dumping of Mr Turnbull, the Liberals needed disaffected protesting Liberals to make the part number 2, thus registering a protest vote while ensuring that at least some of those votes still flowed to Mr Sharma once preferences were distributed. The decision of Labor and Greens to run dead was, I think, designed in part to prevent this.

The second thing to stand out is the divided nature of the electorate, with a relative divide between the Northern harbour suburbs (Sharma) and the booths in the western and southern portions of the electorate (Phelps) reflecting their different demographics.

The third thing to stand out is the way the postal votes favoured Mr Sharma. These were generally cast earlier. There seems to have been a shift to Dr Phelps in the last week or ten days of the campaign.

I am left with the strong impression that the Liberals could have won Wentworth despite external factors, including Mr Turnbull's sacking. They failed because they ran a bad campaign, especially in the last week or ten days. Instead of keeping their campaign focused on positive issues, economic management and local needs, they became distracted. The appeal to voters to vote for Mr Sharma, the Jerusalem announcement, smacked of a certain level of desperation. I think that this failure is the real lesson from Wentworth.

Postscript

On his blog Happy Antipodean, Matthew da Silva had a rather nice piece What motivates Malcolm Turnbull?  I have included it here because of, among other things, its description of Sydney's Eastern Suburbs.    

Jack Ryan and Tom Clancy - interpreting Donald Trump revisited

It's been a while since I said anything about President Trump. There seemed to be little sensible that I might say that would add value to such a polarised discussion.

Looking back over the little I have written, in  Jack Ryan and Tom Clancy - interpreting Donald Trump (18 January 2018)  I suggested that the writing of Tom Clancy might be used as a framework to interpret President Trump. I said:

I am not equating Jack Ryan with Donald Trump. They are very different people. However, Clancy did capture accurately certain aspects of US right wing populist thinking (I am using that phrase in a descriptive not pejorative sense) including distrust of those within the Beltway and of career politicians, a belief in bureaucratic inefficiency, a belief in the people, a belief in US military power and a somewhat mercantilist view of trade.

I also noted that in bringing about change, President Ryan has to deal with a media and political establishment that constantly tried to interpret his actions against existing models, paradigms, of thought and action. I thought that this was important, for that's what people were trying to do, judge Mr Trump against existing models that didn't quite fit. I thought that we would have to watch and wait to see what it all meant. I really didn't know! At the end of this post, you will find the new President's inaugural speech. That's worth re-reading, for it does provide a framework for President Trump's subsequent actions.

Clancy wrote rattling good yarns and I still enjoy them. However, I always thought that there was a certain naivety in his view of the world, one that became more pronounced with time. This included a belief in and fascination with the application of technology in a military environment allowing the US to win wars despite an over-stretched military. .

Jack Ryan is not Donald Trump. In Executive Orders (1996), Ryan becomes President unexpectedly after a Japanese pilot crashes his airliner into the Capitol building during a special joint sitting killing nearly all members of the Congress, the Cabinet and the Supreme Court. That's cleaning the swamp on a large scale.

Ryan inherited a fully functioning White House staff. This included Arnold van Damm as a Chief of Staff, a key figure with extensive political and Washington experience who guided the President through those first turbulent days. Ryan also picked highly competent replacement figures, especially in Treasury and Defence. They may be stereotypical of that belief that private sector figures are best, their attitudes may reflect prevailing orthodoxy about the inefficiencies of the public sector,the need for tax reform and redeployment of Defence spend, but they were highly competent, able to manage the re-emerging Congress without involving the President. In turn, Ryan gave them a wide degree of freedom.

Unlike Ryan, President Trump came to office after a very messy election campaign. Unlike Ryan, he faced a fully functioning if somewhat dysfunctional Congress. Unlike Ryan, he had to create his office from scratch. President Trump also faced a problem in that he did not have a lot of real depth to draw from in setting up that office and in making Executive appointments.

Twelve days after that first post I wrote Monday Forum - the administrative competence of the Trump Administration.That post began:

I think that the thing that most surprised me about President Trump's Executive Order "PROTECTING THE NATION FROM FOREIGN TERRORIST ENTRY INTO THE UNITED STATES" was the apparent administrative incompetence involved, something that may be becoming a feature of the new US Administration at this point in its life.          

This was an initial analytical, not political; observation. I said something very similar about new Australian Prime Minister Kevin Rudd very early.The weaknesses and features displayed in the immediate period after his election would ultimately bring Mr Rudd down.

It will be twelve months Saturday since President Trump's inauguration. It's been a roller-coaster ride. If we look at a policy level, I think that President Trump has broadly tried to stay true to his original campaign pledges sensible or not. But then we have twitter and off-the-cuff Trump. Not only has this created uncertainty, but it has continued an almost existential debate that began prior to Mr Trump's election, one in which different world views collide in ways that may not have a lot to do with what is actually happening.

One unfortunate result has been a coarsening of the political rhetoric on both left and right as they talk past each other and try to relate beyond.. I listened to an example of that this morning from Australian Trade Minister Steven Ciobo.

Australia is engaged in a trade dispute with Canada over wine. In describing this this morning on ABC Radio National, Minister Ciobo used Trumpian language about Australian jobs and Australian first. I'm not sure he used exactly that last phrase, but that was the message.

This is a trade dispute. Australia believes, correctly to my mind, that Canadian restrictions are reducing importation of Australian wine in a way that is in breach of World Trade Organisation (WTO) agreements intended to prevent restrictions on global trade.. Australia is therefore taking action against Canada under the WTO rules  to try to reduce the perceived barriers.

The way that Minister Ciobo phrases it plays into the current trope about the dangers of globalisation and free trade and the need for countries to to adopt them first attitudes regardless of the broader consequences. This began on the left and has now spread to the right and to the left and right populist parties. To my mind, it is one of the most dangerous sides of Trumpism.

This cartoon presents the results of the me-first policies that helped create the Great Depression. I could not find the Low cartoon on autarchy that shows each country eating their own legs in the interests of self sufficiency. 

At present, my train reading is W K Hancock's Argument of Empire (Penguin Books, 1943). Keith Hancock is arguably Australia's greatest historian. I will write about this book properly later in my train reading series. For the moment, the book reminded me of the Great Depression and its aftermath.

In 1930,  The US Congress passed the Smoot–Hawley Tariff Act. This was an America first measure designed to protect American jobs at a time of global downturn. It lead to other countries adopting or increasing protectionist measures. The result was disaster, a collapse in world trade, that turned a depression into the Great Depression. As the results were recognised, countries began to reduce tariffs and sign free trade agreements, a process brought to a sudden end by the onset of war. However, the lessons learned led to a new series of agreements including Bretton Woods (1944) and the General Agreement on Tariff and Trade (1947) that created the structure for a new rules based economic order.

This structure laid the base for economic expansion in the Post War period, but is now under severe threat. How President Trump responds on trade issues is one of the two critical Trumpian things I will be watching in 2018.

The second can best be described as insecurity. For much of the time since the Second World War, Australia has operated within a relatively stable international relations and security framework. The American Alliance has been central to that. New developments such as the rise of China posed a challenge to that framework, but few Australians (me included) expected a situation where instability and uncertainty in US foreign policy itself would become a significant challenge.What do Australia and all US allies do now?

I don't see this as necessarily a bad thing, but it is unsettling. It's unsettling for the US too in ways that I'm not sure are properly recognised there as yet. The US is used to doing its own thing, used to being in the lead with others following. As the US withdraws  from certain activities such as the agreement on climate change or the TPP, other countries step up.

We simply don't know how the Trump administration will evolve over the next twelve months, we don't know what changes in defence and foreign affairs will be made as a consequence. We just have to wait.     .

PCA, the law of the sea and the battle for the South China Sea

This map from the BBC sets out China's territorial claims in the South China Sea. Now the Permanent Court for Arbitration has ruled following a case brought by the Philippines against China that China's claims to historic rights were contrary to UN convention.

The ruling came from an arbitration tribunal under the United Nations Convention on the Law of the Sea (UNCLOS), which both countries have signed.

The ruling is binding but the Permanent Court of Arbitration has no powers of enforcement.

Very few Australians, I think, have been following the battle for control in the South China Sea even though Australian military aircraft have been involved in the challenge to China's claims to sovereignty.

That's a pity, because this is arguably the most dangerous of Australia's current foreign policy challenges because of the risk of a major war.

Postscript

I'm not sure that I agree with this Chatham House interpretation.  

Saturday Morning Musings - miscellany

Today's Saturday Morning Musings is another round up. In a piece in priceonomics, Zachary Crockett.looks at the evolution of the ubiquitous supermarket shopping trolley. Who would have thought that the inventor would be forced to hire actors to encourage shoppers to use the damn things!

In Syria, the temporary truce seems to have come into effect. President Putin's intervention has been a game changer. Looking back, Western foreign policy since the War on Terror began has been a mess. The problem lies not so much in the concepts, although there have been problems there, but in abject failures in implementation.

A first thy Poet, never let him lacke

A comely cleanly Shirt unto his backe.
Cleane Linnen, is my Mistris, and my Theme
—John Taylor, In Praise of Cleane Linen (1624)

I used to love time travel stories. I still do actually, although the obsession with fantasy that has over-swept science fiction means that they are far fewer on the ground now. One of my problems in going back in time has always been health and hygiene. How, for example, might I clean my teeth?

Now I am not your modern suburbanite. With the exception of a great dislike of peeing or pooing in public, something deeply embedded in my own past, I don't mind getting dirty, I can go without showers, I can sleep on the ground, I quite like smelling of smoke from the fire. Yet in all this, I have always wondered about that voluminous Tudor clothing. It struck me as quite unhygienic that in the absence of baths.

Here I refer you to an interesting piece by Ruth Goodman, Getting Clean, the Tudor Way.

Finally, discussion continues on earlier posts on Australia's refugee policy. I have yet to respond to the latest comments. In the meantime, a challenge for you. These are the latest Australian immigration detention statistics. Can anyone tell me what they mean?.

Postscript

kvd has pointed me to the story of that Elizabethan painting. It's quite fascinating.  

Russia's strategic adventures

Flying to and from Europe this time, I was very conscious of just where the plane was flying and wondered about missile risk. That came back when I watched the release last night of the Dutch Safety Board Report into the downing of MH17.

I don't think many in Western countries believe the apparent official Russian Federation line that it wasn't a Russian made missile that brought the plane down. In fact, I don't think that many people believe much that President Putin says full stop.

These things have a habit of working themselves out with time. It's actually quite difficult to make a position stick in the longer term where that position is based on a fundamental untruth. Ultimately, the position unravels. Of course, a lot may happen in the meantime.

The MH17 report made me look back at the small number of posts that I have written linked in some way to Russian foreign policy and strategic objectives. Since I first wrote after the start of the Ukrainian crisis, Russia has consolidated its hold over Crimea. The war in Eastern Ukraine has entered an uneasy stasis in large part, I think, because Mr Putin and his colleagues have achieved their immediate objectives, have other fish to fry, and so need to let things rest.

The importance that Russia places on the Eurasian dream has become clearer, linked to President Putin's vision of the re-assertion of what he sees as Russia's traditional place in Eurasia. The Russian involvement in Syria is, to my mind, a coldly calculated strategic decision that serves several objectives. It protects existing Russian bases; it tells Russian allies we will protect you; it further complicates life for the West; and it provides Russia with new bargaining chips and allies. And, by the way, it helps sell a variety of military kit! It's win-win all round.

The model that the West including Australia has been using with its focus on terrorism and existential threat seems to me to be flawed, flaws further exposed by Mr Putin's Syrian adventure. Sometimes there is something to be said for asking the most basic question, what's in it for me? That, I think, is Mr Putin's sole rule-stick.

So far as Syria is concerned there are obvious risks, but is still looks like win-win at this point regardless of the particular outcome.

   

Miscellany - Australian foreign policy, Ashley Madison and the economic outlook

This is another piece, Bill Henson's untitled (2009-10) from the current Luminous World exhibition at the New England Regional Art Museum.

On 20 August 2015, the Secretary of the Australian Department of Foreign Affairs and Trade, Peter Varghese, gave a big-picture address to the Lowy Institute on Australia's place in a changing global and regional order. John Garnuat, the Asia Pacific editor for Fairfax Media and one of Australia's better reporters on foreign policy matters, provides a useful summary. However, the speech is worth reading since it sets out quite clearly the nature of the challenges facing Australia in evolving world.

The Ashley Madison Affair drags on and on. This is an interactive map of users world wide. The main lesson, of course, is the now oft repeated warning not to assume that data you provide or the conversations you can have on-line will be safe. We all do it, of course. Well, only 30 million or so were registered with Ashley Madison, but we all unconsciously trust the internet. It's just so bloody convenient that we ignore the risks. Reminder to self!

Earlier in August (Updating the Australian political and economic outlook) I reported on the latest economic views put forward by the Australian Reserve Bank in its Statement on Monetary Policy. In a way, the message was steady as she goes. Now today's media is full of reports on the global share crash. Should we all be worried? Well, yes and no.

On the yes side, I have felt for some time that equities were over-valued. I had no really rational reason for that view, just experience. Price Earnings ratios used to be based on the current price to previous earnings. Now they seem to be increasingly based on current prices to expected earnings. I actually have no idea what that means. I can take past earnings and adjust for projected changes, but I struggle with the idea of adjusting future earnings. I may just be out of touch of course, but it seemed to me that future earnings projections are inherently unstable. Just ask Treasurer Joe Hockey!

If equities were over-priced adjusted for risk, and risk margins have narrowed, then it made sense to expect some correction. That then flows through into the real economy via the wealth effects.People owning shares are worth less and have to adjust their spend accordingly. So a share crash affects both expectations and spend. What we don't know is the scale of the correction.

On the no side, and I am thinking especially of Australia, the crash in the value of the Australian dollar provides a certain protection. I note a certain irony here. After all the fears about the future of the Euro, the Euro has strengthened against many other currencies because it is seen as a safe currency! At least for the moment.

The Australian economy has been going through an adjustment phase. Unusually, and I know of no previous example, the country has missed (at least to this point) the bust side associated with previous resource booms. However, adjustment had to occur as resources attracted to mining were redeployed. This process takes time. The Australian dollar was unusually strong for an unusually long period. This led to a degree of contraction in non-mining trade exposed sectors. This takes time to turn around.

Assume, for the moment, that the worst case scenarios for commodity prices come about. There will be some further contraction in mining. However, cost cutting in mining has been underway for some time. Buffered by a lower dollar and with new production still coming on stream, Australia can survive the lower prices. Indeed, the collapse in oil prices means that the price effects on the non-mining sectors that might have flowed from a depreciated currency will be much muted.

The Sydney/Melbourne housing boom will end, bringing some pain. Again, that's a necessary correction, one that is already underway.

And what happens if the rest of the world collapses in economic terms, entering depression? Worst case, all bets are off. However, at the moment I can't see that happening. We are more likely to see stagnant growth while the economic imbalances work themselves out.   Perhaps not nice, but not disastrous either.          

  

Sunday Essay - is this the Eurasian century?

There was an interesting piece recently by Matthew Susse on the Lowy Institute blog, Putin's pivot: The Russians are coming to Asia, about the shift in Russia's strategic focus towards the east. This makes a degree of sense on economic and security grounds, but it is also another sign in the continuing shifts in directions within Asia that are, I suspect, not well recognised in Australia.

In an earlier post I mentioned that I had been reading the travels of Marco Polo travelled what was known as The Great Silk Road that stretched from Europe to China with a southern sea route involving the subcontinent. The book paints a picture of life and commercial and cultural interaction across a vast space.

Marco Polo travelled in the 13th century. By then, the Great Silk Road was near the end of its practical life Political, military and religious conflicts broke the land route, while the rise of Western European shipping provided an effective alternative. However, now the Great Silk Road is coming back, driven by a China with memories of its imperial past.

Three articles in by Robert Berke in oilprice.com provide a useful introduction - here, here, here. Russia's strategic objectives mesh, at least at this point, with those of China. Russia wants to preserve its influence across its old territories but, and more importantly, it wants new markets for its oils and gas in China. By the way, I don't know if you noticed, but Gazprom appears to be a major sponsor of the current soccer Women's World Cup. Congrats, by the way, to the Australian team for their win over Nigeria.

Considerable doubts have been raised about the geopolitical problems facing the Chinese initiative. I think that these miss a key point. We are talking relatively long time periods, several decades. As the roads and railway lines spread, so will trade. In a way, I also think that the Chinese are hedging their bets here. If the recreation of the southern Silk Road with all its various projects lags, they still have fast routes to Europe via Russia.

No where so far as I have seen, I may well have missed something, will you see references to the rise of Eurasia as a continent.We are used to thinking of Europe and Asia as separate continents. They are not. They are a single land  mass that has never been fully integrated because of distance. This is changing quite quickly.

I think that this is important. In Australia. we like to talk of this as the Asian or Asian Pacific century.What happens if this is actually the Eurasian century?  What does Australia do then?        

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Musings on Flight MH17

The downing of Flight MH17 over Ukraine has transfixed Australia, making a distant conflict very real. It’s not just the Australians killed, the count here has risen to 28, but also the loss of delegates coming to the international AIDS conference.

One interesting feature of the coverage was its sheer speed, combining traditional and new media. The information provided effectively framed discussion. It also made almost impossible the task of the Russian ambassador to Australia in arguing that the incident was the responsibility of the Ukrainian Government.

It will take time for all this to work through. We need to give it that time. Meantime, it has changed the political dynamics in ways that none of us can see.

Saturday morning musings - Indian elections, demographic change and the situation in the Ukraine

Voting in the 2014 Indian elections opened on 7 April and will conclude on 12 May. That's a very long time, but it's a very large electorate. This Economist piece looks at the difficulties involved.

Talking to my taxi driver last Sunday, he came from India when he was seventeen but retains close links, he commented that corruption and the need for change was central from his viewpoint. One of the features of this election has been the importance of social media. This piece will give you a feel. Measured by the size of the electorate, well over 800 million, those with access to social media remain a minority, but an increasingly important one.

Meantime, down in Victoria, a Parliamentary Committee is investigating the possible misuse of social media and ads associated with election campaigns. I must say the story sounds a bit of a beat-up, Perhaps I'm wrong.   

Over on The Interpreter, Stephen Grenville records

The latest IMF World Economic Outlook (WEO) records a watershed moment for the global economy. In terms of purchasing power GDP, the emerging and developing economies are now clearly larger than the advanced economies. Moreover, they have accounted for three-quarters of global growth since 2009 and make up two-thirds of forecast global growth.

The inexorable power of compound interest means that this trend will continue. However, we need to exercise a little care in interpretation.The subdivision between developed and emerging and developing economies is a statistical subdivision. Like all statistical constructs, it conceals as much as it reveals.After all, when these statistics were first collected Japan, Korea or Singapore were not included as developed countries!

What is clear is that particular countries and indeed areas are experiencing shifts in economic position that greatly affect the world's power map.Underlying these changes are the progressive shifts in demography that I have been writing about for a while, shifts in the size and structures of populations in particular countries and regions that over time greatly affect the economic and political power of those areas. This makes for unstable politics.

In the Ukraine, the position gets messier all the time. Faced with a declining Russian population and influence, Mr Putin appears to be responding by a combination of irredentism with action to increase the domestic birthrate. Driven by the dream of Imperial Russia, a vision of the great Russian people, Mr Putin is attempting to re-establish Russia's position now.

It is very hard to see a sensible end-game in the Ukraine. Events in Slaviank suggest a situation rapidly spiraling out of control. The suddenly apparent well trained militia men may, or may not be, Russian as this Australian Melbourne Age story suggested, although it is hard to see just how such forces could emerge without some form of state backing. However, it would seem that Moscow cannot control local responses among the groups that it has been backing. Mr Putin's rhetoric makes it very hard for him not to order intervention in order to "stabilise" the situation should things spin further out of control.And from that point, things get even messier. . .   .   

Australians don't realise how unusual Australia is. Russia needs people, but they must be "Russian" people. Immigrant countries such as New Zealand, Australia, the US or Canada have defined images and political structures independent of ethnicity or religion. Despite their problems, these are inclusive societies.That's actually quite unusual in the current world.        

Sunday Snippets – the Ukraine

Today’s post is a follow up to Has war with Russia become inevitable? This drew a number of comments.

Anon wrote:

I think the rhetoric about Putin has gotten way out of hand. Hitler killed hundreds of thousands of people when invading Ukraine. Putin has the military power to reduce Kiev to a smoking crater and has decided on non lethal options.

kvd wrote;

Well fwiw these are my further thoughts on what has happened and maybe what could happen to cool this crisis.

1. Putin saw the weakening of a Ukraine government which was friendly towards Russia as a direct threat to his naval forces in the Black Sea. For his own internal reasons he cannot afford to have that asset under threat.

2. (Not talking about the initial demos, more the violent step-up before it ended): It would not surprise me to read eventually that the violence in Kiev was Russian-inspired/instigated because, although Putin lost a weak ally, he took from that the needed excuse to 'protect' his people in the east - for which actually read 'his naval base'.

3. Ukraine gave up its nuclear weapons in return for a guarantee of its territory.

4. A possible mutually acceptable solution might be for Ukraine to cede to Russia the land containing the naval installations, to achieve the situation now existing in Cuba for the US. (please don't lecture me on the history of that place; I get it)

5. In return, Russia and the West would formally acknowledge Ukraine as 'neutral' - see Switzerland. This would have huge economic benefits to all sides of this conflict.

All that said, much like you, Jim, I see confrontation now verging on the inevitable - but as to if that becomes a 'hot' war, or simply harsh economic sanctions, who knows?

I come back to a comment I made on your earlier post: Putin will do exactly what he says because he cannot afford not to - and that is his major bargaining chip. He needs to gain something out of this. They need to give him a way out which can't be mistaken for a step backwards.

He followed up with:

Also, I think this analysis is worth a read - http://www.telegraph.co.uk/finance/comment/10700292/Why-China-is-right-on-the-future-of-Ukraine.html  - even tho the author dismisses a sanctions approach.

And last thought: isn't it funny that we have Putin defending the overthrown democratically elected government, and now promoting a referendum, while the US and the rest are firmly behind the 'revolution' involving some pretty dismal sorts?

Ramana wrote:

If you are a betting man, I will wager that nothing will happen. There will be a lot of huffing and puffing and noise and it will all eventually die down. Yes, even the sanctions. Just watch the Brits. They are the guys who will miss out on big commissions and see how they have reacted so far. No noise at all from the suits there. Ukraine will say, thank God Crimea left and the Russians will have to foot big bills in subsidies to the Crimean part of the new dispensation. It will all work out fine eventually.

Orby Wrightville said...

Excuse me but just who is going to go to war with Russia over this?

To which Neville responded:

Orby, I think you are right. I would favour also ceding Finland, and Poland and any country ending with 'ia' and 'stan' as well.

Let's simplify the map; there maybe only three colours then required! Anything to appease.

Over at skepticslawyers, Lorenzo’s Built-in Imperialism: an era of farcical return provides that writer’s historical perspective. Meantime, I went searching for a Ukrainian source on all this and found the Kyviv Post.

Reading the Kyviv Post reminded me of the complexity of all this in human terms in a world of complex interlinks: the Ukrainian migrant workers in Russia; the teachers now not being paid in Crimea; the progressive Russian sanctions (they began before all this) on Ukrainian businesses in Russia; the paperwork involved in Crimea as you have to re-register ownership of key assets; the collapse of payments systems; the reshaping of possible gas supplies within Europe.

And where might those gas supplies come from? Australia, at least in part.

Friday short round-up

This morning's post is another brief round-up focused especially on recent posts on this blog.

A week back, in Complications with managerialism I said that I was writing a short history piece for the Armidale Express on the University of New England's various VCs following Jim Barber's resignation. It turned into two pieces, with the one I wrote last night focused on the turmoil of the second half of the eighties and the nineties, a turmoil that almost destroyed the place and greatly damaged its market position. It's a case study in what can go wrong and on the impact of managerialist/corporatist approaches.

I have been written a little before on this case study and will write some more soon, telling it as a story. In the meantime, here is a 2003 piece by John Quiggin that came up in the discussion. Look at the comments as well.

Since I wrote SPC Sunday and other matters, the Victorian Government has come up with a package that seems to ensure the future of the operation and the fruit growers that depend upon it. I suspect the decision was made easier by the swelling public support for SPC. Treasurer Hockey had no comment to offer.

When I first started reading Australian history, I found the Australian Agricultural Company very boring. I guess that I thought it a bit of a sideshow. I now find the AA Company popping up everywhere. In two books that I am reading at present - Eric Rolls on the Australia-China connection (Sunday Essay - musings on Eric Rolls and the Chinese experience in Australia plus a history of the Australian Miners' Union - there is lots of AA stuff. There are some stories there.

Since I wrote Chinese warships off Christmas Island, the dreaming and middle class decline, the Australian Strategic Policy institute has released a report, China's new dream: How will Australia and the world cope with the re-emergence of China as a great power, while media coverage is focusing on arms races and relative power balances. This is an example.

There are normally lags in public responses. I must admit to being a bit worried that responses will focus on the perceived threat, rather than looking objectively at the longer term dynamics.

Stop the boats, rot the relationship?

When writing as an analyst, I generally (not always) try to divorce my personal views from my writing. Still, there is something rather depressing about the way in which the Australian Government's aggressive stop the boats policy seems to be complicating relations with Indonesia, playing into domestic politics in both countries.

This story from the ABC, Indonesia probes asylum seekers' burns as Scott Morrison rejects 'sledging' of Navy, together with this story from the SMH, Tony Abbott to Indonesian President SBY: We will continue to secure our borders, will give you a feel for some of the reporting on the Australian side. This piece by Stephen Grenville in the Lowery Interpreter blog, The role of the press in Australia-Indonesia relations focuses on the attitudes of the Australian

On the Indonesian side, the Jakarta Globe reports Indonesia Steps Up Patrols, Lashes Out at Abbott for ‘Sovereignty’ Statement, while the Jakarta Post headline reads Tension with OZ escalates as RI deploys warships. The Jakarta Post also reports in TNI gears up, sets sights on foreign threats on plans to restructure the Indonesian Defence forces to increase defensive and potentially offensive capabilities. I quote from that story:

House of Representatives defense, intelligence and foreign affairs committee member Susaningtyas Handayani Kertopati said the TNI should strengthen its “outward-looking” approach at a time when there were signs of escalating threats.

“The greatest threat will obviously be from Australia,” she said.

Just recently, Australia apologized to Indonesia after its border patrol boats entered Indonesian territorial waters without permission in their bid to stop migrants.

A Defense Ministry official has warned that Australia’s “tow-back” policy may soon ignite conflict.

In the midst of all this, Australia appears to be trying to counter at Indonesian grass roots level: Australia to Aid Jakarta, Makassar in Water Management Programs. One wonder about the success of these efforts.

In the end, Mr Abbott may well stop the boats; he is prepared to be ruthless enough. However, I do worry about the longer term costs to both countries. 

And the winners in all this? The Jakarta Globe and Jakarta Post whose on-line Australian readership seems to have grown very rapidly! 

Postscript

Today (Friday 24 January 2014), the Australian media is full of this story. Some of the reporting is quite breathless; look at this piece from Robert Gottliebsen -  How Indonesia will control Australian migration. This is actually very silly stuff. Note the use of the Jakarta Post as a primary source.

In the Australian Financial Review, Laura Tingle's We are prepared for a clash, Jakarta warns is far more objective.  Note again the use of the Jakarta Post as a primary source.

Far more damaging to the current Australian Government is a later opinion piece by Laura Tingle in the same paper, "Australia crosses a thin blue line of credibility." I can't give a link. Why more damaging? Well, based on my reading of her pieces, Ms Tingle is hardly a bleeding heart liberal.

The underlying question she poses is can you believe the Australian Government or, indeed, the Australian Defence Forces? Her answer appears to be no. I actually find it incredibly hard to believe that Australian Defence Force personnel would force asylum seekers to hang onto hot engine pipes while being towed back.

But that view has absolutely nothing to do with the question of whether or not I would trust the Australian Government when it asks who do you believe? I certainly wouldn't trust the Australian Government on this issue. It spins porkies. My view is simply based on my judgement of Defence personnel. 

The Government is fighting back as best it can, This report on ABC, Government claims five-year record in stopping asylum seekers from reaching Australia, is an example. However, I don't think that it matters beyond a hope that it will be true because of the need to avoid complicating things further, including the risk of inadvertent military clashes. Who would have thought that a purely domestic issue, if a key campaign pledge, would be mishandled to such a degree that it becomes a major foreign policy problem?

Mr Abbott may still win this one in purely domestic political terms if the boats stay stopped. However, that success would come at a price of a damaged relationship, a wounded and distracted Government. Mr Abbott has spent political capital that he needed to bring about other changes. 

Sunday Snippets - gardens, a loss, problems with policy and management, all with a dash of schnapps

I have been away, and just catching up. The hose is on kvd's garden bed watched by his and LE's chairs. kvd sent me  some photos of his son's garden bed. This is one sample. Now that's what I call a garden bed! Feelings of inadequacy?!

Having explored the concept of elegance, (Elegance and tennis), our Polish-Australian blogging friend AC has been out exploring the Australian countryside: Getting to know Australia – Thredbo. I really have to visit the Wildbrumby Schnapps Distillery.

Ramana, another of our blogging friends, has suffered the loss of his sister-in-law, A Death And A Reconnection, although Sudhira's death re-established old connections. It's a bit sad that so often this has to happen through deaths and funerals. Perhaps something to think about there?

My post on the current Australian curriculum review, The Pyne curriculum review - Dr Donnelly's challenge, has continued to attract visits and comments. Neil Whitfield wrote in a comment:

I am getting weary of this..... we are all wasting our time and energy on this tripe. If I can stomach it I may do a post along these lines soon.

I can see his point of view. However, I would argue that one of the key things with questions like this is the need to delineate the issues. Otherwise it becomes one set piece in opposition to another set piece.

It seems that the Indonesian Government has sent a warship to protect its southern boarders against Australian incursions. Meantime, the Australian Government has apologised to Indonesia- again.

In writing on this topic, I have tried to make a difference between the stop the boats policy and the way it is applied, focusing my criticisms on the second.

This photo from the Jakarta Globe (link above) shows Australian Foreign Minister Bishop meeting her Indonesian counterpart on 5 December.

Look at the body language. It must be bloody uncomfortable for Ms Bishop to deal with all this. How often can you get on the phone to say sorry?

In a comment on Problems with project management, DG pointed me to this paper by David Gadiel and
Jeremy Sammut, How the NSW Coalition Should Govern Health: Strategies for Microeconomic Reform. I haven't had time to read it properly yet.

As it happened, over coffee on Saturday I was trying to explain the failures in current management (public and private) and policy development as I see them.  Yes, i know that this is a hobby horse of mine, but I so hate inefficiency. Still, I will let that hold to a later post.

A Monday round-up - loss at Lone Pyne, MIKITA, dispute over territory, Graincorp and Mr Hockey's two bob each way

It's been a busy period. Today's post focuses on things that I have noticed or that have been swirling around in that stew that counts as my brain. It's actually a sort of note to myself to jot things down before I forget them.

Retreat from Lone Pyne

It's been quite funny really, if a bit sad also. First we had Gonski, then retreat from Gonski and now its Gonski reborn. Or is it? I don't feel able yo comment on the education policy issues involved for I don't yet actually know what the policy is. 

Foreign Policy

I tend not to write on foreign policy because of my own lack of knowledge of the immediate context, but its been an interesting period. We have the continuing standoff between Australia and Indonesia triggered in part by the spy row. Then there was the imbroglio over the Chinese declaration of an Air Defence Identification Zone over disputed islands in the East China Sea where the Australian position resulted in a Chinese rebuke. Then there was something that I hadn't actually heard of, the first meeting a month back of MIKTA.

Ever heard of MIKTA? I hadn't. Alex Oliver on the Lowy Institute Blog speaks of it this way.

A month or so ago, with little fanfare, Australia participated in the first meeting of MIKTA, an informal grouping of five nations — Mexico, Indonesia, South Korea, Turkey and Australia — described in press releases by Turkey and South Korea as an informal and non-exclusive group of 'middle powers', cooperating to address some of the diverse challenges of an increasingly complex international environment.

Leave aside the question of whether Australia is a middle power or a pivotal power, I find both terms misleading, the meeting was an interesting response to the complexity faced by countries who are big enough to have some importance, but not big enough to be real players.

Names, Language and Territory in Modern Aboriginal Society

Turning to my traditional country, a story in the Armidale Express begins:    

ABORIGINAL tribes have gone to war over a planned Welcome to Country sign at Armidale’s gateways.

The Anaiwan tribe want to be solely recognised in the sign.

But members of the Gumbaynggirr tribe claim the city is also part of their traditional land.

They want wording on the sign to  reflect all Aboriginal tribes in the area.

Leaving aside the use of the word "tribes", there were no such things, the story is an example of disputes running across Northern NSW and beyond over boundaries inspired by the European obsession with hard lines on a map. Europe wasn't like that for nearly all its history, nor was Aboriginal Australia.

Armidale Express editor Lydia Roberts has given me the okay to write on this in my next History revisited column, and also suggested that I put forward my suggested solutions in a letter to the editor. I will do so, having consulted some of my Aboriginal friends.

It's interesting and also important to me that feedback informs. Two example,

The first was a comment from a work friend that many of the big New England Aboriginal ceremonial sites appear to lie at the junctions of multiple traditional Aboriginal languages. They were gathering points for the nations, to use a modern phrase that would not have been recognised by traditional Aborigines. While i more or less knew it, I hadn't focused on it at local level. 

The second is the concept of the elders. Like many modern Australians I have equated this with age. That's not true. It equates to knowledge and respect, so that a younger person might be an elder, an older person not. Here we have a problem that I might write about later. 

South Grafton

Staying briefly with New England, Ursh Tunks is focusing on the history of South Grafton (Facebook page). One of the joys of my writing, including my writing as a regional historian, is the way it leads me to connections that then feed my thoughts. This is an example. Because of Ursh's interest, I have focused on South Grafton as an example. It's a fascinating place, at least to me.  

Economic Outlook

The economic outlook and the associated policy discussions continue to fascinate me. Writing in a long piece on the outlook for 2014 prepared a month ago for another publication, I commented:

Doubts linger, casting a continuing cloud as we move towards 2014. Uncertainty over the ending of quantitative easing and the impact that this might have on markets adds to doubt, as do continuing uncertainties over the Chinese economy. Despite these doubts, I think that 2014 is likely to be a better year in economic terms, far better than some analysts allow.

That remains my view, although pessimism continues to abound. Here the discussion on the budget deficit continues to exercise a distorting effect, pushing policy discussion towards mechanical solutions. Now Canberra based economics consultants Macroeconomics have released a new report arguing for drastic cuts budget cuts to restore fiscal balance. Now in the arguments they put forward was one point that genuinely puzzled me. If we cut spending, they apparently suggested, the value of the Australian dollar will fall. Huh?

For the life of me, I cannot understand just how this might happen. Perhaps someone can explain to me the arguments involved,

Graincorp and the FIRB

The Treasurer's decision to block the proposed acquisition by Archer Daniels Midland Company (ADM) of 100 per cent of the shareholding in GrainCorp Limited (GrainCorp) has been greeted with outrage in many quarters, as has the role of the National Party in arguing for rejection. This is, it is argued, a case of special pleading, of the National's sectional interests over-riding the national good.

This argument misses a key feature. Wheat growers are concerned about the impact on their international sales activities, nor do they have any special trust for corporate promises. The National Party is reflecting those concerns. Leaving aside emotional arguments about foreign ownership of Australian land, arguments that I do not support, the grower arguments about the impact are at least arguable. Further, they are the ones that will suffer if their concerns are correct, while any benefits will go elsewhere.

Interestingly, Treasurer Hockey appears to be having a two way bet on this one. At the end of his statement he says:

ADM has advised me that it wishes to be involved in the Australian market place for the long term.

ADM currently owns 19.85 per cent of GrainCorp. It was open to me, under the Act, to continue to cap ADM’s shareholding in GrainCorp at its current level. I have decided not to do so.

In fact, to encourage ADM to demonstrate its commitment to the Australian grains industry through its continued investment in GrainCorp, I am inclined, based on current circumstances, to approve any proposals from ADM to increase its shareholding in GrainCorp up to an interest of 24.9 per cent. This would also provide a platform for ADM to build stakeholder support for potentially greater participation in the Australian industry as it develops.

The Australian Government recognises that our nation needs foreign investment so that we continue to grow and prosper.

That's very definitely two bob each way! Now come on chaps, he appears to be telling ADM, increase your share. That will give you greater influence, a chance to refine your proposals and gather support. Do this, and we will have a further chat. 

Electronic espionage - a bridge too far?

The repercussions from the Snowden affair roll on. This is current Australian coverage: here, here, here. This is Indonesian coverage from the Jakarta Globe: here, here.  The Jakarta Post does not appear to be covering the story, although I was interested to learn in passing that  Mt Toba may erupt again, while marriage registers are in short supply. I am easily distracted!

Whatever Mr Snowden's motives, he has done damage to Australia's relations with Indonesia and potentially other countries. All countries spy, while Australia's intelligence cooperation with the US is well known. The problem arises when you get caught doing it. That said, I am inclined to agree with the Indonesian Foreign Minister's reported comment that this isn't cricket.

I think that this is one of those examples of the because I can I will problem. The apparent blanket tapping of all messages and conversations is a very blunt instrument. I suspect that the angst we are seeing in response is not the normal somewhat formalised protestations associated with getting caught at doing something that all do, nor even concern at US technical capacity. Something far more personal is at work.

If you think about it, how would you like your personal conversations caught?

Say you are a political leader from any country. Your conversations cover a range of personal and political matters, express a range of emotions; love, lust, anger, your children's problems, your plots against a rival. Now you learn that that all that detail has been caught by a foreign spy agency. Someone is listening to your most trivial and human day to day responses. You feel outraged, but you may also feel fear that material may be misused or leaked. That, I think, is why the response has been so strong. The response is personal. not professional. This is a bridge too far.

Stop the boats - Australian Government scores own goal

Last Saturday I wrote (Saturday Morning Musings - Abbott: ideas, structures and success):

What has surprised me a little coming from a PM who promised a calm and ordered approach to Government has been the initial speed of action. It may be ordered, but it's not calm. It's more ram through. However, it is consistent with Mr Abbott's pledge that the new Government will do what it says it is going to do. However, herein lies a potential problem.

Stop the Boats, Mr Abbott now prefers Operation Sovereign Borders, has already ruffled Indonesian feathers. The sillier aspects of the policy such as the boats buy-back or payments for Indonesian informers are probably not-doable unless the Indonesian Government chooses to cooperate. The broader aspects including turn back the boats may or may not have the desired effect. However, what I didn't quite understand was the way it was done.

Was it really necessary to ruffle Indonesian feathers in quite that way? In process terms, all the Government had to do was to announce immediate steps, noting an intention to discuss further steps with our neighbours.

In the early days of the Rudd Government we saw both haste and a lack of sensitivity in action especially on the international front that proved to be early signs of later problems. We also saw something that I struggled to describe at the time, but which I came to think of as a disconnect between party and people, indeed between party and reality.

Now the new Government's Stop the Boats 'appears to have broken into a full scale diplomatic spat with Indonesia, one not helped by former Howard Government Foreign Minister Alexander Downer's comments. Those comments display the sensitivity for which Mr Downer was once famous.

My point on Saturday focused not on what was done, but how it was done. In a response,DG wrote:  In relation to "insulting Indonesians", Joe Ludwig's ban on the live cattle trade, apart from kicking an 'own goal', surely takes the cake?  Too true. It was indeed a case where a purely domestic response had very significant effects that continue.

Australian Foreign Minister Bishop may have indicated, as the Indonesian Foreign Minister's statement apparently suggested, that Australia wants to work "behind the scenes" and "quietly" on the issue to prevent too much publicity. The approach followed seems to have had the opposite effect. It is, in fact, an own goal.

Mind you, I too am responding from within an Australian frame. The story leads the Australian airwaves this morning. However, as I write, neither the Jakarta Post nor Jakarta Globe on-line editions carry any reference to the spat. Stop the Boats may be a top Australian issue, but it is well down the rankings when it comes to Indonesian domestic concerns.

In concluding, my focus here is not the rights and wrongs of the Australian position, but on the way it was done.

Postscript

It appears from today's reporting that the release of details of the meeting were all an error.

Postscript 2

I had missed this recent story until commenter DG pointed it out. I quote from the Australian:

 UP TO seven West Papuan independence activists are believed to have fled across the Torres Strait to northern Queensland in search of asylum after supporting Australian "Freedom Flotilla" members who sailed close to Indonesian waters earlier this month. ................

The flight of the West Papuans has the potential to cause a serious row with Jakarta, just when the Abbott government is already under fire from Indonesia over its controversial plan to turn back asylum-seeker boats.

Here is the Radio New Zealand report, here the NITV report. It will be interesting to see just how the Australian Government handles this one.