Using Coles to make Defence more effective and efficient?

Mr John Coles CB RCNC, author of the Coles Review, speaking at ASPI's International Conference 'The Submarine Choice' in April 2014.

The successful 2012 Coles review could be noteworthy for more than just advising on submarine sustainment. It might also suggest a different model to consider for improving the effectiveness and efficiency of Defence.

Some will ask why bother? With promises of a 2% GDP defence budget, monetary pressures could be expected to gradually recede. But John Coles gave us something money couldn’t buy: his report made the submarine force more effective. There’s no reason to believe simply throwing more money at the force would’ve addressed its problems. As Coles reported, some 30% of the Navy’s sustainment budget was going into generating a steadily diminishing number of operational submarines. In late 2009, out of six submarines, only a single boat was usually available. Reinforcing failure by spending more would’ve been imprudent.

Coles found that the lack of online submarines wasn’t from lack of money but principally from internally-generated management difficulties. Coles’ worthy predecessor, the Rizzo review, had a similar finding about the amphibious ships. Coles, though, in following up his review in a just-released report has verified that the changes he recommended are actually delivering the desired outcomes. Hard data suggest he was right.

So the big lesson from Coles (and Rizzo) could be that the contemporary Defence organisation can’t reform itself through its normal internal processes. There might be many reasons why the organisation is unable to be self-critical: complacency, groupthink, a bias against innovation, confused lines of responsibility, an inability to hold anybody to account or simply a lack of internal devil’s advocates. The underlying reasons are less important than the success of the Coles model in cutting through the internally-generated bureaucratic and Service inertia.

Defence of course has had many reviews and reform programs. Indeed the submarine sustainment system that Coles improved was a product of more than two decades of well-intentioned reform programs. But many of those were high-level, cross-enterprise examinations that advocated general solutions for application across all parts of the organisation.
Such an approach may be well suited for uncomplicated, homogenous organisations but perhaps less so for complex, heterogeneous organisations like Defence. In the latter case, one-size-fits-all solutions might not work. . Compounding that problem, traditional, large-scale reform programs are deliberately long-running with outcomes both uncertain and distant. It seems people lose interest over time.

Coles offers a different approach to those enterprise-wide, broad-brush, managerially-based reviews and reform. His model suggests taking a technocratic approach, in which subject-matter experts examine the issues in depth within a strictly limited area of concern.
And the model might be particularly suited to issues of high political interest. In this case, intense ministerial interest helped motivate Defence to solve the problem and not simply to bury it. Indeed, there’s little to suggest Defence would’ve addressed this issue without direct ministerial intervention, just as the earlier problems with amphibious ships that Rizzo reviewed were seemingly overlooked. Both cases involved quantifiable problems that both ministers and taxpayers could see needed fixing and there was a set of metrics for measuring the success rate in addressing those problems.

But if Coles worked, why not simply repeat it using in-house staff? Consultants, so sceptics say, are simply people who borrow your watch to tell you the time. Defence has many smart people—surely they could do the same, or better? Well, Defence demonstrably can’t, or else they would’ve done it. Moreover, Defence doesn’t necessarily have a lot of spare subject-matter experts waiting around to undertake reviews. They all have day jobs. The ADF’s submariners are arguably some of the smartest people in Defence. If they found it impossible to address their own problems, it suggests insiders can’t.

Could the Australian National Audit Office (ANAO) undertake this function? The ANAO produces excellent reports that frequently delve into areas many departments wish they didn’t. However, ANAO staff are not subject-matter, technical experts in the esoteric disciplines found within Defence. Moreover, ANAO reports often focus on determining whether money was spent in the approved manner rather than whether it was well spent. Such reports highlight important issues but—again—if ANAO could do what Coles did they would surely have done it earlier.

The Coles model seems worthwhile instituting as a permanent series of continuous, rolling reviews into particularly worrying areas within Defence. But that would run the risk of diluting the impact of such enquiries and might simply become part of the landscape. Still. it doesn’t seem right to have to wait for major capabilities to fall over before getting serious, so a compromise needs to be found. One solution might be to extend the DMO gate review process into the post-delivery phase, with capability managers drawing on external expertise and, when necessary, commissioning out-sourced reviews which would aim at practical solutions to problems, with later follow-up studies to credibly verify if the reforms have worked. Even so, achieving success would need ministers to be interested and Defence to be motivated.

The impressive operational effectiveness gains and efficiency improvements the Coles review has brought are surely worth bringing to other areas of Defence.

Peter Layton is an independent researcher completing a PhD on grand strategy at UNSW. He has been an associate professor at the US National Defense University.

The threat that leaves something to chance

US Coast Guard vessels Cutters Adak and Monomoy.

Since 2009, China’s non-military maritime law authority vessels have engaged in low intensity coercive activities (PDF) designed to alter the status quo in China’s maritime periphery. Regional states have largely been at a loss as to how to deal with China’s growing maritime presence and, for its part, the US has been reluctant to physically insert itself into disputes for fear of militarising them unnecessarily. But there are signs of mounting frustration in Washington with the current state of affairs and America’s policy settings. And while analysts are right to point to the risks of escalation in any confrontation between the PLA and the US Navy, it’s increasingly clear that the US must do something, even if it means mirroring China’s own provocative practices.

In a recent Foreign Policy article Ely Ratner and Elbridge Colby argue that by foreshadowing the prospect of ‘penalties’ for coercive diplomacy in future, America can ‘inject a healthy degree of risk into Beijing’s calculus’, and discourage China’s destabilising behaviour. While Ratner and Colby aren’t forthcoming on what kinds of penalties the US should be willing to impose, it’s clear that directly threatening the use of superior force would be a risky option. China could quite easily ignore threats (whether implicit or explicit) and push the difficult choice of conceding or escalating back onto the US. China’s much heralded counter-intervention capabilities mean that America’s ability to impose substantial military penalties is heavily reliant on capabilities like stealth and long-range precision strike. Those capabilities are hard to leverage in threat-based contests because they are not visible until used against an adversary, in which case a conflict threshold has already been crossed. Rather, the US needs to find ways to contest China’s actions without unnecessarily escalating a crisis or making threats that can’t be honoured.

A good place to start would be choosing the right tools. China has developed the practice of deploying maritime law enforcement ships and wielding the implicit threat of naval vessels over the horizon. The US should mirror this practice. Deploying US Coast Guard vessels to the region, and possibly even basing them in the Philippines—perhaps joint crewing them with Manila—would enable the US to exert greater low-level presence in the maritime commons. This would greatly complicate Beijing’s current strategy and might enable the US to force a stalemate in some circumstances. Besides this operational effect, a greater presence would send important signals of support and commitment to regional states. A strategy aimed at achieving the limited objective of effective contestation is more plausible than a strategy aimed at eliciting a Chinese back-down.

Now it is not immediately evident that Coast Guard operations would be sufficiently intimidating to alter Chinese behaviour. But even low-level operations like this take on a quality Thomas Schelling described as ‘the threat that leaves something to chance’—this is an action that deliberately exploits the risks and uncertainties that accompany even low-level military action. Putting Chinese and American forces alongside one another in an adversarial setting increases the risk that, through accident or false alarm, the situation escalates. That type of threat can be more effective than a clear and direct one because its credibility rests on a dynamic which is partly independent of deliberate retaliation. So let the Chinese leadership fret about a breakdown in their control over the PLAN, or weigh the consequences of accidents at sea. That would make the risks of China’s coercive diplomacy all the more vivid.

As well as risks there would also be costs involved in ‘effective contestation’—it might involve actions that dilute the increasingly thin premise of American neutrality in Asia’s territorial disputes. That, in turn, might renew Southeast Asian states’ concerns about polarisation. But while those costs might be substantial, the costs of not turning up accrue steadily. China’s actions are already undermining the security architecture that has arisen organically in East Asia over the past decades. Unilaterally altering the balance of ‘facts on the ground’ directly flouts the stipulations of ASEAN’s Declaration of Conduct, as well as UNCLOS. Over time that’ll foster a less cooperative and more competitive regional order.

Perhaps just as important from an American point of view, China’s ability to bully its treaty allies with impunity saps American prestige. Prestige can be described as a reputation for power. America’s unwillingness to dirty its hands in low-level maritime coercion increasingly looks like impotence, and reinforces a stubbornly persistent narrative of American ‘weakness’. If the US wants to shake off the visage of a fading leviathan it will have to commit to the relevant level of conflict. Doing this in an effective and non-escalatory manner may require sending in the Coast Guard.

Daniel Grant is an intern at ASPI. Image courtesy of Flickr user US Coast Guard.

ASPI’s submarine conference—key messages

RADM Gregory Sammut CSC RAN, head of the Future Submarine Program, addressing ASPI's International Submarine Conference. Image credit: Luke WIlson, ASPI.

Everyone seemed to miss it—a statement in public (at ASPI’s Submarine Choice conference) from the chairman of the Western world’s largest and most successful builder of conventional submarines: a fleet of 12 large state-of-the-art boats would cost around $20 billion. That’s $16 billion less than ASPI’s own estimate and was given by Dr Hans Christoph Atzpodien, the head of ThyssenKrupp Marine Systems. Since his company has built over 180 submarines since 1960, he should know about submarine costs.

Bizarrely, his estimate appears to have been totally ignored. I saw that my friend and colleague Stewart Cameron has written in The Australian that 12 submarines will now cost around $40 billion. That estimate was repeated by Alan Dupont in the same newspaper and subsequently also appeared in the Fairfax media.

So the estimate of someone who knows well is ignored, while the comparative ‘guesstimate‘ of $40 billion is well on its way to being entrenched as ‘fact’. Read more

A conspiracy theorist might think this is all a huge collective effort to make Australians feel that submarines are so costly and so difficult to buy that we need to procrastinate for even longer before making hard decisions. That was certainly the distilled essence of the British speakers at the conference, who were the lead of the Integrated Project Team and the design managers for the program and revealed, to the quiet amusement of some in the audience, that after a couple of years of study—and undoubtedly millions of dollars in fees—they haven’t even reached the ‘pre-concept’ phase of their work.

Some sense of direction was provided to the audience by project director RADM Greg Sammut (pictured) in a rare and welcome public address. But in arguing his apparent preference for a new, large and complex design, he seemed to misapply some of the lessons of history, describing long-range US submarine operations in the Pacific during World War II and contrasting them favourably with Australia’s own likely concept of operations. Similarly, he was dismissive of the relevance of shorter-range German operations in the North Atlantic.

Long-range US submarines (many based in Fremantle) didn’t somehow travel to the far north Pacific and park themselves off the coast of Japan. Instead, they analysed Japan’s sea lines of communication and then went about aggressively sinking every Japanese ship they could find—especially around the Philippines. In other words, they recognised the importance of choke points, just as the Australian Navy nowadays would attempt to exploit the choke points to be found in the Indonesian archipelago. Moreover, students of history will know that even more damage was done to the Japanese war machine in April 1945 by a campaign of mining by low-flying B-29s, named frighteningly and completely accurately ‘Operation Starvation’. In other words, the US looked beyond the use of submarines alone to achieve its strategic goals.

A huge amount came out of the conference and ASPI is to be congratulated for being able to attract such a high quality list—as well as quantity—of speakers. Observers of the event will be unpacking the data for months to come. The depressing part was that Defence’s future submarine project, SEA 1000, still seems to lack purpose and direction, with little to show for the previous five years of effort and money.

But from my industry background, let me just say: it shouldn’t be this hard. Here are the necessary steps:

  1. Navy needs to decide the maximum distance from a home port that they need to operate (and consider the possibility of operations being conducted from Guam and Darwin as well as HMAS Stirling); how long they should sensibly like to remain on station, and with what sort of weapon load;
  2. That should be translated into a Request for Tender;
  3. That request for tender should be selectively released to appropriate companies;
  4. When two bidders have been selected, a funded Project Definition Study needs to occur, with qualified RAN personnel being embedded in both teams. A final selection can be made on the outcome of those detailed studies, which will have enough information to allow a transition to the construction phase.

A similar process needs to be followed for the combat system. So there you have it—a methodology similar to that of the Collins Project, which wasn’t a disaster and is something that we can all learn from.

Kym Bergmann is the editor of Asia Pacific Defence Reporter and Defence Review Asia. A full report on the ASPI submarine conference will appear in the next edition of Asia Pacific Defence Reporter. Image credit: Luke Wilson, ASPI.

Portrait of a Minister: Julie Bishop’s economic diplomacy

Foreign Minister Julie Bishop holds a press conference at the APEC Summit on the afternoon of October 5, 2013, in Nusa Dua, Bali, Indonesia.

One of the things that any new Minister for Foreign Affairs has to decide is where to focus his or her attention within an extensive portfolio. Foreign affairs spans a wide field including security, prosperity, international order and international aid.

Some past ministers have seemingly decided to cast themselves as ‘Minister for International Cooperation’, focusing their attention on the UN and multilateral institutions, while others have aligned closely with their defence counterpart, positioning themselves as ‘Minister for International Security’. In one case, Prime Minister Rudd acted like his own minister for foreign affairs, leaving the unlucky Stephen Smith as essentially ‘Minister for Whatever the Prime Minister Isn’t That Interested In’.

In Julie Bishop’s case, her first six months suggest that she’s focusing her energy as ‘Minister for Economic Diplomacy’, aligning her role closely with the efforts of the Minister for Trade and Investment and the government’s economic agenda. Read more

Analysing Bishop’s first six months through her published speeches43 in that period—gives a revealing insight into her key preoccupations. ‘Economic diplomacy’ is one of the most frequently-used phrases in her speeches and appears as a regular reference point. The Minister defines putting economic diplomacy first as utilising international assets to promote Australia’s economic prosperity. That includes focusing on economic reform and trade liberalisation, supporting open trade, pursuing an ambitious free trade agenda, supporting a vibrant business sector at home and abroad and working for closer ties to Asia.

While a concern for economics isn’t new—trade has always been a key concern for Australian foreign policy—the level of emphasis is distinctive. At a time when there are also a number of security issues in the region, it’s striking that most of the Minister’s discussion of Australia’s relationships in Asia is framed primarily in terms of trade.

Certainly, when telling the story of Australia’s relationships in the region—with Japan, China or Korea—trade comes first. In her speeches describing our relationships in Asia the Minister appears to sequence Australia’s three foreign policy priorities in this way: trade, then security cooperation, then working for a rules-based international order.

This could be part of a wider view on the relationship between economics and security. In other contexts, the Minister speaks about the role of greater economic prosperity not just as an end in itself but also as vital for regional as well as global peace and security.

The exception to this is the Minister’s speeches on the US: here it’s clear the security relationship comes first. The Minister has a keen understanding of the Australia–US alliance and considers it ‘the indispensable feature of Australia’s strategic and security arrangements’. She pays tribute to both countries’ shared history, restating the Coalition’s traditional position on ANZUS as the ‘central, vitally important truth which underpins Australia’s foreign policy’. This isn’t to say that there isn’t also a trade agenda—the Minister notes that the US-led Trans Pacific Partnership ‘has the potential to deliver a major boost to trade and investment in the region’—but it’s clearly subsidiary to the security alliance.

Of course the Minister does focus on security issues where relevant, for example in speeches on cyberspace or humanitarianism. And in speeches to the United Nations, security issues are clearly a focus as part of Australia’s term on the Security Council. Minister Bishop spent her first week in office on issues such as preventing sexual violence in conflict, the security situation in Yemen and chairing the UN Security Council’s session on small arms and light weapons. However, Minister Bishop’s speech to the General Assembly draws heavily on the role of economic development in contributing to security and outlines Australia’s role in advancing international trade liberalisation and economic growth as contributions to security.

A good example of the Minister’s priorities is her speech chairing the newly-renamed Indian Ocean Rim Association (IORA) at its meeting in Perth. The Minister expresses her wish for both stability and prosperity for the region; but beyond a brief mention of piracy and maritime security, she focuses on ways to cooperate for the ‘peaceful, sustainable use of this magnificent ocean‘ as set out in the Perth Principles. She notes her particular interest on issues of women’s economic empowerment and educational exchanges and outlines the Government’s New Colombo Plan to build educational and people-to-people links in the region.

Through these speeches a portrait emerges of a minister clearly focused on economic diplomacy as the enabler for strengthening international relationships and contributing to peace and security. From her first six months of speeches, we can expect a minister with a keen consideration of Australia’s economic interests and the focus and determination to pursue these. In other words, the Defence Minister need not be worried about his patch.

Melissa Conley Tyler is national executive director of the Australian Institute of International Affairs and Doris McDonald-Seaton is a research intern at the Australian Institute of International Affairs. Photo courtesy of DFAT.

Cyber maturity in the Asia-Pacific region

Cyber metric banner croppedThe Ukraine-Russia Cyber War is Heating Up’, ‘Catastrophic Heartbleed bug exposes 60% of private internet data’, ‘NSA surveillance program reaches ‘into the past’ to retrieve, replay phone calls’. The public discussion surrounding cyberspace is fraught with dire warnings, fear mongering and outright panic. The reality is that cyberspace is as complex and multifaceted as the tactile world in which it’s entwined. While risks to privacy, assets, and even security are real, cyberspace also drives social mobility, economic empowerment, and connectivity. For this reason, to truly understand and act in cyberspace, a more comprehensive dialogue on the opportunities and pitfalls of the most unique of global commons must be developed.

Today, ASPI’s International Cyber Policy Centre releases its inaugural Cyber Maturity in the Asia-Pacific Region 2014 report (PDF). The report attempts to capture this complexity and organise it in a digestible manner, using metrics to provide a snapshot through which government, business, and the public alike can garner an understanding of the cyber profile of regional actors. Cataloguing hardware and capabilities provides only a thin description of the cyber domain. Maturity on the other hand looks at the presence, implementation and operation of cyber-related structures, policies, legislation and organisations. These maturity indicators encompass whole-of-government policy and legislative structures, military organisation, business and digital economic strength and levels of cyber social awareness. Read more

The Asia-Pacific region is ideal for exploring the concept of cyber maturity. It has undergone tremendous economic growth, political transformation and social change. The development of cyberspace and the information and communications technology that powers it has been an integral part of the region’s socioeconomic growth. The online environment is also growing rapidly in importance as an avenue for political and social expression in Asian societies. At the same time, the potential for conflict in the region is on the rise, as the traditional power brokers jostle for position. While it’s clear that all the countries analysed are increasingly cognisant of cyberspace as a critical area, the approaches and priorities each adopts are diverse, and it’s the exploration of each sector that proves most revealing.

Cyber maturity weighted scores

Cyber maturity weighted scores

China received well-deserved high scores for international engagement and the military’s role, but business-government digital dialogue, public awareness, and the vast gap in urban-rural connectivity are a drag on China’s cyber maturity. Singapore is incredibly cyber savvy, but legislation that verges on censorship remains an area of concern. Myanmar suffers from a stark absence of infrastructure, but increased foreign investment in recent years, matched by ambitious government efforts, shows clear potential. Australia for its part leads the regional pack, with strong capabilities and international engagement. However a lack of whole-of-government strategy, ambiguity surrounding leadership and the need for an updated cyber strategy leave room for improvement.

Oversimplifying the cyber domain as one where spooks, crooks, generals, and nefarious actors lurk in every corner presents a geography where conflict rules the day. But looking into the complexities of what cyberspace means, opens room for engagement, confidence-building, capacity-building and cooperation. While many paint the Asia-Pacific as a cauldron of conflict, likening it to pre-World War I Europe, conflict isn’t inevitable, and the report shows there’s incredible opportunity for governments, business, and even society as a whole to engage with regional partners. While likeminded states such as Japan, Singapore, United Kingdom, and United States provide the most opportunities for Australia, there are areas for engagement across the region.

International engagement with China, military-to-military cooperation with India, and bolstering CERT-CERT dialogue with Indonesia, all offer avenues to collaborate. There’s no doubt that cyber conflict is a real possibility in the Asia-Pacific, but as a global common it’s international cooperation that’ll secure cyberspace. Fighting cybercrime requires transnational responses, digital economies rely on an international marketplace, and social empowerment rises from connectivity. Cyberspace mirrors the conflicts and partnerships of the international community, and a mature approach to cyberspace must be equally all-encompassing.

The Cyber Maturity in the Asia-Pacific Region 2014 report (PDF) and infographic is the first edition of an annual series that seeks to both inform and spur debate. Join the discussion @ASPI_ICPC #cybermaturity.

Tobias Feakin is a senior analyst at ASPI and director of ASPI’s International Cyber Policy Centre. Klée Aiken and Jessica Woodall are analysts in the ICPC. Images (c) ASPI 2014.

Submarines: German–Swedish tensions

At last week’s submarine conference, the following exchange took place between Dr Hans Christoph Atzpodien of TKMS and RADM (Rtd) Göran Larsbrink of Sweden, prompted by a question from the floor. Given the potential contribution of German and Swedish industry players to project SEA 1000, and given recent press interest, we thought it worth presenting the discussion in its entirety.

Errors and omissions excepted

Kym Bergmann (Asia Pacific Defence Reporter):

…to Dr Atzpodien, we read in the European media that there’s a high level of unhappiness between TKMS and your Swedish subsidiary Kockums. Could you please comment on this for us?

Hans Christoph Atzpodien:

Just coming back to your question, actually as everybody knows we are the 100% owner of Kockums in Sweden, which in the meantime is renamed into TKMS AB. We have been invited to acquire it 15 years ago, and unfortunately now as Sweden has engaged in a national submarine program called A26 it seems that we are no longer wanted as a foreign owner— that is our perception. Of course we would have been open to any discussions and fair solutions to this new situation, but there was not much of talking—recently there was much more of, let’s say, force to deprive us of our basic ownership rights, and I can only hope that this will come to an amicable solution. Finally, at least I can say we are open for talks and have offered this various times, and I hope we will have a good solution for that in time because we feel first and foremost a responsibility also for the employees of the company. Read more

Göran Larsbrink:

My name is Göran Larsbrink, retired Rear Admiral from Sweden. Normally there would have been speakers from Sweden here today, but there are reasons for not being here, and it’s just recently that the information about what’s going on has become public, and therefore I think it’s appropriate to mention a little bit about what’s going on since this has an influence on Australia’s choices.

And Sweden is today in a process to resume command over its own naval industry and thereby its own future. And this industry is classified as being of essential national security interests. As wrong as it was to sell Kockums to HDW in 1999, as right it is today to take it back and resume control. In doing so Sweden will be in control of and have the capability to design, produce and operate our own submarines, as well as to cooperate with whom Sweden wants to cooperate with in order to meet national security interests, all under the umbrella of government-to-government agreements. And in this Sweden possess all relevant IP and use it as we want, together with whom Sweden wants, and there is no one else that can use it without permission from our Government.

What is going on now is a swift and determined transition of submarine design and production competence from former Kockums to Saab. The infrastructure for production can and will be solved in different ways. The submarine program A26 is terminated, but instead the project NGS—Next Generation Submarine—will arise like a bird phoenix. Furthermore, there is a political will to substantially increase Sweden’s defence budget—thank you Mr Putin—including an increase of our submarine force from four to five submarines. And in this, the Government, the Opposition, all the defence authorities and the industry (meaning Saab) are agreed upon and are fully committed that it shall be done [inaudible] and successfully.

Hans Christoph Atzpodien:

Please allow me to just comment on this. Mr Larsbrink I think this is a surprising statement. You have to recognise first of all we are the legitimate owner of the company and we are living all together inside the EU, and I rate it quite surprising if you state here that you just take it back. We could, I was not going more deeply into that upon the question I was asked, but with this statement I have to because the measures to take it back resulted in hiring massively our skilled people without telling us, taking away the business licence or putting it on hold, not providing us with any further orders for shipyard in total and thereby destroying the industrial base and the employment base for almost a thousand people, and this is something which we cannot see in line with legal actions and we cannot see in line with responsibility for a company and for the employees.


Globalisation and war: examining the mechanism

The China Marine Surveillance cutter "Haijian 66" and the Japan Coast Guard cutter "Kiso" confront each other near the Senkaku/Diaoyu Islands. Will trade and investment connections and the economic imperatives of both governments prevent conflict?

Charles Miller offers an excellent overview of the large-sample econometric debate among political scientists about whether globalisation can reduce the possibility of war. I’d like to build on his post by digging a little deeper into the theoretical debate and expanding on how policymakers should approach this question in the context of Asia.

A good place to start is to ask how globalisation—taking as Charles does, the proxy of trade—might prevent conflict.

Scholars such as Oneal and Russett (cited by Charles) who say that trade is a force for peace start from the observation that armed conflict inevitably reduces (if not stops) trade between the belligerents, and potentially their trade with third parties. That imposes high costs on domestic economic actors. Firms can’t export their goods, consumers can’t enjoy imports, jobs are lost and the economy suffers. The key pillar of the argument is that political leaders—the ones making decisions about whether to fight—are sensitive to those costs, and that will temper their belligerence. Read more

Those who disagree don’t dispute the economic costs of fighting, but argue that political leaders, and their constituents, don’t care about economic losses when their nation’s survival, territory or perhaps pride and honour are involved. Instead, publics ‘rally ‘round the flag’ and support their leaders when security is threatened. A similar argument can be made for the ineffectiveness of economic sanctions; countries will endure economic pain when the larger security or political goal is worthwhile.

Who’s right? Well, we must acknowledge that this simple theory obscures a great deal of real-world complexity. It might matter whether the government is an electoral democracy or a repressive autocracy, or what kind of trade is in danger of disruption, or whether alternatives to commerce with the ‘enemy’ state are available.  In essence, though, attempting to answer the big question about whether trade can prevent war between two states requires asking two more specific questions.

The first is a question of economics: how sensitive is the state’s economy to the disruption that war would cause to its international trade and commerce?

The second is a question of domestic politics: how much influence do economic interests have over policy? Asked another way, how do leaders balance the economic interests of their constituents against security concerns?

Let’s consider, for example, the region’s most concerning flashpoint, the dispute over maritime territory between China and Japan in the East China Sea. Richard Katz makes a persuasive argument that the economic links between the two countries are a formidable force for preventing conflict. On the economic question, he argues that the depth of Japanese-led investment and production in China is a critical input to China’s development model, especially through job-creation and tax revenue. Similarly, he argues that the Chinese market is equally vital for Japan’s export-dependent economy. On the political question, he argues that the political legitimacy of both governments is founded upon economic growth,regardless of whether those national leaders are democratically elected or not. In his view, the relationship between economic interdependence and political legitimacy is said to restrain both governments’ hawkishness.

While some might want to quibble with his answers, Katz at least answers exactly the right questions. It’s the questions themselves on which policymakers should focus, not just to predict whether globalisation or trade may inhibit conflict, but to understand the mechanism through which such inhibition occurs, so that policies can be targeted to nourish the process.

Countries like Australia with interests in avoiding regional war must look to identify the economic actors—companies, business organisations, unions, and even consumers—within a potentially belligerent country with the greatest stake in peace, and develop ways to multiply their number and increase their capacity to influence their government’s policy. When the next crisis erupts, they might offer the best chance at preventing aggression by their government.

It’s helpful to remember that trade was insufficient to prevent conflagration in Europe a century ago and useful to consider the important ‘data points’ from disputes unfurling right now.

There’s a lot still to be learned from down in the weeds of economic activity between countries and the domestic politics of these interdependent relationships. Focusing on those questions is our best hope to ensure history doesn’t repeat itself.

Darren Lim is an Australian PhD student at the Woodrow Wilson School of Public and International Affairs at Princeton University. His research analyses the microeconomic foundations and strategic consequences of economic interdependence, asking how countries in Asia resolve conflicts between their economic and security interests. Image courtesy of Wikimedia Commons.

The Canberra officer (3): the promised land of jointery

The Governor-General’s Banner is escorted by Australian Defence Force Academy midshipmen and officer cadets during the 2014 Chief of Defence Force Parade.

Tribalism isn’t the scourge it once was in the Australian military. Sure, they still have tribes, but they don’t go to war with each other as often. And the tribes have found better ways to intermingle and agree on a common cause.

Australia’s Army, Navy and Air Force had to stop fighting so they could prosper in the Canberra system. The need for less warring tribalism and more cooperation was one of the lasting lessons the services took from the Tange revolution.

The most recent column in this series looked at Defence creation stories, talking about the Old and New Testaments. Andrew Davies helped set that tone with this comment on what Tange did to the tribes:

When the three services were first thrust together by Tange, the effect was for them to war against each other and against the Forces of Darkness and Anarchy Tange set up to annoy them. It took about 20 years, but they eventually discovered if they intoned the word ‘joint’ (even if they didn’t believe it) they looked more like a bloc than three warring tribes. Over time, jointness has become a credo that has helped propel the CDF to the position you identify in the first column. A joint force to rule them all, C4ISR to find them; A joint force to bring them all together and in the darkness bind them.

Read more

Jointness has become a thing of beauty for the tribes, a mantra often intoned and a common totem of the tribes, always honoured in word and occasionally in deed.

Jointery has mattered greatly for the tribes from education to operational concepts; it has been vital in Canberra officer effort and in working the Canberra system; and jointery was the language used in the realignment of power between the Chief of the Defence Force and the service chiefs.

As a driver of operational concepts, jointery was a break with deep habits. One of the CDFs who helped impose and inspire jointery, Peter Gration, argued that the three services had far more history (and understanding) of operating with allies in coalitions than they did working with each other. Afghanistan and Iraq proved that bit of history is still strong.

Alliance and coalition tend to pull the services apart; jointery is now how they’re taught and structured. The three levels of officer education tell the story.

Pre-Tange, all officer training was conducted by single-service institutions. Direct-entry officer training and service-specific training is still provided by the individual services. But there’s now a tri-service institution at each level of officer education. And they’re all in Canberra.

The first is the Australian Defence Force Academy, which sits over the hill just behind Russell HQ, and provides entry level officer training.

The second is the Australian Command and Staff College, a few kilometres south down the valley at Weston, which prepares officers for command and staff jobs. The top layer of officer education, also at Weston, is the Centre for Defence and Strategic Studies. To produce the Canberra officer, the military educates officers in Canberra.

As one former service chief said to me recently when talking about the creation of the Canberra officer, the three tribes had agreed, ‘We’ve got to get smarter in how Canberra works’. Educating them in Canberra is a good start.

The most important physical expression of jointery is the headquarters of the joint operational command, HQJOC, which functions to plan, control and conduct military campaigns and operations.

The JOC broke free of the Canberra effect to the extent that it’s just outside the ACT, on the road to Bungendore, a gentle half hour drive from Russell. The HQ is named after General John Baker, which is a proper honour because Baker was a CDF who fought some of the sharpest battles with the service chief in the name of jointery and the power of the CDF. More on that in the next of this series.

The final point must be that tribalism still throbs, if at a lower level of intensity. As a measure of this, see the Defence Efficiency Review of 1997 (PDF), more than 20 years after the Tange revolution:

In virtually every area examined, those responsible have highlighted dysfunctional aspects of the higher level arrangements, which prevent them obtaining what to them are obvious improvements. The predominant concern expressed was the “tribalism” of the three Services and the Public Service in protecting their assets and influence. We were reminded of President Truman’s comment at the end of the Second World War. “…I have the feeling that if the Army and the Navy had fought our enemies as hard as they fought each other, the war would have ended much earlier”.

Graeme Dobell is the ASPI journalism fellow. Image courtesy of Department of Defence.

ASPI suggests

Commander Submarine Forces, US Pacific Fleet, Rear Admiral Phillip Sawyer. Image credit: Luke Wilson, ASPI

It was submarine-mania at ASPI this week with our international conference ‘The Submarine Choice’ held 9–10 April. And we’d like to extend a big thanks to all—speakers, sponsors, participants and venue staff—who made it a big success. Our speakers included the Minister for Defence Senator David Johnston (full speech here), Chief of Navy Vice Admiral Ray Griggs (full speech here), Commander US Pacific Fleet Admiral Harry B. Harris Jr (full speech here) and Commander Submarine Force US Pacific Fleet Rear Admiral Phillip G. Sawyer (pictured), who said:

Read more

One of the main headlines from the event was the Defence Minister’s announcement to re-examine the previous government’s plan to build 12 submarines. In this blog post, Andrew Davies and Mark Thomson argue there are reasons to think 12 still might be the number. Earlier in the week, ASPI Chairman Stephen Loosley argued that, with a more constrained defence budget, it was time for Australia to back away from the 12-submarine commitment, and that six would achieve our strategic objectives.

For other Strategist posts that break down the big issues from the conference, visit ‘The Submarine Choice’ section on the blog, and for updates and images from the event, see Twitter hashtag #SubCon14.

In Indonesia, it’s been a tougher ride than expected for presidential hopeful Joko Widodo’s political party, PDI-P, in this week’s legislative election. With only 19% of votes (they needed 20% of seats in the legislature or 25% of the popular votes to nominate a presidential candidate), the party might have to cut a deal with others to ensure a shot for Jokowi at the July election. Over at New Mandala’s Indonesia Votes section, Marcus Mietzner, Edward Aspinall, Wimar Witoelar and David Willis share their post-election analysis on PDI-P and the limited ‘Jokowi effect’.

Shifting to broader strategy-related items, this week’s podcasts are courtesy of the ANU. First, a recent public lecture by Professor Sir Hew Strachan in which he made the argument that an emphasis on national interests, defined in terms of geopolitics, can run counter to our ideological commitments. Second, a panel discussion featuring some of Australia and Asia’s leading scholars on whether East Asia risks being brought to the brink of war as Europe was in 1914.

Sticking with the Asia Pacific, Japan has pushed ahead with plans to stockpile plutonium, although not of a grade most desirable for bombs. The stockpile is being used for a nuclear recycling program designed to reuse plutonium as part of an overall plan to reduce Japan’s dependence on external energy sources. The Americans are reportedly unhappy with Tokyo’s stockpiling intentions, for fear of the material being stolen and used by terrorists. For more on the controversy around the plan and Japan’s history of nuclear energy, read this New York Times piece.

Moving to the Middle East, with Iran entering a third round of nuclear talks with world powers this week, CSIS has produced a 3-minute animated video explaining Iran’s missile capabilities, with analysis and narration by Anthony Cordesman.

Turning now to technology and conflict, there’s a new exhibit at the United Nations that simulates walking around landmines. It uses a low-energy Bluetooth technology to find a phone’s location and transmitters hidden throughout the exhibit. When a person comes too close to a transmitter, it acts as a landmine and detonates, filling the user’s headphones with a jarring, visceral explosion followed by an audio testimony of someone’s actual experience.

Lastly, if you’re in Perth, there’s a special art exhibition commemorating the 50th anniversary of the Special Air Service Regiment (SASR) ‘Out of the Shadows’ on display at the Western Australia Museum. ‘Out of the Shadows’ runs from Saturday 12 April to Sunday 1 June and offers a glimpse into the world of Australia’s special forces. For more details visit here.

Natalie Sambhi is an analyst at ASPI and editor of The Strategist. Image credit: Luke Wilson, ASPI.

Governing the Net: pivotal actors go to NETmundial

A word cloud formed from the key words used in content contributions for NETmundial 2014

The United States, China and Russia have so far been the key players in the Internet governance debate. As we showed last week, while the multi-stakeholder and statist schools of thought have shaped the discussion, neither has gained a decisive upper-hand. It’s becoming increasingly clear that the future of Internet governance won’t be decided by the stalwarts of those opposing sides, but by the actors who occupy the middle ground. With an international consensus unlikely, it’ll be the building of like-minded coalitions that shifts the balance towards either end of the Internet governance spectrum. This week, we look to NETmundial in Brazil as the next big Internet governance forum where the positions taken by pivotal actors may determine how the debate progresses, and how our day-to-day Internet experiences might change.

NETmundial’s origins are inextricably bound to Edward Snowden’s disclosure of America’s NSA surveillance activities. At the UN General Assembly in September 2013, Brazilian President Dilma Rousseff spoke strongly against the US and called for the UN to become involved in Internet governance. Two weeks later, ICANN CEO Fadi Chehadé was in Brazil recognising that ‘trust in the global Internet has been punctured’, and that it was now ‘time to restore this trust through leadership and through institutions that can make that happen’. Rousseff accepted Chehadé’s invitation to host a global summit on multi-stakeholder Internet governance, and NETmundial was born. Brazil’s joy was short-lived; the US announcement that it was shifting the last of its internet management responsibilities to ICANN muted the significance of NETmundial and empowered ICANN as the premier forum for the debate. Nonetheless, NETmundial will be an important proving ground for ideas that’ll be taken to future ICANN meetings, so it’s useful to explore the positions of Brazil, India and the EU—all pivotal actors who can shape the debate. Read more

Brazil has been a peculiar actor in the debate so far. Historically, it has supported a more intergovernmental model of Internet governance, deferring to the UN and ITU as the decision-making bodies. So it was interesting that President Rousseff, while requesting UN intervention, also made clear overtures to multi-stakeholderism, calling for ‘open, multilateral and democratic governance, carried out with transparency by stimulating collective creativity and the participation of society, governments and the private sector’. Brazil will be riding into NETmundial on the back of its recent success pushing through the Marco Civil da Internet –a civil rights framework for Brazilian Internet users–and as more recently reported, its designs for global internet governance rules (to be released on 14 April). As a growing economic power and leader in the developing world, Brazil will do much to shape the future of the Internet governance debate.

India’s Internet governance debate, like Brazil’s, is in flux. For a time, India demonstrated that it was an inclusive, balanced actor committed to a free and open internet governed through multi-stakeholder processes. Then, in November 2013, they threw their support behind the multilateral Internet governance model after concerns about data storage and internet traffic management in a post-Snowden world. India highlighted its distaste for the multi-stakeholder process, characterising it as ‘something of a misnomer’ given US dominance in the system. The Indian government has since emerged as a reactionary in the Internet governance debate, attempting to elbow its way into a seat at the table. Itself a beneficiary of an open Internet, India should be encouraged to consider carefully the representations it’ll make at NETmundial as part of a long-term game, not a short-term one.

While the European community has been a strong proponent of an inclusive, bottom-up system, the US legacy role has remained a long-standing point of contention. After the Snowden revelations, European leaders lambasted the US and tabled policies that hinted at Internet Balkanisation, appeasing both sides of the debate, as well as domestic business interests. Fortunately America’s recent moves have largely placated its Europeanpartners. The European community is large and diverse, providing a solid foundation upon which to build a global consensus on Internet governance. But the transatlantic relationship brings its own baggage, limiting the North Atlantic’s potential to function as an incubator for internationally acceptable norms. Europe offers an important critical mass, but not one nearly large enough to solidify Internet governance norms and rules of the road.

The Snowden revelations caused Brazil, India, the EU and others to lose faith in America’s goodwill in the Net governance debate. It’s time to harness those pivotal actors into a coalition of likeminded states whose support can buttress multi-stakeholderism against further moves toward statist Internet governance. The time for talk is over: strong leadership is needed to ensure that the Internet governance debate is shepherded to a positive outcome firmly rooted in multi-stakeholderism. NETmundial holds the potential to drive the transformation of ICANN and boost moves to develop international norms on privacy and human rights online. Australia should not come empty handed to this critical forum, a topic we’ll delve into next week.

Klée Aiken is an analyst and David Lang is an intern in ASPI’s International Cyber Policy Centre. Image courtesy of NETmundial.


Two strategic competitions in Asia

Game of thrones?

The unfolding strategic environment in Asia is generating two strategic competitions: one horizontal and one vertical. The horizontal competition is highly visible: indeed, we see the evidence of it almost daily, as regional countries contest their respective territorial claims. But the vertical competition is less obvious:  it’s a contest over position, not of space. Rank and status matter in Asia. This is a region with a strong historical attachment to notions of hierarchy. We fret the consequences of a possible mishandling of the horizontal competition, but the vertical competition is probably the more serious one—because it’ll define the shape of the Asian security order in the 21st century. Why is that competition important? The main reason is that an era of relative Asian weakness is coming to an end, and Asian countries don’t share a unified vision of the hierarchy of 21st-century Asia. And that, in a nutshell, is what’s especially worrying about current security dynamics in Asia.

That’s not to say the horizontal strategic competition is irrelevant. It certainly isn’t. That contest has two core issues; the growth of Asian power projection capabilities, and the growing intensity of multi-player contests over small islands and rocks. The first of those issues is currently seen most clearly in the steady rise in China’s material power. ASPI analysts have talked before about the geographic expansion of Chinese military power as resembling a growing ‘bubble’, within which it’s becoming more challenging for adversaries to operate. That bubble is slowly expanding to cover more of the US’s principal allies and partners along the Asian rimlands, not to mention the US territories, bases and facilities to be found there. The growth of the bubble underpins Beijing’s ‘anti-access, area denial’ doctrine. Read more

Moreover, China’s recent push on its territorial claims in the South and East China Seas is a clear expression of Beijing’s objectives in the horizontal competition. China knows that it’s well-placed to wear down rival claimants one by one, and that it can do so without provoking a real crisis because the dominant strategic power in the region—the US—holds no position on who owns what. But China isn’t the only rising Asian power. Other Asian countries are generating their own somewhat smaller power bubbles as their economic and military strength expands. And they too are pushing back in relation to their own territorial claims, against China or another rising Asian player. Those various territorial competitions are perhaps best described as contests in low-intensity coercion. No-one wants the contests to escalate, but nor are any of the contestants willing to cede its claim.

One of the reasons why no-one’s pulling back from the horizontal competition is because of what such an action would imply in relation to the vertical competition. Abandoning a claim against a rival would be tantamount to deferring to another player. And such a pattern of accommodation would underpin the gradual emergence of a new strategic order in Asia. And that’s why the vertical competition’s important—because it’s a positional contest for places in the emerging 21st-century Asian hierarchy. Australia isn’t a direct player in the territorial contest, although it has direct interests in the ability of its major ally to operate in the Western Pacific. Our bigger choices are the ones related to the positional competition.

At the moment, we’re not competing with much vigour in the vertical competition. We occasionally send signals that we need to ‘weight up’ in Asia, but don’t show much understanding that the real competition is one of privilege and deference. We’re Westerners, after all. We cling to a notion that the region is moving towards a number of influential states playing alongside each other on an approximately level playing field. That’s a model built upon the basic equality of states, and appeals to our Westphalian understandings about sovereignty. In practice, of course, we accept that all countries aren’t equally influential, but nor do they have to be. But the Eastern notion of Asia is different. Over the past 2,000 years Asian countries have been drawn to models of hierarchy, not equality—to vertical distinctiveness, not to multipolar sameness.

Australia, as a Western country living in 21st-century Asia, has its own conception of an ideal Asian security hierarchy, and it’s one where the US remains the pre-eminent security actor. We seek to buttress that order by encouraging other regional states to support politically liberal, economically open, and socially inclusive values. That’s a noble order to aim for. But it might overlook the likelihood of a looming hierarchical competition as Asian great powers struggle for places on the regional ladder.

Rod Lyon is a fellow at ASPI and executive editor of The Strategist. Image courtesy of Flickr user barto.

The politics of submarines and budgets

Blank (2)The Abbott government is hard at work burying the 2013 Defence White Paper as it prepares a new version to be released next year. Because of the way my mind works, I carried a copy of the Labor White Paper with me to the ASPI Submarine Choice conference. Listening to the defence minister (PDF) while writing the post that went up yesterday, I turned to the shortest chapter in that 2013 policy.

Chapter seven, ‘Defence Budget and Finances’, needs only one and a half pages to make the money statements in 17 terse paragraphs. The third and final page of the chapter has only three words—Page Intentionally Blank.

The beauty of the Intentionally Blank page—as joke or Delphic editorial comment—is that it allows the reader to insert almost any punch line. Overhauling the 2013 White Paper to produce a 2015 version, the Abbott government can scribble happily in that blank space. Read more

The truth of such policy documents is that however much they change and rearrange, a lot of the old finds its way into the new. And some of the language and mindset of the 2013 Paper will surge into the 2015 replacement. Nearly half of the 17 paragraphs in Labor’s budget chapter are devoted to how tough the task is: ‘fiscal discipline’ crops up a couple of times, along with phrases like ‘the sustainability of the budget’, ‘complex choices’, and ‘achieving greater efficiency and effectiveness’. This is the language of budget pain and hard choices which is building in volume and intensity towards Canberra’s annual budget crescendo on 13 May.

In discussing the politics of submarines (and, thus, the politics of defence spending) Australia hasn’t yet seen the identity of the Abbott government. We’ve been taking our entertainment and making premature judgements during the phony war.

Next month, the real stuff starts; the bell sounds and the true fight begins. The first budget is when choices are announced, policies set and priorities picked in all their polarising glory.

As Nikki Savva observes, this could be the most important budget in 20 years, revealing the government’s DNA: ‘Does it have the tough gene and the smart gene in equal parts in its make-up, or will the recessive, populist, weak-ticker gene, prove to be dominant?’

In warming up for the heavy lifting, the defence minister’s speech—announcing the decision to ‘re-examine’ the number of subs—was described on The Strategist as the government’s first big defence announcement.

The ‘re-examine’ pledge implies an answer that says six new subs, not 12; halving the number takes 40% out of the budget estimates, freeing up a big chunk of defence cash if 12 subs would have cost $40–50 billion.

Halving the number of subs in the shift from the 2013 to the 2015 white paper helps with a political and budget must—get a shopping list of defence kit which goes close to matching the cash on offer in the budget forward estimates. As Canberra’s annual May moment of fiscal theatre always makes manifest, the forward estimates reign and will always drive and define the politics.

Mentioning a political/budget imperative requires a reference to Mark Thomson’s wonderful post and accompanying essay (PDF) on the three musts of the submarine question: there must be a Collins replacement, it must be built in South Australia and it must have conventional (not nuclear) propulsion.

Other political musts feed into Mark’s model. The Abbott government was at the wheel when Australia gave up local car manufacturing; this isn’t going to be the government that also gives up local ship building.

During the South Australian election, Prime Minister Abbott was brave enough to say that defence wasn’t ‘some kind of job creation programme’. The cheering defenceniks should read the rest of the quote. Abbott’s tough love was trumped by a repeat of the golden promise:

For years now, we’ve been saying that work on the future generation of submarines would centre on the South Australian shipyards. So I want to make that crystal clear, just as we said before the election, so we will do after the election, we will ensure that work on the future submarines centres on the South Australian shipyards.

Defence budgets are torn by myriad forces, not least the tyranny of forward estimates, ever at war with the political musts.

Graeme Dobell is the ASPI journalism fellow. Image courtesy of Department of Defence.