Indian Strategic Studies: 05/18/15

18 May 2015

Undecided and unwilling

By: Yubaraj Ghimire

The government just cannot make up its mind about what donors should do.

A powerful aftershock on May 12 — almost as powerful as the earthquake on April 25 — took an additional toll not only on human life and property but also on the collective confidence of a people engaged in rebuilding what they had lost. The focus shifted again to search and rescue operations as fresh areas — Dolakha, Solu, Sindhupalchowk and Ramechhap — all east of Kathmandu saw houses falling. It is still not clear how many are buried underneath.

Indian, American and Chinese aircraft that had remained in Nepal promptly joined the mission, but it was hampered by the tragic crash of a US Marine chopper, with six American and two Nepalese military personnel on board. Incidentally, parliament was in session, to pay homage to those who lost their lives on April 25 and to announce the relief and reconstruction package, when the floor and the convention hall shook, forcing members to rub for safety.

Taking a comprehensive view of quakes

C. P. RAJENDRAN

May 18, 2015

The tragic Nepal quake is an opportunity to learn and understand the threats of great temblors

The Nepal earthquake of April 25 is the largest in the Himalayan region since the 1934 quake which measured 8.2 on the Richter scale and destroyed not only parts of central Nepal but also the plains of northern Bihar in India. Mahatma Gandhi, shaken by the Bihar tragedy, wrote in the Harijan that the earthquake was “providential retribution to India’s failure to eradicate untouchability”. Although this statement dismayed the rationalist in Jawaharlal Nehru, it was Rabindranath Tagore who dared Gandhi by sending a letter to the Harijan saying, “Physical catastrophes must have origin in physical facts”. When Tagore, always far ahead of his times, made this insightful statement, the science of earthquakes had not developed. It was only in the 1960s that plate tectonics explained the origin of earthquakes.

Rear View: Vajpayee makes a big bang

By Inder Malhotra

May 18, 2015

On October 16, 1964, when China tested its first nuclear bomb at Lop Nor, Premier Zhou Enlai said to Marshal Ni Rongchen: “Unless you make the big bang, they don’t listen to you.” Obviously, Atal Bihari Vajpayee and his closest confidants also thought so. For, less than two months after his coming to power, he conducted the Shakti series of nuclear tests at Pokhran and declared India to be a nuclear weapon state. Suddenly, the feeling of vague disappointment was blown sky-high. What replaced it was nothing short of euphoria.

Even Congress president Sonia Gandhi’s reaction was fully to endorse the prime minister’s decision. Later, however, some of her naysayer followers persuaded her to soften her support. People at large were dancing with joy.

To be sure, there were some on the Indian scene who were fundamentally opposed to going nuclear. A few of them made themselves ridiculous while denouncing the national mood. Some even questioned the efficacy of the five explosions designed to test weapons with different yields — from tactical to thermonuclear — and for different delivery systems. Foreigners, who condemned Pokhran II as strongly as 90 per cent of Indians had applauded it, knew better. Otherwise, the United States, Britain, Japan and some others wouldn’t have imposed sanctions on this country.

Economic reforms: Looking back & ahead

Charan Singh

May 18 2015

Unfortunately, the debate on the Land Bill got embroiled in controversy and seems to pitch industrial growth against agricultural growth. The progress of agriculture and industry can be complementary to each other.

Make in India will ensure job generation for the youth and schemes like the Jan Dhan Yojana will help to extend bank accounts to unbanked

The first year of the Prime Minister at the helm of policy making in India has truly been momentous. The country has witnessed a number of initiatives on the economic front since he assumed the august office after more than a decade of experience as a chief minister of a fast-developing Gujarat. The reforms, under the PM's stewardship, spanned different aspects of the economy — industry mainly micro, small and medium enterprises; monetary and fiscal policy, social security; skill development; and employment generation.

Learning skills from Seoul

SKAND TAYAL

May 18, 2015

Reuters“In the shipbuilding sector, South Korea has world class technology, but India has obsolescent equipment and management.” Picture shows a Samsung Heavy Industries shipbuilding yard in Geoje, South Korea.

India and South Korea have a robust economic engagement, but the Modi government will need to take bold steps for a deeper partnership

In his first year of office, Prime Minister Narendra Modi has chosen his foreign destinations with careful thought. After wrapping up his visits to China and Mongolia, Mr. Modi will be in Korea on May 18 and 19 in recognition of the country’s potential importance in pushing the agenda of ‘Make in India’, skill development, employment generation and indigenisation of defence manufacturing.

The stage for the visit has already been set by External Affairs Minister Sushma Swaraj, who had, in December 2014, visited Seoul for the 8th Joint Commission meeting. Defence Minister Manohar Parrikar also went to Seoul in April to identify projects for closer defence collaboration.

Britain-India: From Courted to Courtier

By Shairee Malhotra

May 17, 2015

http://thediplomat.com/2015/05/britain-india-from-courted-to-courtier/

Making his first official trip to Europe, Indian Prime Minister Narendra Modi visited France, Germany and Canada in early April this year. His agenda: acquiring Rafale fighter jets, boosting Indian manufacturing through the Make in India campaign, urging the EU to move forward on a stalled free trade agreement, and attracting trade and investment.

Although Modi has said that he “usually tries to visit two to four nations together” in convenient clusters, the U.K. was not on his itinerary, despite some vigorous courting. While Britain has erected a statue of Mahatma Gandhi in London’s Parliament Square in an attempt to entice India, the former colonial power finds itself on the sidelines.

In 2014, five prominent U.K. politicians made official visits to India, from former Foreign Secretary William Hague to Chancellor of the Exchequer George Osborne and former Deputy Prime Minister Nick Clegg. Indeed, Prime Minister David Cameron himself has visited India a whooping three times since assuming office in 2010, including twice in 2013, professing that India is Britain’s “partner of choice” and “relations with India are at the top of the U.K.’s foreign policy priorities.” In 2012, Britain was among the first countries to withdraw its boycott of Modi over his alleged complicity in the 2002 Gujarat riots – the U.S. only followed suit in 2014. In addition, Britain has steadily supported India’s bid for a permanent seat on the UN Security Council.

Bring forth the Northeast

NAMRATA GOSWAMI

The Act East policy, which appears to be driven by Delhi, must include the vision of local actors in the Northeast who are best equipped to understand their realities

I grew up in a small town called Haflong in Dima Hasao District (formerly called North Cachar hills) in Assam, amid the regal Barail ranges. These mountains housed ethnically diverse peoples from the Dimasas and Jemes to the Hmars, Bengalis, Kukis and Nepalis. Haflong was a sleepy hollow, peaceful and tranquil, in the 1980s and early 1990s, but the later years were not kind to this small hill town. Armed insurgencies ravaged it and ethnic rivalry between the dominant community and the minorities created a feeling of distrust and fear mongering. The town has seen little real development since I left it in 1997, and appears caught in a time warp. The weakness of state institutions such as the autonomous district councils have not helped matters much either.

The Significance of Modi's South Korea Visit

By Tridivesh Singh Maini

May 16, 2015

http://thediplomat.com/2015/05/the-significance-of-modis-south-korea-visit/

The attention is on China, but the South Korea leg of his trip could also be important for India.

With Indian Prime Minister Narendra Modi currently on a three nation visit to May 19, all eyes will be on his time in China. His stops in South Korea and Mongolia will receive less attention.

Yet India’s ties with South Korea are important both from a strategic and economic perspective. Bilateral trade has consistently increased over the past two decades. During her visit to Seoul in December 2014, External Affairs Minister Sushma Swaraj referred to both the presence of Korean companies in India, as well as the level of bilateral trade, estimated at $17 billion, still far below its potential of $40 billion, which both countries have targeted.

Pakistan’s Shaheen Missile Family and its Implications for Pakistan’s Security

By Debalina Ghoshal

Following its 1998 nuclear tests, the leadership in Pakistan has emphasized the need to develop “a minimum deterrent capability to meet the requirement of its national, flexible (medium range missile force).”[1] It is a surprising fact that despite being politically unstable, Pakistan has continued a sophisticated ballistic missile development program. Pakistan’s success is due in large part to assistance from China and North Korea. Pakistan claims that its missile program has been mostly India centric, and “it does not aim at augmentation of strategic power for a political rationale.”[2] The paper will address Pakistan’s nuclear strategy and then examine the Shaheen missile system and its place in Pakistan’s nuclear strategy.

Understanding Pakistan’s Nuclear Strategy

Strategy can be defined as a set of actions to be undertaken in order to achieve a goal. Nuclear strategy lays down a set of actions need to be undertaken for the development and the use of nuclear weapons. These plans of action aim to address the crucial issues pertaining to nuclear weapons, such as under what circumstance is it possible for the state to develop nuclear weapons; the issue of strategic and tactical nuclear weapons; and most importantly, the use of nuclear weapons - whether to use nuclear weapons against counter-value targets or against counter force targets or adopt a countervailing strategy, and the survivability options of nuclear forces.

Asia’s Watery Graveyard for Asylum Seekers

By John Sifton

May 16, 2015

The tragedy unfolding in the Andaman Sea can no longer be ignored.

On the Andaman Sea, west of the Siam peninsula in Asia, a tragic scandal is unfolding. Thousands of Rohingya asylum seekers who had recently fled Myanmar or Bangladesh on boats — mostly small open fishing boats and larger trawlers — and a smaller number of Bangladeshis, have been trying to reach Malaysia, where many Rohingya have previously sought refuge.

Because of new crackdowns on traffickers in Thailand and new policies by Malaysia and Indonesia to turn backany of the boats that reach their shores, these “boat people” have been forced into a situation of immense peril: packed together, floating on the open sea at risk of drowning, disease, and dehydration.

Sovereignty in the Himalayas

By Akhilesh Pillalamarri

May 16, 2015

http://thediplomat.com/2015/05/sovereignty-in-the-himalayas/

Historically, the Himalayan region has raised fascinating questions about the nature of state sovereignty.

Forty years ago, in 1975, India annexed the Himalayan territory of Sikkim, which then became India’s 22nd state.This annexation was made official by an amendment to the Indian constitution on May 15, 1975 after a referendum; you can read more about that in this article at The Diplomat by Ankit Panda. In essence, due to migration, ethnic Nepalese came to be the majority of the population in Sikkim, outnumbering the native Sikkimese (Bhutias and Lepchas, who are related to Tibetans). This lead to the overthrow of the Chogyal, the hereditary Bhutia Buddhist monarch and Sikkim’s merger with India.

China's Growing Global Military Presence: Walk Softly and Carry a Small Stick

The alarm bells that are ringing among various governments and in the press with respect to China's growing global military presence are overdone. Yes, in doing so, China is indeed seeking to expand its global political, as well as its ability to project its military power abroad. As the world's second largest economy and de facto superpower, what, exactly, would the West and its neighbors expect it to be doing? The difference is, unlike when the other Great Powers sought to expand their own global reach, China actually has little ability to project its power at the present time.

Not Really a String of Pearls

For more than a decade now, the West has been pounding the 'String of Pearls' drum, arguing that China has been seeking to secure its flow of natural resources from around the world by using its economic and military relationships with governments throughout Asia to establish numerous military facilities throughout the region. There is some truth to this, of course, with the Chinese having either financed, established or having access to ports in Myanmar, Sri Lanka, Bangladesh and Pakistan. But a recent report from the Institute for National Strategic Studies (INSS) notes that, based on its long-standing foreign policy principles and objectives, there is little reason to believe that China will make much additional headway in pursuing more in the way of a String of Pearls, and there is actually no evidence that China is using any of these sites for military activities.

Chasing the Flies and the Tigers

17 May , 2015

Prime Minister Narendra Modi with President of China Xi Jinping at Big Wild Goose Pagoda, China

There is another ‘Actual Combat’ in the CMC’s dual approach, which has regularly come in the national news during the past year. It is the resolute fight against corruption, at all the levels of the PLA. In December 2014, The PLA Daily announced that there will be no escape for the corrupt in the Chinese defence forces. Quoting the flagship newspaper of the PLA, Xinhua commented, “…in the battle against corruption, there will be no privilege or sanctuary of impunity for anyone.” The PLA strongly denied that “continuing the campaign against corruption could destabilise people’s morale and public trust.”

On the contrary, it asserted that the campaign would continue, “The battle against corruption has entered a crucial tug-of-war stage; the anti-graft campaign is in line with the people’s expectations and as the campaign deepens…the Communist Party of China (CPC) and political environment in China will become even healthier. The anti-corruption efforts will only boost the morale among the Party, the military and the public, not undermine it.”

President Xi Jinping knows very well that the question is not to fix one or two adversaries…

China’s Mounting Fiscal Problems

By Sara Hsu

May 17, 2015

Reforms are on the backburner as central and local governments try and stimulate growth.

In recent months, China’s fiscal revenue has grown more slowly than has fiscal spending. Central and local governments’ fiscal revenues increased about 8 percent year on year in April, while national fiscal spending rose by 33 percent. Fiscal spending the first quarter of 2015 measured at 7 percent, the lowest rate of growth since 2009. The divergence between revenues and spending has resulted from a slowdown in growth, as well as from inefficiencies faced by local governments. Now, the Ministry of Finance and State Council have allowed for local governments to once again tap local government financing vehicles (LGFVs) for funds. While this may alleviate the fiscal spending slowdown, in the long run, this may result in a surge in non-performing loans that will act as a drag on future growth.

What's Behind China's Djibouti Plans

By Ankit Panda

May 17, 2015

Last week, reports emerged, citing the president of Djibouti, that China was in talks with the government there to open a naval base–its first formal overseas military base. In The Diplomat, Rob Edens examines the broader context of China’s Djibouti plans, noting its relation to Xi Jinping’s “One Belt, One Road” initiative. Kevin Wang notes that China’s plans for Djibouti shouldn’t be overhyped–the base doesn’t mean that China is lining up to challenge the international status quo or the United States. Over at Defense News, Alex Williams from the Center for a New American Security remarks that the Djibouti base is a signal of China’s futuer ambitions, noting that ”China is becoming more active in international security affairs than at any time in the history of the People’s Republic because they have an increasing global interest.” Just over a month ago, at RealClearDefense, Robert C. O’Brien had a detailed account of a possible Chinese base opening up in Namibia’s Walvis Bay, granting the PLA Navy access to the South Atlantic. The PLAN’s westward ambitions may end up being supported off the coasts of Africa.

Time to Stand Up to China in the South China Sea

Michael Mazza

May 17, 2015

"A new willingness to stand up to Beijing in a meaningful way—a readiness that has been noticeably absent over the past year—would calm nerves in allied capitals."

It has been more than fifty years since baseball legend Yogi Berra last took the field as a player, but the wisdom of many of his “Yogiisms” remains evident—even for the realm of international politics. On Tuesday—incidentally, the Hall of Famer’s 90th birthday—the Wall Street Journal reported that the Pentagon “is considering using aircraft and Navy ships to directly contest Chinese territorial claims to a chain of rapidly expanding artificial islands, U.S. officials said, in a move that would raise the stakes in a regional showdown over who controls disputed waters in the South China Sea.”

Explained: Why China's Cyberwar Strategy is Extremely Dangerous

Julian Snelder

May 14, 2015

There's an “Uber for X,” goes the little ditty, celebrating the ubiquitous infiltration of the online 'sharing economy.' It seems Uber's business model can be turned to virtually all our needs, and a global ecosystem of app buttons has popped up on our smartphones.

As in so many things, however, this ecosystem ends abruptly just north of Hong Kong's Lok Mau Chau border crossing. From there, an entirely different online realm offers a parallel menu of online businesses and brands that adapt – and often improve upon – sharing apps, with Chinese characteristics of course.

And now, proving real life can be sharper than parody, comes the story of Uber's own run-in with Guangzhou legal inspectors, who closed the service down and then promptly started their own officially-approved network. “The new taxi booking system, called Ru Yue, will be led by the local transport authority of Guangzhou – the very same government agency that sent its officials to raid the Guangzhou office of Uber.” There is, quite literally, a China for Uber.

Co-Designing The New Silk Road – Analysis

By Rajni Bakshi*

China’s Silk Road Economic Belt initiative will feature prominently on the agenda when Prime Minister Modi visits Beijing and Shanghai on 14 May. India can make a strong move to co-design the framework and details of this initiative – making it truly collaborative and win-win for all of Asia

The very mention of a “Silk Road” evokes images of teeming bazaars filled with not just the most beautiful silks but also metal objects, oils, spices, and innumerable manufactured goods that made the lives of our ancestors colourful and comfortable.

It was along this route that the many technological advances of ancient China travelled west and to India—paper, the wheelbarrow, gun powder, and critical innovations in tools which revolutionised agriculture.

China’s plan for a Silk Road Economic Belt (SREB), also known as One Road One Belt, seeks to celebrate not just this material legacy but also the ‘Silk Road Spirit’ which, as the Chinese government’s vision document states, is about “peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit.” [1]

A Future for the China-Russia Alliance?

By James R. Holmes

May 14, 2015

Images of China’s President Xi Jinping hobnobbing with Russia’s Vladimir Putin at VE Day commemorations conjure up breaking news from September 2, 1939. That’s the date of infamy when, speaking on behalf of the Imperial Japanese government, General Hideki Tojo announced Japan’s accession to the Axis. Tojo hailed the “unbeatable team” of “Aryans and those hated by Aryans, working together.”

In turn German chancellor Adolf Hitler gushed over the Reich’s partnership with this “very advanced clan of yellow apes.” Added Hitler: “I salute you, chinky-dinky rat-men….When Germany stands victorious on a conquered Earth, and Aryan supermen wipe out the undesirable mud races one by one, your like will surely survive to be among the last few to be exterminated.” Now there’s a solid alliance for you!

Life, it seems, imitates The Onion. Though less unnatural—and in all likelihood less perishable—a marriage than the Axis, the Sino-Russian entente now taking shape is nonatural alliance or strategic partnership. Whether two ambitious rising powers that share a permeable frontier and a past marked by conflict—including a war within living memory that could have escalated to a nuclear exchange—remains to be seen. Color me skeptical.

Will China Sell Armed Drones to US Ally?

By Franz-Stefan Gady

May 16, 2015

http://thediplomat.com/2015/05/will-china-sell-armed-drones-to-us-ally/

Jordan might be in talks with Chinese officials over the purchase of Beijing’s most capable armed UAV.

A U.S. Republican lawmaker believes that one of the United States’ closest regional allies in its fight against ISIS is interested in purchasing Chinese armed drones.

In a May 14 letter to U.S. President Barack Obama, Representative Duncan Hunter, a Republican from California, noted that he is “now aware that China is presently in Jordan to discuss operations, logistics, and maintenance associated with the urgent sale of weaponized unmanned systems.”

According to Defense One, the congressman became privy to the Chinese offer thanks to “very high-placed sources” in Jordan. Although left unmentioned in the letter, the Chinese UAV in question appears to be the AVIC Wing Loong, aka “Pterodactyl”, China’s most capable armed drone currently in service and by many analysts considered to be a MQ-1 Predator knockoff.

What’s Wrong With US-China Relations?

By Shannon Tiezzi

May 15, 2015

A round-up of the recent debate over the U.S.-China relationship, and how best to fix it.

Those interested in China, particularly on a foreign policy front, have likely noticed a burgeoning debate in the United States over how best to deal with China’s “assertive” behavior in the South China Sea, cyber space, and elsewhere. Today’s links round-up pulls together the various pieces of the debate, which will have enormous consequences for the Asia-Pacific and the world.

The long-simmering debate heated up when Robert Blackwill and Ashley Tellis argued in a new report that “Washington needs a new grand strategy toward China that centers on balancing the rise of Chinese power rather than continuing to assist its ascendancy.” Blackwill and Tellis summed up their 54-page report in an April 2015 article for the National Interest. The crux of their argument is that Washington’s attempts to integrate China into the international order have damaged U.S. interests — instead, the United States should seek to balance China (they are careful to avoid arguing for outright containment), for example by strengthening regional alliances.

Chinese Perspectives on the Abe-Obama Summit

By Aurelia George Mulgan

May 16, 2015

Not surprisingly, the Chinese press has been critical of the outcomes of the Japanese PM’s visit.

Chinese commentary on the summit between Japanese Prime Minister Shinzo Abe and U.S. President Barack Obama has predictably focused on the singular achievement of Abe’s US visit – the unveiling of the revised “Guidelines for US-Japan Defense Cooperation” – as well as Abe’s “historical revisionism,” and the Trans-Pacific Partnership (TPP). In highlighting these themes, the commentary has emphasized the degree to which U.S. and Japanese interests complement each other, particularly on trade and security policy.

The Chinese press has remarked on how Japanese and U.S. strategic ambitions coincide in the new defense guidelines. In their view, Abe wants to free Japan’s military from its postwar shackles and strengthen U.S. commitments to Japanese security by making a greater contribution to the U.S.-Japan alliance, at the same time as reinforcing the bilateral security relationship as a bulwark against the rise of Chinese power in the Asia Pacific. The United States, on the other hand, wants to retain its regional dominance but at a lower cost and so is pleased to see Japan free itself from restrictions on the dispatch of its military overseas.

Taiwan and Strategic Security

By Joseph A. Bosco

May 15, 2015

http://thediplomat.com/2015/05/taiwan-and-strategic-security/

The U.S. declarative policy on Taiwan of “strategic ambiguity” needs to change sooner rather than later.

When Japan bombed Pearl Harbor on December 7, 1941, it also simultaneously attacked the Philippines, triggering World War II in the Pacific. It was the opening salvo in the Japanese Empire’s campaign to invade and subjugate Southeast Asia in pursuit of its Greater East Asia Co-Prosperity Sphere. The bombers were launched from the island of Taiwan, which was then under Japanese military rule. It was the jumping-off point for the attacks on both the Philippines and the Dutch East Indies (now Indonesia). Throughout the war, Taiwan served as the staging area and major supply base that sustained Japan’s armies in Southeast Asia and as the control point for all shipping through the Taiwan Strait. The U.S. State Department at the time stated that strategically no location in the Far East, with the exception of Singapore, occupied such a controlling position. Taiwan’s geography tells the story.

The Japanese Defense Reform No One Is Talking About

By Yuki Tatsumi

May 16, 2015

On May 14, Prime Minister Shinzo Abe’s cabinet approved a set of legislative packages that would change the operational parameters of the Japan Self-Defense Forces (JSDF). During a press conferenceheld on the same day, Abe explained that these legislative changes are absolutely critical for Japan to defend itself in a fast-changing security environment and continue its efforts in making a “proactive contribution to peace.”

The legislative package will be the central focus of legislative deliberation in the Japanese Diet in the coming few months. Already, opposition parties, the Democratic Party of Japan (DPJ) in particular, are openly complaining about Abe’s “promise” to pass the legislation through the Diet by the end of this summer in his April 29 speech in front of the U.S. Congress. Critics see that pledge as a sign of Abe’s contempt for the Diet, claiming that he committed Japan to actions that are not yet authorized by the Japanese Diet. As public opinion polls, such as the one conducted by Nippon Hoso Kyokai (NHK) and released on May 11, 2015, continue to show almost an even split on the potential for JSDF assuming a greater role overseas, the Abe government will face an uphill battle as it pushes through this legislation, which is critical in implementing the new U.S.-Japan Guidelines for Defense Cooperation.

Tajikistan Closes Eastern Region to Tourists

By Catherine Putz

May 16, 2015

Recent fighting in Afghanistan’s Badakhshan province has prompted Tajik authorities to close the neighboring Gorno-Badakhshan Autonomous Region (GBAO) to foreigners.

Asia-Plus reports that the deputy head of the country’s tourism committee, Rezo Nazarzoda, said that “As soon as the situation in the neighboring country changes for the better we will resume issuing permits to foreign citizens for visiting Gorno Badakhshan.”

GBAO makes up approximately 45 percent of Tajikistan’s territory, but is home to only 3 percent of the population. Nazarzoda said that 80 percent of Tajikistan’s tourists come to visit GBAO, specifically to see the breathtaking Pamir Mountains. The Pamir Highway that traverses the mountains is one of the highest roads in the world, an ancient piece of the Silk Road, and modern GBAO’s only real supply line.

Russian Foreign Policy Under Dimitry Medvedev’s Presidency (2008-2012) – Analysis

By Richard Rousseau

Putin’s Russia (2000-2008) not only established internal stability, following the difficult and painful transition of the 1990’s onwards, but recovered economically, bolstered by a rapid increase in revenues from oil exports. Vladimir Putin knew how to take advantage of Russia’s position as the main supplier of energy to Europe. He also used it as a bargaining chip in achieving political ends. Russia is now trying to regain its former position as a major power, grounded on a strong and independent foreign policy. However, regardless of how well-intentioned this policy initially was, it ultimately created tensions with the West – especially with the United States (U.S.) and the European Union (EU).

The inherent limitations of this policy were brought to the forefront during the economic crisis of 2008-2009, which demonstrated that Russia was still plagued with serious economic, social and institutional deficiencies. President Dmitry Medvedev, Putin’s successor in the Kremlin in May 2008, quickly realized that a new course of structural reform was needed, not only to provide immediate solutions but to allow Russia to continue to be counted among the ranks of the world’s major powers. After setting these reforms, referred to as “modernization,” into motion Medvedev did not hesitate to approach the West for the required investment and technology transfer so desperately needed in many spheres of the Russian economy. These initiatives coincided with the election of Barack Obama as president of the United States. Obama first came across as less inclined towards unilateralism than his predecessor, George W. Bush, and responded positively to the Russian shift in attitude. This was demonstrated when former U.S. Secretary of State Hillary Clinton and Russian Foreign Minister Lavrov symbolically pressed the “reset button,” a highly-publicized event designed to turn a new page in the ledger of relations between Washington and Moscow.

What Happened to North Korea's Defense Minister?

By Tae-jun Kang

May 15, 2015

South Korea’s NIS allegedly told lawmakers Hyon Yong-chol was executed via anti-aircraft gun.

South Korea’s National Intelligence Service (NIS) recently told local lawmakers that North Korea executed its defense chief, Hyon Yong-chol, in late April. Hyon was executed by anti-aircraft fire in front of other high-level North Korean officials, NIS said, according to the legislators. Hyon was charged with treason, including being disrespectful to top leader Kim Jong-un and falling asleep during an event in which Kim participated.

However, some South Korean analysts question authenticity of the report. As evidence against the story, they point out that Hyon can still be seen in material from North Korean media outlets. In North Korea, it is highly unusual for officials to still appear in government propaganda after being removed from power.

Europe and Turkmenistan Make Nice

By Paolo Sorbello

May 17, 2015

The completion of the East-West pipeline could allow Turkmen gas to be delivered to Europe in the near future.

European leaders have visited Turkmenistan with impressive frequency in recent years, their only aim to bring natural gas back west. The crisis with and within Russia has prompted Brussels to diversify its sources of hydrocarbons, while trying to reduce carbon emissions. The latest trip to Ashgabat and the subsequent official visit of Turkmen president Gurbanguly Berdimuhamedow to Austria may bring years of negotiations to fruition.

EU Energy Commissioner, Maros Sefcovic visited Turkmenistan at the beginning of May. Sefcovic underscored the mutual interest between the two subjects, aiming at diversifying both export and import options. The most notable quote from Sefcovic’s trip was reported by Reuters: “Europe expects supplies of Turkmen gas to begin by 2019.” This is the first time the EU has put a date on what has traditionally been regarded as a pipe dream. For years, Brussels has sought to convince Turkmenistan, Azerbaijan, and energy companies to build a pipeline across the Caspian seabed between Turkmenbashi and Baku. The chief resistance to this option came from other Caspian littoral countries, such as Russia and Iran, which were still unconvinced about the legal status of the Caspian. With the prospective easing of Western sanctions towards Iran and with the relationship with Russia still strained, Europe can now rethink its diversification strategy.

The Worrying Rise of Anti-China Discourse in the US

By Dingding Chen

May 16, 2015

Forget U.S. patrols in the South China Sea. This is the real threat to U.S.-China relations.

There is no doubt that U.S.-China relations are entering a new period of tensions given reports that the United States is considering the possibility of sending naval ships and planes to challenge China’s sovereignty in the South China Sea. This U.S. move, if realized, is certainly provocative and has the potential to lead to a clash with Chinese ships and planes.

So far a lot of analysis has focused on the possible motivations behind the U.S. move and the possible consequences thereof for China-U.S. relations and Asian security. Almost all would agree that this move, whether right or wrong, is a risky one and worrying indeed.

To better understand this particular military move, one has to understand the larger background for all of the current developments in China-U.S. relations. This larger background is the new, rising anti-China discourse in various circles of the United States, including the government, academic, policy, and certainly military spheres. Three types of anti-China discourses stand out.

Is America about to Get Tough in the South China Sea?

Felix K. Chang

May 16, 2015

How the United States has treated maritime disputes in East Asia over the last 40 years owes much to a little-known cable that was drafted in the waning hours of December 31, 1970. On that night, Chinese patrol boats were shadowing an American oil exploration ship, the Gulftrex, in the disputed waters of the East China Sea. In Washington, a small group of officials from the U.S. Departments of State and Defense gathered to discuss how the United States should handle the situation if it escalated.

At the time, the United States was still militarily engaged in South Vietnam; and some officials feared that the Gulftrex could turn into another Puebloincident (in which North Korea seized an American surveillance ship and imprisoned its crew). After a lengthy debate, the decision was made not to use U.S. forces to protect the ship, since it had already been warned that it would be sailing in disputed waters; and a cable was sent to U.S. Pacific Command. Underlying that decision was an assumption that the United States would remain neutral in the region’s maritime disputes. In fact, American policy was to “not only be one of scrupulous noninvolvement, but of active discouragement.”

Is America's Deadly B-1 Bomber Headed to Australia to Deter China?

Benjamin Schreer

May 15, 2015

Australia woke up to media news this morning that U.S. B-1 strategic bombers would be “coming to Australia to deter Beijing’s South China Sea ambitions.” This referred to a statement made by U.S. Defense Department Assistant Secretary for Asian and Pacific Security, David Shear, during a testimony before the U.S. Senate Foreign Relations Committee on Wednesday. As part of his answer as to what the government was doing in response to China’s assertive behavior in the South China Sea, Shear also stated that the US “will be placing additional Air Force assets in Australia as well,” including B-1 bombers and surveillance aircraft. However, a statement by a spokesperson for Defense Minister Kevin Andrews said that the “U.S. Government has contacted us to advise that the official misspoke.’ Thus, the U.S. Embassy in Canberra is likely to correct Shear’s statement.

Russia and China: A Great Power Partnership America Should Fear?

Julian Snelder

May 15, 2015

The China-Russia relationship is the world's most important, and the best between any two great powers, Xi Jinping told Vladimir Putin a couple of years ago. Last week, at the Kremlin's V-Day celebration, their ties were reaffirmed in grand style.

Some observers dismiss the partnership as an 'axis of convenience' or a charade of camaraderie. Others point to the widening power disparity between the two, and doubt that Russia will accept subordination to China. Some even think that the two countries are bound for conflict as China thrusts into central Asia, or the two will clash over oil and gas supplies. Chinese nationalists haven't forgotten their lost territories, ceded to imperial Russia under the 'Unequal Treaties.'

So the significance of the rapprochement last week is open for debate. One important dimension of the debate must be the towering role of official media in shaping historical consciousness and in constructing the public worldview. Both great powers run formidable propaganda machines that manufacture well-reasoned but emotional, nationalistic truth.

The Amtrak Disaster: Part of a Much Bigger Problem

Paul R. Pillar

May 15, 2015

The fatal crash of an Amtrak train in Philadelphia obviously is disturbing to those of us who often use the same service; it also is a symptom of a pattern, involving politics, economics, and morality, that is disturbing in a much larger sense. The chief investigator for the National Transportation Safety Board assesses that had a federally mandated automated system for restricting the speed of trains been in operation on the section of track involved, the crash would not have occurred. Amtrak has been ahead of the rest of the railroad industry in installing the system, but as is often the case, resources are the major factor in more rapid progress in installation not having been made. The day after the crash, and despite that fatal incident, a committee of the House of Representatives rejected a proposal for increased funding of Amtrak. This posture is indicative of a broader neglectful attitude toward America's notoriously deteriorating infrastructure. The anomaly of this situation prevailing within the world's superpower is apparent to any traveler who has enjoyed the use of more modern public services in any of several European countries, with rail transportation providing one of the most glaring contrasts.

The Disintegration of the World The postwar geopolitical system is breaking down, and what comes next could be highly volatile—especially for big corporations.

Josh Cochran

Leon Trotsky is not often invoked as a management guru, but a line frequently attributed to him would surely resonate with many business leaders today. “You may not be interested in war,” the Bolshevik revolutionary is said to have warned, “but war is interested in you.” War, or at least geopolitics, is figuring more and more prominently in the thinking and fortunes of large businesses.

Of course, multinational companies such as Shell and GE have long cultivated an expertise in geopolitics. But the intensity of concern over global instability is much higher now than in any recent period. In 2013, the private-equity colossus KKR named the retired general and CIA director David Petraeus as the chairman of its global institute, which informs the firm’s investment decisions. Earlier this year, Sir John Sawers, the former head of MI6, Britain’s CIA, became the chairman of Macro Advisory Partners, a firm that advises businesses and governments on geopolitics. Both appointments are high-profile examples of a much wider trend: an increasing number of corporations are hiring political scientists, starting their board meetings with geopolitical briefings, and seeking the advice of former diplomats, spymasters, and military leaders.“The last three years have definitely been a wake-up call for business on geopolitics,” Dominic Barton, the managing director of McKinsey, told me. “I’ve not seen anything like it. Since the Second World War, I don’t think you’ve seen such volatility.” Most businesses haven’t pulled back meaningfully from globalized operation, Barton said. “But they are thinking, Gosh, what’s next?”

Urban world: Cities and the rise of the consuming class

Cities have long been the world’s economic dynamos, but today the speed and scale of their expansion are unprecedented. Through a combination of consumption and investment in physical capital, growing cities could inject up to $30 trillion a year into the world economy by 2025. Understanding cities and their shifting demographics is critical to reaching urban consumers and to preparing for the challenges that will arise from increasing demand for natural resources (such as water and energy) and for capital to invest in new housing, office buildings, and port capacity.

A new report from the McKinsey Global Institute, Urban world: Cities and the rise of the consuming class, finds that the 600 cities making the largest contribution to a higher global GDP—the City 600—will generate nearly 65 percent of world economic growth by 2025. However, the most dramatic story within the City 600 involves just over 440 cities in emerging economies; by 2025, the Emerging 440 will account for close to half of overall growth. One billion people will enter the global consuming class by 2025. They will have incomes high enough to classify them as significant consumers of goods and services, and around 600 million of them will live in the Emerging 440.

The world’s center of economic gravity has changed over past centuries. But since the mid-1980s, the pace of that shift—from the United States and Europe toward Asia— has been increasing dramatically (exhibit). We expect this trend to continue, so executives and policy makers must be prepared to respond.