Why a de facto Japan-India alliance can be a game changer

Brahma Chellaney

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Japanese Prime Minister Fumio Kishida’s trip this coming weekend to New Delhi, close on the heels of Australian counterpart Anthony Albanese’s own India tour, is indicative of growing strategic cooperation among the Indo-Pacific region’s major democracies.

Just as Germany’s rapid rise prior to World War I led to the Triple Entente among France, Britain and Russia, China’s aggressive expansionism has given the key Indo-Pacific democracies strong impetus to work together as a countervailing coalition.

The Quad, though without the form of a formal alliance, represents an emerging entente among the Indo-Pacific region’s four leading democracies: Australia, India, Japan and the U.S.

More fundamentally, the Indo-Pacific power balance will be determined, first and foremost, by events in East Asia and the Indian Ocean. This in turn makes the Japan-India relationship central to the region’s power equilibrium and stability.

Unlike the U.S. and Australia, India and Japan, which share frontiers with China, have seen their security come under direct pressure from Chinese President Xi Jinping’s muscular revisionism.

The Latest @ USIP: India’s Evolving Nuclear Posture Amid Regional Tensions

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In the 25 years since it became a full nuclear power, India has expanded its nuclear arsenal as part of its playbook for handling a severe crisis with neighboring Pakistan or China. But with increased nuclear readiness comes the elevated risk that miscommunication between the region’s various nuclear states and armed actors could result in a nuclear escalation. The University at Albany’s Chris Clary, San José State University’s Karthika Sasikumar and the Carnegie Endowment for International Peace’s Ashley Tellis discuss the biggest changes to India’s nuclear program, the most worrisome threats to nuclear peace in Southern Asia and how to boost strategic stability in the region.

Deconstructing the Bipartisan Consensus on the China Threat

Paul Heer

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The debate in Washington over U.S. policy toward China appears to have turned a corner in the wake of the first hearing on February 28 of the new House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party (CCP). One of the benchmarks of the hearing was Chairman Mike Gallagher’s assertion in his opening statement that the threat posed to America by the CCP represents “an existential struggle over what life will look like in the twenty-first century,” a struggle in which “the most fundamental freedoms are at stake.” No one on the committee or among the witnesses at the hearing challenged this assertion, reinforcing the presumption that it reflects a bipartisan consensus on the nature and scope of the threat from China.

Multiple observers, however, have raised alarm about the potential implications of this judgment, questioning not just the committee’s agenda but also the validity of the premises upon which its agenda is based. One prominent commentator characterized the apparent agreement about the “allegedly existential danger posed by the CCP” as “a classic example of groupthink” that was “forged out of paranoia, hysteria and, above all, fears of being branded as soft” on China. Some detractors responded that it was an earlier consensus in support of “engagement” with China that was misguided groupthink—overlooking (and proving) that “groupthink” is largely a pejorative critique of whatever one disagrees with. Another foreign policy writer speculated that the agreement between the Republicans and Democrats on the committee “could mean they are falling prey to a collective delusion.”

A fragile decade ahead?

Prof. Shiping Tang

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Facing multiple uncertainties and pressures, China needs to strategize for a turbulent period that could last 5 to 10 years

The international system faces enormous uncertainties in the next decade, if not longer, reeling under the triple shocks of the COVID-19 pandemic, the Russia-Ukraine conflict, and the ongoing decoupling between the United States and China. This turbulent period may well last five to 10 years, after which it could take another five to 10 years for the system to stabilize.

The overall distribution of power within the international system will not change drastically in the next decade. The US will remain the largest economy. Europe's core economic status will not be fundamentally shaken, but Ukraine's post-conflict reconstruction will impose considerable pressure on Europe. Since the outbreak of the Russia-Ukraine conflict in 2022, Russia's strength has been greatly weakened and its image tarnished, while its influence in Central Asia and Central and Eastern European countries has drastically dwindled. Although Russia remains an important strategic partner of China, the China-Russia strategic partnership surely faces growing challenges.

The institutional foundation of the entire international order is also under serious stress. Key countries do not share a basic consensus on the core ideas and institutions of the future international order, and the uncertainty of the overall order exacerbates the fragility of the entire system.

The Russia-Ukraine conflict has had a huge impact on transatlantic ties and EU-Russia relations. It will take at least 5 years for the dust to settle. The strategic competition between China and the US may last for 10 years or even longer.

Beijing Looks to Get Economic Projects Up and Running in Myanmar

LIN HTET MYAT

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The general consensus on the status of the China-Myanmar Economic Corridor (CMEC) in Myanmar two years after the military coup is that the projects are resuming—albeit at various paces—especially after the junta’s then foreign minister, Wunna Maung Lwin, was invited to China in April 2022. During his trip, China reaffirmed its commitment to help safeguard Myanmar’s sovereignty, independence and territorial integrity “no matter how the situation changes”.

Amidst rising tension and geopolitical rivalry between the US and China in the Indo-Pacific region, China’s decision to engage fully with the regime—if not recognize it completely—seems to be driven by its strategic considerations and economic interests despite calls for non-recognition and non-engagement by anti-junta resistance forces as the CMEC and other regional initiatives such as Lancang-Mekong Cooperation (LMC) involving Myanmar will address China’s Malacca dilemma and give China access to the Indian Ocean, Southeast Asia and South Asia.

To hedge against the rising anti-Chinese sentiments among the people of Myanmar due to its backing of the junta, known as the State Administration Council (SAC), the emerging pattern of CMEC projects in Myanmar, according to analysts, is that most of them will be implemented in periphery areas controlled by ethnic armed organizations (EROs), which are under Beijing’s sphere of influence and calmer than other areas, although Beijing is not likely to pour billions of dollars into these projects.

China roars as US presses ByteDance to sell TikTok

JEFF PAO

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Responding to the Biden administration’s request that China’s ByteDance sell its stake in TikTok for national security reasons, Beijing has complained that the United States is “suppressing” Chinese companies.

The Committee on Foreign Investment in the United States (CFIUS), an inter-agency committee of the US government, told ByteDance that if it doesn’t dispose of TikTok’s shares, then the use of the short-video app will be banned in the US.

“The US has so far failed to produce evidence to prove that TikTok threatens its national security,” Wang Wenbin, a Chinese foreign ministry spokesman said Thursday in a regular briefing. “The US should stop spreading false information on data security issues and unreasonably suppressing relevant companies.”

Wang said the US has generalized the concept of national security and abused its state power to suppress foreign firms. He also said the US should provide a business environment that is open, fair, just and non-discriminatory to companies from all over the world.

A TikTok spokesperson told media that the company has been contacted by CFIUS but it does not think that a change in ownership can ease American national security concerns if no new restrictions on data flows or access are imposed.

China Inaugurating a New World Order?

Judith Bergman

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On March 10, Chinese President and Communist Party General-Secretary Xi Jinping brokered a surprise agreement between Saudi Arabia and Iran to reestablish diplomatic relations between the two countries, effectively knocking the US off the Middle Eastern chessboard and showing himself as a power-broker on the world stage.

Xi is, in fact, on his way to Russia, possibly as soon as next week, with a 12-point peace plan -- ostensibly to see if he can pull off the same wizardry with Ukraine, but more likely to nail down plans to seize Taiwan.

China as the world's new power-broker anywhere, especially in the Middle East -- until Biden squandered America's alliances there -- is conceivably a seismic turning point: possibly the beginning of China fulfilling its dream of replacing the US as the dominant superpower in a new world order.

For the Biden Administration, this is a blow for which it has only itself to thank.

From the outset of his presidency, President Joe Biden completely deprioritized the Middle East: "If you are going to list the regions Biden sees as a priority, the Middle East is not in the top three," a former senior national security official and close Biden adviser told Politico in 2021.

Biden then proved this highly unwise policy to anyone in doubt with his disastrous Afghanistan exit, creating a power vacuum in the region and demonstrating to allies everywhere that they could not rely on the US.

China’s Chip Industry Dismayed by Multilateral Export Controls

Nicholas Welch

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Media reports from late January indicated that Japan and the Netherlands were prepared to follow the US in applying semiconductor export controls on China — and last week the government of the Netherlands made the first concrete move by announcing export restrictions on advanced immersion DUV systems to China. On February 15, China’s primary trade association for semiconductor firms, the China Semiconductor Industry Association (CSIA), released an official statement condemning the measures. The statement protested the trilateral export controls, warning that such measures would gravely damage the Chinese semiconductor industry and bring harm to the global semiconductor ecosystem. The Chinese statement was then followed by a “suggested translation” (参考译文).

Helpful, right?

In reality, the English translation did a poor job of conveying the full extent of the trade association’s dismay. A closer reading revealed two important omissions and one mistranslation, together making a strong case that the suggested English translation was intended to appear more calm and tempered in front of an international audience. In fact, the original Chinese statement takes a much more indignant tone, reading more like an impassioned call to action to the Chinese domestic semiconductor industry to get its act together.

Deterring a Chinese military attack on Taiwan

Larry Diamond, James O. Ellis, Jr.

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The brutal Russian invasion of Ukraine has given the world a tragic reminder of both the pitiless destructiveness of war as well as the existential and unpredictable danger posed by powerful authoritarian states—particularly those dominated by megalomaniacal strongman leaders. Today the focus is on Ukraine’s heroic struggle to defend and recover its territory and its democratic way of life. But at some time in the coming years, the arena of conflict over the future of democracy could shift to the Indo-Pacific, if the People’s Republic of China (PRC) does what its communist leaders have long threatened to do: use force to compel Taiwan (which it has always regarded as a “renegade” province) to “reunify with the motherland.”

For decades following the Chinese Communist Party’s (CCP) conquest of the mainland in 1949, this was a contingency that US military planners regarded as a dangerous but manageable threat. Despite occasional outbursts of military bluster, as with the threats and missile launches off Taiwan’s coast that the PRC issued in advance of Taiwan’s March 1996 presidential election, China lacked the military capacity to launch a successful amphibious invasion of Taiwan. The 1996 threat met a powerful rebuff from the United States when President Bill Clinton sent two US aircraft carrier battlegroups to international waters near Taiwan, and then one of them through the Taiwan Strait. Taiwan’s election went off without a hitch, returning to the presidency the candidate Beijing had wanted to defeat, Lee Teng-hui, in the first democratic election for that office.

But Beijing resolved then to build up the military strength to succeed in imposing its will at some later date, and to avoid being humiliated again by the US Navy.

4 Key Takeaways From the China-Brokered Saudi-Iran Deal

Aaron David Miller

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Every now and again, a preternaturally predictable Middle East offers up something quite unpredictable. The latest is the agreement, brokered in Beijing last week, between Saudi Arabia and Iran to restore diplomatic relations.

For several years after the 2016 rupture in formal relations between the two countries, Iraq and Oman tried unsuccessfully to get these two to restore relations. That China secretly ended up brokering what appears to be a significant mending of ties seems to have surprised just about everybody.

Is this the proverbial game-changer or inflection point? Or is it just another temporary twist in the Byzantine Middle East labyrinth? It’s far too early to tell. For now, here are four important takeaways to ponder, including the rather inconvenient reality that Chinese diplomacy likely left the Biden administration on the outside looking in.

No. 1: No Coming Golden Age in Saudi-Iran Relations

There’s little doubt that what the Chinese brokered is a breakthrough in Saudi-Iran relations and perhaps a harbinger of a more functional and productive relationship. But anyone who believes that we’re on the cusp of a golden era between Tehran and Riyadh should lie down and wait quietly until the feeling passes.

The proximate cause of their rupture in 2016—the Saudi execution of leading Shiite cleric Nimr al-Nimr and the Iranian reaction that saw protesters storm the Saudi Embassy and Iranian Supreme Leader Ayatollah Ali Khamenei vow divine vengeance—masks decades of tensions and bitter rivalries that will not be easily healed.

3 takeaways 20 years after the invasion of Iraq

Scott Neuman, Larry Kaplow

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U.S. Marine Maj. Bull Gurfein pulls down a poster of Iraqi President Saddam Hussein on March 21, 2003, a day after the start of the U.S. invasion, in Safwan, Iraq.Chris Hondros/Getty Images

Two decades ago, U.S. air and ground forces invaded Iraq in what then-President George W. Bush said was an effort to disarm the country, free its people and "defend the world from grave danger."

In the late-night Oval Office address on March 19, 2003, Bush did not mention his administration's assertion that Iraqi dictator Saddam Hussein possessed weapons of mass destruction. That argument — which turned out to be based on thin or otherwise faulty intelligence — had been laid out weeks before by Secretary of State Colin Powell at a U.N. Security Council meeting.

How America Can Win the Information War

Joe Lieberman and Gordon Humphrey

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When Xi Jinping visits Moscow next week, Vladimir Putin will doubtless ask for weapons to replenish his badly depleted arsenal. Whatever scheme they concoct will further endanger U.S. national security and that of our allies.

A broader danger confronts us in the new axis of evil that spans Europe, the Middle East and Asia. China and Russia have combined with Iran. All three are determined to replace U.S. leadership in the world and to destroy freedom wherever it exists. China’s threats to take Taiwan by force, Russia’s invasion of Ukraine, and Iran’s threats to “annihilate” Israel raise the possibility of simultaneous aggression. Together, this axis may confront us with one of the most serious challenges ever to our security, values and prosperity.

The threats to global stability and the US homeland are growing. How will the war in Ukraine end? Can China and the US develop a less combative relationship? Join historian and Journal columnist Walter Russell Mead and editorial page editor Paul Gigot for an interactive conversation on the threats to US security.See more...

To prevail, the U.S. must employ every tool of national power. Regrettably, one of the most forceful and inexpensive weapons has withered over the last 20 years: advocacy—the marshaling of truth and fact to persuade foreign audiences. Recall the important part played by the U.S. Information Agency in winning the Cold War. Its Voice of America broadcasts persuaded Soviet citizens that life on our side of the Iron Curtain was better than theirs.

Unchecked and Uncooperative: How the Pentagon Has Thwarted Congressional Oversight of Security Cooperation Programs

Katherine Yon Ebright

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When the administration of President Joe Biden redeployed US forces to Somalia in May 2022, it promised that those forces would not be “directly engaged” in combat operations. They would instead support their Somali partners to “enable a more effective fight” against al-Shabaab, a regional al-Qaeda affiliate.

Since the redeployment, however, US forces have conducted a steady stream of airstrikes against al‑Shabaab fighters. By January, the Department of Defense was reporting multiple strikes each week.

It should come as no surprise that the Department of Defense’s work by, with, and through foreign partners, or “security cooperation,” has again embroiled US forces in Somalia’s conflict. In a recent report by the Brennan Center for Justice at NYU Law, I detail how security cooperation—under authorities like 10 U.S.C. § 333, 10 U.S.C. § 127e, and § 1202 of the 2018 National Defense Authorization Act (NDAA)—can enable or involve hostilities, including those that are not authorized by Congress.

The only surprising thing about US forces’ renewed hostilities in Somalia is the extent to which the Department of Defense has disclosed them to the public.

As the Brennan Center report explains, the Department of Defense has typically failed to notify the public, as well as key decisionmakers in Congress, when US forces end up in security cooperation–enabled hostilities. In interviews conducted for the report, congressional staffers expressed frustration that they were not even told the full range of countries in which the Department of Defense engages in security cooperation. The transparency regarding Somalia is the exception, not the rule.

The Surprising Success of U.S. Military Aid to Ukraine

Polina Beliakova and Rachel Tecott Metz

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Ukraine’s military has defied expectations in its war with Russia, and many analysts attribute its success to U.S. help. But the mere fact of receiving aid is no guarantee of a positive outcome. After all, the United States provides security assistance to many countries with mixed results. Billions of dollars in aid and decades of training, advising, and institution building did not stop the armies of Afghanistan and Iraq from collapsing. Smaller scale efforts around the world have produced so-called Fabergé egg armies, militaries that are expensive to build but easy to crack.

One of the main reasons security assistance has succeeded in buttressing the Ukrainian war effort but failed elsewhere has to do with the motivation of Ukraine’s leadership. If leaders are not prepared to prioritize institutional reforms that will strengthen their militaries, then foreign support will be of little consequence. Ukraine’s experience is telling. Between 2014 and early 2022, Ukrainian officials were glad to receive U.S. help, and they followed U.S. advice in making changes that improved the effectiveness of Ukrainian forces. But they did not embrace institutional reforms that threatened the political or personal interests of powerful constituencies.

That changed in February 2022, when Russia launched a full-scale invasion. The attack galvanized Ukraine’s leadership to discard parochial concerns and implement a series of reforms and battlefield innovations that help account for the country’s tremendous performance in the war. At the same time, the redoubled motivation of Ukrainian leaders has simplified the challenge of delivering the country security assistance. Ukrainian leaders no longer need to be persuaded by U.S. advisers. They are motivated enough to implement reforms on their own. What Ukraine needs now from the United States to beat back the Russian invasion is weapons and ammunition. This, the United States has delivered—to extraordinary battlefield effect.

The High Price of the U.S. Military-Industrial-Congressional Complex

Carl Delfeld

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During World War II, America churned out an incredible 297,000 aircraft. In that same conflict, the USS Essex aircraft carrier was ordered in February of 1940. Twenty-two additional Essex carriers were launched by December 1945. In other words, in a mere seventy months, twenty-two fleet carriers were launched. This is roughly equal to one Essex heavy fleet carrier sliding into the water every three and a half months. This does not count 122 escort carriers and nine light fleet carriers of the Independence class. In total, this amounts to 131 escort and light fleet carriers that hit the water in seventy months, for a total of 1.9 smaller aircraft carriers per month.

Fast-forward to modern times. The USS Gerald Ford aircraft carrier, America’s largest and most advanced such time, took from 2005 to 2017 to build. Relatedly, the United States cannot now build two stealthy Virginia-class submarines in a year.

Contrast this with the stock performance of two of our five prime defense contractors. Since 2000, Northrop Grumman and Lockheed Martin’s share prices have both surged more than 2,200 percent.

Since the end of the Cold War, the Pentagon has invested in technology that limits casualties but does not decrease the cost of manpower. It has spent heavily on expensive and scarce technologies for first-strike offensives, largely ignoring the effect of such expenditures on its ability to fund wars and secure supply chains. But now, the U.S.-China rivalry and federal spending/debt are forcing Congress to confront that it needs to reform the Pentagon and its force structure. The challenge is to deal with an away game whereby China can act quickly and has built up formidable capabilities in a short time frame.

CENTCOM commander says ISIS-K will be able to strike US interests in ‘under six months’

Mike Brest

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The Afghanistan branch of the Islamic State, Islamic State Khorasan ( ISIS-K ), will have the ability to launch attacks against United States interests outside of Afghanistan in less than six months, according to the top defense official in the region.

General Michael “Erik” Kurilla, the commander of U.S. Central Command , told lawmakers on the Senate Armed Services Committee on Thursday that it's their assessment that ISIS-K would be able to target U.S. interests, including possibly against the homeland, without much warning in a matter of months.

"It is my commanders' estimate that they can do an external operation against U.S. or Western interests abroad in under six months with little to no warning," he explained, later specifying that this includes Europe and Asia, though he deferred the opportunity to provide more details until the classified briefing, which will take place after the public hearing. "It is much harder for them to be able to do that against the homeland."

When pressed by a lawmaker, Kurilla said, "It's hard to put a timeline on" how long it would take ISIS-K to carry out an attack, "but again, I assess that they could in as little as six months with little to no warning."

The US raises its bet on India

HUSAIN HAQQANI AND APARNA PANDE

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The United States has just raised its bet on strategic partnership with India. High-level exchanges have increased and will culminate with Prime Minister Narendra Modi’s official visit to Washington in June and President Biden’s participation in the G-20 summit in Delhi in September. India and the U.S. have also agreed to expand their economic and technological ties.

Still, India has made it clear that it is not, and does not wish to be, a U.S. ally in a U.S.-led world order. As president of the G-20, India is advancing the case for reinvigorating multilateral institutions and for advanced nations to cater to the demands of what India calls the “global south.” The Biden administration appears to concede that India’s diplomatic leverage and soft power could be useful for U.S. goals in a world that no longer sees America as a sole superpower.

2023 is seen in Delhi as the year of India. The country is hosting summits of both the G-20, comprising the world’s largest economies, and the China-led Shanghai Cooperation Organization (SCO). India would have liked more agreement on global issues at the G-20 foreign ministers meeting earlier this month, but that did not happen because of differences over the war in Ukraine. The meeting in Delhi did provide an opportunity for U.S. Secretary of State Antony Blinken to meet his Russian counterpart, Sergei Lavrov, for the first time since the start of the Ukraine war.

In the absence of a joint statement, the Indian government released a document summarizing the G-20 ministerial meeting, reflecting the views of 18 of the 20 members who condemned the Ukraine invasion while Russia and China did not. India, Indonesia, South Africa and Saudi Arabia, which normally abstain at the United Nations on resolutions tied to Ukraine, appeared willing to moderate their tenor at this meeting, likely influenced by India.

What Does the United States’ MTCR Policy Reform Mean for India’s Space Sector?

KONARK BHANDARI

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Export control-related discussions appear to be the flavor of the season. While the United States has explicitly announced its desire to tighten its export control measures in the semiconductor sector to stay multiple generations ahead of its competitors, concerns have been voiced about the restrictive effect of the International Traffic in Arms Regulations (ITAR) on the AUKUS deal. Overall, the theme remains one of constricting export control measures thwarting cooperation with friends and ratcheting up competition with foes.

However, in a significant change to its Missile Technology Control Regime (MTCR) policy, U.S. Deputy Commerce Secretary Don Graves announced that after undertaking a “careful review” of its MTCR policy, the export of satellites and satellite components to its members will be reviewed on “a case-by-case basis,” as opposed to the earlier standard of “presumption of denial.” This is significant for two reasons. First, for far too long, the standard of presumption of denial had operated without consistency or clarity and was seen as “amounting to denial far more often than it perhaps should.” Opting for a case-by-case approach will provide more discretion while reviewing applications for satellite exports since this approach depends on the fact of each case. Second, India, being one of the member nations of the MTCR, will stand to benefit from the relaxation of export controls on satellite and satellite exports to other MTCR members.

For the uninitiated, MTCR is a regime formed in 1987 that seeks to “limit the proliferation of missiles and missile technology.” To begin with, it was created to keep a close watch on the transfer of missile equipment, material, and related technologies, which could be used for systems capable of delivering weapons of mass destruction (WMDs).

Cryptocurrencies, Digital Dollars, and the Future of Money

Anshu Siripurapu and Noah Berman

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Introduction

In the span of a few years, cryptocurrencies have grown from digital novelties to trillion-dollar technologies with the potential to disrupt the global financial system. Bitcoin and hundreds of other cryptocurrencies are increasingly held as investments and used as currencies to buy a swath of goods and services, such as software, digital real estate, and illegal drugs.

To their proponents, cryptocurrencies are a democratizing force, wresting the power of money creation and control from central banks and Wall Street. Critics, however, say that a lack of regulation for cryptocurrencies empowers criminal groups, terrorist organizations, and rogue states, while the assets themselves stoke inequality, suffer from drastic market volatility, and consume vast amounts of electricity. Regulations vary considerably around the world, with some governments embracing cryptocurrencies and others banning or limiting their use. As of February 2023, 114 countries, including the United States, are considering introducing their own central bank digital currencies (CBDCs) to compete with the cryptocurrency boom.

What are cryptocurrencies?

So called for their use of cryptography principles to mint virtual coins, cryptocurrencies are typically exchanged on decentralized computer networks between people with virtual wallets. These transactions are recorded publicly on distributed, tamper-proof ledgers known as blockchains. This open-source framework prevents coins from being duplicated and eliminates the need for a central authority such as a bank to validate transactions. Bitcoin, created in 2009 by the pseudonymous software engineer Satoshi Nakamoto, is by far the most prominent cryptocurrency, and its market capitalization has peaked at over $1 trillion. Numerous others, including Ethereum, the second-most popular, have proliferated in recent years.

The SVB Collapse Shows U.S. Vulnerabilities Amid Great Power Competition

Zongyuan Zoe Liu

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Bank failures in the United States happen more often than one might think. According to the Federal Deposit Insurance Corporation, there have been 563 bank failures in the United States between 2001-March 2023, or about 25 per year. The fall of the sixteenth largest bank, the Silicon Valley Bank (SVB), is another piece of evidence for Minsky’s financial instability thesis—more about that in a bit. However, the timing of SVB’s collapse could not be worse. As the Joe Biden Administration focuses on winning the great power competition between major strategic rivals, the last thing America needs is the perception of a weakening U.S. financial system.

About fifteen years ago, Washington Mutual’s implosion and Lehman Brothers’ collapse sent shock waves across the global financial system. As economists and investors worldwide tried to make sense of the market turmoil, they discovered the work by Hyman Minsky, a financial economist described by his colleagues as “radical as radical, if not crackpot.” Minsky disbelieved the mainstream efficient market theory and devoted much of his career to developing the Financial Instability Hypothesis. According to Minsky, financial systems are inherently susceptible to bouts of speculation that, if they last long enough, end in crisis.

The US-Russia drone collision over the Black Sea is a sign of increasingly unfriendly skies

Joshua Keating

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After viewing the video released on Thursday of the downing of a U.S. drone by Russian fighter jets over the Black Sea, Brynn Tannehill, a former U.S. Navy aviator, told Grid, “I’ve been intercepted numerous times, flying P-3 [surveillance planes] and SH-60 [helicopters] in the Gulf, and I can tell you that this was incredibly aggressive in ways that I’ve never personally witnessed.”

According to the U.S. account of the incident that took place over the Black Sea on Tuesday, two Russian Sukhoi Su-27 fighter jets buzzed and dumped fuel on an American MQ-9 Reaper drone. Making another pass, one of the jets collided with the drone, forcing the U.S. to bring the drone down in the water. The Kremlin denies this account, claiming the drone was intercepted after flying close to Russian airspace, was never hit by the planes and crashed “as a result of sharp maneuver.” The U.S. government’s release of the video seemed intended at least in part to bolster its own version of the story.

National Security Council spokesperson John Kirby told reporters on Thursday that the U.S. could not determine if the Russians intended to destroy the drone but called their conduct “reckless and unprofessional.” Tannehill, now an analyst at the Rand Corporation, agreed with that assessment and said the intentional dumping of fuel on another aircraft was not a tactic she’d seen before. “That’s not just hot dogging. That’s taking it to a different level,” she said.

But while the specifics of the Black Sea collision may have been unusual, close encounters between Russian and U.S. aircraft are not; they have a long history dating back to the early days of the Cold War. Other nations have had close calls as well. And while militaries generally have guidelines and best practices for avoiding aerial collisions, the widespread proliferation of drone aircraft has changed the equation. And experts told Grid that some of the old rules of the game may need to be updated.

Ukrainian commander reveals true scale of losses – and pays the price

James Kilner

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Ukraine has demoted a top battlefield commander after he admitted his unit had been decimated in fighting around the city of Bakhmut.

The battalion commander, known by his call sign Kupol, gave an unusually frank assessment of Ukrainian losses in an interview from the front lines earlier this week.

He revealed that all of the original 500 soldiers in his unit had either been killed or injured, a rare acknowledgement from inside the Ukrainian ranks, where losses are kept strictly confidential.

The Ukrainian high command is at pains to present a positive spin on the increasingly bloody defence of the east of the country. US officials have estimated that the Ukrainian army may have taken 120,000 casualties compared with 200,000 by the Russian army.

Kupol told the Washington Post this week that the Ukrainian army training was often poor and that some of the rookie replacements didn’t know how to throw a hand grenade or fire a rifle.

Others had abandoned their positions shortly after arriving at the front line, he said.

Ukrainian troops use 19th century machine gun to repel Russians in Bakhmut

Dominic Nicholls,  Joe Barnes,  and Verity Bowman

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Ukrainian troops are using a machine gun first deployed in the 19th century as they fight back “human waves” of Russian troops on the front lines of Bakhmut.

Soldiers in bunkers are firing Maxim machine guns, more usually associated with the colonial era and the First World War, amid shortages of modern weaponry.

The Maxim has “120 years of history killing Russians,” a soldier manning a firing position told the BBC, adding: “It’s a weapon from the First World War being used in the Third World War.”

The Maxim, a recoil-operated machine gun, was invented in 1884 by Hiram Stevens Maxim. It is credited as being the first fully automatic machine gun in the world.

Firing at a rate of 600 rounds per minute, it has to be water-cooled, adding considerable weight. It is, however, able to sustain its rate of fire far longer than air-cooled guns.

Vladislav, 27, told The Telegraph: “I have seen Maxim machine guns in stationary positions many times. Despite their age, it is a rather formidable weapon, the main thing is not to forget to add some water.

“The only drawback is its weight, but it shows itself stoically in constant firing. The Maxim is a fairly effective weapon in capable hands. It needs care so that it does not wedge, and works as smoothly as a clock.”

REAPER DOWN: THREE TAKEAWAYS FROM RUSSIA’S INTERCEPT OF A US UNMANNED AERIAL VEHICLE

Liam Collins

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Earlier this week, two Russian Su-27 fighter aircraft downed a United States MQ-9 Reaper that was flying in international airspace over the Black Sea. The Department of Defense released video evidence of the event, just forty-two seconds long, that appears to justify the US claim that Russian jets dumped fuel on the unmanned aerial vehicle (UAV) and then collided with the Reaper’s propeller, prompting the vehicle’s operator to crash it into the Black Sea.

Not surprisingly and despite the video evidence, Russia claimed that the Russian fighters “did not use airborne weapons or come into contact” with the Reaper. While the evidence clearly indicates the Russian fighters engaged in extremely aggressive flight near the UAV, it is not clear if the fighters intended to physically hit the vehicle or the collision was unintended and instead the result of a miscalculation when flying too close.

Regardless of Russia’s intent, three things can be learned from this incident. First, this might have been a deliberate effort by Russia to distract from the fact that its air force has underperformed in the war to date. Second, it suggests that unmanned platforms may change escalation calculus, with states willing to engage in riskier behavior around unmanned vehicles than manned aircraft. Third, it demonstrates that large UAVs that served the United States well in the wars in Iraq and Afghanistan may not be survivable enough for large-scale combat operations against a near-peer adversary.

Who Blew Up Nord Stream? Investigators Focus on Six Mysterious Passengers on a Yacht

Bojan Pancevski

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ROSTOCK, Germany—The small marina on the edge of this north German city is a popular summertime spot for recreational sailors. German intelligence believes it was also the jumping-off point for the sabotage of the Nord Stream gas pipelines, an assault on Europe’s civilian energy infrastructure unprecedented since World War II.

On Sept. 6, a small group set out from Rostock aboard a rented yacht, the Andromeda, a slender 50-foot-long, single-masted sloop, ostensibly on a pleasure cruise around Baltic Sea ports. Within two weeks, the group returned the boat and disappeared.

Not long after, on Sept. 26, a series of underwater explosions, powerful enough to register with seismologic measuring stations, tore apart three of the four main Nord Stream pipes, built to carry natural gas from Russia to Germany.

Hundreds of investigators from Germany, Sweden and Denmark, with the help of the U.S. and other Western allies, mobilized to figure out who was behind the attack. Submarines surveyed the crime scene. Intelligence agencies scoured communications intercepts. Police sought witnesses.

The Willow Project and the Race to Pump the “Last Barrel” of Oil

NOAH GORDON

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On Monday, the U.S. government gave final approval for the Willow project, a massive operation that will allow ConocoPhillips to drill for oil on public land in Alaska. If Willow produces as much oil over thirty years as expected, the consumption of that oil would release the equivalent of 277 million tons of carbon dioxide into the atmosphere. That’s about 4 percent of U.S. annual emissions, from one project, at a time when emissions need to fall rapidly for the country to achieve its goal of net-zero emissions by 2050. By approving Willow, U.S. President Joe Biden broke a campaign promise that there would be “no new drilling, period” on federal lands.

No one project will make or break U.S. climate ambitions, and Willow’s story is politically and legally nuanced. Even as the Bureau of Land Management gave Willow the green light, the Department of the Interior said it would restrict future drilling in other parts of Alaska. Alaskan legislators suggested they may challenge those “legally dubious” restrictions on future oil extraction, while environmental groups are preparing lawsuits to try to stop the project.

So although it may say little about the direction of U.S. climate policy, Willow’s approval does reveal much about the global race to pump the “last barrel” of oil.

Governments currently plan to produce twice as many fossil fuels in 2030 as would be consistent with limiting global warming to 1.5 degrees Celsius. Their plans for fossil fuel production also exceed the level that would be compatible with 2 degrees Celsius of warming, the less ambitious target to which they committed themselves in the Paris Agreement. Strictly speaking, the task isn’t to get to the last barrel of oil anytime soon: according to one report, the world could produce 40 million barrels of oil a day in 2040 and still be on track to keep warming to 1.5 degrees. (For context, global production in 2022 was about 100 million barrels a day, a new record.) The idea has always been that some residual oil emissions would be canceled out by negative emissions, such as by capturing carbon dioxide and locking it away underground.

The digital solution to fighting corruption

Bjorn Lomborg

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Corruption is an enormous, global challenge, likely costing more than $1 trillion annually, or $120 for every person in the world. World leaders have long promised to tamp down on corruption, but unfortunately, we’re getting nowhere. Now, new research identifies a surprisingly straightforward, cheap way to reduce corruption that can also make countries lose hundreds of millions or even billions of dollars.

Part of the reason it is so hard to tackle corruption is that it is incredibly valuable for the officials taking bribes, while customers paying up often get better or quicker service. Yet, politicians have promised to substantially reduce corruption from 2016 to 2030 as part of the so-called Sustainable Development Goals (SDGs), agreed to by all governments across the world.

Unfortunately, politicians aren’t delivering. The Corruption Perception Index from Transparency International shows that, at a global level, there has been absolutely zero progress over the past decade. The world was as corrupt in 2022 as it was when the measure started in 2012. On current trends, we’re not going to curtail corruption in 2030—or at any time in the future.

Reducing corruption isn’t the only global promise we’re missing. In fact, it is just one of hundreds of grand SDG promises for 2030, and we’re failing at nearly all of them. On current trends, we will reach the development promises half a century late. We need to do better, and now is the right time to start this conversation: 2023 is the halftime point for the SDG promises, but we are truly nowhere near halfway achieving them.

Supply Chain Interdependence and Geopolitical Vulnerability

Bradley Martin, Laura H. Baldwin, Paul DeLuca

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Semiconductors have become an integral part of nearly every industry in advanced economies. The production of these semiconductors is largely centered in the western Pacific region and, for the highest-end semiconductors, exists almost entirely in Taiwan.

To assess the geopolitical implications of Taiwan's semiconductor dominance, the authors conducted a tabletop exercise (TTX) with representatives from the executive and legislative branches of the U.S. government and a variety of industries that rely on semiconductors. The exercise revealed that there are generally no good short-term options for responding to the disruption to the global semiconductor supply chain that would result if China attempted to unify with Taiwan.

The importance of semiconductors in the broader economy means that strategic competition should be framed more broadly than its potential effect on military or political outcomes. The countries that can most easily withstand disruptions to semiconductor capacity in Taiwan have an upper hand in strategic competition. If the United States and its allies have this advantage, it could be a powerful deterrent to Chinese action against Taiwan. If China has the advantage, it could act against Taiwan with reduced likelihood of interference from the United States and its allies to mitigate its global economic risk.

Pentagon starts work on secretive experiment to aid long-range fires

Courtney Albon

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WASHINGTON — With funding “finally” in hand, the Pentagon can start a series of advanced technology demonstrations for which its research and engineering team has planned during the last two years, according to the department’s top technology officer.

Heidi Shyu, the undersecretary of defense for research and engineering, said this week that the Defense Department began to execute four of the projects in the Rapid Defense Experimentation Reserve’s first series of exercises — or sprint — which will focus on technologies that support long-range fires.

“We’re going to be off and running, demonstrating these prototypes in a contested environment,” Shyu said March 15 at the McAleese & Associates conference. “It can’t work just in a lab. It’s got to work in a real environment, and that’s exactly what we’re focused on.”

The Pentagon created the Rapid Defense Experimentation Reserve, or RDER, in 2021 to address high-need capability gaps across the military. Since then, Shyu and her office have culled through hundreds of project proposals from the services and crafted plans for three demonstration sprints. Following the long-range fires effort, the second sprint will focus on contested logistics and the third on base defense.

The department requested $687 million for RDER in its fiscal 2024 budget — nearly double the $358 million it asked for last year. Congress appropriated $272 million for the program in FY23 and $34 million the previous year for the effort, funding that Shyu said helped the department start the first series of demonstrations.

History Shows How Russia’s U.S. Reaper Drone Shootdown Ends

Graham Allison

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The facts about the downing of the U.S. Reaper drone are still emerging, and many relevant specifics are yet to become public, but as we attempt to get our bearings it is worth beginning with applied history. Applied historians ask: have we ever seen anything like this before?

Five cases that are similar in relevant respects are worth recalling: the 2019 shootdown and capture of a U.S. Global Hawk drone by Iran, the collision with a Chinese fighter that forced an EP-3 spy plane to land in Hainan in 2001, the North Korean capture of the USS Pueblo (a spy ship) in 1968, and two U.S. U-2 overflights of enemy territory during the Cuban Missile Crisis of 1962. In each case, the key questions are: what happened? What did the parties say about where the aircraft was? And how did the United States respond?

In perhaps the closest parallel, in June 2019 Iran shot down a Global Hawk surveillance drone over the Strait of Hormuz. While the United States claimed that the drone was 21 miles from Iran’s coast, Iran argued that it had violated its sovereignty earlier in the flight by coming within 8 miles of its border, well inside the 14-mile limits of its recognized territorial seas. President Donald Trump tweeted that Iran had made a “big mistake” and reportedly considered a series of strikes on Iranian radar and missile sites. Nonetheless, no strikes were conducted. Instead, the United States filed a complaint at the United Nations, imposed additional sanctions, and reportedly conducted cyber attacks.

Cybersecurity: Public versus Private Sector

RICH HEIMANN

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Straddling the private and public sectors creates intrigue. We are often asked about the differences in each sector. However, questions about differences between sectors are always tricky to answer and depend on how we analyze the properties for comparison. In many obvious ways, no differences exist between the public and private sectors. Cyber is cyber, and cybersecurity goals are the same for government and private organizations that must manage risk and protect themselves from evolving threats.

Moreover, any question about what is happening in another sector (or industry) is a partial distraction because sector threats are unknown. Organizations can be overwhelmed if they rely too much on aggregate data and trends. What happens in the aggregate will happen only to some organizations. Government and private organizations must start with local knowledge. Cybersecurity leadership begins by understanding an organization’s personnel, infrastructure, assets, and threats, which means understanding local information and signals and acting locally. When local knowledge is acquired, work toward understanding global signals can begin. For example, threat intelligence offers organizations external information about and between sectors and industries that can be assimilated into those organizations’ continuous security lifecycles.

On the other hand, the government and private sectors deviate in different ways. The authors have helped many private sector cybersecurity leaders analyze return on investment to justify the cost of security products and services to management teams and corporate boards, despite the effort containing no value. One cannot know a priori the threat an organization faces, its consequences, or its cost. These calculations are guesswork, and no one should take them too seriously. Despite this, the private sector needs help to consider anything that fails to generate revenue as valuable, including cybersecurity. This misfortune is not a problem in government due to no revenue or profit-and-loss statements. Instead, the government has public funds, executive orders, and other directives that mandate security. The public sector utilizes mandates instead of building support organically and discovering new and unique ways security can support business functions. The over-reliance on directives can create a false sense that security has been accomplished with the stroke of a pen instead of seeing cybersecurity as a human and technological response to a constantly evolving digital threat.

Ukraine’s Cyber Defense Offers Lessons for Taiwan

LT. COL. JAMES HESSON and ANNIE FIXLER

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The Ukraine war has filled the world with graphic images of a surprisingly capable underdog resisting the advances of a lumbering aggressor. But while the pictures are far less compelling, the story is the same in cyberspace: Ukrainian defenders have thwarted an onslaught of Russian cyberattacks. While credit for this success goes to the resilience, persistence, and professionalism of the Ukrainians, America’s efforts to improve their cyber capacity played a key role, and offer lessons for defending Taiwan from Chinese cyberattacks.

Cyber cooperation between the United States and Ukraine has a long pedigree. After Russian hackers shut the lights off in Ukrainian cities in 2015 and 2016, Kyiv launched a monumental initiative to harden its defenses. A partnership with the United States began in earnest in 2017 with the first U.S.-Ukraine Bilateral Cyber Dialogue, driven by increasing cyber threats from Russia. Most importantly, the dialogue linked U.S. agencies such as the Departments of Defense, Energy, and Treasury with Ukrainian counterparts to build their defenses.

After helping Ukraine remediate the attacks on its electric grid, the U.S. Department of Energy worked with the Ukrainian government to strengthen the resilience of Ukraine’s energy sector and national-response planning. Since 2014, the U.S. government has provided more than $160 million in technical support for Ukrainian energy security. That Russia has resorted to targeting electricity systems with cruise missiles and drones instead of malware is a testament to the cyber resilience of the infrastructure.

In March 2020, the U.S. Agency for International Development, or USAID, launched a $38 million program aimed at “strengthening the cybersecurity enabling environment; developing Ukraine’s cybersecurity workforce; and building a resilient cybersecurity industry.” As a critical part of this effort, USAID delivered software and hardware tools that increased Ukrainian cyber defenses.

The Army Is Putting All Its Network Efforts Under One Roof

LAUREN C. WILLIAMS

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The Army’s shop in charge of battlefield communications will soon handle all of the service’s network development and purchasing, according to a defense official.

The service’s acquisitions chief decided that “all network communications needs to be under one PEO. and so it is going to be under this PEO,” Maj. Gen. Anthony Potts, the chief of Program Executive Office Command, Control, Communications-Tactical, said Wednesday during a keynote at the 2023 Satellite conference in Washington, D.C. “Everything that resides in the [Program Executive Office Enterprise Information Systems] that is network will come to us—and yes, we will have to change our name.”

A new name hasn’t been chosen yet, but the plan is to absorb all of PEO EIS’ network-related programs by Oct. 1, including the integrated enterprise network program, global enterprise network modernization programs in the U.S. and abroad, base emergency communications system, and wideband enterprise satellite systems.

The move aims to streamline how the Army manages network integration, materiel development and acquisition since enterprise and tactical networks are no longer separate, said Paul Meheny, an Army spokesperson. The shift is also part of the implementation plan for the Army’s 2021 unified network strategy.