Published daily by the Lowy Institute


What does the arrival of Covid vaccines mean for 2021?

It may seem like a miracle (Province of British Columbia/Flickr)
It may seem like a miracle (Province of British Columbia/Flickr)
Published 12 Jan 2021 11:30   0 Comments

On the eve of 2020, the first case of an unexplained SARS-like pneumonia was noticed in Wuhan. 2021 has begun with vaccines against Covid-19 already approved and mass vaccination campaigns rolling out.

But we also begin the year with almost 85 million people confirmed to have been infected by SARS-CoV-2 and nearly 2 million people dead. No vaccine has ever been developed in such a short time, and never has so much depended on the result. Will vaccines be the difference between 2020 and 2021?

It may not be so simple.

With more than 10,000 people dying every day from Covid (almost half in Europe and a third in the US), vaccines will not suddenly end the pandemic. Humanity needs a very sober view of 2021 and the limits of what vaccines alone can do, lest our actions today make our future even worse than it needs to be.

To end the pandemic, we need to achieve population immunity. That will take time: potentially as much as 18 months, based on current production forecasts. Population immunity also relies significantly on vaccines being roughly as effective at preventing transmission of SARS-CoV-2 as they are at preventing people exposed to the virus from developing Covid: the earliest data on how vaccines inhibit transmission is not expected until March. Until we achieve population immunity, we must continue the basic strategies: control borders, identify and isolate virus outbreaks, avoid crowds or confined spaces, wear masks and wash hands.

One of the least contentious issues is who should be prioritised for receiving vaccines. This life-and-death decision may be the least politicised and uncontentious question of the entire pandemic.

In places such as Europe and the US, where the virus is rampant, committing to these basics could potentially save a quarter of a million lives by the end of March. There is no chance that vaccines can provide population immunity earlier than that. Israel may have achieved 20% vaccination already, but it is an outlier, far ahead of larger and richer countries where scalability and coordination pose greater challenges.

Joe Biden will finally bring some helpful leadership to the US when he is inaugurated on 20 January, but current President Donald Trump is masterfully destroying the foundations of social trust. There are reports that many front-line workers in the US are refusing the vaccine. It may not be possible for the US to convince enough people to accept vaccinations for the country to ever achieve population immunity.  

In places such as Australia, where border control is critical, there remains little prospect of fully opening international boarders in 2021 (although quarantine places for vaccinated international students may be available by June, if things go well). The most optimistic vaccine results report 95% efficacy, which even with 100% uptake would still mean statistically that 20 people on every 400-seat plane could be carrying Covid. Vaccinations will soon be required for international arrivals, but that won’t be sufficient to open borders: Australia (and similar countries) will have to achieve population immunity first.

Another major challenge to the post-vaccine stage of the pandemic is political. The World Health Organisation is coordinating efforts to ensure vaccines are available to everyone around the globe, not just to the privileged few. But the politicisation of vaccines began early, with US President Trump leading efforts to monopolise global supplies.

China has capitalised on Trump’s inhumanity and selfishness by contrasting itself as a global actor, declaring that its (nationalistically branded) vaccines will be available to all. This is part of China’s diplomatic strategy for 2021: to demonstrate domestically that the Chinese Communist Party is more competent than Western governments and therefore is legitimate in ruling China, as well as to strengthen China’s “discourse power” by attempting to make itself the preferred partner of many developing countries (and even of Europe, if possible).

WHO Director-General Tedros Adhanom Ghebreyesus (right) with UN Secretary-General António Guterres during a strategic briefing on Covid-19, Geneva, 24 February 2020 (Jean Marc Ferré/UN Photo)

But to paraphrase WHO Director-General Tedros Adhanom Ghebreyesus, it’s not vaccine promises but vaccinations that save lives. China’s proclamations about their generosity contrast with their efforts to use vaccines for strategic advancement, (allegations dismissed as “groundless” by Chinese state news agency Xinhua). And “vaccine diplomacy” also poses risks for China. China’s attempts at “mask diplomacy” blew up spectacularly, when threats to withhold PPE from countries that did not allow Huawei full access to their 5G infrastructure catalysed the full rejection of Huawei from the UK. The high rate of defective PPE also damaged global perceptions of China. If China’s vaccines are as shoddy as their PPE, it will be a much bigger problem.

Surprisingly, one of the least contentious issues is who (within countries) should be prioritised for receiving vaccines. This life-and-death decision may be the least politicised and uncontentious question of the entire pandemic – with broad agreement, there are three categories of people we would like to prioritise within countries: people who are vulnerable to death, people who are most likely to transmit the virus, and essential workers who can’t be protected in any other way. The elderly and front-line health workers (including quarantine guards) are broadly supported as first in line. Health workers (about 3% of the world’s population, but 14% of Covid infections) have more than earned whatever support they get.

That vaccines are now available at all seems like a miracle. But it’s actually the result of huge amounts of work, including general vaccine science done before Covid-19 existed. Having vaccines will ensure 2021 is not a repeat of 2020.

But we are in a much worse position now than we were at this time last year, having spent most of 2020 making terrible mistakes. Even vaccines will not solve our problems immediately, and maybe not even by the end of this year. The number of infections is facilitating mutations at a rate that could degrade the efficacy of vaccinations if we don’t act quickly.

As for our political problems, the world will receive a merciful substitution in the White House in just a handful of days, but as with vaccines, the presence of Biden will not solve all our problems immediately. 2020 may have been the year humanity made the biggest blunders since the Second World War. In 2021, we will have to deal with the consequences of that failure.


Main image courtesy of the Province of British Columbia


Covering the Covid shock on The Interpreter in 2020

A virus of overlapping consequences (7C0/Flickr)
A virus of overlapping consequences (7C0/Flickr)
Published 24 Dec 2020 06:00   0 Comments

From the first days in January this year, the question that dominated the outbreak was how upfront Beijing had been about the novel coronavirus that became known as Covid-19. Richard McGregor:

So far, the handling of the crisis seems to have underlined one of the ongoing problems with the authoritarian strictures of the party-state, which places a premium on the control of information in the name of maintaining stability … Could the virus have been contained, and its spread limited, if officials in Wuhan had levelled with both their bosses, and the public, earlier? It is impossible to say, but at the moment, it certainly looks that way.

Still, the warning signs about the rapid spread of the virus – and what would result in more than 1.7 million deaths so far – did not translate into public trust, particularly in already politically stressed Hong Kong. Vivienne Chow:

An unprecedented level of panic is caused not just by fear, but by the lack of trust. Reactions of the people of Hong Kong and the international community are a vote of no confidence in the authorities’ abilities to protect people and contain the virus. Authorities here are not only the Hong Kong and the Chinese governments, but also the World Health Organisation, which is supposed to “lead partners in global health responses”.

Australia began to react with travel restrictions, buying time at a cost to the education and tourist industries, but Dominic Meagher warned “that time must now be used effectively”.

Three things must be done: eliminate panic, develop some form of treatment, vaccine, or cure, and put in place more sustainable policies to slow down the virus.

But by late February politics and prejudice had complicated the response around the world over. Audrey Jiajia Li:

With 28 countries so far reporting confirmed cases of the virus, caution over the mysterious deadly illness is expected and natural. Yet it is important to emphasise that Chinese people are the victims, not the culprits, of this epidemic.

South KoreaEurope, the United States, India and almost everywhere saw spiking rates of infection. The Tokyo Olympics were soon abandoned, Indonesia struggled and Pacific island nations feared the danger as lockdowns spread. Leaders felt the pressure to rise to the occasion. Michael Fullilove:

There has been a lot of discussion about the communications tools, including websites and texts, that governments are employing to speak with their nations about the coronavirus pandemic … The media noise being generated about Covid-19 is deafening – but the single note of a good speech, well delivered, can penetrate it.

And by the end of March, it was increasingly clear the virus would hold momentous consequences for the world. Daniel Flitton

The crisis will affect everything in some way, whether budget assumptions, global supply chains, or the trappings of power … drastic change [may be] later assimilated into a “new normal”, the point was still a major readjustment and far-reaching – and lasting – implications not only for the community, but also for relations between nations.

So The Interpreter examined the cross-cutting influence of the virus had on existing international challenges, whether the Hong Kong protest movement, poverty in India or the Philippines, migrant workers in Singapore, insurgency in Thailand, fighting the remnants of Islamic State, conflict in Afghanistan or tensions on the Korean peninsula. The crisis had a disproportionate impact on women, while the cost to the global economy was also manifesting. Roland Rajah:

The social distancing required to slow the virus – both voluntary and mandated by governments – means the economic hit is going to be large, and there’s probably not much that traditional demand-stimulus policies can do to materially counter it. In part, that’s because people won’t go out to spend the money, but it’s also because the virus is an intensifying supply-side shock as well – with big disruptions to normal business activity and many workers pulled out of work, either for health reasons or as workplaces and schools are temporarily shut down.

And if a first step to combating a problem is first understanding it, disinformation and conspiracy online was certainly no help. Natasha Kassam:

The dilution of information on the internet is currently posing a risk to global health and safety. Much like globalisation has extended the reach of the virus, social media has extended the reach of fake news. And the stakes are higher.

Austin, Texas (Ampersand72/Flickr)

Bright spots emerged. Enterprising Indonesians mixed their own hand sanitiser, and Bob Kelly – aka BBC Dad – had some helpful advice for those staring at a Zoom meeting working from home:

This will be a slog for the next several months, and my guess is that for all the convenience of telework, most people will enjoy going back to an office when this situation finally breaks.

Nick Bisley wondered at the future power dynamics in Asia. Mark Beeson asked what the crisis might hold for the vaunted international order?

Any of the big issues that collectively confront us – including climate change, economic disadvantage, and, of course, controlling pandemics – would seem to necessitate some form of institutionalised international collaboration.

Countries raced to develop vaccines while wrestling with the rights to privacy when tracing the virus spread. The future design of cities was questioned, we wondered about spies and the warning signs, protecting political leaders from the virus or whether they could strike a global bargain to do better next time?

Jennifer Hsu charted the growing power China’s Xi Jinping amid the pandemic, while Erin Hurley watched Donald Trump shrivel before the challenge. Meantime, Stephen Howes urged the world to remember those most vulnerable:

Covid-19 is hitting at a time when the number of displaced people is at its highest since the end of the Second World War. What if the virus takes hold in a massive refugee camp in Africa, the Middle East or Asia?

Should the world have been better prepared? Shahar Hameiri:

Used to financing and implementing limited interventions far from home, developed states’ governments were suddenly fighting huge contagions on the home front, for which they were often poorly prepared. And since very limited collective capacity had developed previously, their full focus immediately turned inwards, thus producing a fragmented, “zero-sum” response globally.

Or did the world overreact? Ramesh Thakur:

Health professionals are duty-bound to map the best- and worst-case scenarios. Governments bear the responsibility to balance health, economic and social policies. Once these are included in the decision calculus, the political and ethical justification for the hard suppression strategy is less obvious.

Perhaps, in the end, planning doesn’t matter. Gordon Peake and Christian Downie:

Magnified exponentially by these last few weeks, there seems something both absurd yet strangely comforting about feeling emboldened enough to guess a course for endpoints years away … [looking back] planning documents are proof-positive of that old Yogi Berra maxim that the most difficult thing to predict is the future.

Let’s see in 2021 if nature cares that humans can count in years.


Main image via Flickr user 7C0


The strange connections of isolation

Crowds unimagined before 2020 (Sameer Al-Doumy/AFP via Getty Images)
Crowds unimagined before 2020 (Sameer Al-Doumy/AFP via Getty Images)
Published 22 Dec 2020 10:00   0 Comments

Today, as it has for nine months, the Australian government’s Smartraveller website tells me “do not travel”. Every country on the map is coloured red. To leave the country, I would need an exemption on compassionate grounds. Apparently it’s a high bar.

For the last few years, I averaged 100 flights a year, carbon-offset, commuting from Melbourne to Canberra and internationally. When I moved jobs recently, I was excited to reduce this to 75 and have more time with my family. I never imagined how much.

Working in the field of international relations, I think about what’s happening in the world and how it affects Australia. So when in January I hear of Covid-19, I begin to think about the impact on geopolitics. I imagine that there will be two types of countries: ones that have no hope of containing the virus and where it becomes endemic, as has happened in India, and ones which manage to contain the virus but then have to control their borders to prevent reinfection, as occurred in New Zealand.

Until a vaccine is widely available, the cost of controlling the virus will be closing off to keep danger outside. The risk will be closing off international engagement.

That’s the dual challenge for Australia in 2020: how to deal with the pandemic without cutting itself off from the world. This is my story of a year in isolation spent thinking about connection.

A city changed by pandemic, Melbourne in June (r reeve/Flickr)

In January, everyone’s focus is on China. I give a talk to the Office of National Intelligence focusing on what Covid-19 means for Beijing.

If they’ve been to China recently, teachers at my Chinese language classes go into self-isolation, well ahead of any government advice. One of the students, in his 70s, asks me to tell him my travel history. I’m not offended. I just transited through Hong Kong on my way back from New Delhi. I could have caught the virus. I was lucky.

I go to a City of Melbourne function where the Town Hall facade is floodlit red to show support, with hundreds chanting “Wuhan jiāyóu”. Later I ask my teacher to translate, and she says it’s like barracking – so perhaps “C’arn Wuhan”, making it rhyme.

I hashtag #IWillEatWithYou when I visit my favourite Chinese restaurant.

As I drop my son off in Canberra for his first year at university – with bushfires still smoking, one tragedy bleeding into another – there are signs at the student accommodation telling returning students how to self-isolate. They’re lucky to get back in time.

As the borders close and the air routes shut, it’s bad luck if you aren’t where you want to be.

By February, Australia closes its borders to China. Returnees from Wuhan uncomplainingly quarantine at Christmas Island then Darwin. The Chinese strain of the virus never reaches significant transmission. The first wave silently moving through the Australian community mainly comes from travellers from the United States, Europe and cruise ships.

Australia closes the border to Iran, but not to the US. My father in Mornington would probably know some of the crowd who brought back infections from Aspen in the US. Again, we’re just lucky.

I speak at a function to develop future leaders’ Asia capability. No one knows whether to shake hands, and it makes us sheepish. I talk about the stereotypes of how Asians see Australia: as subservient, selfish, rich, racist, transactional and moralistic. And how we can try to counter these.

In March I start planning to work from home. My graduate colleague tells me his three housemates have already lost their jobs and have moved back with their parents.

People organising conferences don’t want to cancel. But employers and insurers are nervous about travel. I pick up my visa for an Indian defence conference the day the borders slam shut.

My last normal moment: seeing the Women’s T20 World Cup Final. I hesitate, but I go and celebrate amid the 86,000 Australians and Indians crowded in Melbourne Cricket Ground.

Early in the lockdown, I conscientiously do yoga on my balcony every day. Passenger planes have almost disappeared from the sky. Now I only see the tiny props. And the helicopters landing on the hospital roof.

As the borders close and the air routes shut, it’s bad luck if you aren’t where you want to be. I interview diplomats about their work repatriating 16,500 stranded Australians, even using a cargo plane delivering cyclone aid to give Australians a ride home.

Then the virus is loose from Melbourne quarantine. The cap on arrivals is reduced. It’s reported that 25,000 then 27,000 Australians are unable to return from overseas.

A colleague shares that she can’t visit her dying father in the US. She wants to go, but isn’t sure she’ll be allowed back. It’s the right call. Later I see news of a small boy stuck visiting his grandparents in Vietnam. His parents look beside themselves.

Grounded planes in Adelaide (Michael Coghlan/Flickr)

 

Prime Minister Scott Morrison tells international students and temporary visa holders to return to their home countries. Many can’t. I talk to a graduating student who can’t go back to Mongolia because the border is closed. It takes seven months. Another from Mauritius quickly organises her enrolment so her visa doesn’t run out. She knows of friends stuck sleeping in airports, unable to stay or go.

With no jobs and no federal assistance, a line of international students snakes around Melbourne Town Hall for food relief. I’m thankful someone is doing something. Then a Brazilian student tells me how Australia’s response is being compared to the generosity of Canada and the United Kingdom. On social media, those who feel abandoned are telling future students not to come.

I keep checking on my “hostee”, a scholarship student from Bangladesh. I joined the University of Melbourne’s welcome program when I heard that most international students never go inside an Australian home. I can’t ask her to visit, but I pay a taxi to deliver toys for her daughter.

I write about the war of words between the US and China over Covid-19. Will the US end up being seen as the victim of external forces or its own mismanagement? Will China end up being seen as the country that unleashed the virus or the one that showed the world how to overcome it? Lowy Institute polling shows that Australians are unimpressed with both.

In April, all alone, Australia calls for an inquiry into the origins of Covid-19, which China views as targeting it. China’s ambassador wonders aloud why Chinese consumers would support a country that is not so friendly, even hostile. Eventually Australia works with other countries to adopt a more neutral proposal, but the damage is done.

Artswest, University of Melbourne (a.canvas.of.light/Flickr)

Asian-Australians report an increase in racial abuse. An Indonesian colleague says he thinks people are standing further away from him, but how would you know? When two international students are attacked at the University of Melbourne, I listen to the Vice-Chancellor’s angry, disgusted condemnation. The Australian National University’s Centre for Asian-Australian Leadership encourages people to call out racism.

I give a webinar on optimism in international relations. I talk about disaster fiction and why the worst-case scenarios won’t eventuate. I survey the audience and find the optimism count has gone up. So that’s my good deed for the month.

In Chinese class, I’m making progress. It’s cheering to be able to do something I couldn’t before. On Twitter, I encourage colleagues who have gone back to learning Japanese and Indonesian. An act of hope that one day we’ll be able to use our halting skills to connect.

I still have nightmares that I’m about to miss a plane, even though they’re almost all grounded.

The collapse of international air travel is unprecedented. Even in the Second World War, a route operated. You’d have to go back to the First Fleet awaiting resupply.

Indigenous Australians were never isolated. They had trade and cultural ties. For National Reconciliation Week in May, I organise a seminar looking at First Nations’ connections with Macassans. Even with no common language, they managed to establish mutually beneficial seasonal trade.

I still have nightmares that I’m about to miss a plane, even though they’re almost all grounded. On a cold night, I dream of my trip to Antarctica with my daughter last year. If we’d travelled 12 months later, we would have been on one of the plague ships going from harbour to harbour, rejected by all. The Greg Mortimer is allowed to dock in Montevideo because today’s leaders remember Australia’s compassion to refugees fleeing Uruguay’s dictatorship in the 1970s. What you give now will be returned to you.

At end of financial year, I donate to the Asylum Seeker Resource Centre. It’s estimated that more than 1.1 million temporary visa holders in Australia can’t access any government support. My body isn’t big enough to hold the shame.

My son comes home from university for semester break. As Melbourne’s second wave rolls in – not due to the Black Lives Matter protests, despite the relentless misinformation – he makes it back to Canberra just in time before the border with Victoria is closed. Our neighbours in the North Melbourne government housing towers are shut in, the beginning as the city tips into one of the world’s longest lockdowns.

Melbourne’s government housing towers, some of which were locked down hard following a Covid-19 outbreak (David Jackmanson/Flickr)

Australia releases its new international development policy Partnerships for Recovery. I write on the biggest negative: no new money, just reallocating the funds for volunteers and scholars who can no longer travel. In the last six years, Australia’s overseas development program has been cut by 27%. Australians think we spend 14% of the federal budget on aid. It’s 0.8%.

Australia releases its Defence Strategic Update in July. The headline figure is $270 billion (that’s 67 years of the aid budget). I write on the tendency to view international issues through a security lens and the self-fulfilling prophecy of treating China as an enemy. Former defence secretary Dennis Richardson warns against “national security cowboys” putting the nation’s interests at unnecessary risk. The Lowy Poll reports the five threats that concern Australians most: drought, pandemics, global economic downturn, environmental disasters and climate change. None will be helped by military hardware.

Shadow foreign affairs minister Penny Wong calls on Australia to develop greater foreign policy ambition, bringing a similar sense of urgency and purpose as we did to suppressing the virus at home.

The Department of Foreign Affairs and Trade cuts jobs.

I’m on a panel with Australian Institute of International Affairs national president Allan Gyngell, who says that in the new Covid-19 world, Australia will be poorer, weaker and more isolated. I write on foreign policy identity politics and the danger of playing with Australia’s security for domestic advantage.

In August, the government announces a foreign relations bill to give Foreign Minister Marise Payne power to veto international arrangements made by local councils, state governments and universities. I write against it. Have we reached the point where these are suspect: a semester abroad, a student home stay, a trade mission, an arts exchange?

When I appear at a Senate inquiry into the legislation, I’m not asked to denounce the Chinese Communist Party, but three Chinese-Australians are.

In a tit-for-tat between Canberra and Beijing that only becomes clear over time, ASIO raids Chinese journalists’ homes in an investigation into a NSW parliamentarian and his staffer. Journalists from the last two Australian media outlets with a presence in China are spirited home.

In September, I sit on the selection panel for New Colombo Plan scholarships for young Australians to study and work across Asia. For three days on Zoom, I hear brilliant, motivated students talking about their great plans for 2021. I check in with one of the previous winners, who never got to travel. She says she’ll go when we’re back to normal, soon. In lockdown, I’ve got used to having no desires for the future. Hope hurts.

A new normal (Jay Phagan/Flickr)

In class, we look at a brochure for Chinese tourists and plan a sightseeing tour of Melbourne. I suggest Puffing Billy railway and Healesville Sanctuary zoo. I think about all the attractions and livelihoods gone. Lavender farms and opal stores and the Great Ocean Road.

More could be done to let tourists visit Australia. Those from places where Covid-19 is endemic might not mind quarantining to live like they did before: a sort of time travel to a pre-Covid era. There’s a deep human need to experience. I’m old enough to remember that before travel was easy and affordable, it was an adventure which could change your life. That’s what I’d choose to use my carbon allotment for: the sights and sounds of new encounters.

I realise that I haven’t left the house in three months, my daughter in six. My husband is immunocompromised. This changes your calculation. Is this outing really worth risking his life?

Australia does best when it’s open to the world, not in times of isolation and economic nationalism.

I speak by video to a friend in Rhode Island. The US case numbers are extraordinary, yet life is mostly going on as normal around him. We’re living in different worlds.

Qantas airline asks if I want to buy a case of the little wine bottles they used to serve in-flight. I buy some. I think it might help me drink less.

The university sector is in crisis. Our third-largest export industry joining tourism, our fourth. For universities, the disaster feels deliberate. Government decisions had consequences: citizens and permanent residents could return, but those with a student visa could not. JobKeeper, the government support package for workers during the pandemic, was amended three times to ensure that universities weren’t covered. Pilot programs for a few hundred international students to return to South Australia and the ACT are announced then postponed. It’s the end of November before a plane with 63 students returns via Darwin. Proposals from student accommodation providers are rebuffed. With no plan for 2021, there’s no hope for first semester enrolments. Education used to contribute $37 billion to the Australian economy.

A lesson from lockdown: 24-hour news doesn’t make you feel connected. But parcels do.

Someone says she works night shift at the supermarket fulfilling online orders, and without even thinking I thank her for her service. I mean it.

Australia was not the only country to see panic buying (dmbosstone/Flickr)

I’m not in Canberra for the federal budget announcement in October. I can’t go five kilometres from my house. Online I check that, yes, the Department of Foreign Affairs and Trade’s funding allocation is the lowest percentage in Australia’s history. There’s a tiny piece of good news: $300 million to fight Covid-19 in the Pacific and Timor-Leste.                                

I look at the money being spent in the budget – the biggest in my lifetime – and wonder where Australia’s future prosperity will come from. Not education and tourism.

Young people are bearing the brunt of this pandemic. What plan are they being offered? On climate, 60% of Australians want the economic recovery to be driven by renewables. But gas chooses itself.

Someone posts on LinkedIn that she listened to the budget with tears in her eyes, feeling we’re all in this together. I can only think of who’s been left out.

The third of our exports that go to China are looking shaky. Chinese investment in an Australian dairy company is blocked on national interest grounds. Getting out of a recession while antagonising our largest trading partner will be tough.

Australia does best when it’s open to the world, not in times of isolation and economic nationalism. We’re a country of immigrants, with half of Australians born overseas or with a parent who was.

Without migration, our economy won’t grow. It’s estimated that Australia will be half a million smaller in 2022, with flow-on effects from construction to retail. Migration could restart with user-pays quarantine, but it’s not on the agenda.

I read that a primary school is cancelling its long-standing Vietnamese program to teach Italian instead. Vietnam has been a big winner this year, and its economy is projected to double in the next decade. When we indulge in nostalgia, we hurt ourselves.

I write on how the US election may mean the end of Australia’s American dream.

Are we taking some first steps towards the long-hoped-for travel bubble? New Zealanders travel to Sydney without quarantining. The first chance to see a granddaughter. The first kiss in eight months. When it goes wrong – the Kiwis don’t stay put – it doesn’t build confidence.

After a false start, it’s announced that Darwin will again host returnees. Repatriation flights restart from London. Then Johannesburg and New Delhi. There haven’t been commercial flights from India for seven months. A maths problem: if the Northern Territory takes 500 returnees a fortnight, how many months will it take to get the now 32,000 home?

A group of Australians stuck in the Philippines are trying to charter a boat to return.

Then 26 October is double doughnut day. No new cases, no deaths. An exhausted Victorian Premier Daniel Andrews announces an end to Melbourne’s lockdown after 111 days. Only a handful of places – Japan, South Korea, Singapore, Vietnam and Hong Kong – have so successfully defeated a second wave.

A traveller walks past an advertising display screen at Sydney International Airport in March (Mark Metcalfe/Getty Images)

My husband tells me that in July, Victoria had the same infection rate as France. The day Melbourne comes out of lockdown, France records 36,000 new cases. Its economy is among the worst-hit worldwide, along with the UK and Spain. State premiers were right not to see it as economy-versus-health.

In its downward spiral, the relationship with China hits a new low. Economic punishment signals China’s displeasure. Sector after sector is hit: barley, beef, lamb, wine, timber, cotton, coal – even lobsters. Scott Morrison demands an apology for an offensive tweet. I can’t see any sign that Australia has a plan to repair the relationship.

In November Victoria celebrates elimination day. Western Australia lifts its hard border. We deserve to congratulate ourselves. Yes, there will be outbreaks that will need to be contained quickly: in Adelaide, in Sydney’s Northern Beaches. But we’ve shown that we can.

I’m so proud of what we’ve achieved within Australia. I’m sad and frustrated about our lack of vision for anything beyond. Can we count on staying lucky as the world gets more contested and harder to navigate?

I speak on a panel with former race discrimination commissioner Tim Soutphommasane. He describes a “fortress Australia” mindset that’s taking hold. A mentality where Australia is retreating inward and views everything outside as a threat.

I watch independent MP Zali Stegall speak in parliament to introduce a Climate Bill. She warns that Australia will be isolated from our trading partners if we remain out of line with international expectations. Putting our head in the sand is not a solution.

I look up at the sky and see a plane. It’s December and there’s a passenger plane landing in Melbourne. Perhaps 2021 will be different. Can Australia face outwards with ambition? Or will we cut ourselves off from the world?


Learning from an island in a pandemic

Reykjavik, Iceland (L. Toshio Kishiyama/Getty Images)
Reykjavik, Iceland (L. Toshio Kishiyama/Getty Images)
Published 18 Dec 2020 06:00   0 Comments

Through a quirk in circumstances, I presently find myself sheltering from the pandemic in Iceland. I wouldn’t consider myself stranded like other overseas Australians. I am here due to personal necessity and because the country is a relatively safe place. While the recent success of my home city of Melbourne in eliminating Covid-19 has afforded it the ability to open up in time for an almost normal summer, Reykjavík’s long, dark and cold winter is providing a natural incentive to stay indoors and limit the virus’s spread.

For Iceland, the effects of the pandemic have been far more structural than biological. Like Australia, the country has an advantageous geography that has allowed it a certain degree of insulation. Yet unlike other island nations such as New Zealand or Taiwan, Iceland’s government has opted for a strategy of suppression, rather than elimination. This is proving reasonably effective.

The country has recorded 28 deaths from the virus – a comparatively low rate that is partially due to its small population, but also due to a highly competent contact-tracing regime that has worked quickly to isolate cases and minimise transmissions. While in the past month European countries have seen an explosion in cases, Iceland has been hovering between 10 and 20 daily cases. A stubborn but manageable caseload for the country’s healthcare system.

The country is again looking to realign itself, this time as a niche market for those who are able to work remotely, spend enthusiastically and wish to reside in a relatively pandemic-safe environment.

This suppression strategy is born from the country’s complex relationship with Europe. While Iceland has remained outside the European Union, it has nevertheless become intertwined with the European structures that it has deemed valuable. It is a member of the European Economic Area (EEA) which links Iceland, Liechtenstein and Norway to the rules of the EU’s single market, and was an early and enthusiastic member of the Council of Europe, the body that seeks to govern the continent’s basic ideals. But crucially in regard to the pandemic, Iceland is a member of the Schengen Area, effectively making it impossible to fully isolate itself from the continent’s current woes.

Instead, the government has required all arrivals into the country to pre-register with their contact details, as well as to submit themselves to a Covid-19 test at the airport, which can be turned around in a matter of hours. Arrivals are then required to isolate for five days, before taking a second test. This approach has so far proved effective.

While Iceland has been unable to close its borders to Europe, the country has implemented stricter measures for countries outside the region. The government has created a small list of eight countries whose residents pose a minimal risk in transmitting the disease and are therefore permitted to enter the country, Australia being one. However, the border remains closed to major sources of tourism such as the United States, Canada and China.

It is in tourism that the effects of the pandemic have been most keenly felt, effects created by Iceland’s unique recent economic history. In 2008, Iceland had a booming and oversized financial services sector, with its three largest banks holding assets that were valued at ten times the size of the country’s overall GDP. As a result, when the global financial crisis struck, it hit Iceland hard. These banks collapsed. The local currency plunged in value, savings were lost and unemployment soared. Unlike the US, Iceland refused to bail out its banks and even imprisoned senior bank executives. What the country also did was pivot its economy.

“Sun voyager” sculpture in Reykjavik (Arian Zwegers/Flickr)

Over the next decade, tourism emerged to become Iceland’s dominant industry, accounting for almost half of the country’s export revenue, and employing around 16% of the population. Its singular and spectacular geography became seen as a far more tangible and reliable asset than the vagaries of high finance. Attracting an endless stream of wide-eyed tourists seemed like a permanent economic advantage. By 2018, the country was host to 2.3 million annual visitors, over six times the country’s resident population of just under 370,000 people.

However, the unforeseeable pandemic has now burst this bubble as well. The array of budget airlines that once funnelled hordes of tourists into Iceland from European and American cities have ceased operations. Currently regular flights are only entering the country from Denmark – where there is a significant Icelandic diaspora – and Poland, whose citizens have come to dominate Iceland’s fish processing and construction industries.

Reykjavík’s main thoroughfare, a street that embodies Iceland’s economic shift, now lies semi-dormant. Its shops selling outdoor essentials and unique Icelandic wares are empty, while its cafés and restaurants that would usually be filled with hungry tourists are sparsely populated.

Yet, the enterprising spirit of the country has also seen an opportunity in the pandemic. Iceland now seeks to capitalise on the world’s shift to remote work. If you are from outside the Schengen Area, and able to enter Iceland without a visa (as Australians are), your visa-free stay can now extend from three months to six. However, there is a catch. In order to qualify you must be earning more than A$10,000 a month (a criteria I very much do not meet).

The country is again looking to realign itself, this time as a niche market for those who are able to work remotely, spend enthusiastically and wish to reside in a relatively pandemic-safe environment.

And if this year holds a lesson, “remote” is a term in need of redefinition.


Favourites of 2020: A lockdown loaf

Sourdough, by Ian Bruce
Sourdough, by Ian Bruce
Published 11 Dec 2020 14:00   0 Comments

An end-of-year series as the Lowy Institute staff and Interpreter contributors offer their favourite books, articles, films or TV programs this year. Look back on the series and watch for more recommendations and reflections in the days ahead.

A year like no other. From global pandemics to climate change to the US presidential election, there was no shortage of crises this year. We lurched from one to another. As I worked from home, the amount of news I consumed increased exponentially. Anxiety levels increased the more I read. There was a sense of helplessness – the inability to see family and friends within Australia, let alone internationally.

Sure, I can write about my favourite book, podcast, films, TV program … things consumed to take the edge off the year. But surely, the zeitgeist for 2020 has to be the sourdough.

To our family and friends in the Northern hemisphere facing a second wave and a winter like no other, keep Zooming and keep baking.

In February, before lockdown happened, I started my own sourdough starter. For those in the know, sourdough starter takes a month or so to cultivate before it is ready to bake bread. When we were ready to start baking in March, we were facing shortages. Whatever flour we could locate went to the sourdough baking/stress-buster project. Ironically, locating flour became a stress in itself.

When The Economist and Financial Times publish articles and “how-to” videos, we know we have reached peak sourdough. Even Barack Obama has his own sourdough starter.

The act of creating something with your own hands and the meditative effect of kneading the dough gives back some of the power that the lockdown took away. In the face of chaos and financial scarcity, bread making and cooking in general provide a sense of achievement and gratification.

Yes, everyone was at it and every post on Instagram was of a sourdough loaf. We might be in isolation, but when it came to baking bread, we were part of a community – sharing in the highs and lows of each loaf.

To our family and friends in the Northern hemisphere facing a second wave and a winter like no other, keep Zooming and keep baking. As Sydney eases its way out of the pandemic, we have not discarded the sourdough project – rather it has become a ritual of our household to enjoy the smell and taste of freshly baked bread each week, and it reminds us of the community we have joined.

Sourdough starter: Holger

Diplomacy after Covid: No looking back

Modern diplomacy (Evan Schneider/UN Photo)
Modern diplomacy (Evan Schneider/UN Photo)
Published 21 Oct 2020 06:00   0 Comments

The 75th United Nations General Assembly held last month was unique. The media spectacle of leaders’ speeches gave way to resident diplomat introductions, pre-recorded video presentations, and videoconferences. For some, the unspectacular and even boring nature of the General Assembly’s high-level week suggested that videoconference diplomacy will come to an end with Covid-19. But there are strong arguments to suggest the world’s worst Zoom meeting may not be the last of its kind.

Innovation in diplomacy has three criteria: recognised need, technological and/or social transformation and human resources to exploit it, and financial support. The evolution of diplomacy has been marked by these three criteria combining to transform and update diplomatic practice.

The 20th century saw summit diplomacy, shuttle diplomacy and hotline diplomacy become mainstream diplomatic processes. Each change resulted from a recognised need to streamline and increase the speed of diplomacy in face of intensifying of what military jargon dubs as the observe–orient–decide–act cycles in modern warfare. Essentially, technological innovation in ballistic missiles and nuclear weapons superseded the time needed for protracted diplomatic communication.

Diplomacy had to change. Changes in transportation and communications technology and the financial support to provide for it, allowed diplomacy to catch up – albeit at a cost. The representative role of the resident ambassador changed to less of an envoy who acts on behalf of the executive (entering into legal agreements and/or committing the state to action) to one who predominantly stands in for the executive (demonstrating the power, prestige and influence of the sending state). The ambassador’s foreign decision-making role decreased, and the public diplomacy/political role increased. Indeed, stemming from these now dated innovations, the ambassador’s role continues to transform.

The United Nations General Assembly in an age of social distancing (Manuel Elías/UN Photo)

We are again in a period of recognised need. Covid-19 has disrupted and distorted diplomacy. In the early stages, it disrupted practices (and the lives of diplomats) and threatened to distort the very fabric of resident representation. The sense of crisis in the Covid-19 pandemic precipitated a sense of need in foreign ministries to rapidly adapt to long-standing, yet not exploited communication technologies, such as videoconferencing. But “Zoomplomacy” was never going to be enough. States are now committing financial resources to build infrastructure to sustain videoconference diplomacy with task-specific adaptability, national control and security.

Preparations are also being made for the next step. Several countries recognise that the digital diplomacy revolution is more than communication technologies, and are exploring how 3-D gaming, deep learning, machine thinking, artificial intelligence and robotics will impact diplomacy.

To imagine that the changes underway will disappear with Covid-19 is to imagine that academic travel budgets will return, online shopping will be discarded, and work from home will end.

Concept developers are already working on replacing the much-criticised Zoom diplomacy conference with what the tech world knows as open-world/sandbox gaming, which would allow diplomats to attend conferences and maintain real life/virtual characteristics of trust and reputation, hold secure, private conversations, undertake corridor diplomacy, and schedule media interviews on the conference sidelines. Such gaming technologies promise to integrate and improve on earlier conceptualisations of diplomacy in the digital environment, such as “Diplomacy Island” on Second Life.  As computer processing power and graphics capacities increase, and open-world gaming becomes more accessible, more and more diplomatic applications will emerge.

The criticisms of videoconference diplomacy and whatever follows it are many – but no more than Lord Palmerston, the British Foreign Secretary, who on receiving the first-ever telegraph message on his desk in the 1840s, is reported to have declared it the end of diplomacy. The criticism of the telegraph’s instant communication and the threatened end to the calm, thoughtful and discreet deliberation that marked 19th-century diplomacy, was soon forgotten as new skills, new practices and new diplomats came to fill the gaps in an ever-evolving profession.

So will diplomacy change again – multilateral diplomacy in particular. Fly-in/fly-out missions such as the UN General Assembly will become less common.

There are several reasons to support this claim. First, multilateral diplomacy has come under increasing criticism regarding waste, imbalance, inefficiency and corruption, leading to an increased unwillingness to apportion budgets to multilateral diplomacy. Second, as a result of the Covid-19 pandemic, foreign ministry budgets over the next five years will be particularly tight. Finally, the irony of organisations dedicated to addressing the causes of climate change and doing little to change their own inefficient, airplane-contrail-exacerbating practices is not lost on those criticising multilateral diplomacy.

Videoconference diplomacy will not go away. It will at first rest side-by-side with fly-in/fly-out missions. With time, it will replace them. To imagine that the changes underway will disappear with Covid-19 is to imagine that academic travel budgets will return, online shopping will be discarded, and work from home will end. There are already clear signs that we are already in the new normal.

The criteria for innovation in diplomacy is here. Covid-19 has provided a recognised need. The technological and/or social transformation and human resources to exploit it are now in place, and the financial support is coming. A less-than-spectacular UN General Assembly and an overwhelmingly boring week of leaders’ speeches will not stop diplomacy’s evolution.


Building a Covid vaccine strategy for Australia

Any Covid-19 vaccine that reaches the market is likely to be imperfect at best (Paul Kane/Getty Images)
Any Covid-19 vaccine that reaches the market is likely to be imperfect at best (Paul Kane/Getty Images)
Published 22 Sep 2020 10:00   0 Comments

This month, Australia signed a partnership with AstraZeneca, the pharmaceutical company behind the University of Oxford’s proposed Covid-19 vaccine, securing the rights to locally manufacture the vaccine, should it meet safety and efficacy requirements. The Oxford vaccine group has been one of the forerunners in the global race to develop a vaccine against Covid-19, with at least 25 additional vaccine candidates undergoing clinical trials globally, and more than 100 in earlier stages of development.

But as the prospects of a viable vaccine become increasingly within reach, focus is now shifting to what a Covid vaccination strategy should and would look like.

While Australian leaders have set an impressive target of 95% vaccine coverage, limitations in manufacturing and distribution are likely to see a staggered roll-out of any new vaccine. And if so, as we seek to tackle a disease that unashamedly discriminates along lines of socioeconomic class, race and comorbidity, how do we choose who gets vaccinated first?

Three key considerations should guide an effective and equitable vaccine distribution strategy for Australia – and how Australia helps its neighbours.

An imperfect vaccine – letting go of the idea of the silver bullet

Unlike the panacea many are wishing for, any Covid-19 vaccine that reaches the market is likely to be imperfect at best. This requires a paradigm shift in our expectations of a Covid vaccination strategy.

The influenza vaccine is probably the most useful comparison – with effectiveness estimated at between 30–60% (in preventing local doctor or hospital presentations with influenza), and requiring annual vaccination to reflect changes in circulating viral strains, the fluvax is hardly a silver bullet in influenza prevention. Vaccines for coronavirus are likely to face similar limitations in effectiveness and duration of protective effect.

A Covid-19 vaccination strategy will be far from a one-shot wonder and instead will require a long-term commitment to viral suppression.

However, unlike the fluvax, the objective of a Covid-19 vaccination strategy will be to achieve herd immunity, where the proportion of individuals with immunity to the virus is sufficiently high as to halt viral transmission. Estimates to date have indicated that around 2 in 3 people would need to be immune to Covid-19 to achieve herd immunity.

How many people would actually need to receive the vaccine to achieve this level of protective immunity is still unclear, and depends on how effective the vaccine is in generating a protective immune response. Simulations from the US suggest that for a vaccine that is 80% effective, 75% of people would need to be vaccinated. However, a less effective vaccine may need near complete coverage in the community, raising a broader question as to the ethics of mandating vaccination.

Evidence to date also suggests that the immune response to vaccination is likely to wane with time, meaning that regular repeat vaccinations are likely to be necessary. In any sense, a Covid-19 vaccination strategy will be far from a one-shot wonder, and instead will require a long-term commitment to viral suppression.

An unequal virus – who gets the vaccine first?

Viruses may not be able to choose their hosts, but the past six months has unreservedly shown that Covid-19 discriminates. Indeed, data from the US, where the virus has run an aggressive and widely disseminated course, has revealed higher incidence rates of Covid-19 among racial and ethnic minority groups and individuals from lower socioeconomic backgrounds, with concentrated outbreaks occurring in prisons and aged-care facilities.

It is on this backdrop of inequity that focus is now shifting to developing a priority model for distributing a Covid-19 vaccine within Australia. Traditional approaches to planning mass vaccination for pandemics such as influenza have focused on vaccinating those at highest risk of severe infection and mortality (such as those with underlying health conditions) and individuals such as healthcare workers who have high risk of exposure and may serve as vectors for transmission.

Australian leadership in supporting vaccine access and distribution within for Asia-Pacific neighbours is likely to advance broader diplomatic interests (UN Women Asia and the Pacific/Flickr)

Models for a Covid-19 vaccine largely draw from these principles but are undoubtedly shrouded in ethical complexity. Even if a tiered approach for vaccine access is devised, such as to prioritise essential workers or individuals with multiple medical issues, ongoing attention will be necessary to ensure individuals from minority groups are not left behind. This will rely on extensive engagement with community leaders to ensure accessible, culturally appropriate (and correctly translated) information, and will require vaccine distribution to go hand-in-hand with a comprehensive surveillance strategy.

Neighbourly duties – investing in leadership in the Asia-Pacific

Finally, in a time when national introspection has become the norm, Australia has the opportunity to assert itself as a leader and advocate within the Asia-Pacific.

Amid increasing geopolitical uncertainty, Australian leadership in supporting vaccine access and distribution within for Asia-Pacific neighbours is likely to advance broader diplomatic interests, as well as demonstrate a commitment to global health equity.

While Australia has successfully negotiated access to the intellectual property of the Oxford vaccine, a lower “ability-to-pay” and/or lack of manufacturing capacity may preclude similar access for other nations. Australia has indicated a willingness to roll out a working vaccine to Pacific island nations and countries in Southeast Asia. Harnessing this opportunity for collaboration has potential to build stronger Asia-Pacific ties, and at the same time may allow for earlier resumption of travel within the region.

Indeed, as Australia stands on the precipice of the next phase of the Covid challenge, the choices we make in building our vaccine strategy will be best measured by those it leaves behind.


Pandemic democracy

Election day in the Basque Country region of Spain in July (Robert Bonet/NurPhoto via Getty Images)
Election day in the Basque Country region of Spain in July (Robert Bonet/NurPhoto via Getty Images)
Published 7 Sep 2020 13:30   0 Comments

How will Covid-19 affect electoral democracy in Australia and around the world?

The pandemic has starkly revealed two fundamental aspects of successful democracy: the extent of a given society’s trust between its citizens and their government, and the capacity of those same governments to deliver and enforce appropriate public health responses. 

Countries whose governments are both trusted and capable have seen them handle the virus relatively well, while those with neither trust nor capacity have seen it spread out of control. On this metric, Australia more resembles Asian democracies such as Taiwan and South Korea in our relatively high levels of social compliance than the more individualistic Anglophone societies with which we tend to feel comity.

As the examples of the United Kingdom and the United States have shown, democracy itself is no guarantee of an effective response to the virus.

However, the pandemic also presents a major challenge to one element of modern democracy – the holding of mass elections. 

Election day – a forum for a mass public gathering of adult citizens across the country, and their congregation within discrete and sometimes crowded polling stations – has become more dangerous in the Covid-19 era. Even when social distancing can be enforced, this kind of activity is now inherently problematic on public health grounds.

Sanitising a voting station in Lawrenceburg, Kentucky, United States (Cassandra Mullins/The National Guard/Flickr)

Delay or cancellation of elections is one response to Covid-19, and a growing concern, given the worldwide democratic recession. Local elections in Hong Kong, for example, have recently been delayed for a year using the pretext of coronavirus, but really as a response by Beijing to the growing support for pro-democracy parties.

Even in established democracies, many elections are being postponed. New Zealand’s general elections, originally scheduled for this month, have been delayed till October as a result of the Auckland outbreak. In the United Kingdom, local elections – including the London mayoral vote – have been pushed out by a full year, on advice from medical experts.

For jurisdictions within Australia such as Queensland, whose state election is constitutionally fixed for 31 October, expanded use of pre-poll voting and social distancing at polling places is the response – at least for the time being.

Another option is to hold elections over the internet. Estonia already does this, but due to well-founded security concerns, very few countries have yet taken the step to open up their elections to all voters on-line. 

Paper ballots and a paper trail are still seen as essential to election security and providing a post-election audit capacity to safeguard the integrity of results. In 2017, Finland abandoned plans to move to online voting, concluding that the costs outweighed the benefits.

Even if the virus prompts a rethink, the kinds of investments needed to provide an acceptable level of ballot security and to withstand cyber intrusion are likely to be some time in future.

Postal votes (Ian Britton/Flickr)

A third and most likely option is thus a renewed focus on voting by mail. In Australia, we have already embraced this and other forms of “convenience” voting in large numbers. At the 2019 federal election, 40% of Australians cast their ballot prior to election day, while the recent Northern Territory poll saw, for the first time, more voters casting their ballot in advance than on election day itself.

Australia and other established democracies are increasingly shifting from having a polling day to having a polling period, a change which may turn out to be irreversible.

But there is a potential downside to this shift: the loss of civic engagement and broader opportunities for democratic deliberation.

In Western Australia, postal voting was introduced for most local government elections in 2011, in order to make voting easier, particularly in rural areas. This shift increased turnout but has been criticised for making democratic engagement more superficial, particularly in passionate rural communities.

The looming congressional and presidential elections in the United States this November ­will be a stress test of postal voting’s compatibility with democracy in a polarised and low-trust political environment.

Given that the point of elections is to choose, the lack of widespread exposure to the election campaign and the debates on policies makes a swing towards voting by mail problematic. If voting by mail diminishes the salience of elections and makes it less likely that informed deliberation over policy alternatives takes place, it has the potential to undermine democracy itself. 

The looming congressional and presidential elections in the United States this November ­– which will effectively be a referendum on the Trump presidency and his handling of the pandemic – will be a stress test of postal voting’s compatibility with democracy in a polarised and low-trust political environment.

With decreasing confidence in the ability of the US Postal Service to handle a surge in requests for early ballots now as well as postal votes themselves, it would be prudent to expect at the very least a degree of uncertainty and potential delays in results, akin to the 2000 Bush-Gore election. 

But there is also the potential – lesser but not trivial – for more significant problems than just delayed results. 

Voting by mail has already become an issue of major partisan division, with Democrats seeking greater voting by mail and Republicans opposing it, as part of their ongoing efforts to restrict the franchise. If this continues to November, we may be facing a high-level contest not just to see who wins the election but over the rules of the game itself.


Australia needs the workers, the Pacific needs the jobs

G’day mate (David Gray/Getty Images)
G’day mate (David Gray/Getty Images)
Published 27 Aug 2020 07:00   0 Comments

Finding a consistent stream of agricultural labour in Australia has long proved a challenge. With Australians often unwilling to accept this type of work in the numbers required to get food to market, the government has sought to use visa schemes to remedy the problem, welcoming foreign labour. Yet in doing so, they have pivoted the industry’s labour market towards one specific visa category, and created an unfair competition between different visa holders. This situation now has serious implications for Australia’s foreign policy.

First, a little history. In 2005, the government thought it had struck upon an innovative solution to its agricultural labour shortage problem. Thousands of young and physically capable people entered Australia each year through its Working Holiday Maker scheme (known as the “backpacker visa”). This visa is open to people aged between 18 and 30 from European, North American and East Asian countries, allowing them to work in Australia for a year (citizens of Canada, France and Ireland have an age limit of 35). The scheme proved incredibly popular, and many people used it as an opportunity to advance their careers or find a pathway towards permanent settlement in Australia.

Capitalising on this sentiment, the Australian government decided to offer the chance to gain a second year-long visa if people first spend three months working in the agricultural industry in a rural setting. Subsequently a third year-long visa was made available after a further six months of agricultural labour.

Yet the upshot was to completely skew the agricultural labour market towards a group who weren’t actually committed to the regions they were working in – people who would simply disappear after meeting their minimum requirements. At the same time, it created a captured market for employers. This led to numerous instances of worker exploitation in both wages and conditions.

Fast forward to the present and the Covid-19 pandemic, and the restrictions on movement to Australia have meant the reliance on this visa group has also created a serious labour shortage in the agricultural industry.

In competition with these backpackers is one of the central pillars of Australia’s “Pacific Step-up”, the Seasonal Workers Program (although the scheme itself pre-dates the “Step-up” branding). The seasonal workers program aims to create agricultural job for citizens of Australia’s Pacific Island neighbours, as well as those of Timor-Leste.

Tomatoes on the vine, Queensland, Australia (Universal Images Group via Getty Images)

Providing labour market access to developed economies for the citizens of developing nations has long been understood as the most effective – and least paternalistic – tool to enhance their livelihoods. Pacific Island governments have sought such access for some time. In contrast to backpackers, these seasonal workers return each harvesting season, understand the requirements of the work, and because they are supporting families in their home countries ­– rather than just ticking a box ­­– are regard as more committed and productive

These barriers to the seasonal workers program actually serve as a sheet anchor holding back one of the primary aims of Australia’s foreign policy: to foster the stability and prosperity of its Pacific neighbours.

According to the World Bank, following several months within the seasonal workers program, Pacific Islanders typically send back around $8,000 (US$5,700) to their families in their respective countries. This can be as much as three years worth of wages that they would earn at home. Tongans are the largest group who utilise the seasonal workers program, in per capita terms, and it has been estimated that their net earnings exceed the combination of Australia aid to Tonga and Tonga’s exports to Australia – an indication of why the scheme is so valued through the Pacific.

Yet the seasonal workers program has significant barriers to entry for agricultural businesses. Employers must be pre-approved by the government, and all positions they have must face labour market testing. Employers also must also provide accommodation, and be responsible for worker welfare outside of work hours. This helps mitigate against the chance of exploitation (although not completely), but it also leads some employers to baulk at using the program for their labour needs, seeing the framework around the scheme as too burdensome, especially when hiring backpackers involves none of these provisions.

These barriers to the seasonal workers program actually serve as a sheet anchor holding back one of the primary aims of Australia’s foreign policy: to foster the stability and prosperity of its Pacific neighbours. With the Covid-19 pandemic decimating the region’s tourism industry, the seasonal workers program will be even more vital for Pacific Islanders once borders gradually reopen.

Yet Australia should be looking for more ways to further encourage the agricultural industry to use the program to meet their labour needs. The most obvious solution would be to reconfigure the backpackers visa to reduce its agricultural components. However, the visa should not be completely abolished, as some unions are advocating in a misguided belief that Australians would rush to take these jobs instead. They won’t. The working holiday scheme remains an important instrument to attract young and educated people to Australia.

Reducing the unbalanced competition this visa creates in the agricultural labour market should be a priority for the government. There is currently a strong alignment of needs between Australia and the Pacific in this area. Allowing the seasonal workers program to flourish is in Canberra’s interests just as much as those of Pacific Islanders.


Diplomacy and global governance after Covid‑19: Prepare for change

UN General Assembly, New York (Cia Pak/UN Photo)
UN General Assembly, New York (Cia Pak/UN Photo)
Published 18 Aug 2020 14:30   0 Comments

Regardless of whether recovery from Covid-19 occurs over a short or medium-term period, it’s clear the experience will have a lasting impact on diplomacy and global governance. Covid-19 has sped up transformations stemming from long-term trends in foreign policy management, multilateral governance administration and digital technology use. With inevitably tighter budgets, foreign ministries will face some tough choices over the coming years.

First, Covid-19 has furthered the long-term trend of increasing executive power over foreign policy decision-making and administration. The trend can be seen across the majority of countries in any number of metrics, from the balance of political appointees versus career professionals in ambassadorial appointments to the size of departmental budgets. Obviously, it has been more intense in certain countries than others – and exacerbated by inappropriate communication strategies and social media.

Covid-19, much like the immediate crisis decision-making responses following the terrorist attacks of 11 September 2001, necessitated greater executive control over foreign policy. But also, like terrorism, the threat from pandemic disease may never fully disappear, meaning decision-making practices passed over to the executive are likely to remain there.

Second, Covid-19 has brought out growing dissatisfaction with multilateral governance. There’s long been recognition that the current system of global governance doesn’t fully reflect strategic realities (G7/8, OECD), is increasingly unable to achieve its aims (WTO, WIPO), is political more than practical (WHO, UNHRC), and has become bloated, inefficient, and corrupt (UN, FIFA, IOC).

The days of diplomatic travel, hotels and restaurants, to attend what most publics see as a pointless political talkfest, will be replaced by late night zoom sessions, document sharing software and food from the local takeaway.

There’ll be no better display of this than the UN General Assembly debate where global leaders speak in September.

Normally, the largest event on the multilateral calendar, attended by massive executive, foreign ministry, and media delegations, the UNGA General Debate leaders’ presentations will this year be replaced by pre-recorded video and/or online presentations with only diplomats already in New York present – the first ever “virtual General Assembly”. After this event, the biggest question asked will be “why haven’t we been doing this for the last 20 years?”. The days of diplomatic travel, hotels and restaurants, to attend what most publics see as a pointless political talkfest, will be replaced by late night zoom sessions, document sharing software and food from the local takeaway.

Third, Covid-19 has forced even resistant foreign ministries to adapt to digital technology. To begin with, the implementation of digital practices proved difficult and frustrating. Digital diplomacy gives fewer opportunities for networking, off-the-record floating of ideas, and using non-verbal signals. Additionally, individual diplomats have faced challenges and disruptions to professional and family life with quarantine and travel restrictions. But over time, these practices are becoming more routine.

Australia’s Marise Payne speaks to a video conference for the Special ASEAN-Australia Foreign Ministers’ Meeting on Covid-19 (ASEAN Secretariat/Flickr)

Preferred techniques are being shared and improved, new skill sets are being developed and personnel training strategies implemented, and new job roles and specialisations are being created. Perhaps most importantly, the use of digital technologies are becoming viewed as more practical, efficient, and time saving.

Wholesale adaptation to an online environment presents cost-savings that would be impossible in an all in-person environment. The more time spent in the digital diplomacy environment, the less likely foreign ministries will return to previous practices. As has been noted by commentators in the education, business, and retail fields, the changes precipitated by Covid-19 are here to stay.

Finally, most foreign ministries will face budget pressures over the next five years. There will be less travel and overseas nationals, meaning a less supportive constituency. With much of their work hidden and/or difficult to assign to performance indicators, foreign ministries have always been targets for budget cuts. Add to this increased executive power over foreign policy, growing dissatisfaction with multilateral governance, and potential cost-savings from continued use of digital technology practices, and the calls for budget cuts to foreign ministries will increase.

Together, these changes suggest policymakers will need to make hard decisions across a range of activities – including on initiatives that have come to be seen as routine. For Australia, MIKTA serves as an example.

Australia joined the informal partnership with Mexico, Indonesia, Korea, Turkey with the aim to build a coalition within the G20. Highly optimistic commentators immediately jumped to support the initiative on the hopes of a “middle power revival” to save global governance. Seven years later, the G20’s relevance as a platform for addressing global issues has declined. Hopes for a middle power revival have dissipated, and Australia and South Korea now aim to secure more direct influence by joining an expanded G7/G8.

In exculpatory anticipation, the Department of Foreign Affairs and Trades’s MIKTA website page answers the question “Why MIKTA?” with public service doublespeak, noting that members  both “share important fundamental values and interests” and “diversity … to build consensus”. For practitioners, having any platform to work with non-traditional partners, and work ever more closely with traditional partners is important and serves a purpose. For those looking to secure cost savings, concrete achievements matter much more. As MIKTA turns to covering issues related to Covid-19, it could also ultimately become a victim.

Even with a rapid return to normality, the trends and the changes already brought out will have an ongoing impact. Post-pandemic planning for foreign ministries has the potential to bring transformational change to diplomacy and global government.

The UN Secretary-General’s conference room, New York (Kim Haughton/UN Photo)

Europe, united in recovery – for now

LIBER Europe/Flickr
LIBER Europe/Flickr
Published 29 Jul 2020 10:00   0 Comments

It took four days and a “historical” summit for the heads of states and governments of Europe to finally agree on the recovery plan that should help the European Union face the devastating consequences of the Covid-19 pandemic.

Celebrated by a recovery in local stocks, the agreement last week marks an important step forward for European solidarity. But the length and the many concessions made to reach this accord also reflect the need to reform the current model of the Union.

The recovery plan – ambitiously called “Next Generation EU” – will put €750 billion (A$1.2 trillion) on the table, split between €390 billion in grants and €360 billion in low-interest loans, funded by Brussels-issued bonds, backed by all 27 members, and repayable over the 30 years from 2028.

The agreement is historical both for its size and the financial mechanisms behind it.  

While this is not the first time that Brussels has borrowed on the markets on behalf of member states, it has never done so in such magnitude. Funds for the plan will come from bonds issued directly by the EU in its own name and guaranteed by its own revenues (instead of using funds raised by national governments). The money will be distributed by the European Commission to industries and regions most affected by the crisis. Budgetary allocations will then have to be reimbursed, via an allocation key similar to the contribution of member states to the EU, and not according to what each state has received.

The length, the compromises and the difficulties in which negotiations took place demonstrate the inadequacy of the EU institutional system in times of urgency.

For the first time in its history, Europe will borrow money to distribute it among its member states, according to the needs and priorities of each. In itself, this represents a form of so-called mutualised borrowing.

But this “historical” moment almost never materialised. Indeed, negotiations stumbled in the face of different, sometimes opposite, vision of Europe.

On one side were the so-called “Southern” countries, most affected by Covid-19 but also the most indebted (Spain, Italy, Greece, Portugal, France), who support a federalist system of common debt, and joined since May by Germany, a champion of budgetary rigour and the draconian criteria of Maastricht.

On the other sat Austria and its partners, the Netherlands, Denmark and Sweden (AKA the “Frugal Four”), recently joined by Finland. True to their role as strict guardians of financial orthodoxy, these members constantly opposed any creation of a common debt and were ready to grant loans rather than European aid to the European Union states in difficulty.

Despite the urgency of the Covid-19 crisis, reaching an agreement for stronger fiscal coordination was difficult and time-consuming. To reach unanimity, the plan had to dramatically downscale its ambition and increase concessions.

While Next Generation EU can be seen as a decisive step forward in the European integration process, it falls short of institutionalising a more federal system in two distinct ways.

First, the plan doesn’t clearly secure Europe’s own resources. To repay such gigantic loans, member states have several options: either they raise their national contribution (increasing pressure on citizens), or they reduce their European spending. Another solution would be for the EU to allocate its “own resources” to Europe. In essence, the Commission would levy taxes – it already does so in a few rare cases, and for very small amounts – making part of the Community budget no longer dependent on national treasuries.

This would allow the European Parliament to direct common investments (for instance, towards defence, research and health systems) while allowing members states to better devote themselves to domestic public policies.

While the principle was acted upon at the summit, the 27 refrained from going too far on this subject, knowing the repayment deadline is still in the far distant future.

Secondly, this four-day European Council meeting confirmed the need to reform the European decision-making process and its institutions. The length, the compromises, and the difficulties in which negotiations took place demonstrate the inadequacy of the EU institutional system in times of urgency, and in particular the need to put an end to the rule of unanimity.

It is no longer acceptable to suspend the action of the whole Union by this rule, giving any member a right of veto to block decision-making. The Union must prefer the principle of qualified majority to its current model and reform itself in order to establish a genuine European federal democracy.

With Next Generation EU, Europe has taken a giant leap for the Union, but only a small, temporary step towards federalism. The plan now needs ratification by the European Parliament, which is not a given.

Meanwhile, the clock is ticking. As the grim milestone of 650,000 deaths from Covid-19 has been crossed worldwide, many European countries have decided to enhance health measures, once again costing their economies.


Economic diplomacy: Covid recovery, from Singapore to the EU

World Trade Organization headquarters in Geneva (Robert Hradil/Getty Images)
World Trade Organization headquarters in Geneva (Robert Hradil/Getty Images)
Published 16 Jul 2020 15:00   0 Comments

Labour pains

High-end guest workers play such a big role in Singapore’s carefully constructed economy that they even have their own technocratic acronym: foreign PMETs – for professionals, managers, executives and technicians.

But in one of the many deglobalisation cracks wrought by Covid-19, this week’s worse-than-expected 12% quarterly slump in the country’s economic growth after an uneasy weekend election for the government will only add to the dilemma over the Singapore model’s reliance on foreign labour.

The city-state has about 1.4 million foreign workers in its 5.8 million population. But at the electoral grassroots, the high-end ones from places such as Australia are perceived to have pushed up the cost of property, while the low-end ones from places like Bangladesh are seen to push down wages.

It is hard to judge what role population played in the Peoples Action Party’s worst or second-worst (depending on the definition) recent election performance last Friday. But dramatic claims about population growth from the opposition parties seemed to unsettle the government more than anything else during the short campaign.

Is the colourless so-called 4G (fourth-generation) leadership blooded in this election but brought up on foreign worker–fuelled growth really up to the job of managing a more anxious population?

Singapore is facing a dilemma similar to Australia’s restrained approach last week to throwing open its doors to Hong Kong refugees. Both countries have relied on a steady flow of foreign workers to underpin their recent economic growth, and this may be a strategic time to plan for the future by taking in Hong Kong’s own well-qualified PMETs.

However, now the Covid-19 economic downturns are only emerging in the official statistics, the old foreign-worker economic model is going to need a lot more persuasive explanation to voters. With Australia’s Treasurer Josh Frydenburg even warning that unemployment is worse than it looks ahead of his economic statement next week, the PAP will no doubt be at least feeling smug about getting its election over before the full impact of a forecast 7% growth contraction this year is felt.

But watching the opposition campaigning shift easily from economics to near-xenophobia at times in a country which celebrates its multiracial character, the PAP faces a more existential question. Is the colourless so-called 4G (fourth-generation) leadership blooded in this election but brought up on foreign worker–fuelled growth really up to the job of managing a more anxious population?

Back to basics

Online diplomatic summits may be one of the unexpected legacies of the coronavirus pandemic. But European leaders have tellingly chosen to go back to the future on Friday this week, when they meet physically for the first time in five months to thrash out potentially historic economic integration measures.

Traditional close-contact diplomacy seems likely to be essential to some progress towards more collective fiscal responsibility to pay for the cost of recovering from Covid-19. The leaders will have to bridge deep divisions to produce a combined agreement on a €750 billion (A$1.2 trillion) recovery fund, extra debt issuance to finance other policies and draft plans for the bloc’s next €1 trillion seven-year budget. 

If the plan is agreed this weekend, or more likely over the European summer, the European Commission is set to issue bonds on its own behalf. This would be a small but significant step away from a highly fragmented system of sovereign debt, in which much of each country’s government bonds are held by its own domestic banks.

Despite its many free-market critics, the EU’s integration measures, from the common market to international trade deals, have still reflected the globalisation consensus that held sway before Covid-19.

At a time when the pandemic has once again raised questions over the future of the EU, this could pave the way for a euro-denominated safe asset, the absence of which has been one of the biggest holes in a 20-year-old currency union still only half-finished.

Nations are at loggerheads over the extent to which recovery-fund money should be provided in the form of grants rather than loans, and also over the allocation criteria to determine who receives what – pitting a group of hawkish northern capitals including The Hague against southern and eastern members.

Despite its many free-market critics, the EU’s integration measures, from the common market to international trade deals, have still reflected the globalisation consensus that held sway before Covid-19, like Singapore’s dependence on foreign workers.

In the new era of economic sovereignty and further separation from the US, the mood seems to be shifting to a greater role for public investment and more business regulation. But the looming debate about collective power over individual country reform plans in return for the mooted collective debt will provide an insight into what sort of alternative the EU might provide to the duelling US and China economic governance models.

Green shoots

The Group of 20 (G20) major economies has remained largely moribund as a collective entity during the Covid pandemic, despite promises of action at the hastily arranged virtual summit of leaders in March.

But new figures from the World Trade Organization (WTO) suggest these countries – which account for about 80% of all trade – have actually pulled back from their initial pandemic barriers, in a rare sign of some recovery in the global trading system.

WTO tentatively estimates world trade volumes have fallen 18% in the first half of the year, less than the more pessimistic 30% forecast.

The WTO G20 trade monitor report shows that by mid-May, these large economies had removed 36% of the trade barriers imposed in the first weeks of the pandemic and that overall 70% of pandemic-related trade measures were actually trade-facilitating rather than limiting.

And while the WTO tentatively estimates world trade volumes have fallen 18% in the first half of the year, this is less than the more pessimistic 30% decline forecasts back as recently as March. 

The G20 monitor shows that after excluding pandemic trade measures, in the six months to May the 20 economies introduced import-facilitating measures covering US$736 billion, compared with import restrictive measures, covering only US$417 billion in trade.

While it is far from a recovery, this has prompted outgoing WTO director general Robert Azevedo to observe: “Not since 2014 have import-facilitating measures implemented during a single monitoring period covered more trade. There are [also] signs that trade-restrictive measures adopted in the early stages of the pandemic are starting to be rolled back.”

And in a call to arms for a multilateral institution which seems to be missing in action (see Stephen Grenville here), he says, “There is no room for complacency: building on these positive indicators will demand consistent efforts and leadership, starting with the G20.”

Education 101

The Australian government’s continued stumbling over how to deal with the foreign students who are among the country’s top export revenue sources has once again been thrown into contrast by the way US universities and technology companies have overturned similar bumbling by the Trump administration.

While Australia’s direct competitors for foreign students in Canada and Britain have managed to keep the welcome mat out, the US was trying to eject students who were only studying online, in a loose parallel to the way the Australian government once told students in financial distress to just go home. 

But Harvard and Massachusetts Institute of Technology have now led the tech companies (which actually depend on these students for cutting-edge research) in using legal action to force the administration to reverse the decision.

With Australia’s foreign students increasingly caught between the government’s disdain for both the university sector and China (the source of most students), there seems to be a clear message here for universities.

They are going to have to be at least as creative as the Australian Football League has been in dealing with Covid-19 setbacks if their foreign student–dependent business model is going to survive.


Economic diplomacy: Diversification dilemmas

A farmer sprays his crop in Dungowan, north-west New South Wales, Australia, May 2020 (Mark Kolbe/Getty Images)
A farmer sprays his crop in Dungowan, north-west New South Wales, Australia, May 2020 (Mark Kolbe/Getty Images)
Published 2 Jul 2020 16:00   0 Comments

Costing the D word

Diversification might be the word of the moment in the lexicon of Australian trade debate, even though few advocates make much attempt to explain how it will actually work.

But now we have two interesting efforts to quantify just how selected reductions in trade with China in different sectors might actually play out in terms of overall costs to Australian – and, for that matter, Chinese – living standards.

There are a lot of assumptions here, and these sub-sectoral studies don’t really grapple with the bigger reality that China accounts for at least one third of exports. But this is the sort of analysis that will be needed if the country is going to be able to make hard-headed decisions about future trade restraints.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) and, separately, University of Queensland economist Scott Waldron have now tried to quantify how the recent Chinese barley and beef export restrictions will play out. And they both provide interesting insights into the double-edged impact and the diversification opportunities.

Both these studies follow some ground-breaking work last year by the Victoria University Centre of Policy Studies (CPS) on the impact of a 25% cut in Chinese coal imports from Australia which followed the unexplained slowdown in processing of coal exports by China earlier in the year. That research found that the annual cost in terms of lost consumption would be about $31 per head for Australians, whereas there would be a much smaller loss for China.

Waldron’s broader point is that if the net public costs of trade diversification moves were better known, the government and community would be better able to make decisions about them.

Last week, ABARES released parallel research about the Chinese barley tariffs, which finds that gross exports to China of about $1.2 billion a year will probably be lost. But after adjusting for barley export redirection, alternative use of farmland for other crops, new grain exports and alternative use of cheaper barley in Australia, the worst-case loss of agriculture output would be only about $250 million.

But remarkably, ABARES finds that the tariff might cost China $3.6 billion due to its barley users such as brewers having to shift to other inputs, resulting in higher costs and less efficient domestic grain production.

Waldron takes this sort of analysis further by arguing, on one hand, that Australian exporters need to better understand what drives these Chinese decisions – for example, the way China is focused on ensuring food security with diverse supply chains. On the other hand, he warns that these interventions will recur, and so Australian producers need to both maintain alternative markets and to understand the real – rather than headline – flow-through costs, as ABARES has done.

Waldron says:

Australian farmers and agribusiness firms have benefited enormously from the trade due to the underlying drivers of supply and demand and complementarities that thrive under stable conditions. However, the risks of dealing with China are considerable and increasing and many Australian agricultural industries are heavily exposed to the risks.

Drawing on the CPS modelling approach, he broadly estimates that the combined costs of the latest Chinese barriers to barley and beef might only be about $1 a head for Australians.

Waldron’s paper contains more specific suggestions about how Australia should deal with Chinese farm trade tensions. But his broader point is that if the net public costs of trade diversification moves were better known, the government and community would be better able to make decisions about them.

Reshoring risks

World Bank economists have taken up this subject from a different angle in their latest Global Economic Prospects report, which raises concerns about the downside costs of the now widely forecast winding back of global value chains (GVCs) towards more localised manufacturing as a result of Covid-19.

Australia is taking tentative steps down this path under the government’s “economic sovereignty” strategy, although as noted here before, Industry Minister Karen Andrews has emphasised consumer nationalism as the driving force over government intervention.

While the World Bank economists note GVCs were already being wound back before the pandemic and more shrinkage will occur, they counterintuitively warn:

During the crisis, offshore sourcing has posed less risk to supply in several key sectors than has concentration of production in a few large facilities (eg. meat packing, medicines) – a reduced reliance on foreign inputs often results in an increased reliance on domestic inputs, which are also vulnerable to disruption from the pandemic.

The Bank’s East Asian regional economist Aaditya Mattoo made the point more bluntly in an Asia Society Policy Institute webinar this week, where he said that state support for reshoring – or what he calls “dependence diversion” – could quickly turn into a slippery slope towards protectionism. 

And when Australia is specifically turning to varied trade deals with India and Indonesia to diversify from risks in China, Mattoo noted that those two countries, in particular, were prone to the lure of self-sufficiency, which would likely only increase due to the global reshoring push.

Unmake in India

Remarkably, India has now put itself at the front line of the economic diplomacy manoeuvring to reduce dependence on China, driven by the deadly border clash between the two countries in mid-June. It has banned popular Chinese online platforms including Tik Tok, imposed Australian-style de facto reviews of new Chinese investment, embraced Chinese-style informal import restrictions on Chinese goods and is considering a ban on telecommunications company Huawei.

This is remarkable because only last October at their Chennai summit, Indian Prime Minister Narendra Modi and Chinese President Xi Jinping appeared to lay the groundwork for continued economic engagement, despite their strategic rivalry.

Chinese investment in India’s e-commerce and consumer products sectors has gone from negligible to about US$26 billion in the past five years, in a faster-paced mirror of what has also happened in Australia. But while India is only about half as dependent on China for two-way trade compared with Australia, it has a large trade deficit with China – unlike Australia.

Chinese investment in consumer products factories did seem to be paying off for India by reducing the Chinese trade deficit with greater local production and underpinning Modi’s “Make in India” manufacturing revitalisation scheme.

But cutting the economic sinews with China just when the Indian economy is undergoing one of the world’s larger Covid-19 slumps runs the risk of higher prices, component shortages and perhaps lower manufacturing quality, which would hurt any export push.

This seems to be a real “Make in India” moment, where the country can slide back towards Mattoo’s warning about traditional Hindu nationalist self-reliance or perhaps rethink its recent aversion to trade liberalisation via the Regional Comprehensive Economic Partnership and the moribund Australian bilateral deal.

Down on the farm

Meanwhile, the decision by chemical company Nufarm this week to stop manufacturing crop protection products in Australia is exquisitely poor timing for the government’s national sovereignty campaign. Only two months ago, the company was warning that Australia needed to boost local manufacturing to reduce its reliance on China.

This will likely make Australian farmers – who spend about $500 million a year on Chinese agricultural machinery and inputs – even more dependent on Chinese supplies, just when Chinese demand for their products such as barley and beef is in question.

But this is an area where some of Waldron’s careful diversification and risk-analysis thinking needs to apply.

While farmers do spend about $500 million a year on Chinese imports, they also sell China products valued at about $13 billion. And as ABARES has previously shown, China needs about $2 billion of those Australian commodity exports as inputs to manufacture its own food exports.


Economic diplomacy: Positive globalism and American exceptionalism

Australia’s Minister for Trade, Tourism and Investment Simon Birmingham at the National Press Club, 17 June 2020 in Canberra (Sam Mooy/Getty Images)
Australia’s Minister for Trade, Tourism and Investment Simon Birmingham at the National Press Club, 17 June 2020 in Canberra (Sam Mooy/Getty Images)
Published 18 Jun 2020 13:30   0 Comments

Hindsight

There was one phrase that would have neatly rounded out the interesting complementary speeches delivered by Australia’s two key international affairs ministers this week: positive globalism.

Here’s Trade Minister Simon Birmingham on Wednesday:

I know the WTO and its processes can seem arcane, but having an effective rule book is the cornerstone of a functional, rules-based system. It couldn’t be more essential for a country like Australia.

And here’s Foreign Minister Marise Payne on Tuesday:

Australia’s interests are not served by stepping away and leaving others to shape global order for us. Isolationism would also cut us off from the world on which we are so dependent for our own security and prosperity in the world's most dynamic region.

These are welcome but essentially unremarkable comments from ministers running a middle-power, export-oriented, foreign investment–dependent country with a proud track record of international engagement and citizens serving in numerous global jobs.

Except for the way their upbeat attitude to global engagement is quite a change of pace from Prime Minister Scott Morrison’s Trumpian swipe at “negative globalism” in his Lowy Lecture last October. That was before the bushfires, Covid-19 and China’s growing intransigence all in different ways underlined the value of Australia participating in a wide range of international institutions, despite the diplomatic trade-offs sometimes required.

While Morrison suggested some of these bodies were running out of control and threatening democratic nations, Payne is now saying that the negative globalism audit ordered by her boss has found that multilateral organisations are “vital” to Australia’s interests. So, it is perhaps not surprising that she sugar-coated the not-unexpected shift back to middle-power reality by remarkably suggesting that Morrison’s speech was trying to prepare Australia for an unforeseen pandemic. 

Economic distancing

Asia is converging into a more coherent economic entity, rather than taking sides in the US-China power struggle, according to new modelling of the region’s new trade zones – the revamped Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Partnership (RCEP).

Indeed, the Peterson Institute for International Economics modelling highlights how the two zones are creating a more traditional East Asian economic sphere at odds with the newer Indo-Pacific security framework, mainly because the US and India have absented themselves.

Trade deal modellers Michael Plummer and Peter Petri characterise the US and India’s stance on agreements which will raise the annual output of their members by US$147 billion (CPTPP) and $US186 billion (RCEP) by 2030 as “economic distancing”. India, in particular, is projected to lose US$6 billion from not joining RCEP, compared with gaining US$60 billion if it had joined:

Despite a history of political tensions in East Asia, these trends will deepen economic integration among China, Japan, and Korea, building on their already substantial production networks. The losers will be the United States and India, in economics as well as strategic influence in the region.

At odds with much of the post-Covid strategic debate, they further state, “By lowering East Asian trade costs, RCEP will accelerate the decoupling of the East Asian and US economies, arguably the most productive regional partnership in economic history.”

The modelling also finds that the two Asian trade agreements will broadly offset the US$301 billion in annual lost global income by 2030 from the US-China trade war, but not the losses to the US and China themselves.

Birmingham is due to join an online meeting of trade ministers to maintain the momentum towards the signing of RCEP in November.

But while the pan-Asian agreement is now a standard feature of the government’s growth and diversity rhetoric, the Plummer/Petri modelling does not offer much joy to Australia, due to the fact it already has trade agreements with all other 14 participants, now that India is out.

The modelling suggests it will only increase Australian real national income by a negligible US$1 billion a year by 2030, compared with US$85 billion for China and US$48 billion for Japan.

Currency reserve

When the International Monetary Fund (IMF) released its Asian regional outlook in April, Asia-Pacific director Changyong Rhee surprisingly emphasised the role of the US dollar in the region, pointing out it had actually risen in significance since the last financial crisis in 2008.

It was a nod to the way the currency’s global reserve status remains one of the most significant hard- and soft-power assets the US has – especially at a time when even the military has lost some stature by being drawn into the domestic debate around the Black Lives Matter demonstrations.

But what is more striking since April has been the roll call of high-profile US commentators worrying about the future of the currency amid the Trump administration’s assault on globalisation.

In Foreign Affairs, former Treasury secretary Hank Paulson says the enduring dominance of the dollar is remarkable, given the US economy’s relative decline over the past 50 years. But while he says the currency may retain its role, he warns:

The dollar’s status will be tested by Washington’s ability to weather the Covid-19 storm and emerge with economic policies that allow the country, over time, to manage its national debt and curb its structural fiscal deficit.

Currencies set the equilibrium between domestic economic fundamentals and foreign perceptions of a nation's strength or weakness, according to former Morgan Stanley Asia chairman Stephen Roach on Bloomberg, who predicts a US dollar slump driven by Trump’s international economic policies and a savings decline due to the pandemic recession. He says:

Like Covid-19 and racial turmoil, the fall of the almighty dollar will cast global economic leadership of a savings-short US economy in a very harsh light. Exorbitant privilege needs to be earned, not taken for granted.

But this week at Project Syndicate, former IMF economist Kenneth Rogoff took the argument further, suggesting that an underappreciated aspect of Trump’s reshoring and deglobalisation campaign would be a decline in demand for US-dollar assets just when the country has a rising budget deficit to finance. He says:

Even if the US turns a blind eye to deglobalisation’s effects on the rest of the world, it should be remembered that the abundant demand for dollar assets depends heavily on the vast trade and financial system that some American politicians aim to shrink.

Meanwhile, as the Trump administration has dithered domestically and meddled globally over Covid-19, the single most significant US pandemic mitigation action was the Federal Reserve’s swift extension of currency swap lines to more than a dozen other central banks to calm financial markets in March.

So the future of the dollar is going to rely on continued global trust in American exceptionalism, amid growing global distrust of the politicians who manage the country.


Climate change makes Covid-19 politics look easy

The Big Smoke: Sydney in December 2019 (Getty Images)
The Big Smoke: Sydney in December 2019 (Getty Images)
Published 10 Jun 2020 12:00   0 Comments

Covid-19 has been an extremely difficult challenge for national policymakers. If policy and politics are about managing competing interests and prioritising different constituencies, the varied national Covid-19 responses point to the acute challenges of getting this balance right.

How do we balance the economic implications of movement restrictions against the public health risks of increased infections? How do we weigh individual freedoms against community protection? And if we shut down elements of our economy, do we protect affected people and businesses? All of them? How much support should we give them? And for how long?

What the Covid-19 experience tells us is that the public and policymakers have a capacity to listen to and follow the guidance of experts.

Almost every country has answered these questions differently, with measures ranging from total lockdown to contact tracing, widespread testing to business as usual. These have seen varying degrees of success, of course, and varying degrees of public support for those measures.  Within Australia, we’ve seen consistent and robust debate about the policies enacted, including movement restrictions and the closure of schools, borders and businesses. Who would want to be a policymaker trying to get this balance right, and trying to sell it politically?

Climate change, however, makes the policy and political challenge of responding to Covid-19 – at least in Australia – look like a picnic, by comparison. In at least five ways, climate change is much tougher:

  1. With Covid-19, the public has a sense of what a worst-case scenario looks like. It makes justifying extraordinary measures a lot easier for politicians if they can, for example, point to dramatic scenes from a country hit hard by the pandemic to say, “These are people and societies much like ours, and that’s our future if we do nothing.”
    The same is more difficult to say of climate change – or at least with any degree of certainty. We can point to the devastating effects of disasters like the 2019–20 bushfires or the drought that preceded it. We know that climate change means an increase in the frequency and severity of such events. But we can’t definitively say that climate change caused these disasters – and plenty of voices in Australia contest any attempt to link them. The threat of climate change in this sense is a different one, and emergency measures are just a bit harder to sell.
  2. With Covid-19, we have a clearer idea about the effectiveness of different responses. We can see from other states – and from sophisticated modelling – what measures will lead towards what range of outcomes, and in what timeframe. The same does not apply to climate change. Ecosystem functions are far more complex, and the suite of possible measures – from mitigation to adaptation to geoengineering – make this a much more complicated policy challenge.
  3. With Covid-19, unilateral national action can work. Quickly closing off borders is actually possible, and if New Zealand’s experience is anything to go by, can be effective. With climate change, the nature of the atmosphere as a global commons obviously makes such actions impossible. We can focus on adaptative measures to try to insulate ourselves from the effects of climate change, but we can’t prevent disasters from happening in the first place. So we need mitigation, but one country can’t achieve necessary goals on its own. We need sustained international cooperation, with many states doing their part – which has proved to be elusive in practice. And if we think – or we’re led to think – that others aren’t doing their part for international response, major domestic mitigation efforts are that much harder to sell domestically.
  4. With Covid-19, we’re protecting ourselves and those closest to us. Covid-19 can immediately and directly affect us, family members and fellow citizens, which is how extraordinary policy measures can be justified and sold. Those most immediately and directly vulnerable to climate change, though, are seen as something other – they’re people in the developing world, other living creatures, or future human generations. We’re seldom encouraged to orient our moral – or political – concerns to these constituencies. Again, this makes mobilising and sustaining extraordinary measures harder than with Covid-19.
  5. A return to something approaching life as normal beyond Covid-19 seems possible. Sacrifices are politically easier to sell if it looks like a “for now” scenario, with effective measures in place and the chance of a vaccine on the horizon. That won’t be the case with climate, where we’ll likely be facing a world that has changed irrevocably.

In all these ways, climate change poses more profound challenges for policy and politics than Covid-19. That’s even assuming that policymakers have the political will to try to address climate change, which hasn’t been self-evident in the Australian context.

More positively, what the Covid-19 experience tells us is that the public and policymakers have a capacity to listen to and follow the guidance of experts. We seem to recognise that prevention is much better than cure. And when we recognise an issue as a crisis, we appear capable of enacting and accepting extraordinary measures.

Whether the Australian public – and in particular its leaders – can accept that climate change is a crisis is, of course, another thing altogether.


India-Australia strategic partnership: Leveraging aerospace capacity

An Indian Navy Chetak helicopter lifts off from HMAS Parramatta during AUSINDEX 2019, in the Bay of Bengal (Australian Defence Force)
An Indian Navy Chetak helicopter lifts off from HMAS Parramatta during AUSINDEX 2019, in the Bay of Bengal (Australian Defence Force)
Published 2 Jun 2020 15:00   0 Comments

The forthcoming virtual summit between Indian Prime Minister Narendra Modi and Australian Prime Minister Scott Morrison assumes considerable significance for an India-Australia strategic partnership, particularly as it comes against the backdrop of heightened friction with China for both countries. Enhanced defence cooperation between the two countries could be an important signal to Beijing of the costs of overly assertive strategic behaviour – whether in the Himalaya or in trade. For some years, defence cooperation has largely focused on the naval relationship. Now is the time for enhanced air-power cooperation.

The Modi-Morrison virtual summit is likely to focus significantly on defence and strategic security interests. One deliverable will be the conclusion of a Mutual Logistics Support Agreement, finalised at the “2+2” dialogue of the foreign and defence secretaries in New Delhi last December. The agreement will facilitate reciprocal access to military logistics facilities and may be followed by other pacts aimed at developing alternative supply chains.

Aerospace cooperation is a largely unexplored area. India’s aerospace capability has seen considerable expansion in the last decade, creating new opportunities for cooperation. The Indian Air Force (IAF) long devoted most of its attention to India’s northern and western borders. But since it began addressing Indian Ocean security in the mid-2000s, there has been a quantum change in IAF’s expeditionary capabilities. These include induction of Su-30 MKI aircraft, air-to-air refuelers, AWACS, C-17 heavy-lift transport aircraft, C-130J special operations aircraft and a significant number of helicopters inclusive of heavy lift, attack, and medium-lift aircraft.

The IAF and the Navy have been carrying out bilateral and multilateral exercises with foreign air forces and navies for more than 20 years. Having started relatively late, India-Australia joint exercises are gathering momentum.

The IACCS (Integrated Air Command and Control System), combined with satellite communications and surveillance system, now enables the IAF to cover the entire northern Indian Ocean region. With the activation of new air bases in the Indian Peninsula and the Andaman and Nicobar islands (Sulur, Thanjavur, Thiruvananthapuram, Car Nicobar), the IAF now has significant reach in the Indian Ocean. In recent times, India has used IAF’s expeditionary capability to provide support to friendly nations through humanitarian and disaster relief operations.

IAF also operates Su-30MKI, Jaguars and Mirage 2000s for maritime operations in support of the navy. Plans for permanent basing of fighter aircraft in the Nicobar islands are on the cards, enabling the air force and the navy to expand their operational reach to the Malacca Straits.

Increased Chinese naval activities in the Indian Ocean and the Bay of Bengal highlight the importance for India of monitoring strategic choke points of the Malacca Straits and the Indonesian straits of Sunda, Lombok and Ombai-Wetar. With the proximity of Australia’s Cocos islands to the Indonesian straits and that of Andaman and Nicobar islands to the Malacca Straits, there is much potential for coordinated aerospace operations from these islands to monitor these strategic choke points.

The Indian Navy, with its Boeing P-8I maritime surveillance aircraft, has considerable reach and coverage across the Indian Ocean. Its carrier-borne air power is currently limited to one aircraft carrier, INS Vikramaditya, while a second domestically built carrier is likely to enter service by mid-2021. The Navy aims to become a three-carrier force by mid 2030s.

There is some possibility for international collaboration with the US in the development of the third carrier. India-Australia collaboration in related areas of aerospace industry, in areas of hi-tech components manufacture and supply logistics is also worth exploring.

Having established the post of Chief of Defence Staff, the Indian government is now restructuring towards integrated theatre commands. However, there is still a lack of clarity in the concept and structure. An Air Defence Command and a (naval) Peninsula Command are the first two likely integrated commands to be established by 2022, which would impact the IAF and Navy the most. While integration in operations is vital, success of integrated command is dependent on well-defined operational philosophy. This has some way to go, but once in place, an integrated command structure will help international cooperation.

While IAF to RAAF and Indian Navy to RAN interactions will continue in areas of training and service specific cooperation, integrated Indian theatre commands could facilitate operational cooperation by exploiting synergised aerospace and maritime resources. This could make a major difference in areas of intelligence sharing and ISR coordination, counter-terrorism, anti-piracy, maritime domain awareness, and joint coordinated patrolling in the Indo-Pacific. A good example is US INDOPACOM’s role for decades in promoting Indo-US defence cooperation.

The IAF and the Navy have been carrying out bilateral and multilateral exercises with foreign air forces and navies for more than 20 years. Having started relatively late, India-Australia joint exercises are gathering momentum. The two-week bilateral naval Exercise AUSINDEX has run every two years since 2015, and Australia’s interest in participating in the Malabar naval exercises may gain traction in Delhi this year.

In 2018, the IAF participated in RAAF’s largest biennial multilateral exercise, Pitch Black. There are further areas for significant IAF-RAAF cooperation. The IAF can, for example, gain from RAAF experiences of rapid operationalisation of network-centric warfare concepts. The two air forces can also bring enormous weight and synergy through joint humanitarian assistance and disaster relief missions in the Indo-Pacific, an area with high occurrences of disasters.

When India’s integrated theatre command reforms take effect in a few years, the two countries can take further mutual advantage of significant aerospace and naval capabilities. By coordinating and sharing ISR activities, aerospace and naval competencies, India and Australia can contribute considerably to ensure security and stability of the Indo-Pacific in the post-Covid world.

This piece is part of a two-year project being undertaken by the National Security College on the Indian Ocean, with the support of the Department of Defence.


Designing a “built environment” for the pandemic age

Adapting to lockdown, a street library in Richmond, Virginia (Ronnie Pitman/Flickr)
Adapting to lockdown, a street library in Richmond, Virginia (Ronnie Pitman/Flickr)
Published 28 May 2020 10:00   0 Comments

We don’t give much thought to a flushing toilet, until the damn thing is broken. The same goes for the footpath that runs out the front of the house. A ribbon of smooth concrete serves as an unconscious guide for our feet, unless it’s cracked and potholed, transforming what is intended as a community service into an obstacle to avoid.

But as the world experiments with lifting the Covid-19 lockdown, we’re being encouraged to think a lot more about the everyday background of constructed items that make up our homes and cities. Little changes in this “built environment” might just keep us healthy, while a major mindset shift could help even more. This isn’t just a challenge for wealthy countries that experienced the early wave after coronavirus spread from China, but for emergent nations, too, with less established infrastructure.

The issues are in rethinking design, operations, maintenance and behaviour, all to ensure that the modern workplace – and hence the broader economy – is not so susceptible to the disruption of disease.

After all, preventing the festering risk of disease was the initial goal of those easily forgotten yet vast and complex sewerage systems that connect the sprawling suburbs with far distant waste treatment plants. Footpaths came about to keep pedestrians safe from the increasing congestion and speed of road traffic. The list goes on. Street lighting, public parks, underground trains, regulations to ensure fire safety standards or stop the use of hazardous materials, and more examples besides, all developed with the ideal of improving safety and the quality of life.

“The history of the built environment is the history of public health,” says Elena Bondareva, a consultant who has worked across the world on projects as varied as office space design to discussions about building science. You could go as far back as the earliest days of human civilization, as Bondareva puts it: “Why do you think we slept in caves, then built up villages? Why were the oldest cities in the world surrounded by walls and watchtowers?”

Now, in this new age when terms such as “social distancing” and “moist breath zone” are part of the vernacular, Bondareva sees the challenge as one where the built environment is at the forefront of reinforcing public health, in a similar fashion to the way construction standards and other measures are recognised as important to mitigating climate change. Bondareva spoke to me from the US, where she works for building science consultants CETEC, after she passed along an article written during the first weeks of lockdown, urging those with expertise in the field to advance a view.

So much of what we don’t often notice in a city is designed to keep us safe (Evan Schneider/UN Photo)

The issues raised have fascinating consequences. A front-page story last week, for example, warned of a $50 billion wipeout of the value of commercial office properties in Australia’s big cities, as companies assess whether to maintain big tower offices or persist with working-from-home measures. Consequent reduced pressure on transport networks – roads and rail alike – would be only one flow-on result. Another report this morning looked at the prospect of more people choosing to shift to regional towns away from Australia’s crowded cities that hug the coastline – and taking their jobs with them. 

Not that Bondareva is giving up on the office just yet.

“We’re social creatures. When interacting with others, we’ve evolved to consume some 90% of our information non-verbally – that’s very hard online.” While she is in no doubt there will be change, she doesn’t see a 2021 where people remain in solitary capsules connected by the internet. And besides, so many jobs simply don’t come with an online option.

But the issues are in rethinking design, operations, maintenance and behaviour, all to ensure that the modern workplace – and hence the broader economy – is not so susceptible to the disruption of disease. Shared “hot desks” suddenly seem far less desirable, while a building site might need to slow down to allow different trades the physical space required to safely get the job done.

“There is indisputable science that our spaces define our health,” Bondareva says. “Is there leadership and courage to make change based on these facts – the way we have done throughout history?” She cites past examples such as the introduction of mandatory seat belts as a measure where governments moved beyond voluntary options that private industry might recommend to tackle the road toll. Nor should this be limited to thinking only about coronavirus. Other diseases, such as obesity, diabetes, heart disease and issues related to mental health, can all be exacerbated by the places where we live and work.

Will the commuter crowds be diminished? (Evan Schneider/UN Photo)

There is a major international dimension to such debates, too. The post-Covid world could see the prospect of “leapfrogging” by emerging nations, in much the same manner as the expensive roll-out of copper networks for fixed telephone lines was bypassed by technological advances such as the mobile phone. Attracting labour to Covid-safe workplaces, for example. Regulations for new buildings could minimise the use of materials where coronavirus can linger and spread, for instance, as scientists learn more about what type of surfaces Covid-19 can survive on, and for how long. Or codes could be adopted to change the way air is circulated in a room – whether by the placement of windows, vents or coolers are placed – to limit the mechanics of airborne transmission.

“Frankly, this is where I challenge countries like Australia and the US to stay competitive because of the time lag,” says Bondareva. The adaption need for climate change again offers  a guide. “If we need at least a decade to get today’s petrol-powered vehicles off the road, the challenge is ever greater with existing buildings. This gives an immense advantage to regions developing more rapidly. If China was set to open 600 airports faster than an Australian city can get one brownfield district redeveloped, isn’t that an advantage once we put our finger on what precisely – materials, HVAC [Heating, Ventilating, and Air Conditioning], occupancy profiles, building typology – halts infectious disease transmission?”

Keeping the taps running and the power on is no longer enough.


In an Olympic-sized challenge, Japan’s golden chance could go begging

A games, without crowds? (Katharine Lotze/Getty Images)
A games, without crowds? (Katharine Lotze/Getty Images)
Published 15 May 2020 11:30   0 Comments

There have been plenty of Japanese officials weighing in on Tokyo’s Olympic rescheduling plans over the last few months. At times, it’s been hard to know who to focus on, especially when trying to follow the whole affair from Australia.

From the ageing Tokyo 2020 President Mori Yoshiro to former athlete turned Olympics Minister Seiko Hashimoto Haguida Koichi (the current Minister for Education, Culture and Sport) to Prime Minister Abe Shinzo himself – Japan’s hungry news media has understandably been asking anyone and everyone for comment.

While the Olympics press conferences in this most ordered of Asian nations were uncharacteristically haphazard at the start of this planned Olympic year, things have now slowly settled into a rhythm. It seems those responsible have also agreed on a party line too: if the Olympics can’t be done properly next year, they should be cancelled altogether.

Imagine a 2021 event where some of the competing nations were still in lockdown, while others were basically back to normal. The already uneven playing field of world sport would be even bumpier.

The cancellation position has firmed up in Japanese officialdom. First off the blocks was Tokyo 2020 President Mori, a former prime minister himself, saying that a postponement of the Games into 2022 would be impossible. If a further delay was required for public health reasons the Olympics would just be scrapped, he said.

Taking up the baton, Abe reiterated in parliament that the Games had to be held in a “complete form” for both athletes and spectators. He added that the coronavirus pandemic needed to be “contained” before that would be possible. Hashimoto, a former speed skater and track cyclist, ran the anchor leg, saying the Games’ viability did not depend on whether a Covid-19 vaccine was found in time.

Abe’s all or nothing approach makes sense if you look at it from a sporting perspective. Imagine a 2021 event where some of the competing nations were still in lockdown, while others were basically back to normal. The already uneven playing field of world sport would be even bumpier. At random times during the lead up, some athletes would be unable to prepare properly for events where tiny performance advantages can be the difference between winning gold or missing the final.

And what would it mean for the Olympic spectacle if fans were not allowed into the events, for health reasons? Try to imagine Brazil’s dramatic home win on penalties in the Rio 2016 men’s football final without a crowd. Would Neymar have sunk to the ground in tears in front of no-one? In fact, trying to picture any Olympic final without a crowd is just bizarre. All that passion released when an athlete trains for years and years and then succeeds, just screamed out to empty seats.

A full cancellation of the Games would be a gutsy decision though. Only three times have the Summer Olympics been called off completely, and on each occasion it was due to a World War. It would be sad for local supporters and for the athletes themselves, but most importantly perhaps, it would be a shame for Japan.

Before social distancing: the 2016 men’s football final, Rio 2016 (The Asahi Shimbun via Getty Images)

Quite aside from the huge expense that Japan has incurred so far, the event has incredible potential for the country to rebuild a few damaged relationships across the region. Japan has had recent trade disagreements with South Korea and the two countries have reportedly not bothered to talk on coronavirus measures. North Korea, meanwhile, remains a disliked neighbour after firing missiles into Japanese fishing areas. The country's relationship with China has been strained for years. Due to the coronavirus China’s President Xi Jinping had to cancel an overdue trip to Japan in April, but he could foreseeably reschedule that to coincide with an Olympics next year.

Those that dismiss sport as a blunt diplomatic tool should think back to the Winter Olympics in 2018, where South and North Korea showed rare glimpses of camaraderie. During the Games Kim Jong-un’s sister, Kim Yo-jong, met with South Korean President Moon Jae-in. Just months later Moon and Kim shook hands at the DMZ in an historic meeting. While relations between the two sides have definitely cooled since, the heady unity of the PyeongChang Games at least created the right conditions for talks to start.

It’s amazing what sort of opportunities, both political and sporting, an Olympics can toss up. All of these would be missed if the Olympics were scrapped completely next year. That’s why it’s so regrettable that a cancellation is being mooted at the moment by Japan’s top Olympic officials ­– even if some scientists are already saying it would be the right move.


Covid contest in Indian Ocean region: India, China jostle for top spot

Nathu La border crossing between India and China (Diptendu Dutta/AFP via Getty Images)
Nathu La border crossing between India and China (Diptendu Dutta/AFP via Getty Images)
Published 15 May 2020 09:00   0 Comments

In recent times, Australia has been searching for ways to support its Pacific “family” through the Covid-19 crisis with an eye on China’s moves. India has also been trying to help countries in the Indian Ocean region amid China’s growing influence. Responses to the corona crisis have so far largely focused medical aid. But it will soon shift to financial assistance, where India will be at a big disadvantage to Beijing.

Initial responses to Covid-19 in the Indian Ocean region by China and India have been largely symbolic. As in other parts of the world, through much of April, China focused on so-called “face-mask” diplomacy to bolster its image. China donated relatively small amounts of testing kits and protective clothing to several countries, including Pakistan, Bangladesh, Nepal, Sri Lanka, Mauritius, Maldives. China also made commercial sales of much larger quantities of supplies, some of which were of questionable quality.

India has responded in its own way, keen to position itself as the “net security provider” in a regional crisis. India sent supplies of hydroxychloroquine (HCQ) tablets to South Asian countries such as Bangladesh, Bhutan, Sri Lanka, and Afghanistan and island states such as Mauritius, Maldives, and Seychelles. This week, an Indian naval ship departed for Maldives, Mauritius, Seychelles, Madagascar, and Comoros, carrying medical teams and supplies of HCQ tablets and Ayurvedic medicines – both touted by Indian authorities as remedies for Covid-19.

India’s efforts have sometimes rubbed against regional sensitivities. Reports that Indian Army medical teams were being readied for deployment to other countries in South Asia provoked sharp responses from Bangladesh, Sri Lanka, and Afghanistan to the effect that Indian troops were not required.

Prime Minister Narendra Modi in a video conference of SAARC leaders on combating Covid-19 in March (MEAphotogallery/Flickr)

These early soft power moves by Beijing and Delhi may have been appreciated in some cases and not in others, but their effect was probably also fairly transitory. But the important story is how China and India address the impact of coronavirus on the region in coming months and years, and how each builds a narrative.

The Indian Ocean region has been a major focus of China’s Belt and Road Initiative (BRI), and the fallout from Covid-19 has the potential to severely damage it, or at least considerably alter it. A major economic downturn, including a downturn in global trade, will likely significantly reduce the need for new infrastructure as well as the feasibility of recently-built infrastructure. Many planned projects will likely be put in the deep freeze and in some cases, regional states may find it increasingly difficult to service debt loads on existing BRI projects.

Almost inevitably this will put a dent in China’s BRI, even assuming that it is willing to continue with the level of funding that it made available in pre-Covid days. In many cases, Beijing will need to decide whether to provide new loans, reschedule existing loans or foreclose on debts (which could controversially include taking control of infrastructure).

China has already “indicated some willingness” in principle to provide debt relief to low income countries, but it remains to be seen how much relief it would be willing to give – and whether it would seek strategic quid pro quos from borrowers. Widespread debt relief would also likely reduce the willingness and ability of Chinese lenders to back further ventures.

Relief supplies have been the focus of China’s so-called “face-mask” diplomacy in a bid to bolster its image (US Air Force)

Despite significant disruptions to many projects, Pakistan, China’s principal strategic partner in the region, is pressing ahead with the China-Pakistan Economic Corridor (CPEC). If anything, Pakistan is likely to double down on CPEC, reflecting how much successive governments have staked on it as the country’s saviour. At the same time, Pakistan has already asked China for debt rescheduling on US$30 billion in projects, which it is likely to obtain given the political importance of CPEC to Beijing.

Elsewhere in South Asia, China has made a $500 million loan on concessional terms to Sri Lanka, another regional partner. According to some reports, China has offered similar loans to Bangladesh, Nepal and Maldives. Bangladesh has also requested debt rescheduling or interest rate cuts on loans on several BRI projects.

India may have an ever greater imperative than China to fashion a strategy of regional financial assistance in response to the crisis.

Mishandling necessary debt re-negotiations could further dent China’s soft power in the region. But deft diplomacy – and a willingness to write off large amounts of money – could reinforce a positive image for Beijing. Indeed, stringent economic circumstances in future could improve the BRI by forcing lenders and borrowers to give greater focus to economic sustainability and value of new projects.

India may have an ever greater imperative than China to fashion a strategy of regional financial assistance in response to the crisis. India has reportedly offered a US$400 million currency swap to Sri Lanka to help liquidity and has released (a previously agreed) $150 million in currency swaps to Maldives. But its lack of economic resources means that it will find it hard to compete with China across the broader region.

As has been the case before, New Delhi may instead be forced to rely on Japan as a source of funds to balance China’s influence in the region. This may include bilateral loans such as a US$1 billion loan from Japan’s International Cooperation Agency (JICA) to Bangladesh or financing through the Japan-led multilateral lender, Asian Development Bank, which has tripled its Covid-19 facility to US$20 billion.

The corona crisis in the Indian Ocean region will probably soon move beyond masks and remedies to money. India may find that claiming the mantle of net security provider to the region can be an expensive business.


Muddled messages as Britain seeks to stay alert

The harsh UK experience of Covid-19 helps explain the anxiety surrounding the next stage (Number 10/Flickr)
The harsh UK experience of Covid-19 helps explain the anxiety surrounding the next stage (Number 10/Flickr)
Published 14 May 2020 11:00   0 Comments

After the seven weeks of lockdown, which had managed to suppress the spread of the coronavirus, Prime Minister Boris Johnson addressed the British people on the evening of Sunday 10 May to explain the next steps. Restrictions were to be eased, but moves would be tentative and contingent, checking for new outbreaks at each stage, with a possible return to more stringent measures if the virus took advantage of the relaxed rules.

The three biggest constraints resulting from the lockdown were to be eased: the limits on outdoor pursuits including regular exercise; not being able to get to work if you were unable to do your job from home; and school closures preventing parents leaving for work even if they wanted to. Thus “Stay at Home”, the previous headline advice, was qualified. The new slogan was “Stay Alert”, a very different sort of instruction.

This was not the first time the government was accused of poor communications during the crisis.

As an exercise in communication this was not a great success. A lengthy document to help explain the new guidance and provide the scientific background was not published until the next afternoon. It was only then followed by a parliamentary session and a press conference when many of the issues raised could be explored. By this time confusion reigned and the government was accused of “muddled messages” that could be dangerous in their consequences.

The largest issue was whether this was simply too early for any easing. Covid-19 was well down but certainly not out. But the source of the confusion was guidance for different sets of circumstances that kept on throwing up anomalies. Employers had to ensure social distancing at work but what was an individual desperate for the money to do if they had failed to do so? If they could not cycle or walk to work dare they use public transport? You could meet up with one person you knew outside your household in a local park, but what would happen if you came across two members of your family by chance? If no visitors were allowed, including grandchildren, why could you bring in a cleaner?

Boris Johnson was hardly a unifying figure after years of political polarisation and arguments about Brexit (Number 10/Flickr)

This was not the first time the government was accused of poor communications during the crisis. The weeks leading up to lockdown were notable for inconsistencies and sudden changes of gear, as it dawned on the government that they risked failing to grip the situation. There was talk of “herd immunity”, an important topic but not helpful as an apparent rationalisation for doing very little. The lockdown came as a result of a combination of new epidemiological advice that highlighted the virus’ speed of advance and public anxiety that while other countries moved to shut schools and ban large events the government was dithering.

Johnson was reluctant to shutdown society and the economy. His strengths as a communicator lie in his optimistic outlook and not as a purveyor of sombre news. As his government advised not shaking hands he admitted he had just done just that when visiting a hospital. He was hardly a unifying figure after years of political polarisation and arguments about Brexit. Yet once the uncertainty was over, the seriousness of the situation acknowledged, with few dissenters, and new measures were in place, the government found itself backed and trusted. The level of compliance with the lockdown measures was extremely high. In that respect the messaging worked well. For some weeks, Johnson, for a while with the Health Secretary, was hors de combat with Covid-19. The moment when he was rushed into intensive care was alarming. His personal appreciation of the support he’d been given in hospital, gained sympathy and also encouraged a more emollient and consensual tone.

The support continued despite a growing awareness that the UK was having one of the worst experiences in Europe, certainly when measured by deaths. There were a number of reasons for this. London as a global hub and the largest city in Europe was one factor. Delay in introducing stringent measures was another. There were problems, not unique to the UK, in getting adequate supplies of personal protective equipment (PPE) for frontline staff.

Yet something else was going on which was only belatedly appreciated. Having watched what had happened in Italy the government’s top priority was to ensure that the National Health Service was not overwhelmed by desperate patients needing intensive care. The special place the NHS occupies in British life made this a popular choice. Every Thursday at 8pm people went out on to the streets to clap for health workers. Extraordinary efforts were made to prepare for incoming cases, even building new hospitals within days.

But this sharp focus had costs. People ill for other reasons failed to seek the support they needed. Most seriously the burden was shifted onto the social care system (sometimes literally as elderly people, possibly still infectious, were moved out of hospital into care homes). Long underfunded, fragmented, and with carers moving within homes and around the wider community, the system struggled to cope. Most European countries had similar problems. Nonetheless the spread of the disease in care homes took a terrible toll of the most vulnerable group.

The harsh UK experience of Covid-19 helps explain the anxiety surrounding the next stage. With the economy crashing and debt accumulating the UK government is caught (again not uniquely) between a desire to get people back to work and the fear of a second peak. This tension has been reflected in the messaging to the public about next steps. It was possible to go into the lockdown with clarity but it is only possible to get out with uncertainty.