Thursday 24 Jan 2019 | 00:15 | SYDNEY
Thursday 24 Jan 2019 | 00:15 | SYDNEY

Weekend catch-up: Australia in the Security Council, FDI, and Abbott on the China question



14 June 2014 08:00

Bringing together the best longer Interpreter articles you were too busy to read this week.

This week the Lowy Institute published a new Analysis on Australia in the Security Council by Richard Gowan. In an accompanying Interpreter post, Richard assessed Australia's performance to date:

Evaluating the efforts of any temporary member of the Security Council is tricky. The five permanent members (America, Britain, China, France, Russia) dominate most debates. The most impressive feature of Australia's term is that has tried to escape this trap, taking a leading role in debates over humanitarian aid to Syria. This has been a slow and in many ways dispiriting story: although the Council passed a resolution initiated by Australia, Jordan and Luxembourg on getting aid into Syria in February, the results have been almost nil and the slaughter goes on.

But Australia deserves some credit for persevering. 

Australian Prime Minister Tony Abbott continued his overseas trip, this week in North America. James Bowen argued that he was in keeping with his mentor John Howard in avoiding the 'US or China' question

Nonetheless, any in the audience or playing along at home would have been left sorely disappointed if they were waiting for some meaty discussion of recent events off the coast of Vietnam or how other future tensions arising from China's rise might be managed. There was only the briefest mention of the importance of American 'friendship' in addressing developments in the South China Sea, which was listed alongside conflicts in Syria and Ukraine, and without reference to any particular antagonists.

Abbott instead chose to focus on China in purely mercantile terms, seeing its rise as good for the wider world because there are 'now so many more people to afford to buy what the rest of the world produces. 'A rich China doesn't mean a billion competitors so much as a billion customers,' the PM said.

On the economics front, Julian Snelder gave us 10 questions about FDI and Stephen Grenville examined whether economists really are hopeless at forecasting. Here's Julian:

China's form of state capitalism is particularly opaque, and in the eyes of some foreigners this taints all Chinese companies, not just SOEs. The reason is so simple yet so sensitive that few dare speak of it: the Chinese Communist Party. The Party is powerful and pervasive yet also completely elusive, like a secret ethnic masonic lodge backed by the world's largest standing army. My friends in the Party (many of them in 'private sector' cells) view membership as useful and elite and, yes, patriotic. That's fair enough, but they need to ponder how their secret senior club looks to outsiders. Then they'll understand the wariness to Chinese FDI.

And Stephen:

In cases where the IMF has a substantial assistance program, it's awkward for policy-makers to predict a poor GDP outcome because it would raise the question: 'why don't you do something to make it better?' This is especially fraught when there are political constraints surrounding the assistance package: either it is too small to do the job properly or there has been disagreement about its terms. It would be unhelpful, to say the least, to deliver a dismal forecast at a moment like that. Unlike a weather forecast, an economic forecast can actually change the future.

Iraq is back in the news. Rodger Shanahan highlighted Australia's amnesia when it comes to Iraq.

When the word 'Iraq' is mentioned, countries like Australia tend to cough, look downward and shuffle their feet uncomfortably while hoping the conversation moves on. That's because deep down we know what we did was ill-informed and without any understanding of the likely consequences of our actions. We just can't quite admit it.

We also featured two pieces highlighting women's role in decision-making: Claire Spoors on the extractives industry, and Philippa Brant on female political representation in the Pacific:

It is crucial for women to be able to participate in and influence decision-making processes. Studies have shown that the inclusion of women in peacemaking processes strongly contributes to a more effective and lasting peace. Could something similar be said for when an oil, gas or mining company and a community sit down to negotiate? If women are excluded from these dealings, they cannot voice their needs or problems. When women are excluded inequality worsens.

Robert Kelly looked at South Korea's underbelly, exposed by the Sewol tragedy

Corruption is one of Korea's biggest medium-term economic problems (two other large ones are demographic collapse and a stubborn emphasis on manufacturing at the expense of the service and information economy). I have written about some of these issues before (also here and here), but it is worth reiterating that Korea's Transparency International score is a disturbingly high 46 out of 177. Korean business leaders routinely get in trouble for bribery or fraud. Almost every Korean president has been investigated after leaving office for irregularities like kickbacks. Indeed, an investigation of that type is why former President Roh Moo-Hyun killed himself.

In her post-Sewol remarks, Park has referred to corruption as an 'evil' which she has not fought hard enough, and that she will now crack down on the 'bureaucratic mafia' that undercut safety regulation and led to the Sewol tragedy. And there is more to come, as the Sewol investigation will almost certainly turn up regulatory irregularities, collusion, and corruption.

James Brown examined the detail of a new defence agreement announced by Prime Minister Abbott and President Obama in Washington yesterday:

The agreement has taken longer than anticipated, largely because neither side has wanted to pick up the bill for the new defence facilities required in northern Australia. That issue appears to have been resolved, and the US President made a point of acknowledging the Prime Minister's recent commitment to rectifying shortfalls in Australian defence funding. The force posture agreement formalises existing plans to increase the rotation of US Marine Corps troops through Darwin, and to embark on trilateral military exercises in Southeast Asia. But it also the lays the foundation for new alliance defence initiatives, not least of which is a deepening Australian involvement in ballistic missile defence.

Though it wasn't seized on by media traveling with the Prime Minister, this US statement says that 'We are also working to explore opportunities to expand cooperation on ballistic missile defense, including working together to identify potential Australian contributions to ballistic missile defense in the Asia-Pacific region.'

Photo by Flickr user Elvin.

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