What might President Hilary Clinton’s foreign policy have looked like 2017-2020?

……extract from my book “Australia and the World 2040”.

In 2018, an alliance of Arab Academics, leading business people, politicians, and lay people formed a group called “Towards a true Arab Secular Consensus” TTASC. The basis of this organisation was a five year Study by a group of sociologists from Cairo University which looked at Arab societies pre and post the so-called Arab Spring. What they sought to find out was why the so called secularists, and their political parties, had failed so badly in these revolutions. Their conclusions had a profound effect on these people.

Their findings stated that it was not true that secularism had no support in Arab societies – quite the opposite was true. By far the most popular government form was a secular government where constitutions formally separated Church and State. This was of course what all the dictators or Tunisia, Libya, and Egypt claimed to be the case with their dictatorships. But it was not the case at all. In those societies, the governments designated a particular church which favoured their world view, supported them with cash and resources, and squeezed the other ones out. There was never a secular state as such. This arrangement so annoyed the other churches, that when the Arab Spring came they saw it as their chance for revenge, and managed to highjack the democratic agenda through superior organisation and funding from sympathetic petro states before the true secular forces could get focussed and organised. The new TTASC organisation sought to educate, create debate, and form political parties to argue for what they regarded as true secularism. Secretly, Western intelligence services began to fund the TTASC.

Hilary Clinton could see this too, as she sought to find a way through the mess which was Syria. In her inauguration speech of 2017, Clinton went said:

“Unfortunately, we live in a dangerous world. The civil war in Syria has continued on its bloody path now for almost 6 years. The factions are no closer to resolution than they were four years ago, in spite of our military trying to blast then apart with our extraordinarily accurate and skilled strategic bombing from our drones. This is the most dangerous situation in the world right now, and I pledge to work with our Middle Eastern Allies and friends in finding some sort of peace in this troubled country. We must find a way of showing all Syrians that a society can be formed which treats all religions equally, and that Governments are seen to be even-handed in the eyes of all of its citizens”.

It was true that the Syrian Civil War had raged on since 2011, when the so-called Arab Spring showed so much promise of an Arab democratic awakening. Unlike Libya and Tunisia, which settled down fairly quickly to stable but not exactly democratic secular regimes, Syria in 2017 remained a quagmire and Clinton was entitled to some caution. What followed though was some of the most effective US diplomacy in living memory.

Obama’s Secretary of State, John Kerry, made it his mantle when he came to office in the second Barrack Obama term, that he would do everything in his power to obtain an Arab-Israeli settlement. It took him nearly four years, but eventually he had an agreement in June 2016. In exchange of land for peace i.e. in other words, substitute the land taken by the ultra orthodox settler movement on Arab land for land in Israel which presented a corridor between the West-Bank and the Gaza Strip (something the Palestinian had always longed for, and which in many ways made the new Palestinian state viable), and in declaring Jerusalem an international city under collective control of Israel, Palestine and the UN. Both the Palestinian side and the Israeli side now had something they could live with. They had a mutual interest in making it work, but no-one could have predicted the Syrian mess.

By 2016, the Syrian war had been going on for 5 years, locked in a stalemate which would have made World War 1 Generals proud. With so much hope after the historic Arab-Israeli settlement, the region seemed destined to slide back into chaos. They did not bargain on either Clinton’s determination, or Kerry’s skill. Clearly the only way to save this situation was to get the Arabs to resolve the situation themselves.

The incoming Clinton administration knew that there were grave concerns in the Middle East about Obama’s Climate Treaty with Xi JinPing. After all, in the last three years since action on climate change had gathered force, they had seen the oil price drop from $110 per barrel in 2010 to $62 in 2016. This could only be as a result of a migration away from oil to alternative energy sources as the price of carbon started to climb. For this, the Gulf States were in a bind. Much of their wealth when the oil money was rolling-in in the last 50 years had been wasted in extravagant lifestyles of the ruling elites, and flagrant wastage  of energy by the regimes which paid zero notice of modern energy conservation technologies. Further, they had done little to use modern financial devices such as sovereign wealth funds to accumulate cash and invest it for the long term in the interest of their populations as the Norwegian Government had done.

Clinton wanted to do a deal. She suggested the Middle Eastern Arab States needed as one to force a regional settlement on Syria, whereby the various ethnic and religious factions were given a district which they could regard as their sovereign territory. This might end up a bit like the former Yugoslavia, but it might be the price that needed to be paid. Further, Clinton advised that she expected the Gulf States to commit to forming a regional military force of 100,000 men to go into Syria after this regional agreement was signed to ensure its transition.

In parallel, the CIA and MI6 funded the emergence of credible educated secularists, and used modern communication techniques to position them as the alternatives to the literally warring factions of Syria. In doing this, the US gave these statesmen a gift in that if they could come to a settlement, all imports of oil in the future into the US would be ordered from the Gulf States (this was hardly a big concession because she knew that oil use in the US was dramatically dropping in favour of alternative energies and the local production of fracking inspired natural gas). It nevertheless gave the Sheiks of the Gulf States something to sell to the populations, and greatly increased the power and prestige of the secularists.

In 2018, after nearly 10 years of war, Clinton had an agreement, and the Arab Military force moved into Syria to keep the peace. It would be another 6 years until their withdrawal, after much more bloody fighting and killing, at the end of which half a dozen mini states were formed in Syria, with secularists heading four of their governments. Many equated it to the portioning of India and Pakistan in the late 1940’s – an apt description.

Clinton had several other urgent foreign affairs issues to address if she was going to keep her promise of progress in the world, not least the Korean Peninsula. North Korea by 2017, had become even more unstable than before. In December, 2016, there appeared to have been a military coup in North Korea. The People’s Radio broadcast on 16th March 2017 that due to Kim Jong-Un’s inability to stand up to the West and the criminal regime in South Korea, VMar Ri Yong Ho, previously head of the Korean People’s Army had taken over as President and Prime Minister. In the broadcast he said the people could no longer tolerate the appeasement of the West and China and the Korean state would do all in its power to stand up to imperialist and appeasers in the interests of the heroic Korean People. China’s reaction was fierce and decisive, in that if they did not get undertakings of peace from the North Koreans in the next three days, they would take decisive action to shore up their position.

Within 24 hours, the North Koreans started shelling the Chinese Province of Shenyang “in retaliation for the Chinese aggression”. China responded by cutting off all food and water supplies to Korea. Within 12 hours, North Korea landed a “dirty” nuclear bomb on Shenyang killing 3500 people in the process. Within two days, an invasion force had amassed on the border and went over on the night of 24th December.

The West was torn. On the one hand it regarded Pyongyang as dangerously unstable, but it was greatly worried that the invasion of another country by China unchallenged by the West might set a dangerous precedent. Clinton’s response was to immediately fly to Beijing for emergency talks with her new friend Xi Jinping. The results were momentous.

In the interests of stability, and the economic and political progress of the Asia region, Xi proposed a settlement. China would force the collapse of the North Korean regime in return for the withdrawal of all US troops on the Peninsula and the US nuclear guarantee for South Korea. Within 12 months, there would be free and fair elections for the whole of the Korean Peninsula overseen by the European Union who has no vested interest in this fight. After that, it would be up to the new Korean Government to define the way forward. In the meantime, a UN military force from all over the world, but specifically excluding US, Chinese, Japanese and Korean troops will be assembled to keep order on both sides of the border, and a UN appointed Administrator will run North Korea in the meantime.

The new united Korea leant much from the German unification process. For starters, they avoided the huge reconstruction costs that the western part of Germany poured into the East by basically allowing the market, in large part, to finance it. This was brought about by having a federation with two currencies, and watch south Korean, Japanese, European, US and Chinese investment money pour into the North until in 50 years time when the north and south economies would become  similarly prosperous, the currency values would converge at which time they would have a united currency. In the meantime the plan was that North Korea would become a huge low cost factory for the south and the rest of Asia, supported by South Korean expertise, money and their huge conglomerates. The subsequent new taxes would largely support the significant infrastructure which would need to be build to get the population out of poverty and into productive work.

And so it proved to be. Today, in 2040, North Koreans have about twice the average income as the Chinese in 2015, most of the population are now out of poverty, there is no starvation and the Koreans are on track to converge their currencies in 2050. With a population of about 70 million and growing at about 1% per annum, they are on track to have an economy about the same size as Japan by 2075. Japan’s population contracted from 125m to 85 million from 2010 to 2040, and is expected to be less than the unified Korea by 2075.

In 2017, Clinton and Kerry jumped at this new Korean opportunity. This was an historic chance to rid the world of yet another rogue nuclear state. Just as in 1989, when the Berlin Wall came down, the British and French were less than enthusiastic about a united Germany, the second and third most powerful states in Asia, Japan and India, had similar reservations about Korea. The new right wing government in Japan was particularly upset about being excluded in an arena they regarded as their “back yard”, but for the sake of peace, they acquiesced. So eventually did the Indians in return for US support in their continuing conflicts with Pakistan.

Clinton had achieved one more of her dominos for the sake of world peace. Very soon another would emerge which may have a greater long term impact than any of the others.

In 2014, ex-cricketer Imran Khan became the new President of Pakistan. Cambridge educated Khan, playboy extraordinaire from his life in London, had returned to Pakistan to enter politics. His ticket was pro-Islam, but not terrorism, but he very much disagreed with Barrack Obama’s policy of drone strikes in border areas of north western Pakistan near the border of Afghanistan. Khan argued that there are the “good” Taliban and the “bad” Taliban. He promised in his election manifesto that if he could get the Americans to cease their drone attacks that he could get the “good” to control the “bad”. In other words, cease the terrorist attacks on troops in Afghanistan stemming from Pakistan, and set up an Islamist government without the extremes i.e. no education for girls, be-heading or cutting off of hands, or female circumcision. They would still have Sharia law and strict adherence to Islamic beliefs.

He also undertook to send in a dozen divisions of Pakistani troops into those provinces to rid them of extremist under the guidance of the “good”. He knew this may be just a ruse to settle old scores but thought it worth the risk. In return for this clean up, the US would finance a security wall (not unlike that seen in East Germany) along the Afghanistan border to keep the factions apart. This Clinton agreed to.

Beyond that, Khan wanted to transition a fundamental change in the way the sub-continent functioned. He was very much aware of the historic enmity between Pakistan and India, which had poisoned progress since partition in 1947. For instance in 2012, the total trade between the two countries was $2.4 billion. This compared to trade between Pakistan (population 182m) and China (population 1300m) for the same period of $12billion when Pakistan and India (population 1200m) live next door to one another. Or to look at it another way, neighbours Australia (population 23m) and New Zealand (population 5m) had overall two-way trade in 2012 of $21b. Pakistan was nowhere near maximizing their economic and trade ties with India or vice versa.

Khan was very much aware of the lack of economic activity on the sub-continent, and saw fixing that as a means of lifting a lot of his population out of the grinding poverty that so many of them lived in. As part of the resolution of the border disputes and bringing the Taliban under control, he advised Clinton that he would propose an economic union between the major countries of the sub-continent (India, Pakistan, Bangladesh, and Sri Lanka), if she would sponsor that trading block into the Asia-Pacific Partnership Agreement.

This finally came about in mid 2018, and in 2038 India and Pakistan did a total of $158billion in total trade.

The NBN is all about productivity improvement – ask CSIRO

For those of you who are not aware, the CSIRO has an incredibly interesting podcast called CSIROPOD. It shows off the range and depth of Australia’s leading scientific research institution. For those of you excited by the possibilities of science, like me, to solve the world’s problems, it is just a treasure-trove. Most people do not realise, though, CSIRO is not only “hard science”. It has soft science areas like economics and social research.

One area which it has tackled recently is the area of Australia’s productivity. Apparently, if you take mining and agriculture out of the mix, Australia ranks about 33 out of 36 in the OECD productivity table. This is in stark contrast to almost every other social and economic indicator where Australia usually rates in the top 3 or 4. This is a disgrace.

This interview outlines the challenge, but also the solution:

http://www.csiro.au/en/Portals/Multimedia/CSIROpod/Uploading-the-economy.aspx

What it clearly explains is that there is a solution to this predicament, but it involves Australia as a nation committing to completing the roll out of the NBN fibre to the home, which the coalition are still holding the line about dismantling. This is crazy. Malcolm Turnbull has more than enough ammunition to fire at the ALP on this area of economic policy. He should not also prevent the solution from being arrived at. It is politics in its worst form.

I still think Turnbull is the best leader for Australia at the moment, but he is dead wrong on this one.

The coming together of two visionary ideas…..

As regular readers of this blog will realise, I am a great admirer of the Federal Government’s NBN policy – one of the most visionary policies I believe from the Federal Government in recent memory and one which has the potential to greatly change the way we operate as a society for the better.

Some of you also may not realise that I am “an old Asia hand” ie someone who has lived and worked in Asia for almost a decade in my career, so I was delighted to see the Government initially commissioning their “Asia and Australia in the 21st century” White Paper, and releasing it so competently over the weekend. Having now read it thoroughly, I think the authors have done a great job, and deserve due consideration on both sides of politics, as well as in academia and the media.

Imagine my horror today, when listening to the ABC at lunchtime, when the government has allowed themselves to be marginalised by the vested interests on this issue, particularly on their commitment to Asian languages and the line from the opposition “it means nothing without extra funding”.

This is a nonsense. The extra funding comes from the NBN. Sometimes I wonder whether the Government even realises what a revolution they have started in this area.  They certainly did not explain it as they should, something they also have  a habit of doing in other areas of policy.

It started off this morning in “The Age” with one Professor Adam Chen suggesting the commitment to Asian languages “will cost billions”. This was followed up during the morning by the usual procession of vested interests with their hands out (of which as usual the Teachers Unions are the most vocal with their baseless breast beating about class sizes echoed by the Federal Opposition).

Education is the sector, along with Health, which will be most profoundly affected by the NBN. In 10 years’ time, when the NBN will be fully implemented, education will be profoundly changed.  Teaching at universities will be largely done online, when the most important things  for them will not be the size of their campus, but the quality of their teaching and the prestige of their Brand. The NBN will provide virtually unlimited capacity to teach. Rather than a university lecturer being limited to the student numbers dictated by the size of the lecture theatre, it will be restricted by the size of the demand as these services will be delivered via a limitless capacity on the internet.

As with universities, the same will apply to schools. An excellent teacher of Mandarin, rather than being restricted to a classroom, will be able to take regular classes with unlimited capacity via a very fast broadband. It will revolutionize schools, and greatly improve teaching standards to all sectors of society in all subject areas.

It is possible the Federal Labor Government would prefer to take “stick” from the Opposition, than to have to explain this fact to their constituency in the Union movement, most of whom do not appear to understand this profound change (along with most of the Press). Nevertheless, it is coming down the track, and will greatly expand the policy options for government in all sort of areas, not least Education.

In my view, it will be a revolution even more profound than the internet itself.

Overseas Graduates – yet another great chance for Australia

Everyone is aware of the devastation which the GFC and now the euro crisis (s) have brough on Europe. These are dramatically illustrated by the trends in youth unemployment across Europe, particularly since Lehmann’s collapse. In most European countries, graduates make up between 20-30% of youth unemployed. Similarly in the US. Unemployment amongst college graduates is the highest in half a century.

What does all this mean for Australia? It means yet another incredible opportunuity.

Australia, through its good fortune to be one of the strongest economies in the OECD, has an unprecendented opportunity to attract the best and the brightest graduates from countries with high education levels and high graduate unemployment rates ie countries like Spain, Portugal, France, Italy, Greece and the US. Without wishing these countries mis-fortune, the fact is they have some very smart young people bereft of opportunity and many will become “the lost generation”. Australia desperately needs skilled people to provide the energy and drive for the future. Although a properly structured program would be quite expensive, in the longer term it would pay off handsomely, and would be a sensible way to spend any future surplus to set the country up as a brain driven environment to drive innovation, creativity and wealth creation.

This plays to one of the over-riding but unstated tenents of our immigration policy post While Australia i.e. although the policy is non-discriminatory from race, religions and sexuality, it definitely favours the better educated on the basis it is education which is the biggest driver of assimilation and job security. In an environment where our universities are bursting at the seams, and we can’t get enough of graduates, particularly those related to the sciences, why wouldn’t we take the best and the brightest from abroad. Much cheaper than financing additional Phd places, although that should be done as well.

A related issue to this, it was dissappointing to see that there has been a considerable tightening up on criteria for entrepreneurs from abroad immigrating here. Somewhat short sighted I would have thought.

Europe – what a mess

In retrospect, it was a big mistake to think that the Euro could work across diverse economies, without fiscal and monetary union. But that in itself was impossible because of the very diverse ideas in Europe about economic responsible economic management and fiscal discipline. Indeed, the formation of the Eurozone encouraged all the member economies that they could have German style living standards, but without the disciplined, focussed and skilled German workforce and economy, and without the economic management which has charactarized the German government, at least for the last 10 years.

Many countries, led by the French, have believed they could run economies with very generous social benefits without the hard economic management and decision making which so charactarizes successful economies. For instance, when the last president of France hesitatingly tried to instigate mild economic reforms such as raising the retirement age from 60 to 62 there were howls of protest which forced him to back down. This does not even go near economic distorting policies like the Common Agriculture Policy (CAP), exorbitant pension and social welfare provisions, industry subsidies, and unaffordable internal and external deficits. In spite of the fact that the IMF, ECB, World Bank, and Germany have been handing out enormous bail outs to many broke countries in southern Europe, nearly all of them have been unable to fully implement them because their electorates will simply not wear them.

The only way is for the market to force it on them ie leaving the euro zone and issue their sovereign currencies. How might this work? Take Greece. Greece in the current circumstances will never pay back its debts. It will be saddled with such stringent provisions that it could remain in recession for 20 years. Time for a change in direction.

If Greece, without warning, announced that henceforth the Greek currency would be in drachma, and all international debts would be written off,  then there would be short term pain, but eventually the market would kick in (probably 18 months to 2 years), and the Greek economy would begin to recover. There would undoubtedly be a 50% plus devaluation against the euro, which would make Greek exports cheaper, and imports more expensive. It would also allow the Greek central bank to recapitalise the Greek Banks by printing more Drachmas. This, though, would all end in disaster if it were not accompanied by drastic economic reforms to the social welfare system, collection of taxes and other charges, removal of distorting government subsidies of various kinds, reform of the legal system and a crackdown on the corruption which so distorts the efficient running of the Greek state.

Within five years, the Greek economy will recover, the debts will be written off, and the competitive advantages of Greece will start to kick in in a much more  growth friendly environment than before. The low growth, deficit cutting and low investment environment which ios the consequences of the European bailouts, will be delivered via a market mechanisms and will not therefore be the subject of the political vastitudes currently underway in Greece.

No-one though sees this as pain free. It is not. It will be very painful indeed, but in the medium term it will be less so than 20 years of recession, and it will give hope to a population sadly lacking in it, especially the young. It is somethingthe population and government can galvanise around, and on which it could build a prosperous future.

It is also something the other southern European governments such as Spain, Italy and Portugal would also likely copy once the benefits become apparent. The French, well they will remain French, and keep their heads buried in the sand, even though the economy distorting welfare state, government subsidies, the CAP, and unreformed labour, capital and distribution markets are worse than almost anywhere in the EU, and France’s economic performance reflects that. They should also take the economic medicine, and return to the Franc. But they won’t of course!

A Deadly Raid

Comment on Economist artcle (31 May, 2010) “A Deadly Raid”

Until both sides realise that incidents like this will continue until there is a peace deal, this situation is unavoidable. Israel continues to believe that a country with a population of 5 million can use military force to suppress 100m plus around its borders.

The only solution is to stop the settlements, withdraw to the pre 1967 borders, and make peace with the whole of the Arab world. Then have this supported by a million plus troops from UN peace keepers paid for largely by petro dollars, and allow Palestine (Gaza and the West Bank) to develop peacefully into a low cost economic haven right in the middle of the middle eastern powers.

Heaven forbid, Israel may well get on with their neighbours very well, share a common prosperity, even eventually participate in a middel eastern common market. The region could then become a force for good in the world rather than be the reason for most of the world’s conflicts between islam and the West.