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1691. Assessing Indian digital trade policies: Will they support a $5 trillion economy?

Author:
Mark Linscott
Publication Date:
06-2020
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
The ongoing COVID-19 pandemic has forced nearly all public policy questions to be seen through the lens of how to detect and respond to the disease as it spreads rapidly across the globe. These include obvious questions of national health care policy and whether there is a place for international efforts to coordinate their national responses. Trade policy has come to the fore as a growing number of countries restrict exports of critical medical supplies to ensure sufficient availability for patients in-country. In this crisis, international collaboration to keep trade flowing has been limited and has not prevented many countries from imposing new trade restrictions. The importance of digital policies has grown as countries seek to harness the tools of big data, artificial intelligence (AI), and vital infrastructure to trace outbreaks of the virus and assist efforts to find cures and vaccines. While digital tools are proving vital in efforts to track outbreaks and trace contacts, legitimate concerns are growing about potentially invasive government surveillance even after the virus retreats. These policy areas—health, trade, and digital—overlap in the international, national, and local efforts to reduce the duration of the pandemic and mitigate its effects with respect to human lives and economic well-being. The analysis in this paper, while initially conducted before anyone had ever heard of COVID-19, has been impacted by its sudden emergence and will likely require updating to assess the experiences of this ongoing crisis. The paper, which focuses on the U.S.-India bilateral relationship, concludes with a series of questions, as opposed to policy recommendations. This is due partly to the very complexity that all governments confront in mapping out digital policies given the ubiquitous role digital networks and devices play in our daily lives. But these questions may have even more tangible relevance now that COVID-19 is forcing a reckoning with a severe interruption in global economic growth, which could be on the scale of the Great Depression in the 1930s. Ultimately, the governments of India, the United States, and other nations will determine for themselves what answers are relevant to their individual circumstances.
Topic:
Economy, Business, Trade, and Digital Policy
Political Geography:
South Asia, Canada, India, North America, and United States of America

1692. Trump’s JCPOA withdrawal two years on: Maximum pressure, minimum outcomes

Author:
David Mortlock
Publication Date:
05-2020
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
Two years ago, US President Donald J. Trump walked into the White House Diplomatic Reception Room and announced his intention to withdraw the United States from the Joint Comprehensive Plan of Action (JCPOA). The Trump administration reimposed sanctions on Iran and has adopted a policy of “maximum pressure” to compel Iran to change its behavior and to deny the Iranian regime the resources to engage in its destabilizing activities. However, he also promised he was ready, willing, and able to make a new and lasting deal with Iran. In “Trump’s JCPOA Withdrawal Two Years On – Maximum Pressure, Minimum Outcomes” author David Mortlock, Senior Fellow at the Atlantic Council, evaluates the policy outcomes of President Trump’s withdrawal from the JCPOA. The author walks readers through the timeline of President Trump’s decision to withdraw from the JCPOA, the subsequent implementation of the maximum pressure campaign on Iran, and the policy outcomes relative to stated objectives. In sum, Mortlock concludes that although the maximum pressure campaign has been effective in inflicting economic harm on Iran, it has had minimum effect in other areas. Therefore, Mortlock believes the Trump administration should seize the opportunity to pivot from maximum pressure to an approach focused more on policy outcomes.
Topic:
Diplomacy, Treaties and Agreements, Sanctions, Nuclear Power, Economy, Donald Trump, and JCPOA
Political Geography:
Iran, Middle East, North America, and United States of America

1693. US-Brazil trade and FDI: Enhancing the bilateral economic relationship

Author:
Abrão Neto, Ken Hyatt, Daniel Godinho, Lisa Schineller, and Roberta Braga
Publication Date:
03-2020
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
The year 2020 marks the turning of a page for the Western Hemisphere, a region that in 2019 saw uncertainty dominate headlines as new governments came in and out of office, trade tensions grew, and citizens took to the streets to voice their concerns with the status quo. For years, the opportunities that could come with a stronger bilateral relationship between the United States and Brazil have been underestimated. Significant potential exists to produce sizeable benefits for both societies. That potential must be maximized. While US and Brazilian governments and businesses have begun to seize the benefits of the synergies the two countries share, hurdles remain that prevent a full and successful commercial reality. The United States and Brazil would benefit from a closer and stronger trade and foreign-direct-investment-relationship that would amplify growth and prosperity, in both the short and long terms. Deepening the economic relationship would pay dividends in other areas as well, translating into greater opportunities for strategic bilateral cooperation. This paper recognizes that the moment is now and that 2020 is a pivotal year to substantively advance bilateral economic ties. Building upon the successes and progress made over the years, this paper incorporates the input and expertise of the US and Brazilian private sectors and policymakers to offer a renewed vision and new momentum for strengthening US-Brazil trade and foreign direct investment (FDI), supporting concrete steps toward deepening the commercial relationship, and laying the foundation for a potential free trade agreement (FTA) between the United States and Brazil. As the global balance of power shifts, as the world faces new hurdles that could slow growth, and as Latin America must contend with more uncertainty amid new external shocks, the two countries strategically and economically have countless reasons to deepen commercial relations. Stronger ties will ultimately provide additional certainty at this critical time.
Topic:
International Trade and Finance, Bilateral Relations, Global Markets, Economy, and Business
Political Geography:
Brazil, South America, North America, and United States of America

1694. Making the most of Prosper Africa: Leveraging US competitiveness in African markets

Author:
Audrey Hruby
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
Global powers are jockeying for access to opportunities in African markets. In recent years, through the Forum on China-Africa Cooperation, the Tokyo International Conference of African Development, the Russia-Africa Summit, and many others, the world’s largest economies have sought to make headway in what are seen as fast-growing and lucrative new markets. In this environment, effective United States (US)-Africa policy requires greater focus on areas of American competitiveness and concerted efforts to educate, mobilize, and support US commercial success in African markets. In this update of her 2017 issue brief “Escaping China’s shadow: Finding America’s competitive edge in Africa,” Senior Fellow Aubrey Hruby outlines recommendations for how to best utilize Prosper Africa and leverage American private sector competitiveness by focusing efforts on sectors in which the United States already leads.
Topic:
Global Markets, Economy, Trade, and Strategic Competition
Political Geography:
Africa, China, and United States of America

1695. Pushing back against Russian aggression: Legislative options

Author:
Daniel Fried and Brian O'Toole
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
US President Donald J. Trump’s administration has found it challenging to maintain a consistent position with respect to Russian President Vladimir Putin’s repression at home and aggression abroad. It may again fall to Congress to attempt to counter Russia’s election interference, already ongoing in the form of disinformation; back Ukraine as its government seeks to deal with a Russian invasion; and contend with other forms of Kremlin aggression. In “Pushing Back against Russian Aggression – Legislative Options” authors Daniel Fried, the Weiser Family Distinguished Fellow at the Atlantic Council, and Brian O’Toole, a senior fellow at the Atlantic Council, evaluate two Russia sanctions bills, the Defending Elections from Threats by Establishing Redlines (DETER) and the Defending American Security Against Kremlin Aggression Act (DASKA), as tools to forestall new Russian interference in US elections. The authors walk readers through a set of sanctions escalatory measures—covering finance, energy, and the cyber sector – that both sanctions bills draw from. In sum, Fried and O’Toole conclude that DASKA’s sanctions are more measured and thus more implementable. By contrast, the authors deem DETER’s sanctions on financial institutions as simply too harsh with excessive spillover risk to US and Western financial markets to be implementable.
Topic:
Sanctions, Economy, Business, and Legislation
Political Geography:
Russia and Eurasia

1696. The next phase of digitalization in Central and Eastern Europe: 2020 and beyond

Author:
Frances Burwell and Jörn Fleck
Publication Date:
02-2020
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The countries of Central and Eastern Europe (CEE) possess fundamental strengths that uniquely position the region to capitalize on the next wave of digitalization – solid education systems, a large talent pool of “STEM” graduates, widely adopted digitally enabled services, and fewer technology legacies. But, these advantages alone do not mean that Central and Eastern Europe will automatically succeed in this digital transition. One key factor of success will be the ability of these countries— all of them in the European Union—to cooperate in this effort across the region, for both their future economic development and their political influence within Europe and in the transatlantic relationship. In this think piece, Atlantic Council Distinguished Fellow Frances Burwell and Future Europe Initiative Associate Director Jörn Fleck explore how to take forward digitalization in Central and Eastern Europe, especially within the framework of the Three Seas Initiative (3SI).
Topic:
Diplomacy, European Union, Economy, Business, and Digital Policy
Political Geography:
Europe, Eastern Europe, and Central Europe

1697. The Cost of Defence 2020-2021. Part 1: ASPI 2020 Strategic Update Brief

Author:
Marcus Hellyer
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
Australian Strategic Policy Institute (ASPI)
Abstract:
The Defence Strategic Update (DSU) represents a remarkable commitment by the Australian Government to sustained growth in the defence budget. Released on 1 July after months of bad economic news caused by the Covid-19 pandemic and growing budget deficits caused by the government’s measures to mitigate the economic pain, the DSU nevertheless confirms the robust funding line presented in the 2016 Defence White Paper (2016 DWP) and extends it for a further four years. This means the defence budget will continue to grow past 2% of GDP, and indeed at a faster rate than before the Covid-19 pandemic hit. Measured from a starting point in 2019–20, the budget is planned to grow by a remarkable 87.4% over the coming decade. Why did the government make that commitment? It’s clear from the DSU that it’s very concerned about Australia’s strategic circumstances, which it assesses as having deteriorated significantly in the four years since the 2016 DWP. It states that the region is in the middle of the most consequential strategic realignment since World War II. That brings significant uncertainty and risk. The government regards robust military capabilities as essential to managing it. The DSU marks a clear break from previous high-level strategic statements in the frank way it describes those risks and the new capabilities needed to address them. It also makes several key adjustments to strategic policy settings: It redefines our immediate region to an arc from the northeastern Indian Ocean, through maritime and mainland Southeast Asia, to Papua New Guinea and the Southwest Pacific. It’s still a huge area. It prioritises the immediate region for defence planning. It introduces the concepts of ‘shape’, ‘deter’ and ‘respond’ to focus defence planning. The emphasis on shaping reinforces the importance of regional engagement and partnerships in creating a region conducive to our interests. It states that a largely defensive force won’t deter attack. Instead, ‘new capabilities are needed to hold adversaries’ forces and infrastructure at risk from a greater distance. They include longer range strike weapons, cyber measures and area-denial systems.’ It acknowledges that Australia can no longer rely on warning time, even for a conventional military attack on Australia, and so won’t have time to ‘gradually adjust’ military capabilities. While the redefinition of the immediate region might not in itself result in changes to the defence investment program—now known as the Force Structure Plan (FSP)—the other factors listed certainly will. To acquire new capabilities, the growth in the DSU’s funding model continues the pattern of the 2016 DWP. That means the capital component of the budget grows to 40% of the total budget and stays there. That’s a far higher percentage than has historically been the case. By the end of the decade, if that planned increase is achieved, the acquisition component of the budget will have grown by 148% in nominal terms from its 2019–20 start point. Despite the broader economic and budget uncertainty, this means that Defence is in the fortunate position of being able to add some significant new capabilities to its shopping list. Perhaps the most remarkable feature of the FSP is that the ADF has entered the ‘age of missiles’ with a vengeance. There’s potentially $100 billion in investment over the next two decades in missiles and guided weapons. That includes the offensive systems needed to deter and defeat an adversary from a greater distance, such as hypersonic weapons. Even the Army is acquiring long-range missiles. But it also includes greatly enhanced defensive systems, such as ballistic missile defence, which is something Defence has considered for a long time but never previously committed to. That’s a clear sign that the region is getting much more dangerous. While the FSP is short on detail, the big picture it paints is pretty clear. It’s one in which the ADF continues its trajectory of steadily fielding improved capability and developing greater strategic weight. But there are risks, both in the design of the plan itself and in delivering it, that need to be managed. It must be said that Defence’s planning processes are improving along with its costing methodologies, so it’s likely that these are risks that it has considered in the development of the DSU and FSP. The first set of risks relates to the question of whether this is the right force for our deteriorating circumstances. Despite the recognition that Australia can’t rely on warning time, much of the planned force is still a long way off in the future. The first future frigate won’t be operational for 10 years and the first future submarine for 14, and subsequent vessels are to be delivered only on a two-year drumbeat. The Air Force isn’t getting additional air combat aircraft beyond its 72 F-35As until late in the decade. Most of the major new additions to the force structure are also some way off in the future. There’s a funding line that potentially provides a way forward to get Boeing’s Loyal Wingman unmanned aerial vehicle into service, but most of the big buckets of funding for unmanned and autonomous systems are still late in the 2020s or even in the 2030s. Until then, it looks like Defence is relying on improved weapons delivered from existing platforms to provide the main capability enhancement. Also, the force envisaged in the DSU and FSP is growing increasingly broad. There are many new capabilities in the plan, but virtually none are being retired or cancelled. Similarly, the range of tasks that the force is being asked to do isn’t being reduced. In fact, the DSU requires greater regional engagement as well as greater capacity for domestic disaster response—but will the force be able to do all the tasks expected of it? Related to this, our changing strategic environment seems to be pulling the force in two directions. The DSU states that we can’t match major-power adversaries and need to develop capabilities to deter them through strike, cyber and area-denial systems. This suggests a growing recognition of the need for asymmetric operational concepts and capabilities, yet the force is still largely being built around traditional, conventional capabilities such as expensive, multi-role, manned platforms of the kind Australia has relied upon to overmatch potential adversaries. Defence is also investing in an increasingly heavy conventional land force. That’s likely to be useful against some potential non-peer adversaries—but does it play a deterrent role against a major-power adversary? There’s also the question of balance between acquisition, sustainment and personnel funding. Acquisition’s share of the budget is growing rapidly. Personnel’s share is also growing but more slowly, and will decline as a percentage of the overall budget. The DSU states that the government will consider increases to Defence’s workforce next year, but those numbers are already accounted for in the DSU’s personnel funding stream, suggesting that any additional people won’t change the overall trajectory of personnel’s share of the budget. Certainly, increased capital spending is necessary, but is a 40% acquisition / 26% personnel balance feasible in the long term? There’s no point acquiring equipment you can’t crew. Then there are a set of risks that relate to the feasibility of delivery. The first, as ever, is money. The economic future of both Australia and the world is still very uncertain. If the economic impact of Covid-19 results in prolonged economic stagnation, it’s going to take sustained resolve by this and future governments to keep increasing defence funding over the decade. Should that resolve waver and a government revert to something like 2% of GDP, that would be a huge hit to the defence budget of potentially $5–10 billion per year, with a resultant cut to either existing core capabilities or the planned new ones. The government has already stated that it’s committed to Defence’s ‘megaprojects’ and that they aren’t part of any prioritisation or trade-off process, so other things will bear the brunt of any funding hit—potentially, the new asymmetric capabilities being introduced to deter a major-power adversary. Then there’s the very difficult question of the affordability of the force. The defence budget is growing substantially, but so is the list of capabilities Defence is acquiring and sustaining. The acquisition cost of military capabilities grows much faster than inflation. Since 2016, several key capabilities have grown significantly in cost (including submarines, frigates, armoured vehicles and air defence). Moreover, sustainment costs are also growing. The sustainment cost of key future capabilities is likely to be several times greater in real terms than the systems they’re replacing. One of the biggest implementation risks relates to Australian industry’s ability to scale up to deliver the force. The local share of Defence’s capital equipment spend has consistently hovered around one-third of the total. Last year, that was around $2.6 billion. As the capital budget rapidly grows over the decade, local acquisition spending will have to grow to over $7 billion per year just to maintain that one-third share. But it’s clear the government wants that share to grow. It has to, if we’re going to address the supply-chain risks currently inherent in defence capability. Getting to between 40% and 50% means the local acquisition spend will need to reach around $10 billion per year. That’s a lot of money for Australian industry to absorb and a lot of capability for it to deliver, but, if it doesn’t get there, the government won’t achieve the level of sovereign capability that it’s seeking and we’ll continue to rely on imported systems, with the attendant supply-chain risks. While the basic settings of the government’s 2016 defence industry policy statement are the right ones, it’s likely that it’s going to have to do more to develop the kind of local industrial ecosystem necessary to deliver the level of sovereign capability described in the DSU and FSP. Relying on the local assembly of foreign designs using mainly foreign high-value subsystems isn’t going to get us there. More needs to be done to generate technological innovation and advanced manufacturing here. There are only minor increases to innovation funding in the DSU, for example. The new line in the FSP to develop sovereign weapons manufacturing could be a model for a more deliberate approach to generating sovereign industrial capability. The other risk associated with industry policy is the old one of falling into the trap of preferring industrial outcomes to military capability. That risk has already been realised. Some of the hidden costs of continuous-build programs are becoming more apparent: the FSP states that the cost increase for the Future Frigate Program was caused by the government allocating ‘additional funding to enable construction of ships at a deliberate drumbeat over a longer period of time than originally planned to achieve a continuous shipbuilding program’. That is, we’re deliberately paying more to get capability later. The DSU acknowledges that we can no longer rely on warning time to be able to gradually adjust military capability, so surely now’s the time to be spending to accelerate delivery and the rate at which we ‘adjust capability’, not slow it down. If we’re willing to pay a premium to build here, let’s pay it to get more capability sooner, not later. Why are we prioritising jobs for future generations of shipbuilders over capability for current servicemen and women who may be called upon in the near future to use it? The new strategy has been written, and the government most certainly understands the urgency driving its defence policy changes. The key question is whether Defence can sufficiently internalise that urgency to implement the changes needed in how the organisation does business. The Minister for Defence, Linda Reynolds, stated on 7 August that ‘the Defence Department … has systematically for over 100 years failed to deliver on the government’s expectations of the enterprise.’ We now have a plan that calls for speed, lateral thinking, innovation and partnerships—to be implemented by an organisation that’s slow, subject to groupthink, risk averse and reluctant to reach out. Adapting Defence to the demands of our new reality is going to be challenging, to say the least.
Topic:
Defense Policy, Budget, Economy, Economic Growth, and COVID-19
Political Geography:
Australia and Australia/Pacific

1698. North of 26° south and the security of Australia: Views from The Strategist Vol. 2

Author:
John Coyne
Publication Date:
05-2020
Content Type:
Special Report
Institution:
Australian Strategic Policy Institute (ASPI)
Abstract:
North of 26° south and the security of Australia Volume 2’, is a new report by ASPI’s The North and Australia’s Security Program. The report builds on Volume 1 by presenting an all new series of articles by a range of trusted and up and coming authors exploring the continued importance of Northern Australia to national security and defence strategy. Northern Australia had become key political, military and economic terrain in a new era of major-power competition. Despite those developments, Australian policymakers have struggled to develop a cohesive northern Australia strategy. While Australia has a long-term defence capability plan, we need to continue to test our assumptions about the defence of northern Australia and the north’s significance to national security. In December 2019, Defence had finished the first draft of its internal review of Australia’s 2016 Defence White Paper. The review was meant to test the White Paper’s underlying assumptions. Arguably, the economic, social and geopolitical changes driven by Covid-19 will be historically significant, and that will require all-new thinking about northern Australia. This report provides much needed contemporary analysis of the criticality of the North to Australia’s national security and defence.
Topic:
National Security, Power Politics, Geopolitics, Economy, and COVID-19
Political Geography:
Australia and Australia/Pacific

1699. Chinese Coercion in the South China Sea: Resolve and Costs

Author:
Ketian Zhang
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
China’s coercive behavior in the post–Cold War period suggests three patterns. First, China uses coercion when it wants to establish a reputation for resolve. Second, China has been a cautious bully, resorting to coercion only infrequently. Third, when China perceives the “geopolitical backlash cost” of military coercion to be high, it chooses instead to use sanctions and grayzone coercion. (“Geopolitical backlash cost” refers here to the possibility that the target state will seek to balance against China, with the potential for U.S. military involvement.) When China perceives the geopolitical backlash cost to be low, it is more likely to use military coercion.
Topic:
Sovereignty, Power Politics, Geopolitics, and Economy
Political Geography:
China, Asia, and South China Sea

1700. A Moving Frontline in Africa

Author:
Signe Marie Cold-Ravnkilde and Peer Schouten
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
Pastoralism is the key to climate change adaptation in African drylands, but it is threatened by conflicts with farmers, regional insecurity and violent extremism. Stabilisation and development efforts should place pastoralism at the centre by strengthening pastoral livelihoods and should include herders as peacebuilding and development partners. RECOMMENDATIONS ■ Strengthen pastoralist capacities to cope with risk and variability by boosting inclusive and equitable resource governance in new development programmes. ■ Include pastoralists as potential peace-builders in conflict resolution efforts. ■ Support dialogue between pastoralists and local and national governments in order to prevent the further marginalisation of vulnerable pastoralist groups.
Topic:
Climate Change, Democratization, Development, Environment, Migration, Non State Actors, Fragile States, Economy, Conflict, Investment, Peace, and Land Rights
Political Geography:
Africa