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51. 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

52. 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
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

53. 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
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

54. 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

55. 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
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

56. Sudan’s Predicament and the Israeli Connection

Author:
Paul Rivlin
Publication Date:
02-2020
Content Type:
Commentary and Analysis
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In this issue of Iqtisadi, Paul Rivlin delves into the structural factors that led to protests and the overthrow of Sudan's longtime dictator, Omar al-Bashir, in 2019. This background along with more recent developments, explains why some of the leadership in Sudan today believe engagement with Israel makes good economic sense.
Topic:
International Relations, Economy, and Omar al-Bashir
Political Geography:
Africa, Sudan, Middle East, and Israel

57. Coronavirus, Oil and the Middle East

Author:
Paul Rivlin
Publication Date:
05-2020
Content Type:
Commentary and Analysis
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In this issue of Iqtisadi, Paul Rivlin analyzes several of the key economic effects on the Middle East and North Africa caused by the COVID-19 pandemic and the sudden drop in oil prices.
Topic:
Oil, Economy, Coronavirus, and COVID-19
Political Geography:
Middle East and North Africa

58. The Boomerang Effect: How Syria brought down Lebanon, which is bringing down Syria

Author:
Joel Parker
Publication Date:
06-2020
Content Type:
Commentary and Analysis
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In our June issue of Iqtisadi, Joel D. Parker examines the connection between the economic crises in Lebanon and Syria in light of new sanctions imposed by the United States.
Topic:
Sanctions, Economy, Syrian War, and COVID-19
Political Geography:
Middle East, Lebanon, Syria, North America, and United States of America

59. Lebanon, Iraq, and Syria: sinking together?

Author:
Paul Rivlin
Publication Date:
07-2020
Content Type:
Commentary and Analysis
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In this issue of Iqtisadi Paul Rivlin analyses the underlying factors in the economic problems facing Iraq, Syria, and Lebanon, and highlights losses in personal income among the populations in these countries that have added fuel to social protests in recent months.
Topic:
GDP, Economy, Coronavirus, and COVID-19
Political Geography:
Iraq, Iran, Middle East, and Syria

60. Coronavirus in Sub-Saharan Africa: A Certain Economic Disaster, Possible Pandemic

Author:
Rina Bassist
Publication Date:
05-2020
Content Type:
Commentary and Analysis
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
For our latest issue of Ifriqiya, Rina Bassist discusses the immediate economic impact of the COVID-19 pandemic on sub-Saharan Africa, and raises awareness of the threat of a prolonged crisis both for wealthier countries and for the poorest countries in that region.
Topic:
Economy, Crisis Management, Coronavirus, and COVID-19
Political Geography:
Africa and Sub-Saharan Africa