Tag Archives: Economy

Venezuela and Democratic Authoritarianism

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By Victoria Noya, a Venezuelan 3rd year International Development student, currently studying abroad in East Asia.

On December 2015 many Venezuelans gained new hope and optimism for their country, as the Opposition party secured three fifths of seats at the National Assembly, the legislative branch of Venezuela’s government. This was arguably a democratic victory that countered the government’s long standing authoritarian behaviour. However, as many expected, that optimism was short-lived. The Supreme Court, which abides by every whim and fancy of the central government, would go on to prohibit the legislature from naming a handful of members of the electoral council. Nevertheless, since the Venezuelan government has been playing a hybrid regime of authoritarian action with democratic facade and discourse, it came as a huge surprise when on March 29th, under the pretence of the National Assembly’s “contempt”, the Supreme Court decided to usurp the National Assembly[1], ruling that all the National Assembly’s powers would go to the Supreme Court. This has been interpreted by many as a “self-inflicted coup d’état”[2], since what was once a political body that kept the authoritarian regime in check, would no longer continue to do so.

For about 15 years Venezuelans have been living under a de facto dictatorship. At least in the sense that all democratic activity is in some way either restricted or influenced by the government. For example, freedom of speech, a right that goes hand in hand with democracy. Although the government has never spoken against it, it just so happened that throughout the past 15 years, news agencies that are anti-Chavez have been bought up one by one, by entities with Chavista agendas. This type of corruption seeps into essentially every industry that Venezuela has left. Additionally, it is the vox populi that elections are rigged. The subtlety of the government’s totalitarianism was key to establishing Venezuela’s government as a hybrid regime, and it allowed the president and his party to legitimately remain in power. March 29th wouldn’t be the first time the Supreme Court had abused its power, but it would be the first time that their grasp for power was so blunt.

Since March 29th, many peaceful protests led by the opposition have  turned violent, an occurrence that for the past couple of years, is no longer unusual. The blunt decision sparked outrage, since Venezuelans have never actively, perhaps not even knowingly, supported the government’s authoritarianism. This is why the interpretation of “self-inflicted coup d’etat” isn’t quite accurate, it’s more like the government was being honest about what they are: an authoritarian dictatorship. Whether it be because of international or internal pressure, President Maduro later urged the Supreme Court to reverse their decision[3], which only means that the government is back to being dishonest, and that nothing is going to change in the future.

Before I go on, it is important to expand where Venezuela finds itself now. With the progression of Chavez’s presidency, so grew a new political ideology: Chavismo. This populist anti-US ideology gained much popularity among the lower classes, who were told that the government would support them and that their hardships were at the hand of the upper classes as well as US “imperialism”. This repeated discourse over more than 15 years created a social divide that had never existed before. The divide is exemplified in political elections, where Chavistas are extremely loyal to Chavez and his legacy, and society is divided by an intense hostility between die-hard Chavistas and Opposition followers. After Chavez’s death, his legacy remained. The government has targeted the passionate loyalty of Chavistas to ensure power, which means that even under Maduro, a widely unpopular president, Chavistas are unlikely to turn to the Opposition. Insanely high crime rates add to the heightened tensions and fear that has become part of Venezuelan’s daily life, to the point that all new cars being bought are bulletproof – that is, if there even are cars to sell and enough money to buy them, given that inflation is at 800%[4]. Venezuela’s chaotic wasteland of an economy depends on oil exports. The 2014 drop in oil prices had a drastic effect on the economy, but only because decades of high oil revenue with mass deprivatization and virtually no investment in industry or infrastructure, meant the country was not equipped to deal with a sudden drop in government revenue. Today, shortages and scarcity has become the norm in Venezuela: there is no food and no medicine, and prolonged water and electricity cuts are more likely than not. Protests are a regular occurrence, most often for food and medicine shortages, and most recently expressing their disappointment at the Supreme Court.

Given the state of Venezuela today, it is easy to see why the Supreme Court chose to solidify the government’s power. The government likely felt they were losing their grasp on the country due to the economic and social turmoil it faces. That being said, I fear that President Maduro’s demand that the Supreme Court reverse its decision means that any change in the social or political sphere of the country is very unlikely. Firstly, the Venezuelan people may interpret the National Assembly’s regained control as a victory, even though it is not. While the National Assembly was and is able to keep the central government in check to some extent, the Supreme Court and central government have always had more power and could play the National Assembly like a chessboard. Secondly, since it was President Maduro who publicly stated his disapproval of the Supreme Court’s actions, the “blame” is shifted from the central government to the Supreme Court, thus shedding the government in a false democratic light, and solidifying its popularity among voters. Furthermore, banning the leader of the Opposition[5], Henrique Capriles, from candidacy in the upcoming 2018 elections is the same behaviour displayed by the central government since the Opposition began gaining recognition, long before Chavez’s passing. It is with a heavy heart that I give a pessimistic prediction of Venezuela’s future, regardless of any external factor, the core problem is the central government’s reluctance to give up power no matter the cost to society.

Bibliography:

[1] The Economist, Venezuela leaps towards dictatorship, March 2017

[2] Luis Almagro, secretary-general of OAS, The Economist March 2017

[3] The Economist, The Venezuelan Government’s Abortive Power Grab, April 2017

[4] Reuters, CNBC, Venezuela 2016 inflation hits 800 percent, GDP shrinks 19 percent: Document, Jan 2017

[5] Ulmer and Ellsworth, Leading Venezuela Opposition figure barred from office 15 years, April 2017

PHOTO: JUAN BARRETO / AFP

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Cybersecurity and Economic Espionage: The Case of Chinese Investments in the Middle East

cybersecurity

By Sharon Magen, a master’s student at SciencesPo in the field of International Security.

Introduction

The recent usage of emerging technologies for purposes of cyber-attacks or acts of cyber-espionage and the subsequent threat posed to the national security interests of governments in the economic sphere specifically is the cornerstone of this paper. Although many have referred to cyber security risks that are directly connected to the security sphere, national security threats posed by cyber-attacks or acts of cyber-espionage in the economic sphere have not been dealt with to the same extent, a rather puzzling state of affairs.

As cyberspace is increasingly utilized for espionage purposes in various areas, it is imperative to further study the possibility of exploiting cyberspace for intentions of espionage in the international economic arena specifically; far-reaching economic globalization has made the international economic scene vastly interconnected, thus intensifying the world economy’s vulnerability to possible cyber security breaches and intensifying the repercussions of a possible breach on national security interests on a wide scale. It is this lack of contemporary research regarding the utilization of cyber means in order to conduct economic espionage and the subsequent consequences regarding national security that has driven me to further examine this subject in this paper.

The growing importance of further observing this phenomenon, where cyber means may be utilized by foreign entities in order to conduct economic espionage so as to achieve strategic goals, has provided for the incentive of this research. The growing risk to national security posed by economic espionage by cyber means, coupled specifically with China’s economic and political rise, rather intensifies the importance of dealing with this issue. As a country seeking to become a game-changer in the global arena, it is plausible that China, significantly more than other countries, makes use of economic espionage through cyber means to the fullest extent, so as to achieve its goals in other spheres, such as the security and political spheres. It is therefore my belief that this issue should be further studied, in order to assert whether cyber espionage in the economic sphere is a threat posed by China especially, and should therefore be taken into consideration while assessing economic integration which Chinese entities.

During the past few decades, cyber interconnectedness and vast economic integration have transformed the global marketplace into an arena in which state actors and others may utilize cyber means to conduct economic espionage and advance other strategic goals. The current global reality of international cyber and economic interconnectedness presents a new type of threat to national security, as these cyber means may be utilized by foreign actors as vessels for conducting harmful economic espionage. In this case, foreign governments, through private or state-owned companies, may choose to target certain economies or foreign companies in order to make an investment which will inter alia allow that government to conduct cyber espionage in the economic sphere, such as obtaining new technologies, an act that may tip the scale in favor of the investing country, that otherwise would not have been able to receive these technologies.

This phenomenon cements cyber espionage in the economic arena as an undeniable threat to national security nowadays. This accusation is mostly directed today towards China by the United States, as Chinese companies, whom are mostly state-owned, are suspected of utilizing global cyber and economic integration as a vessel for conducting economic espionage. However, it is contended by some that China in fact is not the sole committer of cyber espionage in the economic sector, and therefore should not be targeted as such.

All countries today engage in economic espionage through cyber means to a certain degree, and therefore the question in this paper will deal with the reason for the behavior of the United States, spearheading the notion that China conducts gross economic espionage through means of cyber, whilst it is maintained that other countries do so as well. This research underlines the imperativeness of further study of world cyber integration and the economic espionage risk it entails. Although international cyber integration may present an opportunity for growth, countries must take into consideration the risk of exposing their economy to economic espionage via cyber means.

Past Research Pertaining to Cyber Economic Espionage

According to Mary Ellen Stanley, technological advancements and economic integration have vastly altered the perception of national security in the intelligence sphere, due to wide-ranging cyber economic espionage.[i] Similarly, Matthew Crosston argues that typical types of international economic activity may constitute an intelligence collecting structure through means of cyber, meant to aid as an added aspect of military might enhancement.[ii] Alongside these assertions, Souvik Saha specifically stresses the United States’ standpoint which emphasizes the Chinese encompassing involvement in economic espionage, and the undeniable national security threat it poses.[iii] Furthermore, Magnus Hjortdal stresses that cyberspace is a pivotal element in China’s strategy to ascend in the international system, and that one of the key reasons for this is conducting economic espionage to gain strategic advantage.[iv]

However, Ibrahim Erdogan argues that cyber economic espionage is an immensely lucrative industry in which all countries participate,[v] and therefore cannot be attributed to one specific country. Furthermore, when it comes to the United States specifically, Duncan Clarke contends that even allies of Washington, such as Israel, have been committing acts of economic espionage against the United States for years. According to Clarke, Israeli intelligence units continue to utilize existing networks for collecting economic intelligence, including computer intrusion,[vi] thus rendering the argument maintaining that cyber economic espionage against the United States is an act of war spearheaded by its foes, redundant. The assertion that many other countries, apart from China, commit cyber economic espionage acts against Washington, including allies, and are not reprimanded, weakens the severity of China’s acts and the argument made against it by the United States intelligence community, that it is indeed the forefront of the cyber economic espionage.

Regarding the integrity of the American intelligence agencies’ assessments, John Yoo contends that intelligence and national security agencies in the United States do not always depict an accurate portrayal of national security threats.[vii] In other words, it is plausible that the United States uses untruthful means to protect the nation’s security, thus arguably sacrificing the integrity of the government’s efforts. Robert Bejesky similarly throws into question the reliability of these organizations’ assertions; according to Bejesky, allegations maintaining that executive encouragements may induce intelligence assessments to support the position preferred by the executive branch are not without basis. The CIA for instance has a long history of politicizing intelligence, and at a 2001 panel held at a Harvard conference deliberating the account of the CIA, it had been maintained that the agency does not conduct its role faithfully when it comes to sharing unpleasant truths with the executive branch.[viii]

If so, it is feasible to comprehend that although cyber economic espionage may pose a national security threat, the United States’ formal accusation of China being the main committer of cyber economic espionage may be biased. Although China may be committing acts of economic espionage through means of cyber, it cannot be confirmed at this point that it spearheads this area more than any other country.

Growing Interconnectedness

During the past few decades, technological developments have immensely changed today’s governments’ perception of national security. Conventional acts of espionage which can be traced to a certain perceptible entity have merged significantly with cybersecurity, thus rendering the identity of the intelligence threat ambiguous, and exposing new domains in which harmful data collection may occur, such as the global marketplace.[ix] Today, the world is moving towards a single global economy, due to financial integration.[x] This current reality of cutting-edge technology and worldwide economic integration, has changed the face of espionage, and has created a world in which national security can be harmed, inter alia, via cyber means in the global marketplace.

Today there currently is a necessity to balance a nation’s economic affluence and its national security, as economic globalization may become a vessel for espionage through means of cyber, the bedrock of connectivity in today’s international market. The key methods through which international economic integration may enable cyber economic espionage, are when a foreign state-owned or government associated body conducts business in the host country, or when a foreign entity acquisitions a local business within the country.[xi] It can be contended that this type of activity is not merely a manifest of economic policy, but also functions as a well-planned intelligence collecting scheme intended to serve as an additional facet to military rivalry.[xii] Although it cannot be affirmed that cyber espionage intentions are the main incentive for economic integration, it can be asserted that economic integration enables the possibility of conducting cyber espionage activities. Countries may abuse economic integration in order to conduct cyber economic espionage so as to enhance military might.

In this regard, many claim that China is currently spearheading the sphere of cyber economic espionage.[xiii] According to this approach, China intends to harness today’s worldwide market espionage possibilities in order to enhance its regional and global supremacy. Washington especially perceives Beijing’s intention to commit economic espionage through cyberspace as a dire national security hazard, as China’s success in conducting effective economic espionage may translate into a sharp increase in China’s power potential relative to the United States. China’s current investment policy in economies such as the United States consists of mergers and acquisitions which enable opportunities for undesirable proliferation through means of cyber of intellectual property and trade secrets to Chinese firms.[xiv],[xv]

This type of activity is particularly problematic when Chinese multinational corporations, which are mostly government owned, attempt to purchase American companies with strategic significance or deal with critical infrastructure and assets. According to most recent assessments from the United States intelligence community, there is a heightened assertiveness within China’s international policies, and as part of this it has resorted to massive cyber economic espionage.[xvi] Moreover, according to Pentagon reports, China will continue to aggressively collect sensitive American technological information through cyberspace espionage.[xvii]

However, it can be contended that this assertion, that China is the main global conductor of cyber economic espionage, is meant to serve certain political policies in the United States, rather than represent an accurate status of global cyber economic espionage. Although FBI Director James Comey had stated in May 2014 that the Chinese government blatantly seeks to use cyber espionage to obtain economic advantage for its state-owned industries, Robert Gates, then former United States Secretary of Defense, openly stated that as much as 15 countries at that time were conducting economic espionage in order to take possession of American trade secrets and technology,[xviii] thus shifting the focus from China being the sole leading committer of this act. Furthermore, it has been contended that the United States National Security Agency (NSA) itself had committed cyber economic espionage activities against France.[xix]

Given the circumstances, the main question that arises in this regard is why the vast majority of official American security and intelligence bodies spearhead the notion that China is currently the worldwide main conductor of economic espionage through cyberspace, whilst it is maintained by other sources that other countries are committing cyber economic espionage acts as well, including the United States itself. It can be asserted, that though China does not actually head the world cyber economic espionage sphere, leading security and intelligence institutions in the United States promote this assertion in order to support political needs and policies towards China, who’s growing regional and world dominance is perceived as a threat to the continuation of Washington’s own world dominance and strategic might. In other words, it can be asserted that China’s rise poses a political threat to the United States, a fact which leads to American prosecution of Chinese interests in the economic sphere.

Therefore, another question that arises in this regard is whether other countries similarly argue that China is the global forefront of cyber economic espionage. If it is asserted that other countries equally claim that China is indeed the global leader of cyber economic espionage, another question that would arise in this regard would refer to the reasons supporting this argument. If other countries contend that China is the world leader of cyber economic espionage, despite it being asserted that many other countries in fact participate in cyber economic spying, the question is why they do so. It is my assumption that this is due to security motives, having to do with China’s rise and the security threat it poses via economic growth. This would assist in asserting the assumption that China’s rise de facto poses a threat to American strategic interests.

That being the case, it can be argued that the vast majority of official American security and intelligence bodies currently head the notion that China is the forefront of global cyber economic espionage in order to serve political and foreign policy purposes, and do not therefore portray an accurate assessment of the global cyber economic espionage scene. According to other sources there are a number of global actors that currently take part in cyber economic espionage, therefore not leaving the field for any singular country to spearhead. However, I contend that it is possible that the formal approach of the vast majority of the American intelligence institutions towards China in the cyber economic espionage sphere is intended to serve the United States’ grand strategy towards China’s rise, as they hold the belief that China’s rise may pose a threat to American strategic interests.

The hypothesis claiming that the United States leads the global notion that China is the current forefront for international cyber economic espionage due to political, foreign policy and security reasons can assist in understanding the gap between the popular claim within the American intelligence community and other entities regarding China’s role in the current cyber economic espionage arena. Many contend that China’s vast economic growth coupled with its enhancing military capabilities places it on a collision course with the United States.[xx] It can be asserted that in order to battle against China’s rise, the United States advocates an argument which depicts China as a country with minimal respect for intellectual property, sovereignty, and other critical factors that comprise the bedrock of global trade. International trade serves as China’s bread and butter, fueling its growth and ability to expand its military capabilities. If the United States can damage China’s ability to conduct global trade by asserting that it promotes cyber economic espionage, it would thus damage Beijing’s capabilities in the security sphere.

 My methodology for examining this theoretical assumption entails the assessment of other countries’ approach to China’s supposed cyber economic espionage intentions. If other countries similarly claim that China is the main conductor of global cyber economic espionage, despite the fact that it has been asserted that other countries take part in such espionage acts as well, it would be vital to assert what are the reasons for this type of behavior. In order to assess the approach of other countries towards Chinese cyber economic espionage, I contend that it would be most affective to focus on countries that are not western, such as the Middle East countries. This in my opinion may contribute in portraying a more balanced assessment of other countries’ approach towards China’s cyber economic espionage intentions.

Consequently, in this paper I examine the approach of select Middle East countries to China’s massive involvement in world trade and the possibility of its gross cyber economic espionage activities, in order to assess Washington’s claim. To this end, I examine the cases of Turkey and the United Arab Emirates (UAE). The rationalization for choosing these two countries is such; the main nexus that binds Beijing to the Middle East region concerns economic security, as more than half of China’s oil and natural gas imports are sourced from the countries of the region.

However, in contrast to the majority of other actors in the region, hydrocarbons do not play a big role in Turkey’s relations with the China, thus making Ankara a meaningful choice for a study of relations with China within the Middle Eastern context. If so, an outtake on the Turkish possible responses to Chinese alleged cyber economic espionage may provide an original contribution on investigating this matter. Regarding the UAE, it is important to note that the federation is only the third largest economy in the Middle East behind Saudi Arabia and Iran. Being a source of oil and natural gas imports for China, but not one of China’s principal suppliers, the UAE represents a significant case study in this sense, as it cannot be characterized as being overly essential to Chinese interests. Therefore, the UAE’s approach to Chinese cyber espionage intentions will not be tilted in favor of Beijing.

If proven that these two Middle Eastern countries have taken action against Chinese economic transactions, it can be affirmed that this is due to the national security threat posed by cyber economic espionage. The apprehension that through cyber economic espionage China could access key economic interests in a host country’s economy and realize its interests regardless of the host country’s interests could in my opinion propel them into taking action against Chinese economic transactions, thus initiating the suspension or cancellation of Chinese backed investments and so on.

 In order to measure these Middle Eastern countries governments’ approach to possible Chinese cyber economic espionage through, I will examine possible objections and restrictions made at a government level towards Chinese economic transactions and Chinese funded projects within the country. I contend that upon presenting a consistent trend of government level objections to projects funded by the Chinese, it can be affirmed that this is due to the fact that there is a tangible threat to national security posed by cyber economic espionage, enabled by economic integration.

Turkey

Although more than half of China’s oil and natural gas imports are sourced from the countries of the Middle East region, thus deepening Beijing’s dependence on the region, hydrocarbons do not play a pivotal role in Turkey’s relations with China. Nonetheless, Turkey is a rising power in the region, and has not directly experienced the upheavals felt in the Arab world in the past few years, a fact which still places Ankara as a pivotal partner of Beijing in the region, in the economic and political spheres alike.[xxi] Regarding the Turkish government’s stance on possible Chinese cyber economic espionage activities, it is important to note that in November 2015, Ankara had cancelled a 3.4 billion dollars long-range missile defense system tender provisionally awarded to a Chinese state owned firm in 2013.[xxii]

Turkey had originally entered negotiations in 2013 with the China Precision Machinery Import-Export Corporation (CPMIEC) to finalize the billion dollar contact. Even though French-Italian consortium Eurosam and US-listed Raytheon had also submitted offers, the Turkish government had preferred talks with the Chinese company, a fact which raised serious concerns over the compatibility of CPMIEC’s systems with NATO missile defenses, as Turkey is a member. In its official statement given by a representative from Prime Minister Ahmet Davutoglu’s office, the Turkish government had declared that it had cancelled the deal with China mainly because Turkey had decided to launch its own missile project.[xxiii]

Though the Turkish government officially maintained that the core reason for its cancellation of the multi-billion dollar deal with the Chinse frim had been its decision to self-develop the long-range missile defense system, it can be contended that this was actually done because of concrete concern within the Turkish government regarding Chinese cyber economic espionage. As previously asserted, Turkey had led a comprehensive process in order to decide on a foreign company to lead this project. If Turkey had indeed wished to self-develop this defense system, it would have done so from the beginning, and would not have conducted a complete procedure so as to choose a foreign firm to conduct this project.

In other words, it can be argued that after Turkey had decided to continue with CPMIEC in order to further this project, serious concerns had risen within the Turkish government and out of it regarding subsequent possible exposure of sensitive NATO systems to Chinese eyes. Although the deal did not explicitly determine the direct exposure of critical and classified systems to the Chinese, this transaction could have enabled Chinese access to systems through which harmful data collection could be conducted. Transactions such as this may inadvertently permit foreign penetration through means of cyber, as foreign firms gain access and exposure to computerized systems through which such infiltration may be conducted. Such harmful data collecting activities through means of cyber that are enabled by seemingly innocent business transactions are especially perilous when these transactions involve critical infrastructure of the host country.

If so, it is significantly plausible that Turkey had canceled this multi-billion-dollar deal with China due to cyber economic espionage concerns. Although it can be contended that other motives had brought the Turkish government to the decision to call-off the collaboration with the Chinese state-owned firm, such as the formal Turkish response that contended that Turkey had decided to self-develop the long-range missile defense system, this, as stated, is problematic to comprehend as Turkey had initiated a long process of selecting a foreign contractor. If so, it can be contended that the Chinese cyber economic espionage threat was a pivotal motive in Turkey’s decision to call-off the deal, as it is perceived as a real danger by the Turkish government to its national security.

UAE

The UAE is a federation comprised of seven separate emirates, which together represent the third largest economy in the Middle East behind Saudi Arabia and Iran. The UAE has the seventh largest proven reserves in the world of both oil and gas, and in 2010 China imported 64,500 tons of liquefied natural gas from the UAE valued at more than 23 million dollars. Furthermore, the China Petroleum Engineering and Construction Corporation (CPECC) assisted with the construction of the Abu Dhabi Crude Oil Pipeline Project, which now enables the transport of 1.5 million barrels of crude oil per day from Abu Dhabi’s collection point at Habshan to the export terminals at Fujairah. Oil transported through the pipeline bypasses the narrow Strait of Hormuz, which Iran has repeatedly threatened to block if it is attacked militarily. However, it is imperative to point out that the 3.3-billion-dollar project had experienced repeated delays, initiated by the UAE.[xxiv]

Although it had been officially stated that The UAE has been forced to delay the construction of a pipeline allowing oil to bypass the Strait of Hormuz due to construction problems,[xxv] according to industry sources close to the project, the reason for the delay was that although CPECC was already preparing to commission the pipeline, the Abu Dhabi Company for Onshore Petroleum Operations (ADCO) was not involved in this initial preparation process, a rather perplexing situation, as ADCO would first have to make sure that the commissioned pipeline design suited its standard prior to commencing the production procedure.[xxvi]

The Chinese commencement of designing the pipeline without the participation and involvement of ADCO, the UAE state firm in charge of the project, plausibly points to the fact that there was a Chinese intention to commit an act of sinister nature, regarding the construction of the pipes; such pipelines include highly sophisticated control software that can be hacked and even manipulated prior to its assembling. In 2004 for instance, Thomas C. Reed, an Air Force secretary in the Reagan administration, wrote that the United States had effectively implanted a software Trojan horse into computing equipment that the Soviet Union had bought from Canadian suppliers, used to control a Trans-Siberian gas pipeline.[xxvii]

If so, it is quit plausible that the Chinese had begun the UAE commissioned pipeline design without involving ADCO because they had something to hide, such as the insertion of cyber espionage measures. This would not be an isolated incident for the Chinese, as in 2013 The former head of the United States’ Central Intelligence Agency (CIA), Michael Hayden, contended that it is clear that Chinese telecoms giant Huawei spies for Beijing,[xxviii] a fact which rather solidifies the argument that China indeed utilizes business transactions in order to conduct cyber espionage. In the case of the Abu Dhabi Crude Oil Pipeline Project, the numerous delays due to Chinese repetitive exclusion of ADCO from the pipeline design process can be explained by the fact that CPECC had engaged in illicit activities concerning the manufacturing of the pipeline, namely the insertion of cyber espionage measures. However, it is important to note that in this case, although it can be contended that China had engaged in cyber economic espionage, the UAE had only delayed the project, and had not opted to cancel it entirely.

If so, it is apparent that although these two Middle East countries do not share Washington’s vehement stance towards the Chinese cyber economic espionage threat, there is an understanding of the possible threat, reflected by their cancellation or delay of business transactions with Chinese firms. Although none of these Middle East countries have gone out and exclaimed, as the Americans have, that China makes use of cyber means in order to conduct economic espionage, their behavior towards major Chinese investment points to a government level comprehension that Chinese economic conduct differs from that of other countries, due to a heightened threat of cyber economic espionage.

These two Middle East countries, as others, are not cemented in great power politics such as the United States, and therefore lack the incentive, as well as the protective means, to denounce Chinese economic conduct due to Beijing’s use of such demeanor in order to conduct cyber espionage and enhance its strategic might. Therefore, although it is possible to witness a government level resistance to major business transactions with Chinese firms, it is mainly done so through inconspicuous ‘soft’ methods such as project suspension. However, project suspension coupled with cancellation of business transactions with Chinese firms in my opinion forms a stable foundation for the argument that Chinese business transactions specifically are not treated the same as transactions done with firms from other countries, therefore pointing to the fact that they pose a threat.

However, due to the fact that the anti-China steps taken in the economic sphere are mostly discreet, it is speculative to assume that these steps were taken in light of Chinese cyber economic espionage intentions. Even when publically announcing the suspension or cancellation of Chinese funded projects, those governments do not state that this is due to misconduct rooted in cyber economic espionage. That being said, it can be conferred from their actions that Chinese economic conduct is in fact treated differently than economic transactions originating from other countries, a fact which perhaps further solidifies the American notion that China’s economic behavior is not innocent, for if it were so, there would be no publically announced suspension or cancellation of major Chinese funded projects in both countries.

In the literature review section of this paper, I have noted Crosston’s approach, which states that typical types of international economic activity may constitute an intelligence collecting structure, meant to aid as an added aspect of military might enhancement. Additionally, according to Saha, recent assessments from the United States intelligence community contend that there is an intensified decisiveness within China’s international policies, and as part of this it has resorted to substantial cyber economic espionage. China’s focus on the infrastructure, energy and telecommunication sectors in terms of business transactions, which are all considered critical to national security, may suggest that the Chinese indeed intend to utilize information gained by means of cyber through economic integration in these sectors for strategic purposes. The suspension and cancellation of key Chinese funded projects, prima facie due to technical reasons, suggests that these governments see Chinese further economic involvement in their countries as a threat.

Conclusion

In conclusion, it is feasible to comprehend the vast impact of global cyber interconnectedness and economic integration on the perception of a country’s national security. Whilst pertaining to be of economic nature only, typical types of international economic activity may constitute an intelligence collecting structure through cyber means, meant to aid as an added aspect of a nations’ power enhancement. International economic conduct may permit opportunities for proliferation of economic intelligence through means of cyber into the investing country’s hands, thus compromising the receiving country’s national security. The American claim that China currently spearheads cyber economic espionage worldwide by means of economic integration seems to be sustained by other governments as well, further to the reaction of the governments of Turkey and the UAE to business transactions with Chinese firms. Although these countries’ reaction is not as intense and straightforward as that of the American government, it is nevertheless apparent that they are striving to restrict or monitor it, at the very least.

In regards to the main question of this research, dealing with the reason for the official American intelligence bodies approach, claiming that China is currently the worldwide main conductor of cyber economic espionage, whilst it is maintained by other sources that other countries are committing economic espionage acts as well, in light of the findings regarding the two previously examined Middle East nations, it can be contended that the United States does so because Chinese investments in particular are conceived as a national security threat, a notion shared by other countries. As seen in the cases Turkey and the UAE, the suspension or suspension of Chinese projects, point to the fact that business transactions with Chinese firms are indeed looked upon, not only by the United States, as a source of peril. Although some sources may maintain that China is no different than any other country when it comes to cyber economic espionage, it is in fact proven that other countries, and not only the United States, perceive China specifically as an ominous threat when it comes to economic integration and possible cyber economic espionage.

Even though the global market place is becoming increasingly interconnected via cyber means, countries must take into consideration the risk of exposing their country to national security risks, due to the fact that international economic integration may prove to be a vessel for cyber economic espionage. Indeed, in this research it has been asserted that the United States is not exaggerating in its description of the cyber economic espionage intentions of the Chinese; rather, as a superpower, it is one of few countries that have the prerogative to openly state their opinion on the matter. It is critical therefore, to assess Chinese business transactions differently than those originating from other countries, in light of the fact that the Chinese specifically use economic integration means in order to conduct cyber espionage and enhance Beijing’s military and strategic might on the path of its rise.

Bibliography:

[i] Mary Ellen Stanley, “From China with Love: Espionage in the Age of Foreign Investment,” Brooklyn Journal of International Law 40, no. 3 (2015): 1033-1079.

[ii] Matthew Crosston, “Soft Spying: Leveraging Globalization as Proxy Military Rivalry,” International Journal of Intelligence & Counterintelligence 28, no. 1 (2015): 105-122.

[iii] Souvik Saha, “CFIUS Now made in China: Dueling National Security Review Frameworks as a Countermeasure to Economic Espionage in the Age of Globalization,” Northwestern Journal of International Law & Business 33, no. 1 (2012): 199-235.

[iv] Magnus Hjortdal, “China’s use of Cyber Warfare: Espionage Meets Strategic Deterrence,” Journal of Strategic Security 4, no. 2 (2011): 1-24.

[v] İbrahim Erdoğan, “Economic Espionage as a New Form of War in the Post- Cold War Period,” USAK Yearbook of International Politics and Law no. 2 (2009): 265-282.

[vi] Duncan Clarke, “Israel’s Economic Espionage in the United States,” Journal of Palestine Studies 27, no. 4 (1998): 20-35.

[vii] John Yoo, “The Legality of the National Security Agency’s Bulk Data Surveillance Programs,” Harvard Journal of Law and Public Policy 37, no. 3 (2014): 901-930.

[viii] Robert Bejesky, “Politicization of Intelligence,” Southern University Law Review no. 40 (2013): 243-551.

[ix] Mary Ellen Stanley.

[x] Lucyna Kornecki and Dawna Rhoades, “How FDI Facilitates the Globalization Process and Stimulates Economic Growth in CEE,” Journal of International Business Research 6, no. 1 (2007): 113-126.

[xi] Mary Ellen Stanley.

[xii] Matthew Crosston.

[xiii] Stuart Malawer, “Confronting Chinese Economic Cyber Espionage with WTO Litigation,” New York Law Journal, December 23, 2014.

[xiv] “Foreign Spies Stealing U.S. Economic Secrets in Cyberspace,” The Office of the National Counterintelligence Executive, April 14, 2016, https://www.ncsc.gov/publications/reports/fecie_all/Foreign_Economic_Collection_2011.pdf

[xv] Souvik Saha.

[xvi]  Ibid.

[xvii] Geoff Dyer, “China in ‘Economic Espionage’,” Financial Times, May 19, 2012.

[xviii] Zachary Keck, “Robert Gates: Most Countries Conduct Economic Espionage,” The Diplomat, December 17, 2015, http://thediplomat.com/2014/05/robert-gates-most-countries-conduct-economic-espionage/

[xix] “WikiLeaks Reveals NSA’s Economic Espionage against France,” Progressive Digital Media Technology News, Jun 30, 2015, http://search.proquest.com/docview/1692699265?accountid=14765

[xx] Souvik Saha.

[xxi]Altay Atli, “A View from Ankara: Turkey’s Relations with China in a Changing Middle East,” Mediterranean Quarterly 26, no. 1 (2015): 117-136.

[xxii] “Turkey Says ‘yes’ to China’s Trade Initiative, ‘no’ to its Missiles,” South China Morning Post, November 15, 2015, http://www.scmp.com/news/china/diplomacy-defence/article/1879097/turkey-says-yes-chinas-trade-initiative-no-its-missiles

[xxiii] “Turkey Cancels $3.4 Bln Missile Deal with China,” The French Chamber of Commerce and Industry in China, November, 15 2015, http://www.ccifc.org/fr/single-news/n/turkey-cancels-34-bln-missile-deal-with-china/

[xxiv] Manochehr Dorraj and James English, “The Dragon Nests: China’s Energy Engagement of the Middle East,” China Report 49, no. 1 (2013): 43-67.

[xxv] “UAE Delays Project to Bypass the Strait of Hormuz,”. Al Bawaba, January 9, 2012,

http://www.albawaba.com/business/uae-delays-project-bypass-strait-hormuz-408210

[xxvi] “UAE Delays Oil Pipeline to Bypass Hormuz to June,” Oil & Gas News, January 16, 2012,http://search.proquest.com/docview/916274658?accountid=14765

[xxvii] John Markoff, “Old Trick Threatens the Newest Weapons,” The New York Times, October 26, 2009, http://www.nytimes.com/2009/10/27/science/27trojan.html?_r=2&ref=science&pagewanted=all

[xxviii] “Huawei Spies for China, Says Former NSA and CIA Chief Michael Hayden,” Business Insider, July 19, 2013,http://www.businessinsider.com/huawei-spies-for-china-says-michael-hayden-2013-7

 

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How Refugee Admission could save, and not destroy the UK

refugee crisis

By Paula Koller-Alonso, a first year History & International Relations King’s College London undergraduate

Trump’s travel ban has urged us to take a second look at the refugee crisis and the new cataclysm of migration diaspora. Politics and opinions on the topic are generally split between conservatives believing that the immigration influx will create a security breach and liberals encouraging the intake of refugees as a chance to be humanitarian heroes. Yet between the polar opposites, one consequence of the crisis has not been substantially analysed: the idea that mass refugee intake might just be what saves the UK demographic and economy.

The British parliament voiced a plan in 2015 to take in 20,000 Syrian refugees over the next years, which seemed reasonable and morally noble. However, this plan was mainly limited to unaccompanied children, at times, as Amnesty International’s newest campaign reveals, tearing families apart and prohibiting the entry of these kids’ parents. Furthermore, 20,000 refugees is a marginal number compared to what the UK’s neighbours are accepting: In one weekend in 2015, 20,000 refugees were welcomed in the city of Munich. 13,000 refugees alone arrived on a Sunday, more than the total number of refugees seeking asylum in the UK in the whole of 2015. To put that into perspective, 20,000 people are only equivalent to 0.03% of the total population, whilst Germany expected 800,000 asylum seekers in 2016, which was a total 1% of their population. So then it has to be asked – why is the UK so afraid to be more generous in their humanitarian aid to give asylum to refugees fleeing civil war?

Having watched the media in recent months gives a partial answer to the question. An increased number of terrorist attacks, many linked to radical terrorist groups, in Western Europe creates an atmosphere of fear and an increase in security protocols. Trump’s travel ban itself forbid the entry of citizens from targeted Middle Eastern countries, stating that it was “about terror and keeping [the] country safe”. However, apart from discriminating against a religion and ethnicity, the travel ban and the refusal of a higher number of refugee intakes, also obscures the advantage a country can gain from receiving asylum seekers.

Considering OECD statistics, the birth rate in the UK has gradually decreased in the last 45 years. As a result, concerning the demographic development, there has been an increase of 4.23% in the elderly population, and a decrease of 6.3% in the young population. Admitting refugees in the UK would therefore strengthen the demographic gap in the population, which would benefit the country in a long-term perspective. Consequently, it would reinforce economic productivity, as its increased labour supply would fuel the GDP and taxation backflows. The UK could then be placed on a higher power basis in the international system, through its increased economic strength – a necessary and welcomed step in the wake of the post-Brexit Sterling devaluation.

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Reference: OECD.org

Although it seems morally incorrect to refer to refugee asylum as an economic policy to strengthen the country, it may be necessary to highlight these advantages in order to urge politicians to turn a humanitarian crisis into a political requirement. There are still more than 4 million Syrian refugees displaced in the Middle East, and now is the time to welcome them, rather than reject them – not only because it is inhumane not to do so, but also because it could highly benefit the UK.

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A violent peace: El Salvador 25 years on

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Carly Greenfield is a second year International Relations student with an interest in non-wartime violence, gender theory, and organized crime, especially in Latin America.

El Salvador, a state of little more than 6 million people, often falls below the radar in the 21st century. However, 25 years ago, El Salvador was ending a 12-year civil war that had ushered it into a violent Cold War paradigm and brought global media attention along with it. Today, El Salvador is the battleground for deadly gang warfare and a hardened state presence. While the peace deal of 1992 ensured an end to the conflict, Salvadorans have not been able to cultivate a peaceful society. In 2015, San Salvador hosted the third highest murder rate in the world: with its population hovering around 1.7 million, almost a third of all Salvadorans have been forced to make this a part of their daily lives. The peace deal failed to create a peaceful state due to an inability to remedy the conflict’s roots of inequality and injustice, failure to persecute military members following the deal, and a failure to address the trauma experienced by local communities. Along with a lack of political will, El Salvador has faced the same abject poverty as its neighbor states and extreme levels of emigration towards the United States (US), leading to an excess in crime rates.

The civil war was fought between the Government of El Salvador and Frente Farabundo Martí para la Liberación Nacional (FMLN), but its roots lay much further back in El Salvador’s history. Like most of Latin America, Spain dominated El Salvador for over 300 years until its full independence in 1838. This laid down a system built around natural goods such as indigo and sugarcane and the need for a peasant population to farm it. Following independence, as in the colonial period, a group of elites held almost all of the wealth in the country. In the 19th century, they amassed control of the economy through the farming of a new crop: coffee. Economic disparity grew and in the 20th century, peasant revolts became increasingly common, leading to brutal crackdowns by the government. As El Salvador swung from one military dictatorship to the next and social mobility stayed practically impossible, the growth of leftist guerrilla movements was expected. Like in neighboring states Nicaragua and Guatemala, the 1970s and 1980s became ground zero for revolutionary politics.

El Salvador’s civil war lasted from 1980 to 1992, leaving over 75,000 people dead and thousands more displaced from their homes. It was notorious for death squads, the use of child soldiers, and various other human rights violations. Thousands had fled to neighboring countries, chief among them the United States. The US, who had backed the Salvadoran government during the war, would play a key part in both the peace deal and its ensuing breakdown. Following the 1989 Jesuit massacre, and the US no longer supplying the government with weapons but rather calling for an end to the conflict, the government and FMLN brokered a peace deal. Although the peace deal succeeded in ending the violent civil war and incorporating FMLN into the political system, economic goals of the peace agreement were less successful. Along with this, a lack of funding for government programs reincorporating child soldiers or supporting communities most affected by the atrocities kept areas from healing.

Within the peace accord, several agreements have been breached or not followed closely— Chapter 1, Armed Forces, facing the most challenges. Point 5, End to Impunity, gave the Commission on the Truth power to end impunity for armed actors involved in human rights abuses. However, the Salvadoran Legislative Assembly passed an amnesty law that protected all military and guerrilla forces from prosecution in 1993, undercutting the Commission on the Truth, leaving many victims without anyone to hold to account. To this end, the entrance of the FMLN into the president’s office in 2009 led to the removal of the blanket amnesty law, yet still few cases have been prosecuted. Now, at the 25th anniversary, prosecutions are becoming less and less likely, meaning the justice side of the conflict remains unfulfilled, keeping the country from experiencing total peace. With Point 6 of Chapter 1, Public Security Forces, the government has loosened the regulations set out in the peace accord. While the peace accord set about creating a police force controlled by civilian authorities, rather than allowing the military to conduct the policing within El Salvador, the government has instead militarized its police. Though the primary role of the national civil police was shaped around safeguarding peace, anti-gang policies have been more offensive than defensive in nature. In the first decade of the 2000s, El Salvador’s leadership developed the manu duro policy (iron fist). President Antonio Saca brought more force to the program and labeled it super mano duro. These policies led to increased police presence in El Salvador along with heavier weapons and the legal ability to take harsh methods against suspected gang members, therein beginning to blur the line carefully set out by the peace accords. In 2015, the government labeled street gangs as terrorist organization— a step that proponents said was fitting, given how the gangs terrorize the local population and seek to undermine the government. What this decision also does, however, is expand police rights to round up any person with a gang-related tattoo, as being a member of a gang is now illegal. Searches and raids rose and stories began to crop up of police abuse and overzealousness, but few arrests were made inside the police force. The government’s ability to seek justice as it sees fit is reminiscent of the civil war, making some civil society activists uncomfortable. As many gangs are most active in poor neighborhoods, it is those people who are most affected by gang violence and extortion and government abuse, rekindling the divide between the poor and the heavily armed police.

Point 11 called for the suspension of forcible recruitment: children disappeared throughout the conflict and many were coerced or forced into fighting, leaving a generation with few skills outside of war. While the government has taken steps to protect children, the gangs recruit boys as young as 10 to serve as lookouts and informants throughout the country. Recruitment into a street gang should be treated as a similar crime to that named in the peace accord since most of the gang members are young and die early. The government’s inability to protect its youth shows that the peace accord has not been implemented in its entire scope, made more acute due to a lack of finances.

The El Salvador peace deal, like many other peace deals, focused on resolving the conflict at hand and less with the structural issues going on inside El Salvador. Still, Chapter 5 sought to answer “the agrarian problem.” Land reform occurred to give workers more access to the wealth being gained from the earth they till and more peasants were able to buy land. Still, wages did not rise substantially, and an elite few continue to amass a critical amount of the wealth. The space left between peace accords and truth commissions following conflict leaves substantial room for economic structures to remain in place even while they are often a focal point of the conflict. The failure of the government to set significant reforms in place means that many Salvadorans face similar economic pressures as those prior to the civil war.

It would be incorrect to claim, however, that El Salvador is wholly responsible for its homicide rate or gang epidemic. The role of the US in Salvadoran politics was a main hindrance to peace within the state during the civil war, and its support of the original peace deal was mainly in pursuit of its own national interest. Now, as the international community looks to how El Salvador can lower its homicide rate, it should really be analyzing US immigration policy. The practices that gangs employ have their origins in Los Angeles, not in Soyapongo.

Thousands of Salvadorans escaped the country during the civil war, particularly young men avoiding being brought in to fight. Many fled to the US, albeit without the proper documentation, and settled in Los Angeles. The adolescents noticed the street culture already prevalent in the city at the time, particularly the gang rivalry between the Bloods and the Crips. This gave birth to la Mara Salvatrucha, commonly known as MS-13, and one of the main gangs in El Salvador today. While the gang was formed in Los Angeles, it ended up back in El Salvador: the US government, cracking down on illegal immigration, deported thousands of Salvadorans back to El Salvador following the peace accord. Since the US prioritizes deporting those with criminal records, gang members were the perfect example of what the government wanted to get out of the country. So although the young men were raised in American streets, the US took no responsibility for their behavior, and gang culture was exported to El Salvador along with the people. Since most of these men had little connection to El Salvador, they were difficult to integrate, notwithstanding all of the other issues that the country was facing. US foreign policy towards El Salvador, laden with hypocrisy for decades, has only furthered the destabilization of the small country. By only understanding the civil war through the Cold War, it supported brutal government tactics and furthered the endless bloodshed. The deportation of young gang members and the separation of families across borders continue to put Salvadorans at risk. Furthermore, when the US saw an increase in unaccompanied minors entering the US in 2014, they were careful not to label them refugees, even though they were escaping the deadliest region outside of a warzone. As El Salvador continues to grapple with its rival gangs, the US continues its deadly deportation policy.

What does this all mean, in the context of a 25 year-old peace deal? Small states do not have full agency in their policymaking if they are not afforded it by larger states, such as in the US-El Salvador relationship. The violence in El Salvador should also serve as a reminder of the importance of financial power to put in place post-conflict programs that emphasize reintegration, community building, and job opportunities. Impunity serves no one but those who committed the crimes, even if it is being done in the name of healing and moving on. Furthermore, governments must conduct their own commissions to reform long-established obstacles: while truth commissions may bring victims’ voices to light, and peace accords disarm the opposition, there continues to be no exact model for addressing the long-term grievances of oppressed groups, especially in postcolonial states. The peace accord may have ended the civil war, but it was unable to provide stability or lead to civil society involvement that could have created a peace that meant more than simply the absence of war.

 

Sources:

http://www.seguridadjusticiaypaz.org.mx/biblioteca/prensa/send/6-prensa/230-caracas-venezuela-es-la-ciudad-mas-violenta-del-mundo 

http://www.blog.rielcano.org/ciudades-violentas-sin-necesidad-de-guerras/#comments 

https://www.cia.gov/library/publications/the-world-factbook/geos/es.html 

https://www.theguardian.com/world/2016/jul/29/el-salvador-police-arrest-77-raids-powerful-ms13-gang 

https://www.theguardian.com/artanddesign/2015/sep/04/adam-hinton-el-salvador-ms-13-gangs-prison-portraits 

http://cja.org/where-we-work/el-salvador/ 

http://peacemaker.un.org/sites/peacemaker.un.org/files/SV_920116_ChapultepecAgreement.pdf 

http://www.usip.org/publications/truth-commission-el-salvador 

https://www.theguardian.com/world/2016/oct/18/nayib-bukele-san-salvador-mayor-save-worlds-most-violent-city 

https://www.youtube.com/watch?v=HGG7lRJJkJk 

http://www.nytimes.com/2006/07/11/arts/television/11bull.html 

http://content.time.com/time/world/article/0,8599,1920741,00.html 

http://www.csmonitor.com/1996/1105/110596.intl.intl.1.html 

http://www.csmonitor.com/World/Americas/Latin-America-Monitor/2012/0425/Building-on-success-How-El-Salvador-is-trying-to-keep-gang-violence-down

 

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Military might: France’s ultimate grandeur?

By Pierre Dugué a first-year BA War Studies coming from France. He is interested in Western (Europe and U.S.) grand strategy, intelligence and counter-insurgency operations.

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French national ‘Bastille’ day’s military parade going down the Champs-Elysées

France and war is a rather long story

As we this year celebrate the centenary of the bravely-fought battles of Verdun and the Somme, France’s memoirs are nevertheless still overshadowed by the military humiliation of 1940 that led to the unconditional surrender of the power that had once ruled the world and made Britain tremble. Yet, France has been rebuilding its military might ever since the beginning of the Cold War – with De Gaulle securitizing a siege at the Security Council, the first nuclear weapons tested in the Pacific and Prime Minister De Villepin saying ‘non’ to U.S. Secretary of State Colin Powell’s intervention in Iraq. Although the days of Louis XIV and Napoleon have now passed, unlike what the media worldwide seem to infer [1], France is not done. Then what role should it be playing within the international system? Should it be a military one only?

 

A declining country?

‘Decline’ is a rather simple idea, it is however hardly effectively measurable on the long term. From 2007 onwards France’s economy has been shrinking leading to mass unemployment, restructuration and financial imbalance. Furthermore 2015, its anus oribilis, saw a huge decrease in France’s still fluctuating GDP (0.7%) [2]. Indeed, the two terrorist attacks and the state of emergency that ensued have had a considerable impact on tourism– one of the country’s main sources of income – and French commerce in general. Politically, the population is divided and utterly mistrusts Mr. Hollande – 75% unsatisfied [3]. Hence the fact that – with the 2017 presidential elections coming – the world fears the rise of the Front National, the far-right party. Actually, recent socio-political divisions – due to the rebirth of nationalism triggered by both terrorism and migration – have drawn the world’s attention to France and emphasized its blurred and diminishing influence within the EU [4]. In fact, the recent unsustainable situation in Calais coupled with migrant-related crimes such as the aggressions in Cologne have torn the French apart: half of the people’s position is now aligned on the FN’s, the other half has a strong anti-FN position. Consequently, Marine Le Pen demanded a referendum to be held à propos a potential ‘Franxit’ to ‘protect’ France against what it strived to create [5].

Considered unstable, weakened and dangerous due to economic, social and political factors at the national level (even more since the proclamation of the state of emergency that some relate to a new ‘martial law’ – establishing ‘no-go’ zones for instance [6]), au contraire France shines internationally in terms of foreign policy.

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French soldier at the Louvres museum after the proclamation of the state of emergency

 

France and international interventionism: the case of Africa

Although reluctant at engaging the army in any sort of conflict for many years, Paris has followed the U.S.-led coalitions in 1991 and 2001. The country constitutes a key asset to the UN and NATO when it comes to peace-keeping and humanitarian missions around the globe [7]. Besides, France has had its own missions that have reinforced the country’s international presence and decision-making, particularly in Africa. Indeed, four major military operations have been launched since Mr. Sarkozy’s mandate (2007-2012) onwards [8].

‘Operation Harmattan’ in 2010-2011 whose aim was to bring down Colonel Gaddafi’s regime – following the Arab Spring and the civil war – by involving air and sea powers in a campaign of surgical strikes against Gaddafi and Islamist-held areas. This nonetheless led to Islamist groups fleeing the country to thrive in Africa, benefiting from the weakening of some States. Hence the UN-approved ‘Operation Serval’ launched in January 2013 by Mr. Hollande which ousted AQIM from Northern Mali and helped maintain the integrity of the regime that had asked for assistance (Resolution 2085). France has also deployed troops in the Central African Republic (Operation Sangaris) in 2013-2014 where a coup d’état had drastically destabilized the country; an ethnic-religious genocide between Muslims and Christians was feared by the UN which approved this intervention (Resolution 2127).

These successful operations were backed up by the international community for they were mainly counter-insurgency missions aimed at restoring/maintaining one’s sovereignty in accordance with international law and principles. France has also been joining coalitions and has exercised coercive diplomacy to influence political decisions in order to put an end to humanitarian crisis, especially in the Ivory Coast before 2011. The protection of sovereignty and populations – although contradictory in some cases – are priorities to Paris.

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French soldiers deployed in the Central African Republic in 2013 (Operation Sangaris)

 

Grand strategy and military capabilities: the case of Syria

France’s grand strategy in the Middle East has been made clear: a governmental transition in Syria without Bashar al-Assad, the destruction of Daesh in Syria and Iraq and the support to the UAE and Saudi Arabia in their interventions in Yemen and the Middle-East in general [ç]. To fulfil this political purpose, France has mobilized and deployed its military might over the region.

Following the U.S. on its ‘war on terror’ for the sake of democracy, freedom from want and fear and international stability, France has now been fully engaged in Syria since September 2015 under the name ‘Operation Chammal’ [10]. At first hesitant at engaging its armed forces – going through an ‘identity crisis’ concerned with France’s international place in the future – Paris has launched a series of airstrikes against IS-held positions in Syria in September 2015 following its prevailing doctrine of protecting populations and sovereignty against insurgencies [11]. Ever since November 2015, France has intensified this military effort especially targeting Raqqa, and has actively participated to the withdrawal of Daesh troops from territories now in control of the rebels or the Kurds [12].

In order to effectively conduct these operations, France is endowed with military bases covering both the Mediterranean and the Middle East: the airbase of Calvi in Corsica and the military base in the UAE territory [13]. Furthermore, the deployment of nuclear submarines and the French ‘Charles de Gaulle’ nuclear aircraft-carrier enhances that capacity of deployment as well as it allows joint operations to be carried out especially with the RAF and the U.S. Air Force [14].

Cooperation is key and Paris is insisting on the need for a joint commandership to be established. François Hollande has demanded that intelligence be shared between agencies to maximise the effectiveness of the coalition. The DGSE (French intelligence agency) is most likely to be training rebel troops and gathering intelligence on the ground along with the CIA and the MI6 – although unofficial, special units are constantly being sent to the ground. Nevertheless, cooperation may be compromised. In fact, France has been trying to limit the involvement of Turkey in the conflict due to suspicions concerning the Erdogan regime financing Daesh and feeding their effort against the Kurds. Likewise, France appears to not be supporting Israel – it is on the verge of recognising Palestine a State [15]. Both policies heavily differ vis-à-vis the U.S. grand strategy in the region. It therefore weakens the coalition and slows down the resolution of the Syrian conflict, but affirms France’s independent authority within the international community as a powerful nation.

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The ‘Charles de Gaulle’ sailing out of Toulon harbour to be deployed off the Turkish coast

 

The army to save the day?

What conclusions are we to draw from this obvious dichotomy of a country nationally divided and rather disregarded, but internationally brilliantly effective and therefore key to the community of States? Are the armed forces France’s raison d’être? It is clear the army and the nuclear arsenal have participated in its acknowledgement as a great nation in the international system. But that goes even further. Actually the influence of the military – usually abroad – blurs the traditional distinction made between the national and international spheres (state of emergency excluded). French scientific-military genius and warlike engineering skills have tremendously contributed to strengthening the economy in the long term [16]. Indeed, companies such as Airbus (combat helicopters), Thalès (military innovations), Safran (aeronautics), Dassault (military aviation) and Nexter (FAMAS rifle) are very influential in the stock market. As a matter of fact, the purchase of Dassault-crafted ‘Rafales’ by both the Qatar and Egypt has rectified France’s commercial balance in 2015 [17]. Besides, commemorations and military celebrations such as the Russian-style military parade held every year on national day gather the usually divided population to celebrate the country’s History and glorious days to come.

Paris should, in the future, play a more straightforward military role within supranational instances (UN, NATO), but also as a nation that is aware of its capacity of imposing its – and therefore the West’s – will. France’s military might is probably its ‘ultimate’ grandeur to the sense it is the greatest and most influential/decisive both nationally and internationally, nonetheless it is far from being its last.

Reducing the country to its army is missing out a lot. Paris is now expecting a 1.5% growth in its GDP for 2016 and the breath-taking waves of patriotism that ensued from both terrorist attacks are explicitly indicating that France is not a declining country. The troubled period it is facing is everything but new. For instance, remembering the presidential elections of 2002 when the FN ended up facing Jacques Chirac in the final round; France mobilized and voted Chirac at 81%. As divided and unstable as you want to see it, France still has this exceptional ability to rebound and to make the right decisions at the right time. Because obviously, France is not done and remains key to the international community of States.

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The Eiffel Tower had been lightened in red-white-blue following November’s attacks

 

Sources:

[1] http://www.telegraph.co.uk/news/worldnews/europe/france/11171314/France-is-a-nation-in-decline-and-Britain-could-be-next.html

[2] http://www.insee.fr/fr/mobile/conjoncture/tableau-bord-conjoncture.asp (First graph)

[3] http://www.lemonde.fr/politique/article/2016/01/24/la-cote-de-popularite-de-hollande-en-baisse-celle-de-valls-en-legere-hausse_4852555_823448.html

 

[4] http://www.lefigaro.fr/vox/societe/2016/03/18/31003-20160318ARTFIG00359-crise-migratoire-la-rupture-historique-qui-pourrait-emporter-l-europe.php

[5] http://www.lefigaro.fr/politique/2016/02/20/01002-20160220ARTFIG00014-le-fn-promet-un-franxit-sur-le-modele-du-brexit.php

 

[6] http://www.theguardian.com/world/2015/feb/12/paris-lawsuit-fox-news-reporting-no-go-zones-non-muslims

 

[7] http://www.diplomatie.gouv.fr/en/french-foreign-policy/defence-security/french-defence/france-and-nato/

 

[8] http://www.lefigaro.fr/international/2011/04/07/01003-20110407ARTFIG00735-les-forces-francaises-engagees-sur-plusieurs-fronts.php

 

[9] http://www.bbc.co.uk/news/world-middle-east-34372892

 

[10] http://www.lefigaro.fr/international/2015/09/15/01003-20150915ARTFIG00403-frappes-contre-daech-en-syrie-comment-la-strategie-de-la-france-a-evolue.php

 

[11] http://edition.cnn.com/2015/09/27/middleeast/syria-france-isis-bombing/

 

[12] http://edition.cnn.com/2015/11/15/middleeast/france-announces-raqqa-airstrikes-on-isis/

 

[13] http://www.bbc.co.uk/news/world-us-canada-23849386

 

[14] http://www.euronews.com/2016/01/22/charles-de-gaulle-aircraft-carrier-docks-in-uae/

 

[15] http://www.theguardian.com/world/2016/jan/30/france-recognise-palestinian-state-if-peace-effort-fails-ultimatum

 

[16] http://www.lefigaro.fr/conjoncture/2014/08/07/20002-20140807ARTFIG00253-commerce-exterieur-aeronautique-spatial-etautomobile-en- pointe.php

[17] http://m.lesechos.fr/redirect_article.php?id=021575436493&fw=1

 

 

Photos credits:

 

1-Military parade: http://www.bbc.co.uk/news/world-europe-18842638

 

2- French Soldier and the Louvres: http://www.smh.com.au/world/paris-attacks-day-four-world-leaders-step-up-fight-against-islamic-state-20151116-gl0h67.html

 

3- Operation Sangaris: http://www.huffingtonpost.fr/2013/12/07/operation-sangaris-recit-images-retablissement-paix-centrafrique_n_4404164.html

 

4- Charles de Gaulle : http://www.globalresearch.ca/frances-aircraft-carrier-group-charles-de-gaulle-to-leave-for-middle-east-to-fight-the-islamic-state/5489260

 

5- Eiffel Tower: http://www.nbcnews.com/storyline/paris-terror-attacks/eiffel-tower-glows-french-colors-honor-victims-n464286

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Ukraine is not at War

By Dano Brossman a student at King’s College London, currently at Sciences Po Paris. Contributing writer to Slovakia’s print newspaper called Denník N.

I was told the military conflict in Ukraine is at sleep. What I saw surprised me.

ss.pngA soldier in Kiev, Maidan Square will soon board the train and head eastwards.

The bus station in Košice, Slovakia’s eastern metropole, is crowded. People wait outside,
yet only a few of them stand next to me. I am waiting on the second platform with
only a handful of other passengers. All six of them speak Ukrainian and we are
about to cross the eastern frontier.

“Uzhorod vokzalna?” I ask a teenager sitting in the front raw. “Da, to Uzhorod
vokzalna,” he confirms. After three hours of travelling, we are finally here. Uzhorod a
town of about 110 000 people once belonged to Czechoslovakia. It used to be
relatively prosperous, strategically situated, with a multi-ethnic population.
The post World War II redrawing of borders and incorporation into the USSR
significantly shifted its history. Especially after the fall of communism.

sssdff.pngUzhorod Bus Station

Today, the city belongs to Ukraine. A country with one of world’s highest corruption
rates and only marginal foreign investments compared to its western neighbours.
The contrast with Slovakia is nothing but visible. From the moment I stepped out of
our bus the difference was disturbing. Decades old Soviet taxis, aging buildings and
bumpy roads are perhaps the most visible, yet less revealing signs. The
development gap between us – meaning eastern countries of the EU – and them, the
Ukrainians, used to be much more narrow. The starting line in the early 1990s was
similar, but Ukraine has been stuck behind. Why?

Equal but different

“Poland – comparable in size and history – had a similar GDP per capita after the fall
of communism. In 2013 its GDP was already three times higher than that of
Ukraine,” explains Ivan Mikloš, the ex-Finance Minister of Slovakia in an interview
for mono.sk. He currently works as an advisor to the Ukrainian Minister of Finance
and the Minister of Economy.

Among economists, Mikloš is known as the author of unpopular, but successful
reforms. Through economic liberalization, integration and a flat tax system, he
significantly contributed to converting Slovakia, once called “the black hole in the heart
of Europe” into a prosperous and functioning state. Now he is trying to execute similar
reforms in Kiev, but the task seems to be more difficult. The greatest struggle is war.

Prior to going across the border I tried to get a better understanding of what is
going on. Most sources agreed on one thing: the conflict in eastern Ukraine is at
sleep. I was told there is no actual fighting anymore, no offensive, except for several
ceasefire violations. Perhaps “several ceasefire violations” do not officially
constitute war, but what I saw looked like nothing but a country at war.

jkhyi.pngGoing to the East. Similar pictures can be taken at almost every train station.

“My sister’s husband fought in the east, but he’s at home now. His leg was blown
away by a mine,” says Vladimir, a lorry driver, as we stand on the platform in Lviv.
We are looking at soldiers in uniforms with large backpacks boarding our train to
Kiev. The sixteen-hour journey to the capital is a long one, with new groups of
soldiers entering the train almost every time we stop. “They are heading to the front
in Donbas,” explained Vladimir while we were sitting in a coupé slowly drinking a
full bottle of cognac “just to sleep better”.
Donbas is Ukraine’s eastern region, now almost completely administered by selfproclaimed separatist republics primarily centred around the towns of Donetsk and
Luhansk. Resulting from Russification process initiated by Joseph Stalin, the
majority of its population is Russian speaking and most men work in mines. The
region can be compared to Rhine-Ruhr area in Western Europe. It is rich for steel
and coal. The separatist tendencies are not new. They result from a combination of
socio-cultural ties with Russia, but also Moscow’s appetite for mineral resources.

Living like a boss for 60€

Concluding on a country’s economic situation by looking at old cars is by no means
accurate. It can be used as a mere symbolism. What is more revealing are the
numbers.

Since the outbreak of the Maidan Revolution, Hrivna – the country’s currency –  faces triple digit devaluation. Exchanging 60€ by a rate of 1:27 provides you with enough
money to travel 1500 kilometres by train, sleep in a three star hotel and eat in
restaurants. Four days later, I still had a couple of Hrivnas left in my pocket.

Devaluation does have its bright side. It boosts exports and attracts investors who
seek to minimize costs of employing workers. But the introduction of embargos
from Moscow closed the door to Ukraine’s traditional trading partner. As Vladimir, the
lorry driver says, in the last year he had done zero exports to Ukraine’s largest
neighbour, whereas before, Russia was one of the most frequent destinations. To
make matters worse, “War in Ukraine” headlines have been stimulating concerns
among western companies regarding the security of their employees and assets. In
total, the war-related economic constraints constitute for 20% loss in GDP.

jkljllNot yet there. A sign of hope, the EU flag along Ukranian next to municipal building in Zakarpatia.
Despite red numbers, Ukraine seems to be on the right path. It has pro-reform
ministers, several new MPs without direct links to oligarchy. The government is
looking towards the West, rather than the East. This does not mean it should forget
about Russia completely. Quite the opposite: in the months to follow, normalization
of relations with Russia is even more pressing than accession to the EU. The conflict
in Donbas must end and it will not without Moscow’s cooperation.

Sources:

Mono.sk – Interview with Ivan Mikloš (conducted by Dominik Orfánus)
OSCE – organization for cooperation and security in Europe
DenníkN.sk – Interview with Ivan Mikloš (conducted by Mirek Tóda)
Conversations with locals

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The Dragon visits the land of Uncle Sam

By Yiming Yu, a Shanghai native currently studying International Relations at King’s College London. 
Obama v Xi

When President Xi Jinping cited Sleepless in Seattle and The Old Man and the Sea in his inaugural visit to the United States, the kindness he portrayed attempted to wash over increasing hostilities in Sino-US relationship. Though Xi and Obama tried to create a façade of genuine friendship, the visit by the premier continues his predecessors’ concentration on the economy with little progress made in other areas. With solutions to issues such as cyber security and the South China Sea disputes yet to be found, along with US contempt for Xi’s authoritarian control over China there are question marks over whether these two super powers can live in harmony.

The economy appears to be the area where the most common ground can be found, something to be expected given the importance of these connections in the bilateral relationship. Indeed, just last year China’s trade with the US was almost 600 billion dollars1. Xi’s choice of Seattle rather than Washington as his first stop in the US demonstrates that he continue his predecessors’ focus on economic issues. However, this strategy may backfire for Xi as he must assure US entrepreneurs that the Chinese economy is suitable for investment and trade. The Chinese economy has been slowing down in recent months, and was confirmed by the decline of China on the official purchasing managers’ index (PMI) to a low of 49.82. To get an understanding of what this means a figure below 50 suggests that the manufacturing sector is contracting. While the government still maintain that they have met their growth rate target of 7%, this is doubted by many analysts who estimate that the figure is much lower3. Whether or not this statistic is correct, this is the slowest growing pace of the Chinese economy for over 25 years4. If Sino-US trade is indeed worth over 600 billion dollars to the two nations, Xi had to make sure that the Chinese economy is still an attractive option for American businesses which would strengthen the Chinese economy, and with it the ruling class who rely heavily on a strong economic performance.

There were other positive aspects to the trip with the most important being the climate change deal, where Xi announced that China would set up a cap-and-trade programme to control Carbon Dioxide emissions starting from 2017 and would allocate 3.1 billion dollars to help low-income countries6. In addition to this, the Chinese and the Americans showed that they have common interests in sectors including, but not limited to, nuclear programmes in Iran and North Korea, Afghanistan, peacekeeping and global sustainable development7 and 8. This shows China’s commitment to take the responsibilities of a great power and as David Shambaugh, a famous scholar on Chinese politics point out, this signals China’s willingness for more active cooperation with the US in global governance9.

However, despite many areas of progress, there is still no consensus on long-existing issues, issues that are crucial to the future dynamic of Sino-US relations such as cybersecurity and the South China Sea disputes. It must be noted that Obama clearly expressed dissatisfaction and concern over China’s cyber activities and showed contempt towards the construction of artificial airstrips in disputed territory while Xi denied and defended both of these activities as you would expect10. In the field of cybersecurity, there was little progress, though both parties nominally agreed to refrain from state-sponsored cyber theft for commercial gain. They also promised to establish a high-level dialogue mechanism between the two countries and to work on international rules of cyber conducts11 and 12. Nevertheless, it is noticed that the agreement left room for difference where Obama claimed stop of cyberespionage for commercial gains against companies while Xi only mentioned cybercrime13. Richard Bejtlich, a fellow at Brookings Institution, also points out that there are four ways to interpret this agreement, where China’s subsequent action may range anywhere from an authoritative robust policy restricting cyber theft on intellectual properties, to the continuation of hacking against US governmental departments as claimed by the US government recently14. At the same time as the visit, a high ranking Chinese official lambasted the US for a hypocritical cyber policy15 showing the conflict is not resolved yet, especially with rumours that the US could impose sanctions on China if the hacking continues. While it could be believed that China and the US have found some common ground on the cybersecurity issue, it seems that both sides refuse to compromise on disputes in South China Sea. Though both have signed the little-noticed Annex of the Rules of Behaviour for Air-to-Air Encounters to prevent potential collision and to show their determination to avoid conflicts16, there seemed to be no consensus in the joint press conference and more tension is expected to exist in South China Sea.
Following the end of the summit, there were questions raised as to whether this meeting was successful or not with conclusions ranging from success to failure to satisfactory. However, with so many uncertainties in the conflicted areas and even areas where progress has been made in the summit, it is safe to think it too early to conclude whether Xi’s visit was successful. After Xi took the throne, his assertiveness and revisionism satisfied the population’s ambition of ‘rejuvenation of the Chinese nation’. This fervent nationalism is precisely the thing that keeps the Chinese Communist party in power.

When Xi met with American business leaders in Seattle to promote trade and Chinese economy, it should not be overlooked that favourability towards the Chinese investment markets  in the American business circles is reducing, creating an environment where only 24% of business executives surveyed felt optimistic about doing business in China. Comparatively, 5 years ago this figure was nearer 67% 17. The change of attitude could be largely attributed to the Party’s enhanced national security policies, which include the requirement of passing critical data and intellectual properties on to the authority18. It is believed by the US Chamber of Commerce that these laws would bar American businesses from fair competition with Chinese counterparts19. Also, the Chinese government’s heavy but failed intervention to stimulate stock market in August left a bad impression on these business leaders tarnishing China’s reputation20. Similarly, it is reported that between one fifth and one third of Chinese CO2 emissions are produced by export industries21. Although China is advocating reform of industry structures, considering the economy’s great importance to the Party’s ruling as well as local government officers’ position, would China be willing to potentially sacrifice the growth rate of the economy to fight against climate change, especially in the time of economy slowing down?

The phrase a ‘new type of great-power relations’ may be one of the most frequently quoted words in the Chinese statement on the Sino-US relationship. Domestically, this sentiment could be regarded as the effort to acquire the population’s confidence and support towards the ruling party Party as it recognises the peasantries dream to be a great power. This could explain why some media outlets allege that China took symbolic gestures as China’s primary goal as it ensures Xi’s security and dignity22, which could prove to domestic audience that China is a respected great power. Interpretations of this phrase vary from equal treatment and win-win cooperation to respecting each other’s interests as great powers to US’ accommodation of China’s core interests23. How both sides perceive this description of bilateral relationship may greatly decide progress of diplomacy in the future while also produce many uncertainties.

After all, no one wants to see China and the US walk into the Thucydides Trap which is another phrase used by Xi to explain conflicts between a status quo power and a rising power. Some commentaries claim that the Sino-US relationship has reached a tipping point and could be seen to start a new Cold War. However, when Xi’s predecessors met with the US leaders, despite conflicts over some issues, the bilateral relationship kept progressing24. With the foundation of economic connections and both sides’ willingness to continue diplomatic dialogues, it could be believed that Xi would not be an exception and there will still be a relatively positive relationship between two states. Nevertheless, a new US president will take office next year, which will potentially change their foreign policies towards China. Furthermore, with the Chinese economy in turmoil it may be less alluring to US businesses and Xi’s effort to consolidate the Party’s rule may mean a more assertive foreign policy and more restrictions on foreign business’ activities in China. These factors are likely to lead to more uncertainties in the future. How both sides deal with these uncertainties will eventually shape the future of Sino-US relationship.

  1. “Collision course? Rise of China a stress for the US,” BBC, accessed October 2, 2015, http://www.bbc.co.uk/news/world-asia-china-34368249
  2. “Chinese manufacturing continues to contract in September,” BBC, accessed October 1, 2015, http://www.bbc.co.uk/news/business-34409196
  3. ibid
  4. ibid
  5. “Xi Jinping of China to Address Wary U.S. Business Leaders,” New York Times, accessed October 1, 2015, http://cn.nytimes.com/china/20150923/c23xijinping/en-us/
  6. “China takes a lead on global climate change,” Financial Times, accessed October 1, 2015, https://www.foreignaffairs.com/articles/china/2014-10-09/not-so-empty-talk
  7. “Collision course? Rise of China a stress for the US,” BBC, accessed October 2, 2015, http://www.bbc.co.uk/news/world-asia-china-34368249
  8. “FACT SHEET: President Xi Jinping’s State Visit to the United States,” The White House, accessed October 5, 2015, https://www.whitehouse.gov/the-press-office/2015/09/25/fact-sheet-president-xi-jinpings-state-visit-united-states
  9. “Reserving differences while finding common ground,” New York Times, accessed October 3, 2015, http://www.brookings.edu/research/opinions/2015/09/28-xi-us-visit-common-ground-shambaugh
  10. “Obama and Xi Jinping of China Agree to Steps on Cybertheft,” New York Times, accessed October 5, 2015, http://cn.nytimes.com/china/20150926/c26prexy/en-us/
  11. “Collision course? Rise of China a stress for the US,” BBC, accessed October 2, 2015, http://www.bbc.co.uk/news/world-asia-china-34368249
  12. “FACT SHEET: President Xi Jinping’s State Visit to the United States,” The White House, accessed October 5, 2015, https://www.whitehouse.gov/the-press-office/2015/09/25/fact-sheet-president-xi-jinpings-state-visit-united-states
  13. “Obama and Xi Jinping of China Agree to Steps on Cybertheft,” New York Times, accessed October 5, 2015, http://cn.nytimes.com/china/20150926/c26prexy/en-us/
  14. “To hack, or not to hack?,” Brookings Institution, accessed October 3, 2015, http://www.brookings.edu/blogs/up-front/posts/2015/09/28-us-china-hacking-agreement-bejtlich
  15. “Chinese Official Faults US Internet Security Policy,” New York Times, accessed October 2, 2015, http://www.nytimes.com/2015/09/30/technology/chinese-official-faults-us-internet-security-policy.html?_r=0
  16. “Obama-Xi summit produces landmark deal to reduce dangerous military encounters,” The Interpreter, accessed October 5, 2015, http://www.lowyinterpreter.org/post/2015/09/29/Obama-Xi-summit-produces-landmark-deal-to-reduce-dangerous-military-encounters.aspx
  17. “Xi Jinping of China to Address Wary U.S. Business Leaders,” New York Times, accessed October 1, 2015, http://cn.nytimes.com/china/20150923/c23xijinping/en-us/
  18. ibid
  19. ibid
  20. “A very long engagement,” The Economist, accessed October 4, 2015, http://www.economist.com/news/china/21665034-xi-jinpings-state-visit-washington-will-do-little-resolve-growing-tensions-very-long
  21. “China’s Exports Are Closely Linked to Its Emissions,” New York Times, accessed October 1, 2015, http://sinosphere.blogs.nytimes.com/2015/10/01/chinas-exports-are-closely-linked-to-its-emissions/?module=BlogPost-Title&version=Blog%20Main&contentCollection=World&action=Click&pgtype=Blogs&region=Body
  22. “Watching the signs: Can honesty and candour define Xi Jinping’s first state visit to the US?,” Financial Times, accessed October 4, 2015, http://www.scmp.com/comment/insight-opinion/article/1860413/watching-signs-can-honesty-and-candour-define-xi-jinpings
  23. “Not-So-Empty Talk,” Foreign Affairs, accessed October 3, 2015, https://www.foreignaffairs.com/articles/china/2014-10-09/not-so-empty-talk
  24. “Chinese state visits are always hard: A historical perspective,” Brookings Institution, accessed October 4, 2015, http://www.brookings.edu/blogs/order-from-chaos/posts/2015/09/17-xi-jinping-state-visit-politics-bader
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The Brazilian Financial Crisis

By Tulio Konstantinovitch, a Brazilian second year student reading BA International Relations at the War Studies Department of King’s College London.
brazil crisis

Even though Brazil some years ago was showing a prospect of economic growth that would surpass Britain and France, this year it sank into a crisis that was not evident in the eyes of the population. Inflation rose and prices went up in the last months; interest rates grew in two years from 7% to 14%, a 100% increase, and the currency depreciated 40% from 2014 to 2015. Millions of people became unemployed and the industrial production shrank.

This made the country run deficits and get indebted internationally. Domestically, people are more and more in default with national and commercial banks. However, these catastrophic events did not happen out of nowhere, yet they are the consequence of a bad public administration that started to spend more than it should, creating false promises to the population. The embezzlement in the biggest Brazilian company, the oil-producer Petrobras, intensified this problematic scenario.

The Labour party, which has remained in power for 14 years, sold a false dream to the population. After Lula entered the public administration in 2002, he increased public spending in social programmes to boost demand of goods in order to develop the industrial and retail sector. He also increased the minimum wage and decreased the interest rates by 15%. This strategy worked well in the beginning, but led to complicated consequences for his successor, Dilma Rousseff.

A year ago, with the objective of re-winning the elections, the president Dilma Rousseff used public funds in order not to raise the prices of oil and electric energy. This led to public deficit since prices were controlled artificially, but the truth came out this year. In the last few months, the oil and electric energy prices had to be increased, but the problem was that the increment was too high for the population, especially the poor, causing a downfall in the overall economy.

With the fall of the Chinese economy, Brazil was also harmed. In the last years, the relationship between China and Brazil strengthened and now that China reduced the imports of Brazilian commodities, especially soil, the economy suffered. As if this was not enough, the political scandal involving the Brazilian national biggest company, Petrobras, made many investors take their assets out of Brazil, worsening the economy and depreciating the currency. With a decaying internal market, even with more interest rates and a low currency, investors are choosing to invest in countries that can offer a more extended market, such as China and India. At the same time, imports became more expensive and the international market has not developed the expected attractiveness to Brazilian goods, even with the low currency. In the long term, however, international speculators might invest more in Brazil and other countries may buy more goods due to the weak currency.

At the moment, as a solution to the crisis, the CEO of Siemens Brazil Paulo Stark, believes that “one focus should be public-private partnerships, which will largely depend on government policy, rules, and the concessions program. A revised concessions program that is more open to private capital could dismantle many of the hindrances we have today and attract a lot of foreign investment in infrastructure, which is critical for the country’s growth, in areas like energy, logistics, and water supply.” The problem is that Brazil is still a restricted country to investment due to the lack of trust in the current government. Before any major investment takes place, those in the government who were involved in crimes have to be held accountable and charged and the public machine has to be organised in a way to hinder embezzlement. In regard of mistrust in the country, this will only change in the presidential elections of 2018 if the Social Party wins. Before that, Brazil will not show a good prospect of growth.

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