Wednesday, June 24, 2020

The Real Cause Of The North-South Korea Crisis


Covid-19


By Daniel Sneider, Lecturer, International Policy at Stanford University and APP member

Toyo Keizai, June 23,2020

As tensions rise between North and South Korea, attention has understandably focused on the role of the Dear Sister, Kim Yo Jong. The sibling of North Korea’s Supreme Leader Kim Jong Un has emerged as the face of a nasty and provocative assault on South Korea.

Once the symbol of Pyongyang’s ‘smile diplomacy’ toward South Korea, the stern Kim now issues snarling denunciations of South Korean president Moon Jae-in. In her recent public statements, she claims to be in charge of unleashing the military to threaten the south and literally dismantle the few symbols of more than two years of North-South engagement.

North Korean dictator Kim Jong Un remarks largely out of sight, prompting ongoing speculation on his health and encouraging analysts to see the recent tension as mostly a platform to elevate his sister as his successor. But a deeper look inside North Korea points to a different culprit behind this new crisis – the Covid-19 virus.

Already struggling to overcome the impact of international sanctions, the North Korean economy has suffered a sharp downturn due to the need to seal the country off to prevent the spread of the virus from China. The economic distress seems to have made the regime even more worried about its control over a restless population. And it has added a level of desperation to the need for aid from the outside.

The escalation of rhetoric is intended to convince the South Korean government and ruling party to “break from the U.S.-driven sanctions regime,” a senior U.S. official in Korea told me. “I think they want the South Korean government to put into place legislation that would open up funding streams,” he explained, which would mean scrapping restrictions on trade and investment with North Korea, bypassing international sanctions.

North Korea’s economic situation was difficult last year but its trade with China and Russia - both official and illicit transfers that evade sanctions -- combined with the growing role of the market, made things manageable. “The overall situation was improving modestly over past years,” reports a Western aid worker who visits the North regularly, most recently late last year. “It reflects the determination of the people to survive and because they had a bit more freedom to make money in the market.”
The Pandemic Hits North Korea

Then the virus hit in January. The North Korean regime had experience with the previous epidemics of SARS and Ebola, says the aid worker, who has extensive knowledge of the medical system. It moved quickly to close the border with China on January 21, mirrored by Chinese efforts to seal the border from its side. According to the U.S. official, additional units of the Korean People’s Army were deployed on the border to crack down on smuggling operations.

“They didn’t have much choice,” the Western aid worker told me. “They know what could happen and that is why they reacted the way they did. They know their health care system is weak.”

The border closure sent a shock wave through the North Korean economy, cutting off the flow of tourists and their hard currency, curbing what little investment came from China, and drastically cutting official and unofficial trade. Almost overnight, Chinese exports to North Korea dropped to nearly zero, along with official North Korean exports to China (see graphic below). Some smuggling seems to have continued but analysts believe the border closing affected that as well. Bottom line - the flow of money and credit from China dried up.

The virus-driven downturn comes at a moment when the state-run sectors of the economy were already facing a systemic collapse. “Their planning system is completely broken down,” says William Brown, a former Central Intelligence Agency analyst who specializes in the North Korean and Chinese economies. According to Brown, there has been no mention of a new 5-year plan to replace the one that ends this year. Important segments of the economy – mainly large state enterprises that produce steel and other key goods – still depend on the planned system to deliver inputs and provide rations and wages to their workers.

Kim tried to get Trump to lift the sanctions last year at the Hanoi summit but failed, triggering a re-examination of North Korean policy in the aftermath. In a major policy turn in 2019, the North Korean leadership re-emphasized the need for “self-reliance,” once a watchword of their ideology. Now, says the former CIA analyst, “self-reliance means that you be self-reliant, not the nation.”
North Korea’s monetary problems

Monetary policy is a key weakness of the regime, argues Brown. The fear of uncontrolled inflation meant the adoption of a tight monetary approach, limiting the printing of the Won. On the plus side, it yielded some 5 years now of a steady exchange rate, creating the appearance of stability, and also encouraging growing use of hard currency in circulation. But on the downside, the state is not capable of pumping credit into its state-run enterprises. “They are telling the big steel mills and others, become self-reliant – don’t ask for money from us,” reports Brown.

Now the virus shut off the flow of hard currency from cross border trade and tourism and investment. In response, the regime announced in mid-April it would issue public bonds for the first time in 17 years. The bonds were to be used instead of cash to pay factories for materials needed to carry out big state projects, such as a massive new hospital in Pyongyang. But they were also aimed at forcing individuals and firms to turn in cash they had hoarded cash, including dollars, in exchange for the bonds.

This is hardly a popular decision, and the regime is cracking down on resistance. According to a report in Daily NK, which relies on defector networks, the director of a mining operation was arrested by state security and executed for criticizing the bond issuance at a meeting.

In April, the North Korean authorities also reportedly told private traders that they could restart their activities only if they gave significant foreign currency payments to the regime and imported from an approved list of goods, half of which would be required to give to the government. Smugglers were ordered to shift away from profitable electrical appliances and focus on basic food goods. According to a May 11 report by Radio Free Asia, the state banned the use of foreign currency for most transactions.

A meeting of the senior leadership of the Workers’ Party of Korea on June 6 and 7, chaired by Kim Jong Un, focused on the economic situation. At the top of the agenda was the need to urgently reconstruct the chemical industry, mainly to produce fertilizers, on a “self-reliant” basis – a clear signal that there are shortages of the plastics and fertilizers needed for agriculture. Due to sanctions and the border closing, “farmers don’t have the inputs they need – fertilizers, plastic sheeting, spare parts, fuel, not to mention tractors,” reports the Western aid worker, who has traveled extensively outside of Pyongyang over the past year. “We are heading for difficult times.”

Food supply always is in shorter supply at this time of year as the stocks from the previous harvest are depleted and there is not yet enough fresh food available. “It is not easy for people and especially those living in remote areas where farming is not easy to do,” the aid worker told me. “Spring and summer have always been difficult. Trading is now at near halt and there is a quarantine impact on cargo. There is not much gasoline available for internal transport. All this is putting more and more pressure on the regime.”

The second item at the June Political Bureau meeting was equally telling – “immediate issues of ensuring living conditions in the capital city.” This is a sign that the regime is having difficulties keeping up the flow of goods to the core elite living in Pyongyang, which has been essential for buying their loyalty.

Beginning last year, after the Hanoi failure, Pyongyang criticized the South for its failures to act independently of the U.S. But the current assault is a clear step up in attempts to coerce the Moon administration and the ruling progressive party. “The reason that the north-south agreements…did not see any light of even a single step of implementation was due to the noose of the pro-U.S. flunkeyism into which [Moon] put his neck,” Kim Yo Jong wrote in her June 17 statement.

Whether the Moon government is ready to open its coffers to the north remains to be seen. So far, the North Korean moves have been carefully calibrated not to provoke an uncontrolled ladder of escalation. The initial step of blowing up the joint liaison office took place on North Korean territory. Even the threatened moves to dismantle the progress in demilitarizing the border areas does not directly touch on U.S. or United Nations Command forces.

“They’re going to take their time with this,” predicted the U.S. official. “I don’t see the impetus to escalate quickly. They may overshoot the mark but if they are thinking rationally, they will take an action, take some time to see how Blue House responds to it, and then ratchet it up again.”

Meanwhile the pressures within will continue to mount on a regime that has no real answers for a population long tired of belt-tightening in the name of an unresolved civil war.

Tuesday, June 23, 2020

America’s Big China Mistake

Globalization has failed to make the country more democratic. It’s time for a different approach.


By Clyde Prestowitz

Washington Monthly, June 7, 2020

Since President Nixon’s historic “opening to China” in 1972 and President Carter’s formal recognition of the communist regime in Beijing, U.S. policy has been to promote trade and investment with China. I myself was a leader of the first U.S. trade mission to Beijing in 1982. Our strategy then and thereafter was founded on the notion that free global trade and investment would stimulate not only economic growth but also the spread of democracy and peace.

At the time, it seemed like a smart bet. The collapse of the Soviet Union in 1991 and Chinese leader Deng Xiaoping’s 1992 statement that “to get rich is glorious” seemed to confirm our ideas. Both unleashed euphoria in the West. Francis Fukuyama’s book, The End of History and the Last Man, was widely acclaimed. Despite having shot at least several hundred and perhaps thousands of its own students in Tiananmen Square on June 4, 1989, the Beijing regime was welcomed as a trading partner by the free world. Clinton campaigned for President under the slogan “no coddling of dictators from Baghdad to Beijing,” but as President adopted a policy of “positive engagement,” eventually negotiating to bring China into the World Trade Organization. Of China’s attempts to censor the internet, he joked: “I’d like to see them try to control the internet. It will be like trying to nail jello to the wall.”

But from early on, it should have been clear that this policy was misguided. The Clinton administration’s argument for bringing China into the WTO, widely supported by the economics and foreign policy establishment, was that doing so would liberalize China while dramatically reducing the U.S. trade deficit with Beijing. None of this took place. China became more authoritarian. The deficit mushroomed from about $80 billion annually to $500 billion. Many U.S. companies moved their factories to China to take advantage of cheap labor, the absence of unions, and the lack of safety and environmental regulations. Chinese State-Owned Enterprises (SOEs), meanwhile, began to raise billions of dollars of new capital by listing their shares on the New York Stock Exchange without meeting the same accounting standards as U.S. corporations.

George W. Bush and Barack Obama adopted similar policies, with similarly dangerous consequences. In 2005, as they continued to move production to China, free-world companies began suffering theft of their innermost secrets by hackers with ties to Beijing. Few people raised alarm. Similarly, no one seemed to be concerned when in 2012, General Electric Chairman Jeffrey Immelt, then also Chairman of President Obama’s Commission on Jobs and Competitiveness, transferred GE’s U.S.-based avionics division to China as part of a joint venture with China’s state-owned Avic. Because avionics is not labor intensive, cost reduction could not have been the reason for the move. Clearly, China had let GE know that if it wanted to sell avionics in China, it would be best to make them there.

It was all evidence that, rather than disappearing, SOEs were consolidating and becoming ever more powerful—as was the Communist Party. China began subsidizing economic sectors such as the semiconductor industry in pursuit of international leadership. Its SOEs began investing heavily and strategically abroad in everything from ports in Europe to telecommunications infrastructure in Australia. The country began dredging reefs and militarizing artificial islands in the South China Sea, along with sinking the fishing boats of other nations—all as part of its plan to seize control of the Sea. It began mass arresting its Uyghur minority.

This was not at all in keeping with the long held free world expectations, and eventually, even the biggest cheerleaders of free trade began to admit that, far from becoming a “responsible stakeholder in the liberal, global order,” China was bent on becoming the hegemon of its own authoritarian order. On March 1, 2018, The Economist announced in its cover story that the West had made the wrong bet on China. It simply wasn’t becoming more market oriented or liberal.

By now there has already been talk of companies targeted by China’s industrial policies “de-coupling” from the country: leaving completely. They began to move production to places like Vietnam and even back to the United States. There has also been economic analysis by MIT Professor David Autor and others showing that the offshoring of U.S. jobs has contributed to overall unemployment, and that it has been a drag on working—and middle-class incomes.

Still, there’s resistance to departing China by many companies. Billions of their dollars have gone into putting factories and supply chains in China and training their workers. The cost of tearing it all down and moving elsewhere, even if elsewhere has cheaper labor, seems daunting.

Now, however, the COVID-19 virus, China’s continued militarization of the South China Sea, its drive for high-tech autarky, and its muscling of Hong Kong have put the cost question in a different light. Previously, few asked about the potential cost of over-dependence on fragile supply chains anchored to a single production site in a somewhat hostile country. What would be the costs to the company or to a country if that supply chain went down? What was the cost of not being able to obtain key drugs, masks, ventilators or anything else that you had once made but had long ago outsourced? The virus has revealed the answer to be “very high indeed.”

Simply questioning the Communist Party invites retaliation, as Australia discovered when it called for an international inquiry into the origins of the virus pandemic. The world is slowly realizing that the risks from dependency on China are much greater and more dangerous than ever imagined. The United Kingdom, once ready to embrace Huawei technology, has said it will not. Countries like Japan have already budgeted billions of dollars to assist their companies in bringing their factories back home. Germany and others have imposed strict limits on investment in their countries by Chinese companies. The United States must learn from this experience and these examples. Indeed, there is already a bill in the U.S. Congress to add $100 billion to the budget of the National Science Foundation specifically for the purpose of maintaining U.S. technology leadership over China. The Trump administration is also now limiting exports of some advanced U.S. semiconductor technology to China.

This is not to say that globalization can or should be halted. But it is to say that globalization must be guided by better understanding of its true costs and benefits—and by consideration of the welfare of all citizens, not just that of big corporations. No democracy with a rule of law can afford to be tightly coupled economically with an authoritarian China.

Clyde Prestowitz

Clyde Prestowitz is the founder and president of the Economic Strategy Institute. He formerly served as counselor to the secretary of commerce in the Reagan administration, as vice chairman of President Bill Clinton’s Commission on Trade and Investment in the Asia-Pacific Region, and on the advisory board of the ExIm Bank. His most recent book is The Betrayal of American Prosperity. He is a Senior Fellow at Asia Policy Point.
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Tuesday, May 26, 2020

What Happens to APP Interns II

The Paths to Net Zero: How Technology Can Save the Planet

By Inês Azevedo,  Michael R. Davidson,  Jesse D. Jenkins, Valerie J. Karplus, and David G. Victor
MICHAEL R. DAVIDSON is Assistant Professor of Engineering and of Public Policy at the University of California, San Diego; MIT PhD; APP Intern 2007.

Foreign AffairsMay/June 2020

For 30 years, diplomats and policymakers have called for decisive action on climate change—and for 30 years, the climate crisis has grown worse. There are a multitude of reasons for this failure. The benefits of climate action lie mostly in the future, they are diffuse and hard to pin down, and they will accrue above all to poor populations that do not have much of a voice in politics, whether in those countries that emit most of the world’s warming pollution or at the global level. The costs of climate action, on the other hand, are evident here and now, and they fall on well-organized interest groups with real political power. In a multipolar world without a responsible hegemon, any collective effort is difficult to organize. And the profound uncertainty about what lies ahead makes it hard to move decisively.

These political hurdles are formidable. The good news is that technological progress can make it much easier to clear them by driving down the costs of action. In the decades to come, innovation could make severe cuts in emissions, also known as “deep decarbonization,” achievable at reasonable costs. That will mean reshaping about ten sectors in the global economy—including electric power, transportation, and parts of agriculture—by reinforcing positive change where it is already happening and investing heavily wherever it isn’t.

In a few sectors, especially electric power, a major transformation is already underway, and low-emission technologies are quickly becoming more widespread, at least in China, India, and most Western countries. The right policy interventions in wind, solar, and nuclear power, among other technologies, could soon make countries’ power grids far less dependent on conventional fossil fuels and radically reduce emissions in the process.

Technological progress in clean electricity has already set off a virtuous circle, with each new innovation creating more political will to do even more. Replicating this symbiosis of technology and politics in other sectors is essential. In most other high-emission industries, however, deep decarbonization has been much slower to arrive. In sectors such as transportation, steel, cement, and plastics, companies will continue to resist profound change unless they are convinced that decarbonization represents not only costs and risks for investors but also an opportunity to increase value and revenue. Only a handful have grasped the need for action and begun to test zero-emission technologies at the appropriate scale. Unless governments and businesses come together now to change that—not simply with bold-sounding international agreements and marginal tweaks such as mild carbon taxes but also with a comprehensive industrial policy—there will be little hope of reaching net-zero emissions before it’s too late.

THE FUTURE IS ELECTRIC

From today’s vantage point, no single domain offers greater opportunities for deep decarbonization than electric power. The use of electricity does not increase or reduce emissions in itself; electricity delivers energy that may or may not be clean depending on how it was generated. An electric car, for instance, doesn’t do much good against global warming if all the electricity comes from conventional coal plants. Still, electrifying the economy—in other words, designing more processes to run on electricity rather than the direct combustion of fuels—is essential. This is because, compared with trying to reduce emissions in millions of places where they might occur, it is far easier and more efficient to reduce emissions at a modest number of power plants before distributing the clean electricity by wire. Today, Western economies convert about 30 percent of their energy into electric power. If they want to get serious about decarbonization, that fraction will need to double or more.

No single domain offers greater opportunities for decarbonization than electric power.

Getting there will require progress on two fronts. The first is the electrification of tasks that use vast amounts of energy but still rely on fossil fuels, such as transportation and heating. Overall, transportation accounts for 27 percent of global energy use, and nearly all of it relies on oil. The car industry has had some success in changing this: the latest electric vehicles rival high-end conventional cars in performance and cost, and electric cars now make up around eight percent of new sales in California (although only 1.3 percent nationwide) and nearly 56 percent in Norway, where the government offers massive subsidies to buyers. With improved batteries, heavier-duty vehicles, including buses and trucks, could soon follow. In fact, China already fields a fleet of over 420,000 electric buses. By contrast, aviation—which makes up only two percent of global emissions but is growing rapidly and creates condensation trails in the sky that double its warming effect—presents a tougher challenge. A modern battery can store only two percent of the energy contained in a comparable weight of jet fuel, meaning that any electric airplane would need to carry an extremely heavy load in batteries to travel any reasonable distance. Even in the best-case scenario, commercial electric aviation at significant scale is likely decades away, at least for long-haul flights. Long-distance shipping also faces challenges so daunting that electrification is unlikely to be the best route. And in each of these areas, electrification is all the more difficult because it requires not only changing the conveyances but also building new charging infrastructures.

Besides transportation, the most important electrification frontier is heating—not just in buildings but as part of industrial production, too. All told, heating consumes about half the raw energy that people and firms around the world use. Of that fraction, some 50 percent goes into industrial processes that require very high temperatures, such as the production of cement and steel and the refining of oil (including for plastics). These sectors will continue to rely on on-site fossil fuel combustion for the foreseeable future, since electricity cannot match the temperature and flexibility of direct fuel combustion. Yet in other areas, such as lower-temperature industrial processes and space heating for buildings, electrification is more practical. Heat pumps are a case in point: whereas conventional heaters work by heating up indoor air, heat pumps act like reversible air conditioners, moving heat (or, if necessary, cold) indoors or outdoors—a far more efficient approach.

Electrification, of course, will not on its own reduce emissions by much unless the power grid that generates and distributes the electricity gets cleaner, too. Ironically, some countries have made modest progress on this front even as they have doubled down on fossil fuels. China, for instance, has swapped out aging coal plants with newer, more efficient ones, cutting emission rates in the process. (The country’s most efficient coal plants now emit less carbon dioxide per unit of electricity than comparable U.S. plants.) The United States, for its part, has cut down on its emissions thanks to innovations in horizontal drilling and fracking that have made it economically viable to extract shale gas. In 2005, when this technology first became commercially relevant, coal accounted for half of all the electricity produced in the United States; today, coal’s share is down to one-quarter, with much cleaner and inexpensive natural gas and renewables making up the difference.

In theory, fossil fuels could still become much cleaner, even nearly emission free. This could be possible with the help of so-called carbon capture and storage (CCS) technologies, which capture the carbon dioxide emissions created by industrial processes and pump it safely underground. In practice, investors have remained wary of this approach, but in both the United States and some European countries, recently introduced subsidies are expected to unleash a wave of new CCS projects in the years ahead. One CCS scheme, currently being tested by a group of engineering and energy firms, completely rethinks the design of power plants, efficiently generating electricity from natural gas while capturing nearly all the carbon dioxide produced in the process at little extra cost. In regions where natural gas is cheap and abundant, this technology could be a game changer.

For now, improved fossil fuel technology has amounted to shallow decarbonization: it has reduced emissions enough to slow the rate of climate change—in the United States, emissions from the power sector have dropped by 29 percent since 2005 thanks mainly to the shale gas revolution and growth of renewables—but not enough to stop it. To prevent the world from warming further will require much more focus on technologies that have essentially zero emissions, such as wind, solar, hydroelectric, and nuclear power, in addition to CCS, if it proves commercially scalable. According to the United Nations’ Intergovernmental Panel on Climate Change, these low-carbon technologies would need to generate 80 percent of the world’s electricity by 2050 (up from about one-third today) in order to limit warming to two degrees Celsius above preindustrial levels.

Renewables, in particular, will play a central role. Thanks to decreases in the cost of wind and solar power equipment—and thanks to a mature hydroelectric power industry—renewable energy already accounts for over one-quarter of global electricity production. (Nuclear provides another ten percent.) In the United States, the cost of electricity from large solar farms has tumbled by 90 percent since 2009, and wind energy prices have fallen by nearly 70 percent—and both continue to drop.

Given those plunging costs, the main challenge is no longer to make renewables cheap; it is to integrate them into the power grid without disruptions. To avoid blackouts, a power grid must align supply and demand at all times. Energy output from wind and solar plants, however, varies with the weather, the season, and the daily rise of the sun. The more a power grid relies on renewables, then, the more often the supply will not match the demand. In the extreme, extra power must be dumped—meaning that valuable capital and land were used inefficiently. To be less vulnerable to such shocks, utility companies will need to expand the size of their power grids, so that each can draw on a larger and more diverse array of energy sources. In order to deal with excess supply from renewables—a condition that will become much more frequent as the share of renewables rises—they must also create incentives for users to vary their demand for power more actively and find ways to store surplus electricity on a much larger scale. Today, nearly all bulk storage capacity takes the form of hydroelectric pumps, which store electricity by moving water uphill and recovering about 80 percent of the power when it flows back down. In the years ahead, soaring demand for electric vehicles will drive down the cost of lithium-ion batteries; those batteries could become an affordable way to store energy at the grid level, too. And as the need for storage increases, even cheaper methods may come on the market.

The main challenge is no longer to make renewables cheap; it is to integrate them into the power grid without disruptions.

To better integrate renewables, policymakers can also rely on the strategic use of another zero-emission technology: nuclear energy. Although most efficient when running flat out 24 hours a day, nuclear power plants can also operate flexibly to cover the supply gaps from wind and solar power. Some of France’s nuclear reactors, for instance, already cycle from about one-quarter to full power and back again, sometimes twice a day, to compensate for fluctuations in the supply and demand of renewables.

Independent of renewables, nuclear power already contributes massively to cleaner grids. Every year, some 440 operational nuclear reactors account for lower global carbon dioxide emissions of an estimated 1.2 billion metric tons. In the United States, research suggests that keeping most existing nuclear plants open would be far less expensive than many other policy options. In fact, most countries would do well to expand their nuclear power even further to cut back on their emissions. In the West, however, major expansions are not on the horizon: public opposition is strong, and the cost of building new reactors is high, in part because countries have built too few reactors to benefit from the savings that come with repetition and standardization. Yet in other parts of the world—especially China and South Korea, which have more active nuclear power programs—the costs are much lower and public opposition is less pronounced. Moreover, whereas countries once designed and built their own reactors, today many simply import them. That model can create new risks—the sector’s leading exporter today is Russia, a country not renowned for its diligence regarding reactor safety or the security of nuclear materials—but it also has the potential to make commercial nuclear technology available to many countries that could not develop and deploy it safely on their own. Abu Dhabi’s purchase of four gigantic South Korean–built reactors, the first of which is set to start operating next year, shows the promise of this model. The same approach could work for other countries that currently satisfy their large energy needs with fossil fuels, such as Saudi Arabia.

When it comes to the precise technological makeup of a future decarbonized economy, expert opinions diverge. Engineers and economists, for the most part, imagine solutions that bundle several approaches, with both CCS and nuclear power acting as important complements to renewables. Political scientists, on the other hand, tend to see a bigger role for renewables—one of the few areas in energy policy that usually garners support from across the ideological spectrum, including in the United States. Yet even this rather popular solution can prove divisive. Fierce debates rage over where to locate generators such as wind turbines, including among putative environmentalists who support the technology only if they don’t have to look at it. Public opposition to new wind turbines in Norway—even in already industrialized areas—and to offshore wind parks in the eastern United States are harbingers of tough siting fights to come. The same issue arises when it comes to power lines: making the most of renewables requires longer, more numerous power lines that can move renewable power wherever it will be needed, but public opposition can make such grid expansions a bureaucratic nightmare. In California, for example, the most recent big power line designed to move renewable power where it will be useful—in that case, from the sunny desert to San Diego—took a decade to build, even though the technical engineering and construction portion of the project should have consumed no more than two years. China, by contrast, has blown past the efforts of the United States and Europe, with dozens of ultrahigh-voltage lines, most of them built in the last decade, crisscrossing the country.

THE GREAT UNKNOWNS

Political obstacles notwithstanding, expanding the electrification of transportation and heat and the production of low-carbon electricity offers the surest path to a clean economy to date. The latest analysis by the Intergovernmental Panel on Climate Change, for instance, suggests that more pervasive use of clean electricity in the global economy would cover more than half the cuts needed for deep decarbonization. Yet just how big a role electrification will ultimately play is hard to predict—in part because its impact will depend on the future trajectory of rival solutions that are only just beginning to emerge and whose potential is impossible to assess precisely.

Hydrogen, in particular, could serve much the same function as electricity does now in carrying energy from producers to users—and it offers crucial advantages. It is easier to store, making it ideal for power systems dependent on ever-fluctuating supplies of renewable energy. And it can be burned—without producing any new emissions—to generate the high levels of heat needed in heavy industry, meaning that it could replace on-site fossil fuel combustion in sectors that are hard to electrify. Hydrogen (either in its pure form or mixed with other chemicals) could also serve as liquid fuel to power cars, trucks, ships, and airplanes. A zero-emission economy could integrate the two carriers—electricity and hydrogen—using each depending on its suitability for different sectors.

The technology needed to turn hydrogen into an energy carrier already exists in principle. One option is to break up (or electrolyze) water into its constituent elements, hydrogen and oxygen. The hydrogen could then be stored or transported through the natural gas pipeline networks that already string across all advanced economies. Once it reached its user, it would be burned for heat or used as an input for a variety of chemical processes. So far, this approach is too expensive to be viable on a large scale, but growing investment, especially in Europe, is poised to drive down the cost rapidly. Initial tests, including planned networks of hydrogen pipelines outside Stockholm (for making steel), Port Arthur in Texas (for industrial chemistry), the British city of Leeds (for residential heat), and the Teesside area (for several applications, including power generation) and numerous other ventures, will soon yield more insights into how a real-world hydrogen economy would fare.

CCS is somewhat of a wildcard, too. Some industrial processes produce prodigious and highly concentrated streams of carbon dioxide emissions that should be relatively easy to isolate and capture. The production of cement, which accounts for a whopping four percent of global carbon dioxide emissions, is a good example. But firms operating in global commodity markets, where missteps can be economically disastrous, are hesitant to invest in fledgling systems such as CCS. To change that, state-supported real-world testing is overdue. A nascent Norwegian project to collect carbon dioxide from various industrial sources in several northern European countries and inject it underground may provide some answers.

Another promising area for reducing emissions is agriculture, a field in which advances on the horizon could yield large cuts. More precise control over the diets of animals raised for food—which will probably require more industrial farming and less free grazing—could lead cows, sheep, and other livestock to emit less methane, a warming gas that, pound for pound, is 34 to 86 times as bad as carbon dioxide. (It would also help if people ate less meat.) Meanwhile, a host of changes in crop cultivation—such as altering when rice fields are flooded to strategically determining which engineered crops should be used—could also lower emissions.

Agriculture’s biggest potential contribution, however, lies belowground. Plants that engage in photosynthesis use carbon dioxide from the air to grow. The mass cultivation of crops that are specially bred to grow larger roots—a concept being tested on a small scale right now—along with farming methods that avoid tilling the soil, could store huge amounts of carbon dioxide as underground biomass for several decades or longer.

As the hard reality of climate change has set in, some have begun to dream of technologies that could reverse past emissions, such as “direct air capture” machines, which would pull carbon dioxide from the atmosphere and store it underground. Pilot projects suggest that these options are very costly—in part because it is thermodynamically difficult to take a dilute gas from the atmosphere and compress it into the high concentrations needed for underground storage. But cost reductions are likely, and the more dire the climate crisis becomes, the more such emergency options must be taken seriously.

GETTING TO ZERO

The ramifications of climate change are proving more disastrous than originally thought, just as politicians are realizing that cutting emissions is harder than anticipated. That leaves a large and growing gap between climate goals, such as the Paris agreement’s target of limiting warming to 1.5–2.0 degrees Celsius above preindustrial levels, and the facts on the ground. The world has already warmed by about 1.1 degrees, and at least another half a degree is probably inevitable, given the downstream effects of today’s emissions, the inertia of the climate system, and the inherent difficulty of reshaping industrial infrastructure.

The defining industrial project of this century will be to leave carbon behind.

To close the gap between aspirations and reality, governments need to grasp that they cannot rely solely on hard-to-enforce international agreements and seductive market-based approaches, such as carbon pricing, that will work only at the margins. The world needs new technology, and that means more R & D—much more—and a lot of practical experience in testing and deploying new technologies and business strategies at scale. To stimulate that progress, governments need to embrace what is often called “industrial policy.” In each major emitting sector, authorities should create public-private partnerships to invest in, test, and deploy possible solutions.

The details will vary by sector, but the common thread is that governments must directly support fledgling technologies. That means tax credits, direct grants, and promises to procure pioneering green products even if they are more expensive than their conventional alternatives. These steps will ensure that new low-emission products in sectors such as cement, steel, electricity, plastics, and zero-carbon liquid fuels can find lucrative markets. The need for such government intervention is hard to overstate. Producing steel without emissions, for example, could initially be twice as expensive as producing it in the traditional way—a penalty that no company operating in a global, competitive commodity market will accept unless it has direct support in developing the necessary technology, reliable markets through government procurement, and trade protections against dirtier competitors.

For now, no major government is taking these steps at a reasonable scale. The much-touted Green New Deal in the United States is still weak on specifics, and the more concrete it becomes, the harder it may be to form a supportive political coalition around it. Its counterpart, the European Green Deal, is further along yet also faces political challenges and administrative hurdles. If these schemes focus on making critical industries carbon free and provide lots of room for experimentation and learning, they could prove effectual. If they become “Christmas-tree proposals,” with ornaments for every industrial and social cause imaginable, then they may collapse under the weight of their cost and poor focus.

A bigger supply of new fundamental ideas for decarbonization is essential. On the first day of the 2015 Paris climate conference, a group of 24 governments, along with the eu and the billionaire philanthropist Bill Gates, pledged to double their spending on clean energy R & D. So far, the group’s self-reported data show that it is at 55 percent of its goal; independent and more credible assessments suggest that the actual increase is only half of that. Mission Innovation, as the collective is known, has also set up working groups on solutions such as CCS and hydrogen, but those groups have little capacity to develop and implement a collective research agenda. What is needed instead are smaller, more focused groups of high-powered backers. Powerful governments have a part to play, but not an exclusive one, considering that some (such as the United States today) are unreliable and therefore less important than subnational actors, such as California, or even wealthy philanthropists.

Initiatives such as Mission Innovation are essential because markets for clean technology are global. Three decades ago, when diplomatic efforts to combat climate change began, most innovation in heavy industry, including in the energy sector, came from a small number of Western countries. No longer. When it comes to electric buses and scooters, China is king, with India taking some baby steps. For electric cars, U.S., Japanese, and European manufacturers are in the lead technologically, but Chinese firms have larger volumes of sales. Innovation in ultrahigh-voltage power lines is coming particularly from engineering firms based in Europe and Asia. The explosion in China of low-cost production of solar photovoltaics was initially geared to supply the highly subsidized German market.

Given this geographic breadth, nationalist trade policies that limit cross-border exchange and investment could easily gum up the works. In particular, the United States should reform its approach to foreign investment in sensitive technologies. Instead of the current review policy—an opaque process managed by the Committee on Foreign Investment in the United States—regulators should follow the “small yard, high fence” rule proposed by former U.S. Defense Secretary Robert Gates: identify a short list of technologies that are truly sensitive and protect the United States’ advantage in those areas while opening the doors to the power of globalization for all others.

Blaming China

Behind Trump’s push to blame China

Trump administration mounts global campaign against China that harks to false WMD claims made before US invasion of Iraq

By DANIEL SNEIDER, Stanford University and a former Christian Science Monitor foreign correspondent and APP member. This article originally appeared Monday in Tokyo Business Today.

Asia Times, May 26, 2020

The rhetorical clash between China and the United States over the Covid-19 pandemic escalated to new heights this past week. Harsh language and taunts are now a daily event, feeding growing concern that the war of words could lead to more serious tensions over Taiwan or the South China Sea.

Calls for “decoupling” from dependence on supply chains for vital medical equipment and technology produced in China took concrete form in new steps to block China’s Huawei telecom giant from using American-designed technology.

Both Chinese President Xi Jinping and US President Donald Trump face challenges to their legitimacy and political future from the pandemic and the two are equally eager to deflect responsibility for the crisis.

The Chinese regime has mounted an aggressive campaign to promote the superiority of its system and assert global leadership, despite widely held doubts about the veracity of its claims. It has hawked xenophobic propaganda blaming foreigners, even the US military, for the spread of the virus.

In Trump’s case, the urgency is even greater thanks to the presidential election campaign. The campaign now places central responsibility on China, labeling his Democratic Party opponent, former Vice President Joe Biden, “Beijing Biden.”

This strategy was laid out in a confidential Republican strategy memo on April 17th that instructed candidates to accuse Democrats of being “soft on China” and to claim the virus is “a Chinese hit-and-run followed by a cover-up that cost thousands of lives.“

This election is going to be a referendum on China,” Trump advisor Peter Navarro predicted in a television interview this past week.

When Trump signed a trade pact with China on January 15, things were quite different. The trade deal was a centerpiece of a re-election strategy touting a booming economy and having put “America First.” And for the next two months, Trump issued a string of praises for China and Xi, lauding the handling of the virus.

Then came a stunning collapse of the stock market, a looming recession and rising infection rates. “Trump completely panicked after Covid and the economic collapse hit his campaign,” Jeffrey Bader, former Obama administration national security advisor on Asia, told me.

“He had to find a new villain. He had to come up with all these conspiracy theories about how the Chinese handled the virus. There is a whole disinformation campaign these guys are orchestrating.”

Trump is pushing for the US intelligence community to provide evidence to support this effort, according to reports in the New York Times and other publications, and confirmed to me by a senior intelligence official.

“Regarding Trump’s next steps, he has tasked the entire US intelligence community, including CIA [Central Intelligence Agency], NSA [National Security Agency], and DIA [Defense Intelligence Agency], to search all of their files – intercepts, humint [human intelligence], whatever – to find out if China is responsible for COVID-19,” the senior official told me.

“When this kind of tasking takes place, it is almost certain there will be some type of ‘intelligence’ that can be overstated, manipulated, overblown, to make the case – any case.”

The official compared this to the pressure brought by former Vice President Dick Cheney on the CIA to provide evidence of an Iraq-Al Qaeda-9/11 link to justify the invasion of Iraq.

“While there is no denying the importance of determining how this came about,” he said, “it is equally hard to escape the conclusion that Trump will politicize the intelligence as a means of distraction from his own abysmal management and leadership in dealing with the pandemic. Of course, all of this is intended to serve one purpose: his re-election.”

In an unusual joint article in Foreign Policy, three former senior CIA officials warned against the politicization of intelligence by the Trump administration. They wrote:

“This pattern of politicization is particularly concerning now, as the country confronts the coronavirus pandemic. The answers to key intelligence questions – Did the coronavirus emerge from nature or escape from a Chinese lab? To what extent did the Chinese government misrepresent the scope and scale of the epidemic? – will have profound implications for the future of U.S. national security policy, especially concerning China." 

We know Trump’s preferred answers to those questions. What we don’t know is whether the career analysts in US intelligence agencies will be allowed to speak the truth when they uncover it.

Charge of Deliberate Speed

With Secretary of State Mike Pompeo leading the charge, the Trump administration is mounting a global  campaign against China, including a four-page letter sent to the World Health Organization accusing it of doing the handiwork of the Beijing regime.

In recent days, Trump and his close advisors have moved beyond their earlier attempts to pin Chinese responsibility on their suppression of information on the infection, or the lab-origin theory, to a bolder charge that the Chinese government deliberately spread the disease out into theworld.

In a tweet this past week, Trump accused China of “trying desperately to deflect the pain and carnage that their country spread throughout the world.” Trump advisor Navarro, a key figure in the anti-China policy, told ABC News this past week that “China sent hundreds of thousands of Chinese on aircraft to Milan, New York and around the world to seed” the virus. 

This theory was first laid out in a little-noted commentary by Lewis “Scooter” Libby, a former senior aide to Dick Cheney and now senior vice president at the Hudson Institute, a conservative think tank that has become the most important influencer of the administration’s China policy.

In the essay, published on April 29 in the conservative National Review, Libby argued that Xi and the Communist Party leadership were under increasing threat from multiple challenges – the protests in Hong Kong, the re-election of the pro-independence Taiwanese government, exposure of the suppression of Chinese Muslims and, most of all, the stumbling of the Chinese economy due to the Trump administration’s tough trade policy.

With Trump heading for re-election, party dissent against Xi was mounting, he wrote.The Covid-19 outbreak in China posed a new challenge for Xi. “As long as the virus raged primarily inside China – derailing only her economy, stigmatizing only her government – his troubles would soar. All the while, the world predictably would have leapt ahead, taking Chinese customers, stealing China’s long-sought glory.”

But the pandemic had a potential upside, Libby argued. Its spread diverted attention from the Chinese regime’s internal woes and “rendered disease-weakened nations more susceptible to China’s goods,” he wrote. Trump’s re-election was no longer certain and a weakened economy would impact US defense spending.

In Libby’s account, Xi went beyond simply taking advantage of an opportunity. The Chinese regime deliberately “let tens of thousands of travelers, infected among them, leave China and enter an unwary world.” All of this, he concludes, is part of the quest for world domination byXi’s inner circle. “A fever for Chinese primacy burns among them.” Libby is no stranger to the construction of this kind of narrative. 

He was Cheney’s point man in pressuring the CIA to support the false claims that Iraq was building weapons of mass destruction and had links to the September 11 attacks. He was convicted in 2007 of perjury and obstruction of justice for his attempts to discredit a diplomat who disputed those claims.

Surprisingly, Libby was pardoned in April 2018 by Trump, even though former President George W. Bush had refused to give a pardon, despite pleas from Cheney.“

Libby’s presentation has the feel and smell of yet another problem in the making,” said the senior intelligence official, comparing this to the Libby role in the Iraq war buildup.“

This is Scooter’s ‘wag the dog’ fantasy,” agreed another former senior intelligence official with long experience in Asia. 

He dismissed Libby’s belief that the Chinese leadership would have an interest in spreading the pandemic around the world.“

Party legitimacy, Xi’s position and China’s future depend on sustained growth, even if the rate of growth is much slower,” the former intelligence official told me. “Spreading CV19 could only further depress Chinese growth and accelerate realignment of supply chains in ways that disadvantage China. Chinese leaders understand that.”

Hudson Institute Connection

The alarm over China’s assertiveness is widespread in U.S. policy circles. But Hudson is home to a group of policy makers who articulate a much darker view of China as both a totalitarian state and one with long-term plans for global domination.

Writers like Michael Pillsbury, who enjoys access to the President, as well as Libby and others are based at the think tank. Vice President Mike Pence delivered a major hardline China policy speech in late 2018 at Hudson, as did Secretary of State Mike Pompeo in October 2019.

Hudson has also become the favored channel for Japan’s Abe administration to reach the White House. Prime Minister Shinzo Abe has delivered several major addresses at Hudson, where Libby, a personal friend, introduced him. Hudson President Kenneth Weinstein, another Abe friend, has been nominated to be US Ambassador to Tokyo.

While Trump’s views of China seem mostly to reflect his obsession with trade imbalances and his neo-isolationist impulses, men like Pompeo, Navarro and Libby have deeply held views on the China threat.

“For the ideologues, this was their magic moment to overcome resistance,” Bader argues. “Trump went along with it because he needs an election plank. The true believers don’t know if Trump is going to win or not but they are putting as much in place as they can before November.”

Saturday, May 9, 2020

What Happens to APP Interns


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Like Dinyar Patel they become PhDs from Harvard and publish path-finding books. An APP internship is only for the sharpest minds. The skills you learn at APP ensure that you succeed.

Naoroji: Pioneer of Indian Nationalism’ Review: Portrait of an Independent Mind
by Dinyar Patel

A member of the British House of Commons at a time when Indians in India couldn’t vote, he argued that the empire was impoverishing his homeland.

By Tunku Varadarajan
Wall Street Journal, May 8, 2020

When the British government announced in 2014 that it would install a statue of Mohandas Gandhi in London’s Parliament Square, there were complaints in certain quarters that the wrong anticolonial Indian was being honored in the heart of an erstwhile empire. The statue, some said, should be not of the Mahatma—however great his status as tormentor-in-chief of the British Raj—but of Dadabhai Naoroji.

If there were many befuddled people who said “Dadabhai who?” at the time, there will be far fewer who will say so now, given the publication of “Naoroji,” by Dinyar Patel, an absorbing biography of the first Indian ever to be elected to the House of Commons. Naoroji won election as a candidate for William Gladstone’s Liberal Party in 1892. He represented Englishmen in a London borough at a time when Indians in India had no right to vote and no parliament of their own.

As struck as we may be today by the irony that the House of Commons was the only legislature for which Naoroji—a man with few rights in his own land—was entitled to run, we would also do well to note the unseemly fact that this “pioneer of Indian nationalism” is almost entirely forgotten in India.

There are many reasons for Naoroji’s absence from contemporary India’s nationalist memory bank. One is an intellectual failing to which Mr. Patel draws apt attention: Historians of South Asia, he writes, “have almost reflexively shunned political elites” who do not “mesh well with the Marxist and postcolonial traditions that still dominate” the Indian academy. Naoroji was a textbook man of the elite. He was an anglicized, highly educated Parsi (or Zoroastrian), a member of a tiny ethno-religious minority that fled to India from a recently Islamized Persia in the eighth century. The Parsis prospered greatly in their new Indian homeland, especially under the British, who favored them for their lighter skin and warmed to their embrace of Western ways, even as they remained faithful to their own tenacious religion.

The dogmatic anti-elitism of Indian historians is matched, says Mr. Patel, by their unwillingness “to accept biography as a legitimate form of scholarship.” Naoroji’s isn’t the only story to have gone largely untold by scholars, and there can be few major countries with a history as rich as India’s that have been as biographically neglectful of their prominent men and women. Luckily, Naoroji’s personal papers survive, although “forbiddingly vast,” damaged and disorganized. Mr. Patel—a Parsi himself, and now an assistant professor of history at the University of South Carolina—spent two years poring over Naoroji’s private correspondence, some 15,000 documents in all. His book grew out of eight years of study at Harvard, principally for his doctoral thesis. But the erudition of his enterprise, while everywhere evident, is never daunting.

Naoroji, born in 1825, deserves a sage biography. He was a scholar himself, becoming, at the age of 29, the first Indian to secure a full professorship at a British government university. He taught mathematics and natural philosophy at a college in Bombay, yet did so for only a year before setting sail for England in 1855 to partner in a business venture with wealthy Parsi confreres. In Europe, Mr. Patel tells us, Naoroji awakened to the gulf in prosperity between colonized India and the imperial West. He was, for instance, “simply stunned by the prosperity of the French countryside” and in London “felt the stark distance between mother country and colony.”

India now seemed, to the sensitive young Parsi, to be “the very byword for poverty and powerlessness,” and his appetite for commerce was soon dwarfed by a passion for nationalist politics. He embarked on what was to be a lifelong campaign to convince the British that they were “draining” India of its wealth. This “drain theory,” as it became known, disconcerted the British, and Naoroji developed it, Mr. Patel writes, “in an era when many Britons took it for granted that imperialism was a beneficent force and a stimulus for growth and prosperity in their colonies.” Through a “colossal assemblage of facts and figures”—mined from data made available to him by the British authorities themselves—Naoroji sought to demonstrate that imperialism was making Indians poorer by the year.

Paradoxically, it is this enterprise that may explain why Naoroji is an eclipsed figure in India today. Since Independence, most Indians have taken utterly for granted his once-radical view that the British Raj paupered India. Also working against any postcolonial celebration of Naoroji is the fact that he sought to persuade the British that their impoverishing of India was unacceptable, precisely because it fell short of Britain’s own moral values. He titled his own magnum opus on the subject, published in 1901, “Poverty and Un-British Rule in India,” again making the point that true “Britishness” was fairness.

Although he was a founding member of the Indian National Congress political party in December 1885, his calls for India to be “a self-governing and prosperous nation” were tempered by concessions that Indians would still be “loyal to the British throne.” For all his many ties to progressive individuals and movements in India, Britain and elsewhere—and these included women suffragists, Irish nationalists (for whom he had a particular fondness), black Americans like Ida B. Wells and W.E.B. Du Bois, and workers’ unions—he was a gradualist. He preferred suasion, not boycotts, debate not defiance. He held to these views to the end of his life—he died in Bombay in 1917, at the age of 91—even as the independence movement in India became fiercely (if nonviolently) radical.

For all his fidelity to the core ideas of Indian nationalism, it is perhaps fitting that Naoroji’s election to the House of Commons—in an age when such a thing was seen as outlandish—is regarded as his most enduring political contribution. No less a personage than Lord Salisbury, the British prime minister, exclaimed at a political rally in 1888 (four years before Naoroji’s victory at the polls) that no British borough would ever elect “a black man” to Parliament. Salisbury was widely pilloried in Britain for his coarseness, which had the effect of raising Naoroji’s profile and contributing to his victory. Today around 10% of the House of Commons traces its descent to Britain’s former colonies, and the house would appear to be more welcoming of candidates from outside the age-old Britannic mainstream than India’s own parliament is of religious minorities. One has to think that Naoroji, today, would be more at home in cosmopolitan Britain than he would be in his independent—but increasingly intolerant—India.

—Mr. Varadarajan is executive editor at Stanford University’s Hoover Institution.

Monday, May 4, 2020

Abe's Cruellest Month

Japan’s capricious response to coronavirus could dent its international reputation

by Ra Mason, Lecturer in International Relations and Japanese Foreign Policy, University of East Anglia
The Conversation, April 24, 2020
  
The Japanese government’s response to the coronavirus pandemic has been reactive, chaotic and lacking in clear leadership. Japan has effectively lost control of its attempts to isolate all suspected cases.

A full nationwide state of emergency was only declared on April 16, after cases rapidly expanded outside central metropolitan areas. The national emergency gave prefectures the powers to impose their own lockdown measures, but these are partial and not enforceable by law.

This followed ambiguous recommendations by the administration of Prime Minister Shinzo Abe for people across the country to practice the “three Cs”: avoiding closed spaces, concentrated gatherings and close contact.

But the government’s coronavirus strategy might be more fittingly categorised by “three As”: arrogance, anxiety and atypical. This includes over-confidence in party protocol, anxiety over making sudden societal changes and indifference towards conventional advice from foreign peers.

In some ways, this mirrors a wider pattern of the Abe administration implementing policies at home that are out-of-sync with the image Japan has of itself as a leader on the world stage. These contradictions between foreign and domestic policy have led Japan capriciously to the brink of a coronavirus disaster.

Since Abe’s return to power in 2012, Japan has set a foreign policy course aimed at regaining international prestige. This came partly as a response to domestic perceptions that Japan had damaged its reputation over the course of more than two decades of stagnation. Abe’s new agenda has been characterised by concepts of proactivity, promotion of an international rules-based system and regional leadership.

Why then, with so much at stake, has the response of his ruling Liberal Democratic Party to the coronavirus pandemic been so erratic?
Arrogance

This begins with Abe, who has strengthened his grip on power under the pretexts of strong leadership and national interest. Though often framed in patriotic rhetoric, measures introduced by the prime minister on information sharing, military expansion and media control have largely amounted to a reduction in civil liberties and the empowerment of Abe and his inner circle. This concentration of power promotes a discourse of Japanese exceptionalism focused on national pride at home and international prestige abroad.

But there is an arrogance here based on the fact that Abe’s cabinet doesn’t actually have popular approval among the Japanese public for its handling of the coronavirus response. The LDP only commands an overwhelming electoral advantage because of the broken and dysfunctional opposition, with no other party gaining far above 5% of the vote.

This has created a kind of hubris, where the ruling party acts unilaterally as if given a mandate by a huge majority of the people, due not least to the LDP’s almost unbroken grip on power since 1955. In recent years government policies have only been subjected to limited domestic media scrutiny.Abe’s approach has been met with criticism. Kiyoshi Ota/EPA
Anxiety

Japan has long been considered a socially conservative country. Generally speaking, this includes a high level of social awareness and anxiety about social perceptions. This acts as a disincentive for politicians to make sudden or sweeping changes for fear of upsetting the apple cart.

Most Japanese prioritise stability and safety, which is largely reflected in the generally cautious actions of their political leaders. Securing such stability and safety is not, conversely, assumed to require dramatic measures that drastically change daily life. There is evidence, for example, of citizens ignoring or only partially adhering to the comparatively sudden social distancing measures the government requested.

At the same time, Japan has a problem of indifference. Criminal incidents, such as violence or anti-social behaviour, can often go unreported. Instead, there is an expectation for people to practice social awareness and consideration for others through their own, socially conditioned, behaviour. This makes it hard for the government to demand further additional adherence to draconian measures because while some people are anxious about how they are socially perceived, they expect to take personal responsibility for their own actions.

There is also a degree of trepidation in Japanese society that guards against military-style emergency measures that are associated with Japan’s wartime era.

In any case, there is already a degree of deliberate distancing from strangers, and the wearing of face masks has long been commonplace. This could partly explain the initially slow spread of the virus. On the flip side, however, this could have led to a false sense of reassurance.
Atypical

Japan has tended to adapt rather than adhere to international orthodoxies. This goes for politics, economics and society, and has proven effective in sustaining the country’s economic strength and soft power esteem. However, it has also led politicians in Tokyo to believe that not following the advice, policies or behaviour of other leading powers may be warranted. Japan does things differently, they claim, for good reasons.

In the case of the COVID-19 pandemic, this is starting to look like a grave mistake. Japan is out of kilter with many of the countries, such as South Korea, Taiwan and EU states, that it might most need to cooperate with, both to stop the spread of the virus and address its economic impact.

The health concerns from such an atypical approach are obvious. But economically, too, everything from air travel to the Olympics and tourism have been negatively affected. Even compared to other battered global economies and healthcare systems, the prognosis for Japan is grim.

Ironically, then, the combination of disjointed domestic policies could also result in Japan taking an extra hit to the one thing its leader was doubtless hoping to preserve – its international reputation.

Thursday, March 19, 2020

Irresponsible and desperate

Abe and Trump - Two Desperate Men Facing Desperate Times
By Daniel Sneider, Lecturer, International Policy at Stanford University
Toyo Keizai, March 16,2020

The telephone talk this week between Prime Minister Abe Shinzo and U.S. President Donald Trump was a conversation between two desperate men facing increasingly desperate times. Both leaders' personal political fates are now completely intertwined with a global pandemic that is not only a health crisis but the trigger for a deep economic downturn.

The phone call followed President Trump's declaration in a national address from the Oval Office that the United States faced a "foreign virus," abruptly cutting off travel from most of Europe. The next day Trump suggested that the Tokyo Olympic Games might have to be cancelled, or at least postponed for a year.

A panicked Abe called Washington, hoping for reassurance that Japan was not next on the travel shutdown list, and for Trump's support to keep the Games on schedule. He got that in words, but as is often the case with Trump, they are not likely to mean much.

Witness the treatment of the United Kingdom, which on Wednesday was exempted from the travel ban by Trump, an apparent gesture toward his friend and ally Prime Minister Boris Johnson. Trump then reversed that exemption on Saturday, when the reality of the spread of the virus to Britain was impossible to deny.

"I've heard that Abe is terrified at the possibility of Trump banning Japanese visitors," a senior Japan expert in Washington, who declined to be named, told me. "I am not sure that's true," he said, "but you never know with Trump."

As with Europe, the decision is not likely to depend on any judgment about Abe or how Japan is handling the epidemic, but on whether there are mounting numbers of infections and deaths.

"I think that the decision will be based on the reach of the virus," former Trump National Security Advisor Lt. General H.R. McMaster, told Toyo Keizai. "If there are travel restrictions from Japan, they will not be due to concerns over how the government is handling it, but rather the effort to reduce risk to spread in the U.S." McMaster is currently the Japan Chair of the Hudson Institute and a senior fellow at Stanford's Hoover Institution.

As for the Olympics, that decision first of all depends on global pandemic conditions, not just what is happening within Japan. "On the Olympics," McMaster told me, "I think it will require the identification of the peak not only in Japan, but also globally."

Abe's determination to hold the Games is understandable - it marks the pinnacle of his premiership and its cancellation or postponement, accompanied by a deep recession in the economy, is likely to spell the effective end of his political life. But Abe's desperate attempt to drag Trump into protecting the Games - and himself - is an empty hope.

"Whether or not the Olympics will be held in Japan as planned is not Abe's call, nor is it is Trump's," observes George Washington University Professor Mike Mochizuki, a respected Japan expert.
"It is ultimately up to the IOC (International Olympic Committee). So, if Abe called Trump to try to roll back Trump's off-the-cuff remarks about the Olympics, it's doubtful that it will make a difference in the end. Trump does not have much international credibility at this point, so he is not going to be an effective ally for Abe to lobby the IOC to proceed with the games."

The key issue for the IOC, and for other world leaders, will be whether bringing hundreds of thousands of athletes and spectators to Japan could create a potential new hot spot for the virus.
"Although I fully appreciate the economic and political stake that Abe and Japanese leaders have in the Olympics, the number one priority should be global health and safety," Mochizuki said. 

"Japanese leaders should not try to underestimate or underplay the risks because of their keen interest in holding the Olympics. As we approach the summer and temperatures increase, the number of new cases of infections may decrease. But we still need to be extra cautious. The virus could re-emerge in a more virulent form at the end of summer. Remember that the 'Spanish' flu came back with a vengeance in fall 1918, and that is when there was a horrible international death toll."

That view is shared by other Japan experts. "Given that we seem to be nowhere near the peak in most, if not all of the developed world - to say nothing of the developing world - I don't see how Japan will be able to welcome all the athletes, coaches, and spectators that they anticipated for the length of time planned," Tobias Harris of Teneo Consulting and author of a new biography of Abe said.

"Even if Japan were to contain the outbreak, convening the games could easily lead it to spread again. It is difficult to imagine outright cancellation so my guess is either significantly modified - few or no spectators, shorter duration - or delayed for a year or two."

Here in the United States, the coverage of the coronavirus epidemic has focused equally on the health issues and on politics, particularly the widespread perception of the incompetence of the Trump administration and the manifest lack of leadership.

The President's Wednesday night address to the nation proved to be a disaster - it featured a transparent attempt to blame the crisis on 'foreigners,' laced with multiple misstatements that had to be corrected subsequently, along with a failure to address the more crucial questions of the lack of widespread testing and economic assistance for those impacted.

Since the crisis began, Trump and his allies in conservative circles have been mostly content to point fingers of blame at his Democratic opponents, and to issue empty assurances that everything will be better soon.

Even the conservative Wall Street Journal condemned Trump's performance on Wednesday in an editorial the next day. The President "continues to give the impression that he views the virus more as another chance for political combat than a serious public-health problem," the Journal wrote.

The paper politely lacerated the President for an absence of leadership, from the botched roll-out of testing kits and the slow economic policy response, to failing to place the crisis response under the control of experts and instead "putting himself in front of every briefing and speculating about things he doesn't know much about."

The President's Friday declaration of a national emergency and an acknowledgement that tests were not, as previously claimed, widely available, was an attempt at a do-over.

The President was catching up to the rest of the country, which in the last weeks has moved dramatically, under the leadership of state and local governments as well as civil society, to impose drastic steps to mitigate the spread of the disease, including banning almost all large public events and closing universities and school systems.

Still, Trump's insistence that he was "not responsible" for the slow response to the crisis was widely seen as further evidence that he does grasp the role of a President at a moment of national crisis.

The U.S. view of the performance by Abe and the Japanese government is only slightly better. There was widespread criticism of the way the Japanese government handled the Diamond Princess, particularly the decision to keep the passengers and crew onboard rather than have them disembark quickly, be tested and transferred to onshore quarantine facilities. That lesson was learned by the time another cruise ship with infected passengers and crew docked here in the San Francisco Bay area.

"I think there was a lot of concern about Japan's competence during the Diamond Princess fiasco," a senior staff official at the U.S. Senate said. 

"But, frankly, Japan has benefited from the fact that so many of the urgent issues have been elsewhere - in China at first, now in Europe - that Japan has managed to side-step any significant attention or criticism. The fact that Japan has also not 'exported' too many cases to the US has also been a plus for management of the issue in a bilateral context."

Still questions remain about the low level of testing in Japan, second only to the U.S., raising suspicions that Abe has wanted to downplay the crisis to save the Olympics. Unlike South Korea, Japan is not seen as a model for how to manage this crisis.

"I think the American public is very impressed with the efficiency and transparency of South Korea's large-scale testing, and the ability of Singapore, Taiwan and Hong Kong to largely contain outbreaks, despite their geographical proximity to China," Mireya Solis, who heads the Center for East Asia Policy Studies at the Brookings Institution, said. 

"Japan does not stand out -for good or for bad- in this international comparison, making it less visible to the U.S. public after the cruise ship incident."

Ultimately, Americans are much more focused on the appalling way the Trump administration has handled this pandemic than on Japan's experience. Ironically, given how much Abe seems to still depend on the favors of an increasingly desperate Trump, this works in Japan's favor.

"Criticisms of Japan were certainly justified," said Professor Mochizuki, "but Japan does not look so bad compared to the United States."

Sunday, March 8, 2020

Monday in Washington March 9 2020

THE LATEST ON F-35. 3/9, 9:30-10:30am. Sponsor: Mitchell Institute. Speaker: David Abba, Director of the F-35 Integration Office, Headquarters US Air Force.

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A CONVERSATION WITH FIONA HILL ON PUBLIC SERVICE. 3/16, 10:00-11:15am. Sponsor: Brookings. Speakers: Suzanne Maloney, Interim Vice President and Director, Foreign Policy Program, Brookings; Fiona Hill, Senior Fellow, Foreign Policy Program, Center on the United States and Europe, Brookings. Moderator: John R. Allen, President, Brookings.

CURRENT U.S.-PHILIPPINES RELATIONS AND PERSPECTIVE ON WAYS FORWARD, WITH AMBASSADOR JOSE G ROMUALDEZ. 3/9, Noon-1:30pm. Sponsors: Stimson Center; US-Philippines Society. Speaker: Jose Manuel G. Romualdez, Ambassador of the Republic of the Philippines to U.S. Moderator: Bill Wise, Nonresident Fellow, Southeast Asia Program, Stimson Center.

THE DRAGONS AND THE SNAKES: HOW THE REST LEARNED TO FIGHT THE WEST. 3/9, 12:15-1:45pm. Sponsor: New America. Speaker: Author, David Kilcullen, Professor, School of Politics and Global Studies, Arizona State University. Moderator: Peter Bergen, Vice President, New America.

A CONVERSATION ON NATIONAL SECURITY WITH GENERAL DAVID PETRAEUS. 3/9, 2:00-3:00pm. Sponsor: Brookings. Speakers: General David Petraeus, Former Director of the Central Intelligence Agency; General David Petraeus (Ret.), Chairman, KKR Global Institute. Moderator: Michael E. O’Hanlon, Senior Fellow, Brookings.  

WHY IS EUROPE THE WORLD’S REGULATORY SUPERPOWER.
3/16, 3:30-4:30pm. Sponsor: Carnegie. Speakers: Anu Bradford, Henry L. Moses Professor of Law and International Organization, Columbia Law School; Anne-Marie Slaughter, CEO, New America. Moderator: Erik Brattberg, Director of the Europe Program, Carnegie.

Thursday, March 5, 2020

Abe is slipping


Abe Departs from His Own Winning Formula in Battling COVID-19

By Dr Corey Wallace
Australian Outlook, Australian Institute of International Affairs, March 4, 2020


Prime Minister Abe Shinzo’s leadership longevity goes beyond the eponymous “Abenomics” economic program and his self-confident regional diplomacy. Built on a judiciously cultivated appearance of administrative competence and political stability, a key selling point has been an aptitude for crisis management.

In this regard, Abe’s already record-breaking seven-year premiership starkly contrasts with the Democratic Party of Japan’s (DPJ) three-year stint in power (2009-2012). The latter period was characterized by haphazard, personalized responses to national crises, intra-party bickering, circumvention of the bureaucracy, and a revolving door approach to top ministerial positions—including the premiership. After reclaiming the Liberal Democratic Party (LDP) presidency and “taking back Japan” by winning the 2012 elections for the LDP, Abe has not shied away from reminding voters of the dangers of a return to DPJ-style governance.

Prime Minister Abe has sharpened this contrast by limiting turnover in high-level cabinet positions, top bureaucratic posts, and in his circle of personal advisers. His finance minister and deputy prime minister (Aso Taro), chief cabinet secretary (Suga Yoshihide), administrative deputy chief cabinet secretary (Sugita Kazuhiro), and key foreign policy adviser and first ever head of the National Security Council/National Security Secretariat (Yachi Shotaro), were with Abe on day one of his administration. Until September last year, he had had only two foreign ministers, one (Kono Taro) subsequently becoming his defence minister. Hasegawa Eiichi, Izumi Hiroto, and Imai Takuya have also been with Abe as special advisors from the start. This has resulted in the formation of an informal “leading small group” that has enhanced policy planning, crisis management, and public communications in various policy domains.

Abe has also employed institutional enhancements. Influenced by both American and British models, the creation of a Japanese National Security Council (NSC) and a supporting National Security Secretariat (NSS) in the Cabinet Secretariat has helped improve information sharing and analysis within the bureaucracy and clarified working relationships between administrative officials and political leaders. Abe has also asserted greater control over the bureaucracy by introducing a new cabinet-centred process for making top level personnel appointments. Traditionally, Japanese prime ministers have struggled to assert themselves over the bureaucracy, especially at times of national crisis, or felt insufficiently supported by their officials. These institutional enhancements have contributed to centralising political power and decision making around the prime minister and his office (Kantei) and the Cabinet and its secretariat.

These informal and institutional mechanisms for crisis management have not, however, helped Prime Minister Abe in his response to the Coronavirus (COVID-19) crisis. The National Security Secretariat has been a non-entity as disease control sits outside its focus on national security, economic strategy, and geopolitics. Abe has also not been able to count on the steadying hand of his former national security adviser, Yachi Shotaro, due to his recent retirement. Japan also lacks a similar “control tower” mechanism that would perform a role like the United States’ Centers for Disease Control and Prevention (CDC) ideally would, by collecting and analysing information, providing expert advice to officials and local authorities on travel restrictions, quarantines, and isolation, and taking a leading role in public communications during crises.

The Abe administration did not set up a COVID-19 task force in the Cabinet Secretariat until two weeks after the first domestic case was reported (January 16), when the government finally decided to restrict the entry of recent travellers to Hubei Province. It took over a month for an expert advisory group to be set up, with a “Basic Plan” for limiting COVID-19’s spread only communicated to the public on February 25. All the while, the Diamond Princess saga was festering in the background, bringing with it increasing domestic and international concern over the administration’s handling of the quarantine.

Abe appears to have overcorrected, in the process revealing dysfunction in the leading small group that has hitherto served Abe well. Not more than a few days after the announcement of the COVID-19 Basic Plan, Abe made an unprecedented and abrupt announcement requesting Japanese elementary, junior and senior high schools nationwide to close for up to five weeks. It was subsequently revealed that Abe made this decision without consulting Chief Cabinet Secretary Suga or Deputy Chief Cabinet Secretary Sugita and went against the advice of Education Minister Haguida Koichi, arguably his closest political ally. Even before COVID-19, press reports pointed to a strained working relationship between Abe and Suga which had divided the Cabinet and the Kantei. While officials in Tokyo’s Kasumigaseki have generally submitted to the centralization of political power and administration around the Kantei and Cabinet over the last seven years, Abe’s actions have also ignited built-up resentments within the bureaucracy. Word got out in the media about the lack of consultation and internal fissures, and Abe was forced to admit in parliament that he had made this decision on his own and that it was not directly based on advice from his expert advisory group. Abe framed it as a personal, “political” decision for which he would take full responsibility, but it appeared reminiscent of one of Abe’s favourite talking points—the DPJ era’s ad hoc crisis management.

Furthermore, the feasibility of Japan’s public institutions, companies, and parents adapting in such a short period of time has for many betrayed a lack of awareness of the ultimate impact of Abe’s decision. This compounds a perception problem that has consistently dogged Abe, namely that he is out of touch with the day-to-day problems faced by the general public. His policy focus has not always accorded with public priorities, and in some cases has been unpopular. Examples include Abe’s obsession with constitutional change, conservative educational reforms, corporate tax reductions, and the legalization of casinos in Japan. Furthermore, the various scandals involving potential influence peddling have reinforced a sense that Abe is uninterested in public transparency. Some have also started to wonder if the Abe cabinet’s COVID-19 response is symptomatic of a fatigued and complacent administration.

Of course, being perceived as out of touch has not always been a major problem for Abe precisely due to the ability to communicate competence and steadiness in domestic administrative and diplomatic matters alongside robust economic performance. However, last October’s consumption tax rise put the economy on the back foot and infrastructure investment is also slowing ahead of the Olympics. A dramatic reduction in tourists due to COVID-19, particularly from China, will likely accompany decreased foreign demand for Japanese products and components as the Chinese economy grinds to a standstill and regional supply chains are affected. Together with the ubiquitous calls for jishuku (self-restraint) and a likely slump in economic activity in Japan itself, Japan’s economy is expected to enter a recession. In foreign affairs, the ability for Abe to showcase a reaffirmed Japan-China relationship ahead of the Olympics and as part of his political legacy has fallen victim to COVID-19 with Xi Jinping’s visit, the first by a Chinese leader to Japan in over a decade, being delayed. Abe can only hope that President Trump does not ratchet up the diplomatic pressure on Japan as American election season progresses.

Abe has built enough political capital to last out through the Olympics—assuming they go ahead, and the COVID-19 situation does not dramatically worsen. It is still very possible Abe will lead the LDP to another victory in elections likely to take place in late 2020 or early 2021. Whether the progress of COVID-19 is slowed over the next month may well, however, dictate how much influence Abe will have to anoint his successor and influence post-Abe policy. Over the next month the Japanese public will be considering whether the hit to the economy and major disruption of people’s livelihood due to the government’s management of COVID-19 has been worth it.

Dr Corey Wallace was formerly the Einstein postdoctoral fellow at the Graduate School of East Asian Studies at Freie Universität Berlin (2015-2019). From April 2020 he will be Assistant Professor in the Faculty of Foreign Languages at Kanagawa University, Yokohama, Japan. He holds a master’s degree (University of Canterbury) as well as a PhD from the University of Auckland.