Journal of Political Risk, Vol. 4, No. 6, June 2016
By Braz Baracuhy
Traditional Geopolitical Risks for GSCs (Source: PWC – Transportation & Logistics 2030 [p. 17])
The geopolitical underpinnings of economic globalization are changing. Transnational corporations (TNCs) and their network of supply-chains have to operate in a business environment in which emerging geo-economic forces are interacting with shifting geopolitical realities. The challenges for geopolitical risk management will increase in a world of multiple poles of economic power. TNCs and firms operating globally will need to develop a sense of strategic awareness of the new geo-economic spheres of influence and the systemic geopolitical risks reshaping the interdependence of countries and companies in the global marketplace. Corporate geopolitics need to be an essential component of business strategy.
Journal of Political Risk, Vol. 4, No. 5, May 2016
By Sean R. Liedman
In this Sept. 17, 2015, file photo, Adm. Harry B. Harris, Jr., U.S. Navy Commander, U.S. Pacific Command walks past a photograph showing an island that China is building on the Fiery Cross Reef in the South China Sea, as the prepares to testify on Capitol Hill in Washington before the Senate Armed Services Committee hearing on maritime security strategy in the Asia-Pacific region. (AP Photo/Cliff Owen, File)
Since the end of World War II, U.S. strategy towards China has tacked between three central policy themes: containment, cooperative engagement, and competition. Additionally, a fourth unstated strategic theme undergirds the above: prevailing in the event of conflict. Even though they are fundamentally conflicting ideas, the principles of cooperation and competition remain central tenets of the U.S. strategy versus China today, and the tension between those two principles has been on full display in the South China Sea since 2012. Looking to the future, the United States has three broad policy options vis-à-vis recent Chinese activities in the South China Sea: 1) “Continued concession” to Chinese territorial expansion in the South China Sea in the interest of achieving broader strategic objectives, 2) “Freeze the status quo”, or 3) “Roll back” Chinese expansion and excessive sovereignty claims. Key observable metrics will indicate which of these policy options is being followed, the range of diplomatic and military strategies to achieve those policy aims, and their likely outcomes.
Journal of Political Risk, Vol. 4, No. 3, March 2016
By Bhakti Mirchandani
Syrian refugee students wave to welcome United Nations Secretary-General Ban Ki-moon, unseen, to Zaatari Syrian refugee camp, in Mafraq, Jordan, near the Syrian border, Saturday, Dec. 7, 2012. U.N. Secretary-General Ban Ki-Moon on Friday called on the Syrian government to “stop the violence in the name of humanity”, during a visit to the Zaatari refugee camp in Jordan, close to the Syrian border. (AP Photo/Mohammad Hannon)
As the war in Syria hit its five-year mark this past Tuesday, the European strategy for managing the nearly 1 million Syrian refugees seeking asylum in Europe is not working. While most of the refugees that arrived in Europe in 2015 left Syria last year, others are leaving countries of first asylum Jordan, Turkey, and Lebanon for Europe after years of hardship. By way of background, first asylum countries are those that allow refugees to enter their territory for temporary asylum while waiting for resettlement or repatriation. The European Commission is hoping that another deal with Turkey and stronger Schengen Area external border controls will tackle the biggest European refugee crisis since World War II. As long as Syrian refugees lack the assistance they need in Syria and countries of first asylum, they will continue to make perilous journeys to Europe on unseaworthy boats. While the EU and Turkey negotiate a controversial refugee exchange program and the European Commission weighs the establishment of a “European Border and Coast Guard” with a larger budget and more authority than current EU management agency Frontex, the US should fund financially sustainable relief and development to Jordan in parallel with its extensive humanitarian and military aid. Jordan’s commitment to peace and moderation in the Middle East and cooperation with the US on security matters and counterterrorism make it a vital US ally.
Journal of Political Risk, Vol. 4, No. 3, March 2016
By Timo Kivimäki
MANILA, PHILIPPINES – FEBRUARY 4, 2016 – A protester gestures during a protest rally against the legality of the Enhanced Defense Cooperation Agreement (EDCA) in front of the US Embassy in Manila, Philippines. (Photo by Richard James M. Mendoza / Pacific Press)
In East Asia, two approaches for maintaining stability have been especially fruitful: developmentalism and non-interference. This article investigates the possibility of supplementing non-interference and developmentalism by building a legal order. It will explore ways that take the social construction of social structures seriously and applies them in a constructivist manner to the analysis of interaction of social realities with material realities and purposive agency. The intention is to show that the social construction of realities is also a realistic perspective, and that the perceived material realities, too, are largely dependent on social construction for their causal power in the creation of the situation of the South China Sea conflicts. Continue reading
Journal of Political Risk, Vol. 4, No. 2, February 2016
By Kerry Brown, PhD, King’s College, London
U.S. Secretary of State John Kerry, left, poses with Chinese President Xi Jinping prior to their meeting at the Great Hall of the People in Beijing, Wednesday, Jan. 27, 2016. Kerry is in China on the final leg in his latest round-the-world diplomatic mission. (AP Photo/Jacquelyn Martin, Pool)
This paper takes the example of the Chinese claims on the South China Sea, particularly since the appointment of Xi Jinping as General Secretary of the Communist Party of China in late 2012, and looks at the ways in which the Party and the government interact over foreign policy issues, along with how others contribute to this process. It shows that the Party leadership works through articulation of highly abstract macro policy goals, issuing high-level guidance for state, military, corporate and public entities without risking specific details. There is then some space for these “lower bodies” to negotiate and create their own standpoint. This does not mean that the process is solely top-down. What it does mean is that the Party under Xi has a dynamic process by which it allows voices within society to contribute to the formulation of policy in an iterative manner. It also shows how for the Xi leadership the South China Sea is part of a process to establish other forms of legitimacy beyond those simply described as economic. In this way, the Party is able to present itself as the restorer of national pride and rejuvenation and gain immense political capital from this. In this context, the South China Sea is as much a domestic issue as a foreign policy one, something that is often missed in external analysis of this issue.
Journal of Political Risk, Vol. 4, No. 1, January 2016
By Leonardo Bernard
Protesters wearing fish-shaped hats gather outside the Chinese Consulate during a rally in suburban Makati, south of Manila, Philippines on Tuesday June 11, 2013. The group held the rally to oppose China’s alleged continued intrusion and poaching activities in the West Philippine Sea. (AP Photo/Aaron Favila)
One of the most important disputes that exist between states surrounding the South China Sea is over fishing rights, as most of the states bordering the South China Sea assert an exclusive right to fish in parts of it. For example, the Philippines and Vietnam claim that they have an exclusive right over fisheries resources in the waters within 200 nautical miles (M) of their respective mainland coasts. China also declares the right to exploit fisheries resources in the South China Sea, but not only in the waters within 200 M from its mainland coast and from the Paracel Islands. By using the ‘U-shaped line’, China’s claim extends beyond any possible exclusive economic zone (EEZ) limits that can be generated by its mainland and by any islands in the South China Sea over which it claims sovereignty. China, however, has not clarified the meaning of the U-shaped line map, nor the maritime zones generated by the islands in the South China Sea over which it claims sovereignty.
China’s fishing right claim appears to be based on both EEZ entitlement and historic claim. China argues that the features in the South China Sea are entitled to a full-fledged EEZ and continental shelf as a group, but has yet to make any official declaration of the limit of its EEZ claim from the islands. Additionally, China argues that they have a form of exclusive historic rights within the waters inside the U-shaped line but beyond the maritime zones generated from the islands. However, this unusually expansive and exclusive historic claim over such a huge body of water would unlikely be agreed to by the international community.
Whether historic title can trump the provisions of UNCLOS depends on the strength of the claim to historic title. If a state can provide an exceptionally strong basis to its historic claim, then maybe such historic title could be considered as an exception to the rules in UNCLOS. However, justifying a historic fishing right claim over the waters within the U-shaped line in the South China Sea is a Sisyphean task. This uphill battle to make a justifiable historic rights claim under international law has been severely limited by the high threshold of proof set by the ICJ. Moreover, such rights have mostly become obsolete since the advent of the EEZ and continental shelf concepts.
Journal of Political Risk, Vol. 3, No. 12, December 2015.
Below is the speech delivered by H.E. Ambassador Katalin Bogyay, Permanent Representative of Hungary to the UN in New York City on 20th October, 2015 at the Reception on the occasion of the commemoration of the 23 October, 1956 revolution.
Ladies and Gentlemen,
Security Council adopts historic resolution on youth, peace and security. December 2015. UN Photo/Amanda Voisard
In the music of Egmont overture, Op. 84. Ludwig van Beethoven, one of the greatest composers of mankind expressed his own political concerns through the exaltation of the heroic sacrifice of a man condemned to death for having taken a valiant stand against oppression. It was composed during the period of the Napoleonic Wars, at a time when the French Empire had extended its domination over most of Europe.
The subject of the music and dramatic narrative is the life and heroism of a 16th-century Dutch nobleman, the Count of Egmont.
Journal of Political Risk, Vol. 3, No. 12, December 2015.
By Scott Atran
A. What ISIS Wants
Members of Scott Atran’s research team, Lydia Wilson and Hoshang Waziri, run an experiment with a Peshmerga fighter (front) near Mahmour on the frontlines between Mosul and Erbil in Northern Iraq, about 1km from ISIS positions. You can see fusion cards (pairs of circles) and formidability cards (bodies from smaller and weaker to bigger and stronger) in the experiments. March 2015. Photo credit: Scott Atran.
The following are axioms drawn from The Management of Chaos-Savagery (Idarat at-Tawahoush, required reading for every ISIS political, religious and military leader, or amir), and from the February 2015 editorial in Dabiq (online ISIS publication), on “The Extinction of the Gray Zone.” ISIS’s actions have been, and likely will continue to be, consistent with these axioms:
- Work to expose the weakness of the so-called Great Powers by pushing them to abandon the media psychological war and war by proxy until they fight directly.
- Draw these powers into military conflict. Seek the confrontations that will bring them to fight in our regions on our terms.
- Diversify the strikes and attack soft targets – tourist areas, eating places, places of entertainment, sports events, and so forth — that cannot possibly be defended everywhere. Disperse the infidels’ resources and drain them to the greatest extent possible, and so undermine people’s faith in the ability of their governments to provide security, most basic of all state functions.
- Target the young, and especially the disaffected, who tend to rebel against authority, are eager for self-sacrifice and are filled with idealism; and let inert organizations and their leaders foolishly preach moderation.
- Motivate the masses to fly to regions that we manage, by eliminating the “Gray Zone” between the true believer and the infidel, which most people, including most Muslims, currently inhabit. Use so-called “terror attacks” to help Muslims realize that non-Muslims hate Islam and want to harm all who practice it, to show that peacefulness gains Muslims nothing but pain.
- Use social media to inspire sympathizers abroad to violence. Communicate the message: Do what you can, with whatever you have, wherever you are, whenever possible.
- Pay attention to what works to hold the interest of people, especially youth, in the lands of the Infidel [e.g., television ratings, box office receipts, music and video charts], and use what works as templates to carry our righteous messages and calls to action under the black banner.
Journal of Political Risk, Vol. 3, No. 9, September 2015.
By Gregory B. Poling
Construction at Fiery Cross Reef as of November 2014. Source: CSIS Asia Maritime Transparency Initiative and Digital Globe.
There has been an explosion of interest in the U.S. policy community regarding the South China Sea disputes, but that interest has too often resulted in oversimplifications and haphazard recommendations regarding how the United States should respond to Chinese activities in disputed waters. Not every action that could be taken should be taken. In order to respond effectively to increasing tensions, U.S. policymakers must clearly identify U.S. long-term strategic goals and gear policy responses toward achieving them. This paper argues that the United States’ top interest in the South China Sea is the preservation of the global maritime commons, and its eventual goal must therefore be to see China clarify its ambiguous “nine-dash line” claim so that the claimants can reach a long-term agreement on managing the disputes that is consistent with international law. Building partner capacity and boosting U.S. presence in order to prevent other claimants from being steamrolled by Chinese bullying before such a resolution can be effected is an important part of that strategy, but it is not the long-term goal. The paper concludes with a number of recommended policy responses the United States should take in order to further its strategic goals.
China’s island building campaign in the Spratly Islands continued unabated through most of 2015, despite strident condemnation from fellow claimants and outside nations. Chinese dredging ships remained hard at work expanding seven features: Cuarteron, Gaven, Hughes, Fiery Cross, Johnson South, Mischief, and Subi reefs. Their work appears to have been completed. Now China is moving from island building to large-scale construction of military and civilian structures at these artificial land masses. China has presented the region and interested outside parties, including the United States, with a fait accompli.
Journal of Political Risk, Vol. 3, No. 8, August 2015.
By Olena Lennon and Alexander V. Laskin
A woman walks past a shop window with a T-shirt on display reading, ‘I Believe in the Ruble’, in downtown Moscow, Russia, on Monday, Dec. 22, 2014. The ruble has been the worst performing currency this year along with the Ukrainian hryvnia, having lost half of its value. Its collapse in the past weeks sparked a consumer boom as worried Russians flocked to the shops to buy cars and durable goods before prices rose further. (AP Photo/Pavel Golovkin)
Recent sanctions against Russia following its military incursion in Ukraine have not been effective in their short-term goal (Russia’s withdrawal from Ukraine) and long-term goal (change of Russia’s regime). By applying Lektzian and Patterson’s theory of winners and losers of sanctions to the Russian case, we argue that the sanctions have not been effective for three reasons: the cost of sanctions is lower than the cost of conceding, the economic costs associated with sanctions are felt disproportionately across groups, and increased restrictions to international commerce have fueled nationalism and empowered Russia’s authoritarian regime. Our analysis of anti-Russian sanctions also points to a gap in Lektzian and Patterson’s theory, which differentiates between the varying types of countries subjected to sanctions, but overlooks the multiplicity of political agendas among sanctioning parties. The case of sanctions against Russia demonstrates a lack of unity and prevalence of conflicting agendas among the sanctioning parties, such as the E.U. countries, the United States, and Canada. Therefore, to better understand the mechanism of sanctions and predict their success or failure, we recommend further categorizing sanctioning countries based on their involvement with the target country in terms of trade, joint research projects, and political alliances. This differentiation will allow us to examine the interaction between the varying types of sanctioning countries and target countries to determine which combinations are likely to bring the desired outcome.