Geopolitical Risk

[Davexl]

And a Happy New Year to you too GTM (and all other contributors esp BP)

Top Stories 2024: International Operations in the Western Pacific

https://news.usni.org/2024/12/31/top-stories-2024-international-operations-in-the-western-pacific?ct=t(USNI_NEWS_DAILY)&mc_cid=0978f0864d&mc_eid=cc0f71bf89

[Davexl]

Well worth a read, compared to a previous article where Matthew was overly critical of Christopher Luxon's leadership (where it appeared to be possibly personal, IMO...)

Fiscal policy will push New Zealand back to China - Matthew Hooton

https://www.nzherald.co.nz/business/fiscal-policy-will-push-new-zealand-back-to-china-matthew-hooton/U4OB2N77ERAMBEEUK2WPVE5EXQ/

Excerpt:

"In 2014, Nato agreed each of its members should spend at least 2% of their GDP on defence by 2024. In his first term as US President, Donald Trump linked that commitment to maintaining the US security guarantee. More coarsely, candidate Trump said last February that Russia could do "whatever the hell they want" to Nato members not honouring the spending commitment.

Nato is itself now considering raising the guideline to 3% of GDP. Trump reportedly plans to demand 5%, more than the US's own spending of 3.4%, interpreted as pressure to lock in 3%.

Nato's and Trump's demands will inevitably extend to the IP4. Of the 36 Nato and IP4 countries, New Zealand's defence spending is by far the lowest, at a little over 1% of GDP.

In contrast, South Korea is already well above 2%, which Australia reached last year and Japan will pass by 2028. The worst Nato country is Spain, on 1.3% and under strong pressure to comply with the 2% rule.

Just to maintain our current 1% of GDP, Finance Minister Nicola Willis needs to increase defence spending by around $800m a year by 2027/28.

Hitting 2% would cost over $5b a year more. A new Nato-Trump 3% rule would cost Willis $10b a year, four times what she had put aside in her annual spending allowances for everything, including health, education and law and order.

Even matching Spain's unacceptably low 1.3% by 2027/28 demands Willis find nearly $1.5b a year more, or $6b over four years.

We can't plead poverty. The guideline is a percentage of GDP so already takes into account us being poorer than other Nato-IP4 countries. The real difference is that while those countries are allocating more of their GDP to defence, we prefer to spend it on Working for Families, universal superannuation and the recent tax cuts.

There is no way we can expect to remain in the Nato-IP4 club, regardless of Trump, unless we are prepared either to forego billions of dollars of other government spending, pay higher taxes or add billions more to our debt.

If we're not prepared to do any of them, then Peters' work over 20 years and the bold Ardern-Hipkins-Luxon tilt to Nato risks costing us our economic relationship with China while doing nothing to improve our security.

We'd end up with little choice but to follow the example of other failing Pacific states of waving our begging bowl outside the Chinese embassy."

[Davexl]

The scale of Australia's Defence Commitment, NZ doesn't even rate, based on our comparative (economic) sizes...(based on corrected AI txt of article photo)

Canberra prepares workforce to build its own nuclear subs

Washington Post

Ollie Filipponi always thought he'd be an electrician. But then the 16-year-old started at Findon Technical College, a new high school where the curriculum is partly designed by a defence contractor and the welding bays are modelled on those at the local naval shipyard.

Now the curly-haired teen dreams of building nuclear-powered submarines. "That's way cooler than wiring houses," he said.

Ollie is one of the early beneficiaries of Aukus, the trilateral security pact in which the United States and the United Kingdom are helping Australia build nuclear-propelled submarines to counter China's growing military assertiveness in the region. Australia has committed to spend as much as US$250 billion (NZ$446b) over three decades, first to acquire used submarines, then to build its own.

Although submarine construction won't start for at least five years, Australia has already begun assembling an Aukus work- force.

It is concentrated in South Australia, where a new submarine shipyard is under- way. To build these advanced vessels, this state of fewer than 2 million people will need thousands of shipbuilders and hundreds of engineers, according to federal and state officials and representatives of the defence industry.

The state government is boosting STEM science, technology, engineering and mathematics education in its elementary schools, including lessons designed by defence contractors.

Findon is the first of five new technical colleges built by the state to train teens for Aukus-related careers. A local university is teaching nuclear engineering with US assistance. And the federal government will soon fund 800 new places for university students to study STEM in South Australia, plus 3200 more nationwide.

"We are moving at warp speed," South Australia Premier Peter Malinauskas said.

The re-election of Donald Trump has injected some uncertainty into the future of Aukus, however. While Canberra doesn't expect Trump to scrap the plan, some analysts think he could seek to amend or renegotiate it.

Australian opponents of Aukus are meanwhile seeking to capitalise on the uncertainty and upend the deal.

But what that debate often overlooks partly because the first subs won't be completed until about 2040 - is that Aukus is already very much under way in Australia. "This is the biggest industrial endeavour that's happened in Australian history," Defence Minister Richard Marles said. "You can look at these time frames and say, "That's a long way in the future. But, in fact, it's not. Every day matters."

About 60 members of the Royal Australian Navy are training to work on nuclear-powered submarines in the United States or the United Kingdom, according to Australian defence officials, and nearly a dozen are already serving on US or UK subs. One even piloted the used the USS Hawaii into Perth in 2024 for first maintenance of its kind outside the United
States or a US base.

Scores of Australian shipbuilders are in Pearl Harbour training on American subs ahead of rotations of US and UK boats to Western Australia starting in 2027. Australia is spending US$5b on upgrading a naval base in Perth ahead of the visits.

Both efforts are to prepare Australia for when it buys the first of at least three US Virginia-class submarines around 2032. That's also around the time Australia will begin building the first of five nuclear-propelled submarines here in Adelaide.

"This is a huge horse that we're getting on here," Marles said. "We can't just magic this."

Australia's future nuclear submarine factory is currently little more than an empty field on the banks of the Port Adelaide River. But this barren patch of the Osborne shipyard is where BAE Systems, a British defence contractor, will build the Aukus-class sub with a local company, ASC. The Aukus sub is being designed by a UK team with Australians "embedded in it, said Craig Lockhart, chief executive at BAE Systems Australia. The United States is also closely involved since the sub will use US technology and weapons, and preliminary designs are more than 75% complete, he said.

A joint venture between the two companies will hire roughly 5000 people over the next decade. The state and federal governments will begin building a skills academy at Osborne this year to train young sub-builders. And as the shipyard goes up, so, too, will schools, day-care centres, housing and transportation links.

Something similar is happening in Western Australia, where Perth's HMAS Stirling naval base is being prepared, to the tune of US$5b in wharf upgrades and new facilities, for deployments of American nuclear-propelled submarines in 2027.

Aukus will create 20,000 jobs in Australia, officials say. But at a cost of up to US$250b, that works out to roughly US$12 million per job, and some critics argue that the programme doesn't justify the price.

"It's an incredibly inefficient way of creating jobs for people who, for the most part, are already employed," said John Quiggin.a professor of economics at the University of Queensland.

Marles, the defence minister, countered that Osborne will have some of the world's most advanced production lines, saying that "there's no doubt that will flow into the wider economy."

He wants to speed up South Australia's pilot programme to bring local companies into the US nuclear submarine supply chain. The effort is being run by HII, one of two US shipbuilders who make Virginia-class subs. If Australian companies can make some parts, it will speed up US production and prepare Australia to maintain its Virginia-class vessels and, eventually, to make the Aukus sub.

"What we're trying to do is help ourselves and in the process establish sovereign Australian capability," said Michael Lempke, who leads HII's Aukus efforts, adding that the company will soon launch a similar programme in Western Australia.

[Davexl]

 Quote Originally Posted by moka View Post

NATO should have been disbanded after the Cold War ended according to Jeffrey Sachs, but it persisted and evolved in ways that have been detrimental to global security. Sachs presents several key arguments:

NATO's Post-Cold War Evolution
· Missed opportunity: Sachs argues that NATO missed the chance to transform itself more fundamentally after the Cold War. Instead of disbanding or welcoming Russia into a new security architecture, NATO chose to expand eastward.
· Tool for US hegemony: Sachs contends that NATO has served as a war machine and facilitated US hegemony in the post-Cold War era.

Consequences of NATO's Continuation
· Source of global disruption: Sachs believes that NATO's continued existence has become a source of global turmoil.
· Cause of the Ukraine conflict: He argues that the war in Ukraine is a direct result of NATO enlargement, which Russia viewed as a threat to its security.
· Violation of agreements: Sachs points out that NATO expansion violated assurances given to Russia in the early 1990s that the alliance would not move "one inch eastward" if Russia accepted German unification and withdrew from the Warsaw Pact.

Alternative Approaches
Sachs suggests that instead of expanding NATO, the US and its allies should have:

    Emphasized the Organization for Security and Cooperation in Europe (OSCE) as a broader, more inclusive security framework.
    Focused on building confidence with Russia after decades of Cold War tensions.
    Engaged in US-Russia security negotiations, including a promise that NATO would not enlarge to include Ukraine.

In Sachs' view, the decision to expand NATO rather than disband it or fundamentally restructure European security has led to increased tensions with Russia and contributed to current global instability.
Written by Perplexity AI

https://www.jeffsachs.org/newspaper-...f9486kallhnsxw
US-led NATO brings disastrous 'wars of choice'

https://www.jeffsachs.org/newspaper-...ssian-invasion
The continuing U.S. obsession with NATO enlargement is profoundly irresponsible and hypocritical. And now Ukrainians are paying a terrible price.
---------------------------------------

Hi Moka,

Speaking personally, I have some sympathy for Jeffrey Sach's view on NATO's eastward expansion, and Russia quite naturally perceiving this as a direct threat, given Ukraine's role as a buffer state - however the Russian state has been pre-emptive in invading Ukraine, starting in 2014 and expanding further in 2022.

Just because the cold war was 'over' doesn't mean the opportunity for NATO to disband presents itself as an opportunity. No one could credibly suggest that inviting Russia into the NATO pact itself was a credible option, given the state of Russia's remaining power and strongly authoritarian tendencies.

Perhaps over an extended period of time, if Alexei Navalny had been able to assume power, things within the European theatre might have been 'somewhat' different, but given the global reach of nuclear weapons - there would still have been the need to provide deterrence against the rapidly growing strategic power of China.

Deterrence seems to work mostly, most of the time, as we hope it will do with China also with the US AND NATO's power combined with our small contribution in the Pacific.

The key lesson seems to be that real Deterrence costs - and those costs have been largely borne by the US, and to a far lesser extent by NATO in the recent past. That lesson is the one thing that Trump is right about IMO FWIW...

(And I still have a copy of Jeffrey Sach's book "A New Foreign Policy - Beyond American Exceptionalism" sitting on my desk, unread. Probably time to read it !)

[Davexl]

 Quote Originally Posted by Panda-NZ- View Post
NZ exports to US in goods: $8.2b
Services $6b (mainly tourism so impossible to tariff).

Total $14.6b.

https://www.mfat.govt.nz/en/trade/mf...nues-june-2024

Better to wait trump out (last term).

If there's a conflict in this region though during his term though... our reputation amongst our allies could be damaged if we do that. We can still join "free" alliances/defence organisations though.
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Such a pity that New Zealand STILL pleads that it is poor. It simply has bludged off everyone else in the last 30 odd years enjoying its American provided 'relative' Peace Dividend (as has most of Europe), rather than simply accept that Defence is the insurance payment we all need to maintain - and we have other choices to buy weapons from now not just the US.
eg Missiles from India (Brahmos) and Fighters from Sweden (Saab Gripen), Counter-drone systems from Australia...

[Waltzing]

NZ under helen and others adopted to have departments of everything...

and now under this government its departments as usual... one wonders what the per head of population per government agency and related supported off shoot shops is, not just expenditure Per capita..

you cant have more sporty stuff when the stuff you have is lot of supportive stuff...and apparently more is needed...

red alert alarms in north land for doctors of the mind ... minding the support supply shop...

truly a broke nation ... possible a roger D moment coming soon...

then it will be bring your own cut lunch and thermos...

[Waltzing]

The threat of the Russian horde is real... and its a bathtub mobile army...

the Chinese on the other hand have a lot of mobile systems... its not Russia that is the real threat...

https://www.youtube.com/watch?v=qDpfvH1wI-4

[Waltzing]

China maybe about to surprise the world ... or is it the same problem that befell the USSR.. China is hiding the problems behind a state controlled media..

But the Chinese bond investors are fleeing the market ..

https://www.interest.co.nz/bonds/131406/bond-bubble-developing-chinese-financial-markets-and-regulators-are-scrambling-contain

and it has implications for NZ INC..

[Davexl]

The situation as Japan's military sees it...

Japan Facing Most Complex Security Environment Since World War II, Warn Military Leaders

https://news.usni.org/2025/01/06/japan-facing-most-complex-security-environment-since-world-war-ii-warn-military-leaders?ct=t(USNI_NEWS_DAILY)&mc_cid=351f7bd6a6&mc_eid=cc0f71bf89

[Waltzing]

Estonia Ministers are warning its 1938 and there is still time but really is it a bit silly to sound the alarm after russia is back to using golf carts and bathtubs on wheels....

they have lost the MED with it submarine and landing ship leaving the region...

The Russian  cruise missles cant even evade old F16's with one Ukraine air ace downing up to 6 cruise VISSELS in one day using the old F16's...

Russian is a bear lost in the woods well at least at the moment...

More threat to NZ is china catching an economic cold and the KIWI dollar taking a pounding from export sales to china declining..

[Davexl]

 Quote Originally Posted by moka View Post
Jeffrey Sachs's book (2018) "A New Foreign Policy: Beyond American Exceptionalism" offers a critical examination of U.S. foreign policy and proposes a new approach for America's global engagement. The book argues that the United States must move away from its traditional stance of exceptionalism and military dominance towards a policy of international cooperation and sustainable development.

...

Alternative Vision
The book provides a comprehensive roadmap for creating a foreign policy that would make the U.S. a responsible and reliable partner in global affairs. Sachs argues that this approach is not only morally desirable but also offers a better return on investment compared to the current policy of "endless war".
In conclusion, "A New Foreign Policy: Beyond American Exceptionalism" presents a bold critique of past and present U.S. foreign policy while offering a vision for a more cooperative and sustainable approach to global challenges.

https://digitalcommons.uri.edu/cgi/v...6&context=mgdr
Fittingly, Sachs dedicates the book two of "the great truthtellers in our midst" (p. 222): Noam Chomsky and Bernie Sanders. It is a proud tradition that Sachs emulates.
https://www.tandfonline.com/doi/full...9.2020.1782070
------------------------------------------------------------

This summary reminds me of Jeffrey Sach's moral objectives that resonate with me on the 'idealist wing', along with a past admiration of Bernie Sanders as one of 'the great truthtellers'.

The reason I say Past, is simply because in geopolitics one has to take off the rose tinted glasses and deal with the world as it is, not as we would dream for it to be.

Which is why I would have voted for Biden, (preferably a younger version) rather than Bernie Sanders had I been American.

The closest President of 'moral objectives' in my lifetime would have to be Jimmy Carter (see past article on other channel) and even he served in the US Navy (submarines), believing in strong deterrance, in defence of his nation...

[Davexl]

Estonia Ministers are warning its 1938 and there is still time but really is it a bit silly to sound the alarm after russia is back to using golf carts and bathtubs on wheels....

they have lost the MED with it submarine and landing ship leaving the region...

The Russian  cruise missles cant even evade old F16's with one Ukraine air ace downing up to 6 cruise VISSELS in one day using the old F16's...

Russian is a bear lost in the woods well at least at the moment...

More threat to NZ is china catching an economic cold and the KIWI dollar taking a pounding from export sales to china declining..

The Kiwi and the Aussi dollars will likely both be taking an economic pounding.
Looks like iron-ore is dropping below the $100 per ton mark, Aussi nickel being supplied to China by Indonesia instead, lithium at a low...

In NZ looks like dairy prices are heading down also.

The only saving grace for NZ, is that with even higher tariffs on China, they will be desperate to price their exports even more sharply to those willing to trade eg Aussi & NZ,  and increasingly the BRICS countries even as the US continues to decouple from China.

[Davexl]

Re cable sabotage protection etc...

UK to Lead Joint Expeditionary Force, NATO Effort to Track Russian 'Shadow Fleet'

https://news.usni.org/2025/01/07/uk-to-lead-joint-expeditionary-force-nato-effort-to-track-russian-shadow-fleet?ct=t(USNI_NEWS_DAILY)&mc_cid=85faeb7947&mc_eid=cc0f71bf89

[Davexl]

(US) Navy Plan to Buy 85 New Ships Will Cost $1 Trillion, CBO Says

https://news.usni.org/2025/01/07/navy-plan-to-add-85-news-ships-will-cost-1-trillion-cbo-says?ct=t(USNI_NEWS_DAILY)&mc_cid=85faeb7947&mc_eid=cc0f71bf89

Excerpt:

Navy leaders want the current force to prepare for conflict and have made maintaining the existing fleet a priority by 2027. They are planning for a modest three to five percent growth in the shipbuilding budget.

"We cannot manifest a bigger traditional Navy in a few short years, nor will we rely on mass without the right capabilities to win the sea control contest," reads Chief of Naval Operations Adm. Lisa Franchetti's September navigation plan. "Without those resources, however, we will continue to prioritize readiness, capability, and capacity—in that order. We must recognize that the Navy faces real financial and industrial constraints."

[Davexl]

Editors' picks for 2024: 'As important as Ukraine is, a Taiwan war must be Australia's biggest worry'

Emeritus Professor Paul Dibb

https://www.aspistrategist.org.au/editors-picks-for-2024-as-important-as-ukraine-is-a-taiwan-war-must-be-australias-biggest-worry/?utm_medium=email&utm_campaign=Weekly%20The%20Strategist&utm_content=Weekly%20The%20Strategist+CID_0db46f791aa8738cfb9b82cfcb857b0e&utm_source=CampaignMonitor&utm_term=Editors%20picks%20for%202024%20As%20important%20as%20Ukraine%20is%20a%20Taiwan%20war%20must%20be%20Australias%20biggest%20worry

Excerpt:

So, in the event of a US war with China over Taiwan, what could Australia contribute? Our defence force is of a modest size but we have considerable potential to defend ourselves if, instead of just waiting for AUKUS submarines, we rapidly acquire sufficient long-range anti-ship missiles with ranges of more than 2000km.

We would, however, require access to airfields and ports—for example in Okinawa, which is less than 600km from Taiwan. But a more credible military mission for us would be to deny the narrow straits of Southeast Asia (Malacca, Sunda and Lombok) to China's maritime traffic—including the 80 percent of its oil imports.

The purpose of this analysis has been to demonstrate the dangers of listening to those who focus only on the risks of resisting and deterring China. Instead, my analysis here concentrates on the dangers of not resisting and not deterring China.