Trump’s trade tantrums and a delicate balancing act for India

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The US recently announced the termination of its Generalized System of Preferences (GSP) designation for India. Under the GSP, certain designated goods had been permitted to enter the US duty-free. While the US action has made the headlines, its origins and implications are not well understood. What is the larger significance of this spat?

As background: Indian merchandise exports to the US in 2018 were about $55 billion, of which only about $5.5 billion were exports under GSP. The “preference margin" that India enjoyed by gaining duty-free access on these goods was only about 3-4%. If this cost is completely absorbed by Indian exporters, the withdrawal would translate into a loss to India of about $200 million. However, if India has market power in any of these industries, the cost may be passed on to US customers in the form of higher prices. Market realities will determine the sharing of this burden; the ultimate cost to Indian exporters could be considerably lower. Regardless, the costs of GSP withdrawal are quite modest.

US’ Recent Decisions To Cloud Pompeo’s Visit To India – Analysis

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By Kashish Parpiani

Washington is seeking to share onus with New Delhi on continuing the cultivation of strategic ties.

Ahead of his visit to India on 25-26 June, US Secretary of State Mike Pompeo delivered a policy address on the India-US ties at the India Ideas Summit and 44th Annual Meeting of the US-India Business Council (USIBC) in Washington DC. In underscoring the criticality of the evolving dynamic between the two nations, Secretary Pompeo said, “it’s only natural that the world’s most populous democracy should partner with the world’s oldest democracy to maintain our shared vision throughout the Indo-Pacific.”

This address comes amidst a recent flurry of attention to India’s central position in the US’ strategic calculus. For instance, the recent US Department of Defense Indo-Pacific Strategy Report underscores the cruciality of the United States “building new and stronger bonds with nations that share our values across the region, from India to Samoa.” Furthermore, building on the June 2017 discussions between Prime Minister Narendra Modi and President Donald Trump, the US has now reportedly agreed to sell surveillance version of the Sea Guardian drones. If the sale goes through, India will be the first non-formal treaty partner of the US to receive the MTCR Category-1 Unmanned Aerial System.

Glacier Watch: Indus Basin – Analysis

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Many of the world’s most iconic river systems – the Mekong, Indus, Yangtze – are fed by glaciers that both supply and modulate their water flow. Now these glaciers are melting due to climate change, threatening irrigation systems, electricity generation, and drinking water reserves in some of the most densely populated areas of the planet.

No two glaciers are exactly the same. They’re melting at different rates, with some entering their terminal decline sooner than others. The repercussions vary as well. In some cases, reductions in glacier runoff have a negligible effect on downstream flow. In others, they can severely disrupt local water systems, particularly those with antiquated and wasteful extraction methods.

The concept of ‘peak water’ is key to understanding glacier decline. As overall glacier mass shrinks, higher-than-average run-off is produced during the melt season. However, these run-off levels will eventually peak, and a period of terminal – and essentially irreversible – decline will follow. Every glacier has a unique peak water threshold. According to a study published by Nature Climate Change, around 45% of the world’s glacier-fed basins have already passed this point, including the source of the Brahmaputra. Another 22% of basins are predicted to be trending up in run-off through to 2050, including the Indus and Ganges headwaters, which are expected to peak in 2070 and 2050 respectively.

Nepal: “ A Summer of Protests”- Does PM Oli care?

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By Dr. S.Chandrasekharan

This summer, Nepal is seen to be witnessing protests on various issues all of the Government’s own making.

The first was the Media Council Bill which is still attracting a large number of protests. There has been no attempt by the government to explain the Government’s stand! (We have a paper on this)

Then came the advertisement in the Public Service Commission calling for filling up of vacancies of over 9161 local government posts- a responsibility over which the centre has no moral jurisdiction when the States are mandated to do so under the Constitution. This is being done without even ensuring proper quota under the reservation scheme. No doubt the States and particularly the Madhesi groups are up in arms.

Then there is the Guthi Samsthan bill by which the Government ,wants to nationalize the Guthi properties and bring them all under a National Commission- a project the Government had been planning since last November. There was no hurry to take over the Guthi functions done by private institutions under proper checks and there have been no complaints of misappropriation or misuse. Guthis are socio-economic Institutions to fulfill religious, public and cultural functions. Yet the the Government was in a hurry to upset the powerful Newar Community of the valley who allege that it is a direct assault on their cultural heritage!,

11 Years on, Has Nepal’s Republic Succeeded?

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By Peter Gill

Pessimism about Nepal’s politics is common, despite significant changes since the declaration of the republic in 2008.

In Nepal, May 28 marks Republic Day, commemorating the date in 2008 when an elected Constituent Assembly brought an end to the country’s centuries-old monarchy and declared it a federal, democratic republic. This year, the president and a minister marked the holiday by inaugurating a new Republic Memorial at a park that was symbolically carved out of the old royal palace grounds, known as Narayanhiti, in central Kathmandu. But after the VIPs left, the monument did not open to the public as planned. Like many state construction projects, it has faced repeated delays since it began in 2012, and workers are now completing finishing touches and removing scaffolding.

Across the street from the Memorial’s closed gate is a small teashop where office workers and local youth gather in the mornings. Hari Ballav Pant, the shop’s gregarious, grey-mustachioed owner, grew up in the neighborhood and has seen it change dramatically over the years. During the monarchy, he ran a business shampooing carpets inside Narayanhiti Palace. When asked what the new Republic Memorial means to him, Pant replies tersely.

Hong Kong, Taiwan and the hope for a better China

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Nothing better captures the difference between Hong Kong and mainland China than the annual commemoration of the Tiananmen Square massacre that takes place on June 4 every year in Hong Kong’s Victoria Park.

In mainland China the memory of the crushing of the pro-democracy movement in 1989 is ruthlessly suppressed. But Hong Kong has been allowed to continue to mark the anniversary. That kind of freedom matters not just to the 7.4m inhabitants of Hong Kong. Potentially, it is also of great importance to the future of China itself.

Put simply, Hong Kong is acting as a guardian of China’s memory and of the hope that a more liberal China could one day replace the current one-party state. The “one country, two systems” arrangement put in place when Britain handed Hong Kong back to China in 1997 has allowed the territory to continue to preserve vital freedoms, such as an independent judiciary and a free press.

Rare earths give China leverage in the trade war, at a cost

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It looks at first like a classic Chinese painting: water-soaked paddies nestled against endless green hills. But then the brown begins. Abandoned brown pits on the hilltops. Brown gashes down their sides. Brown sludge in the streams. Ganzhou, until a few years ago, was southern China’s mining country. The damage done in the name of economic growth involves an industry that has given China leverage in its trade war with America. The rocks extracted are rich in rare-earth minerals, used in everything from planes to smartphones. It is a dirty business that China dominates.

Rare earths, covering 17 elements on the periodic table, are in fact common. But China holds two-fifths of global reserves. In 1992 Deng Xiaoping quipped that “the Middle East has oil, China has rare earths.” The chemicals used to extract them from the ore create toxic run-off, and for years China was more willing to bear that cost than other countries. By the early 2000s it accounted for almost all the world’s production. “There were no laws back then and everyone here was digging up the ground,” says Xie Yizhen, a local who worked in mining for 18 years.

UK to host economic talks with China on June 17

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LONDON, June 11 (Reuters) - Britain and China will hold the next round of talks about their economic and financial ties on June 17, Britain’s finance ministry said on Tuesday.

“Our economic and financial relationships with countries like China are key to our global future, and this tenth EFD (Economic and Financial Dialogue) will see the golden era of relations between our two countries further strengthened,” British finance minister Philip Hammond said in a statement.

Hammond and China’s vice premier, Hu Chunhua, would discuss multilateral and bilateral economic issues, financial services cooperation, and trade and investment, the ministry said.

Britain is seeking to develop deeper global trade and investment ties as it prepares to leave the European Union. But relations between London and Beijing have been strained in recent years, most notably after a British warship sailed close to islands claimed by China last August. (Writing by William Schomberg; editing by Michael Holden)

Hong Kong, Taiwan and the hope for a better China

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Nothing better captures the difference between Hong Kong and mainland China than the annual commemoration of the Tiananmen Square massacre that takes place on June 4 every year in Hong Kong’s Victoria Park.

In mainland China the memory of the crushing of the pro-democracy movement in 1989 is ruthlessly suppressed. But Hong Kong has been allowed to continue to mark the anniversary. That kind of freedom matters not just to the 7.4m inhabitants of Hong Kong. Potentially, it is also of great importance to the future of China itself.

Put simply, Hong Kong is acting as a guardian of China’s memory and of the hope that a more liberal China could one day replace the current one-party state. The “one country, two systems” arrangement put in place when Britain handed Hong Kong back to China in 1997 has allowed the territory to continue to preserve vital freedoms, such as an independent judiciary and a free press.

Hong Kong is not a full democracy. Its chief executive is elected by a tiny group from a Beijing-approved list. But, nonetheless, since 1997 the territory has provided room for ideas, people and organisations banned from mainland China. I know of well-connected Beijing families who have taken their children to Hong Kong for the June 4 commemoration — just to ensure that the memory of Tiananmen is passed down through the generations.

China's Expanding Media Dominance in Africa

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By Bartholomäus Grill

Chinese state television is gaining influence in Africa. But while the media outlets involved officially claim their journalism is independent, those who work for the companies tell a different story.

An interview? Or perhaps just a discussion on background? "We have no interest in speaking with you," Liao Liang writes in an email. And, thank you for understanding, but a visit to his television broadcaster in Nairobi isn't possible either, he writes. Indeed, the rejection is so complete, it's as though he is protecting a state secret.

Yet Liao Liang's mission in the Kenyan capital is hardly confidential: As a senior editor of the China Global Television Network (CGTN), a subsidiary of Chinese state television, his task is that of shining a positive light on his country's ambitious activities -- particularly those in Africa, where China's reputation has suffered as its footprint has grown.

Japan must prepare as the U.S. and China dig in

BY BRAD GLOSSERMAN

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It is tempting to see the hardening of U.S.-China relations as a temporary phenomenon, a product of unique features of contemporary international politics, the Donald Trump presidency in the United States in particular. Resist that temptation.

The U.S. consensus about the nature of its relationship with China has shifted to the right; it is difficult to find anyone who dissents from the view that the two countries are locked in an intense competition that threatens to spiral into a new Cold War.

This in turn validates the Chinese belief that the U.S. is determined to thwart its rise and encourages a nationalism and readiness to sacrifice on behalf of the nation that harkens back to the Long March. Together, these two perspectives virtually ensure that the U.S.-China relationship will become more confrontational. Japan must prepare for the impact.

The new U.S. approach to China was laid out in the December 2017 National Security Strategy of the United States. The NSS argued that the world had entered an era characterized by great power competition. While this competition is multidimensional, its primary focus is economic and the chief U.S. competitor is China.

The Senkaku issue as seen from the Falklands War

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BY ROBERT D. ELDRIDGE.

KOBE - I read a lot of books, both for fun but also for my work as an academic. Biographies and memoirs are my favorite, but I do not limit myself to those genres alone. That said, one of the best books I read this year so far is the 1993 memoirs of Margaret Thatcher, who served as prime minister of the United Kingdom from 1979 to 1990 and who passed away in 2013 at the age of 87.

All readers my age and older will certainly remember her, and the close relationship she had with Yasuhiro Nakasone, who served as prime minister from 1982-1987 and is still fortunately with us today (at 101 years old). Symbolizing the instability of Japan’s politics with its usual rapid change in administrations, Nakasone was one of the six Japanese prime ministers who were Thatcher’s counterparts during her time in office, although he was the longest serving then and one of the longest serving in the postwar period.

If Thatcher had a good relationship with the strong conservative Nakasone, she had an extremely difficult time with his predecessor, the former socialist-turned-Liberal Democratic Party member Zenko Suzuki. Her frustrations with Japan during the early years of her administration were clear throughout her memoirs, citing Japan’s stance on issues as “lame,” one of the worst put-downs in sanitized English.

Widening the Aperture with Saudi Arabia

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If there is a current U.S. strategy toward Saudi Arabia, it seems an awkward blend of blandishments, critiques, and neglect. While the bilateral relationship has always been complicated, it is especially fraught now. Dangerously, the U.S. government appears to have been personalizing the relationship, stressing the White House’s ties to the Saudi crown prince. U.S. interests require a broader approach, but the relationship appears to be narrowing.

It is worth recalling just why the U.S.-Saudi relationship matters to the United States. It is not, as many assume, simply because Saudi Arabia sells the United States a lot of oil. In fact, U.S. reliance on Saudi oil has declined dramatically in the last decade. And while the Saudis still view the Kingdom’s relationship with the United States as strategically critical, they have long abandoned the quest to be America’s largest foreign oil supplier and increasingly look to Asia for new growth markets.

Still, Saudi Arabia is a key supplier not only to U.S. allies in Asia, such as South Korea and Japan, but also to China and India. Its reserves are vast. Saudi Arabia’s ability to open its oil taps stabilizes oil markets and insulates those markets from disruption due to weather, politics, or mechanical failures. U.S. protection of the Saudi oil trade not only helps stabilize U.S. markets but also helps secure U.S. allies and builds allied support for the United States.

Why Does The Left Love Islam So Much?

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BERLIN — It is one of the most bizarre romances of the past decades: The love of many leftists for Islam. If their ideological ancestors once maintained that "There is no better being, no god, no emperor or tribune", as sung in the famous socialist "The Internationale" anthem, the wind has now turned. The stanzas have been rewritten.

People are protesting alongside Islamists who call "Allahu Akbar" against the state of the Holocaustsurvivors and their descendants, they view the apocalyptic Iranian cutthroat regime as the ideal anti-imperialist power and chant: "Hijab is Empowerment." At the same time, queer-feminist murder is carried out on icons such as Alice Schwarzer, and the liberal female Imam Seyran Ates is given the "haram" stamp: not allowed.

And then Frankfurt am Main. The city has just recovered from the excitement of an exhibition on "modest" Muslim fashion at the Museum of Applied Arts. It then moved on to the following battleground: the Johann Wolfgang Goethe University.

Because professor Susanne Schröter decided to invite people to a conference titled "The Islamic Headscarf: Symbol of Dignity or Oppression?", some students felt compelled to engage in a hate campaign against the head of the Frankfurt Global Research Center for Islam. "Schröter out" is the name of the hashtag slogan on Instagram. "No room for anti-Muslim racism."

Europe’s Dream: Escaping the Dictatorship of the Dollar

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By Keith Johnson

Europe’s quest to find an alternative to U.S. financial dominance and the global rule of the dollar has only intensified since French and German leaders first howled about the need to recover their economic sovereignty last summer. But European governments are finding that coming up with a workable plan is a lot easier said than done—leaving them fuming but still vulnerable to Washington’s strong-arm tactics.

That doesn’t mean, however, the Europeans are going to give up trying—and that poses a long-term danger to U.S. power.

Countries such as France and Germany first bristled at the Trump administration’s decision to unilaterally pull out of the 2015 Iran nuclear deal and reimpose crippling sanctions on Iran, putting European firms squarely in the crosshairs of U.S. sanctions. America’s Iran policy still rankles, and Europe’s efforts to create a so-called special purpose vehicle to enable some trade with Iran continue, with meetings taking place this week even with oil tankers ablaze just outside the Persian Gulf.

But since the return of the Iran sanctions last year, the Trump administration has dramatically stepped up its use of sanctions and other economic weapons to force friends and foes alike to cow to its foreign-policy wishes.

Trump Accuses New York Times of ‘Treason’ for Story on U.S. Cyber Offensive Against Russia

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Allison Quinn

President Trump has accused The New York Times of committing a “virtual act of treason” by publishing a story Saturday saying his administration has been targeting Russia’s power grid as part of an ongoing operation to counter cyber threats. “Do you believe that the Failing New York Times just did a story stating that the United States is substantially increasing Cyber Attacks on Russia. This is a virtual act of Treason by a once great paper so desperate for a story, any story, even if bad for our Country,” Trump wrote on Twitter late Saturday. “ALSO, NOT TRUE! Anything goes with our Corrupt News Media today. They will do, or say, whatever it takes, with not even the slightest thought of consequence! These are true cowards and without doubt, THE ENEMY OF THE PEOPLE!” he said.

The Times report relied on three-months worth of interviews with several current and former government officials, who described the deployment of American computer code into Russia’s electrical power grid in a move meant partly as a warning to Russian intelligence and partly as a pre-emptive strike in case of a cyberattack. Trump himself reportedly granted new authorities to the United States Cyber Command last year, and is also said to have personally signed off on an operation to take Russian internet troll farm Internet Research Agency offline during the 2018 midterm elections. National Security Adviser John Bolton also appeared to hint at a more aggressive cyber strategy toward Russia earlier this week.

U.S. Escalates Online Attacks on Russia’s Power Grid

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by David E. Sanger

WASHINGTON — The United States is stepping up digital incursions into Russia’s electric power grid in a warning to President Vladimir V. Putin and a demonstration of how the Trump administration is using new authorities to deploy cybertools more aggressively, current and former government officials said.

In interviews over the past three months, the officials described the previously unreported deployment of American computer code inside Russia’s grid and other targets as a classified companion to more publicly discussed action directed at Moscow’s disinformation and hacking units around the 2018 midterm elections.

Advocates of the more aggressive strategy said it was long overdue, after years of public warnings from the Department of Homeland Security and the F.B.I. that Russia has inserted malware that could sabotage American power plants, oil and gas pipelines, or water supplies in any future conflict with the United States.

But it also carries significant risk of escalating the daily digital Cold War between Washington and Moscow.

If Trump Doesn't Want a War With Iran, He Should Stop Pushing Iran Towards War

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DANIEL DEPETRIS

Four tankers off the Emirati coast were damaged last month by what investigators concluded were explosives attached to the ships' hulls. The Trump administration immediately pointed to Iran or Iranian-directed proxies as the perpetrators of the attacks. Yesterday, two more ships were attacked near the Strait of Hormuz. And for the second time, Trump administration officials blamed Tehran for the incident, citing a grainy, black-and-white video of an Iranian vessel purportedly approaching one of the ships to remove an unexploded mine hours after the attack happened.

While the circumstances remain murky, we should not be surprised if investigators prove that Iran's Islamic Revolutionary Guard Corps conducted or ordered these strikes. Why? Because U.S. economic sanctions against Iran are crushing an already cash-poor economy, and retaliation was inevitable. If the Trump administration continues its policy toward Iran, we could very well find ourselves in a war nobody wants.

To a wide cross-section of the Washington foreign policy establishment, Iran is the source of all mischief in the Middle East. Iran sponsors terrorism, leverages proxies around the region to keep its opponents on the defensive, threatens to use crude oil as a weapon, and continues to develop the region's largest ballistic missile arsenal. Foreign policy pundits frequently talk about Iran as if it's building another Persian Empire, or is just a whisker away from becoming a regional hegemon.

With Great Demographics Comes Great Power

By Nicholas Eberstadt

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Demographics may not be destiny, but for students of geopolitics, they come close. Although conventional measures of economic and military power often receive more attention, few factors influence the long-term competition between great powers as much as changes in the size, capabilities, and characteristics of national populations.

The United States is a case in point. In 1850, the United States was home to some 23 million people, 13 million fewer than France. Today, the U.S. population is close to 330 million, larger than the British, Dutch, French, German, and Italian populations combined. For more than a century, the United States has had the world’s largest skilled work force, and by measures such as mean years of adult schooling, it has long had among the world’s most highly educated populations. These favorable demographic fundamentals, more than geography or natural resources, explain why the United States emerged as the world’s preeminent economic and military power after World War II—and why it still occupies that position today.

The Complicated Geopolitics of U.S. Oil Sanctions on Iran

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Amy M. Jaffe

It is often said, perhaps with some hyperbole, that Iran’s nuclear deal with world powers was the best hope for conflict resolution in the Middle East. Its architect John Kerry argues instead that the 2015 deal’s limited parameter of closing Iran’s pathway to a nuclear weapon is sufficient on the merits. The Trump administration is taking a different view, focusing on Iran’s escalating threats to U.S. allies Israel, Saudi Arabia, and the United Arab Emirates. Those threats, which have included missile, drone, and cyberattacks on Saudi oil facilities, are looming large over the global economy because they are squarely influencing the volatility of the price of oil. One could argue that the U.S. decision to withdraw from the Iranian deal, referred to as the Joint Comprehensive Plan of Action (JCPOA), has injected an even higher degree of risk into oil markets, where traders now feel that the chances of Mideast conflict resolution are lower.

But, the Trump administration could argue otherwise. From its perspective, the United States extended to Iran $6 billion in frozen funds, opened the door for a flood of spare parts to be shipped into Iran’s suffering oil and petrochemical sector, and looked the other way while European companies rushed in for commercial deals. In exchange, it’s true, Iran began to implement the terms of JCPOA, but as Secretary of State Pompeo laid out in a major speech on the subject, the nuclear deal has failed to turn down the heat on the wide range of conflicts plaguing the Mideast region.

The World Grows More Dangerous by the Day

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By François Delattre

My experience at the United Nations Security Council over the last five years has led me to see a harsh truth: The world is growing more dangerous and less predictable by the day. While the tectonic plates of power are shifting under our feet, driven in no small part by the combined effects of a technology revolution and the rise of China, we are also witnessing the return of heightened competition among the major powers.

We are now in a new world disorder. The three main safety mechanisms are no longer functioning: no more American power willing to be the last-resort enforcer of international order; no solid system of international governance; and, most troubling, no real concert of nations able to re-establish common ground.

As I prepare to return to Paris after almost 20 years as a diplomat in North America, nearly half of them serving consecutively as France’s ambassador to the United States and to the United Nations, I feel the need to share these personal conclusions. The situation today is objectively dangerous. Each serious international crisis has the potential to spin out of control. That is what we saw happen in Syria and what we need to prevent with Iran and North Korea, and in the South China Sea.

The US and the ‘Two-war’ Defense Strategy

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Hal Brands is the Henry A. Kissinger Distinguished Professor at the Henry A. Kissinger Center for Global Affairs at Johns Hopkins University’s School of Advanced International Studies and a senior fellow at the Center for Strategic and Budgetary Assessments. His latest book is “American Grand Strategy in the Age of Trump.”

Over the past 18 months, the Pentagon has been pursuing a radical change in US defense strategy. The Department of Defense has been working to overhaul the “two-war” defense strategy of the past quarter-century, in favor of one that focuses on winning a single high-stakes fight against China or Russia. This one-war strategy is rooted in an entirely correct judgment that defeating a great-power adversary would be far more difficult than anything the US military has done in decades. Yet it also runs the risk that America won’t have enough military power to deal with a world in which it could face two or more major threats at the same time.

The Old Guard Are Killing the World’s Youngest Country

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WAAT, South Sudan—“Jeck,” a voice calls from inside the mud-and-thatch hut. I recognize the pronunciation of my name—it’s close enough—and the voice. “My friend, Jeck,” the man says again. Ducking and then emerging through the door of the hut is a handsome face atop a large angular frame. At 6 feet, 8 inches tall—with broad shoulders and long arms—Koang (pronounced Kong) has a smile so wide it could span the Nile. We slap shoulders and then hands, in the Sudanese way, and then embrace.

It’s the summer of 2016, and I’ve returned to South Sudan, where two years of civil war have shattered the promise of the world’s newest state. I’ve come to speak with South Sudan’s elites and its ordinary citizens, with those perpetuating conflict and those who want nothing to do with it—hoping to revisit the country’s failure in a new light.

I haven’t seen Koang since the night we first met, in 2009, but the memory of our first conversation prompted me to seek him out again. Koang has come of age since I saw him last, and I am confident he will offer a different perspective on where his country has been, and where it is going.

“It’s been what, seven years?” I ask Koang. “Yes, long time Jeck,” he says, laughing. “You have been so lost”—a favorite expression in South Sudan when you haven’t seen someone in a long time. “But now you are found.”

What a Wonderful World

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Last week I was asked to give a talk about multilateralism vs. bilateralism, an important debate but not one that always makes the front page. At the event, the conversation quickly veered off into an interesting discussion of lots of related issues without ever directly resolving the main issue of which path is better. I have thought about that a bit more, however, and this week’s column is about where I ended up.

The issue is timely because we have a president who has repeatedly made clear he prefers a bilateral approach to trade negotiations, or dealmaking as he would say. Ambassador Lighthizer has said that a bilateral approach is superior because it is easier to negotiate with only one party and easier to enforce if there are problems down the road. Those are assumptions that deserve to be tested, but first, we need a word about what we have now.

Most of the world continues to function under the multilateral system created in 1944 at Bretton Woods by the Western allies foreseeing the end of the war and wanting to make sure that never happened again. The tripod of organizations they created have managed the system reasonably effectively for 75 years: the International Monetary Fund (IMF), the World Bank, and the International Trade Organization that failed and became the General Agreement on Tariffs and Trade and was, in turn, replaced by the World Trade Organization (WTO) 50 years later. (A history that demonstrates how difficult getting agreement on trade can be.)

The Politics of Cybersecurity: Balancing Different Roles of the State

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This article by Myriam Dunn Cavelty and Florian J. Egloff investigates the role of the state in cybersecurity. It finds six different roles of the state in cybersecurity: (1) security guarantor, (2) legislator and regulator, (3) supporter and representative of the whole of society, (4) security partner, (5) knowledge generator and distributor, and (6) threat actor. In addition, the article shows that cybersecurity policy is diverse and necessarily includes state, economic, and societal actors.

What is cybersecurity? What seems like a simple question is at the heart of the political challenge this issue has become. Exemplified in the difficulties many state actors confess to have when it comes to agreeing on official definitions,1 cybersecurity is notoriously hard to pin down and is contested politically in both national and international arenas. In explaining the reasons for this contestation, we will advance a better understanding of what cybersecurity has become and will highlight the diverse roles of "the state" that have emerged. Read more

U.S. Interests and Foreign Military Sales

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By Daniel DePetris

Is the Kingdom of Saudi Arabia undergoing a concerted campaign to acquire a significant, more lethal, and survivable ballistic missile capability? According to a June 5 report from CNN, the evidence certainly points in that direction.

Citing overhead satellite imagery from private analysts and unidentified U.S. intelligence, the report paints a disturbing but predictable picture: Confronting what it sees as a dangerous adversary in the Middle East, Riyadh is racing to match Iran’s ballistic missile arsenal. “The previously unreported classified intelligence indicates Saudi Arabia has expanded both its missile infrastructure and technology through recent purchases from China,” CNN concluded.

The Trump administration has taken a low-key approach in its response, reiterating the common U.S. position that the Middle East should be a zone free of weapons of mass destruction. The last thing countries in the region wish to see is an arms race between Saudi Arabia and Iran at a time when both countries are fomenting proxy warfare against one another in multiple theaters. And yet from Riyadh’s perspective, expanding its own ballistic missile infrastructure is a prudent step to counterbalance a foe that already possesses missiles with a maximum range of 2,000 km. Many nations under the same circumstances would do precisely what the Saudis are reportedly doing today.

An Analysis of the RBI’s Draft Framework on Regulatory Sandbox for Fintech

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Click here to download the file.

It originated as a term referring to the back-end technology used by large financial institutions, but has expanded to include technological innovation in the financial sector, including innovations in financial literacy and education, retail banking, investments, etc. Entities engaged in FinTech offer an array of services ranging from peer-to-peer lending platforms and mobile payment solutions to online portfolio management tools and international money transfers.

Regulation and supervision of the Fintech industry raises some unique challenges for regulatory authorities as they have to strike a balance between financial inclusion, stability, integrity, consumer protection, and competition. One of the methods that have been adopted by regulators in certain jurisdictions to tackle the complexities of this sector is to establish a “regulatory sandbox” which could nurture innovative fintech enterprises while at the same time ensuring that the risk associated with any regulatory relaxations is contained within specified boundaries. It was precisely for this reason that establishment of a regulatory sandbox was one of the options put forward by the Working Group on Fintech and Digital Banking established by the Reserve Bank of India in its report of November, 2017 which was released for public comments on February 8, 2018. Acting on this recommendation the Reserve Bank has proposed a Draft Enabling Framework for Regulatory Sandbox, dated April 18, 2019, (“RBI Framework”) which is analysed and discussed below.

Regulations on Protection of Critical Information Infrastructure Security

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The Cyberspace Administration of China (CAC) released its draft Regulations on Protection of Critical Information Infrastructure Security (Draft Regulations) on 10 July 2017. The CAC is seeking public comments on the Draft Regulations until 10 August 2017.

In this e-bulletin we highlight the key provisions of the Draft Regulations and set out our observations on the regime.

Background

The Cyber Security Law (CSL), enacted in 2016, officially introduced the concept of critical information infrastructure (CII) for the first time with a section covering the protection of CII. Pursuant to the CSL, CIIs will be afforded special protection measures in addition to those provided under the Multi-layer Protection Scheme (MLPS), the major cyber protection regime envisaged under the CSL. These protection measures include higher standards for protection obligations and closer scrutiny by the government over the operation of the CII. The CSL authorizes the State Council to publish regulations on the scope of CII and security protection measures.

Highlights of key provisions

I. Scope of CII

In the Draft Regulations, CII is defined as network facilities which, in case of destruction, loss of function or leak of data, will result in serious damage to national security, the national economy and people's livelihood or public interest. The scope of CII includes:

US Cyber Command is reportedly going on offense against Russia's power grid

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Paul Szoldra 

U.S. Cyber Command is reportedly going on offense against Russia's power grid by placing "potentially crippling malware" in its systems, The New York Times reported Saturday.

The cyber incursions, authorized to Cyber Command under new authorities that do not require presidential approval, have gotten more "aggressive" and seem to be a warning that the U.S. can respond to Moscow's past cyberattacks, such as the 2016 incursion into the Democratic National Committee and its attack on Ukraine's power grid.

"It has gotten far, far more aggressive over the past year," one senior intelligence official told The Times. "We are doing things at a scale that we never contemplated a few years ago."

The Times writes:

Both General Nakasone and Mr. Bolton, through spokesmen, declined to answer questions about the incursions into Russia's grid. Officials at the National Security Council also declined to comment but said they had no national security concerns about the details of The New York Times's reporting about the targeting of the Russian grid, perhaps an indication that some of the intrusions were intended to be noticed by the Russians.

A Framework for Protecting Our Critical Infrastructure

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There’s no disputing the importance of a reliable and well-functioning critical infrastructure when it comes to our daily lives—in fact, our national and economic security depend on it. Because our critical infrastructure systems are becoming increasingly complex and connected, we need to understand the real risk of cybersecurity threats and how these threats can impact the nation’s economy, security, public safety and overall health. Cybersecurity threats can also impact companies, reputations and the ability to innovate.

Basically, it’s kind of a big deal!

NIST developed the Cybersecurity Framework to enhance the security and resilience of the nation’s critical infrastructure. The voluntary risk-based Framework integrates a set of industry standards and best practices to help organizations manage cybersecurity risks. NIST worked alongside other government agencies and the private sector to establish the resulting Framework, which uses a common language to address and manage cybersecurity risk. The process of engaging the private and public sectors in developing the Framework went so well that Congress added that responsibility to NIST’s role through the Cybersecurity Enhancement Act of 2014.