30 May 2024

Raghuram G. Rajan Says More…

Raghuram G. Rajan and Rohit Lamba: This is a very good question, and there seems to be much confusion about how India can generate jobs for the future. The received wisdom is that state-subsidized manufacturing – the development path taken by most East Asian countries – is the only way. But manufacturing’s share of jobs in India has not changed much since the early 1980s; those leaving agriculture have instead been absorbed largely by the services and construction sectors. In line with this experience, we see enormous potential today to create a huge number of jobs in tradable services (both direct services and those embedded in manufacturing), as well as more traditional services (such as retail and transportation).

As you note, India is already emerging as a global leader in services exports, accounting for around 5% of global trade in services, compared to less than 2% of trade in manufacturing. Improved communication technologies (think Zoom and Webex) and changes to the rules of business etiquette (meeting a new client virtually is now seen as perfectly acceptable) have made it possible to provide even direct services, like consulting or telemedicine, at a distance.

Modi’s Middling Economy

Rohit Lamba and Raghuram Rajan

On June 4, after counting roughly 650 million votes, the Election Commission of India is scheduled to announce the winner of the 2024 parliamentary elections. Polls suggest it will be the Bharatiya Janata Party, led by Prime Minister Narendra Modi. If the BJP is voted back to power after a ten-year tenure, it would be a remarkable feat, driven largely by the prime minister’s personal popularity. According to an April poll by Morning Consult, 76 percent of Indians approve of him.

There are multiple theories for why Modi is so popular. Some attribute it to the fact that he has advanced the “Hindutva” agenda, which views India from a Hindu-first lens. Despite the periodic dog whistles against Muslims during the elections by Modi and his lieutenants, this agenda is a primary electoral concern for only a small fraction of India’s voters. In the 2019 elections, BJP’s vote share nationally was less than 38 percent, and obviously, an even smaller share are committed to the othering of religious minorities.

Another explanation is that Modi has managed the economy well, with India recently overtaking the United Kingdom to become the fifth-largest economy in the world, and soon surpassing stagnant Germany and Japan to become the third largest. His economic stewardship, some experts argue, is setting up the country and its 1.4 billion people to succeed in the future.

America’s New Island Fighters Are Preparing for Conflict—a Stone’s Throw From Taiwa

Niharika Mandhana

The U.S. and Philippine marines arrived in waves on this little island nearly 100 miles from the southern tip of Taiwan. A platoon clutching automatic rifles and machine guns sprang from Black Hawks and took up positions around the airfield. In a whirl of hot air and dust, Chinook helicopters lowered dozens more men.

They unloaded fuel cans, sacks of ready-to-eat meals and cases of medical supplies, small drones and satellite-communications gear—everything they would need for a three-day stay.

If their ride had continued north, they would reach Taiwan in less than an hour.

This was a military exercise, the guns had no ammunition and the Javelin missile launcher had no missiles. But the marines were preparing for a real-world conflict, fine-tuning a strategy they see as critical to fighting China in its neighborhood—from strings of islands close to it.

What If China Chooses to Blockade Taiwan Rather Than Invade?

Brandon J. Weichert

There’s a debate raging in defense circles about how China plans to press forward with its goal to take Taiwan. Some believe the People’s Republic of China is readying to conduct a massive amphibious invasion of Taiwan.

Others experts, notably in the U.S. Navy, challenge this assessment. They think that the Chinese will use a slower, more methodical method to reabsorb Taiwan, deploying a long-term blockade. This would be supplemented by other non-kinetic approaches such as economic pressure and cyberspace brinkmanship.

China is developing the means to hit Taiwan hard and fast. I remain convinced that Beijing has the capabilities to attempt an amphibious landing this year. That would be a very big risk, however, for Chinese President Xi Jinping, who is already feeling political pressure at home after his failed economic policies and disastrous COVID response protocols.

How Is China Responding to the Inauguration of Taiwan’s President William Lai?

On May 23, 2024, China commenced large-scale military exercises surrounding Taiwan, called “Joint Sword-2024A.” The drills came just three days after Taiwan’s new president William Lai gave his inauguration speech. Chinese officials stated that the drills are intended to “serve as a strong punishment for the separatist acts of ‘Taiwan independence’ forces and a stern warning against the interference and provocation by external forces.” This activity by the People’s Liberation Army (PLA) was accompanied by what China called “comprehensive law enforcement operations” involving China’s coast guard around two of Taiwan’s offshore islands.

This is the third round of major escalatory military exercises China has held around Taiwan, following unprecedented exercises in August 2022 and another round in April 2023. How is this exercise different from the prior ones? What does this exercise reveal about China’s approach towards Taiwan? What was China’s rationale for engaging in these exercises, and what other non-military activities has China taken?

China’s secret spacecraft drops another mysterious object in space, says U

Christopher McFadden

According to the U.S. Space Force, China’s unnamed spaceplane appears to have released another object into space. The nature of the object is unknown, but it has been given the name 59884 (International designator 2023-195G).

China’s spaceplane has been in orbit for over 165 days, with the new object being spotted on May 24. The spaceplane first arrived in orbit on December 14, 2023.

Since then, the spaceplane has been orbiting Earth, deploying other strange objects or emitting strange signals. While the nature of the new object is unclear, some, like Jonathan McDowell of the Harvard-Smithsonian Center for Astrophysics, have some ideas.

China’s spaceplane releases another object

The spaceplane used a released object to perform multiple recaptures as part of on-orbit testing during its second flight.

“A new object (59884/2023-195G) has been cataloged associated with the Chinese CSSHQ spaceplane in a 602 x 608 km x 50.0 deg orbit. It seems to have been ejected about 1900 UTC May 24,” McDowell posted on X.

China-Proofing Asia


China's Belt and Road Initiative (BRI), Beijing’s ambitious international infrastructure strategy, prompted a scramble in Washington and Brussels for a Western response. Perceived as a comprehensive Chinese statecraft initiative aimed at reshaping Eurasia's geoeconomic and geopolitical landscape, every Chinese overseas investment became, in Western eyes, part of the BRI. Indeed, the BRI itself became a catch-all for Western anxieties about Chinese economic power and influence, both justified and unfounded, leading to misinterpretations of Chinese actions and, more importantly, trepidation about China's rise and the West’s own relative decline.

The BRI's launch coincided with a seismic shift in American trade policy. The 2016 U.S. presidential election saw both Republican candidate Donald Trump and Democratic primary contender Sen. Bernie Sanders (I-VT) criticize free trade's impact on America. Former Secretary of State Hillary Clinton, the eventual Democratic nominee, remained the sole national voice in favor of free trade—but she had to pivot her messaging and policy proposals to adjust to the new realities of American politics. The bipartisan consensus on trade fractured, and Trump ushered in a new era of growing support for industrial policy and trade restrictions. This shift continued under the Biden administration with in policies like the Inflation Reduction Act, the CHIPS Act, and a cautious approach to new trade deals due to domestic political considerations.

The Shallow Roots of Iran’s War With Israel

Ali M. Ansari

In early April, the cold war between Iran and Israel suddenly turned hot. A dramatic Israeli air attack in Damascus that killed seven senior commanders in Iran’s Revolutionary Guard Corps put Iranian leaders in a bind. If they launched a commensurate military response, they risked an escalation that could destabilize the very foundations of their regime. If they did not, they faced a credibility crisis among their own hard-liners and allies in Iran’s axis of resistance, a network that includes Hamas in the Gaza Strip, Hezbollah in Lebanon, the Houthis in Yemen, and various Iranian-backed militias in Iraq and Syria, several of which were already chafing at Iran’s restraint in responding to the war in Gaza.

In the end, through a mixture of telegraphing and technical incompetence, Iran’s leaders managed to produce a Goldilocks outcome. On April 13, they launched a massive aerial assault on Israel with more than 300 missiles and drones. But sound Western intelligence and the advanced warning technology and air defenses deployed by Israel and its allies ensured that there was little damage. Iran’s supreme leader, Ali Khamenei, proclaimed that it was the attack itself and not the “hitting of the target” that mattered. Israel was encouraged to “take the win” and, after a restrained retaliation of its own, the status quo between the two sworn enemies was restored with surprising alacrity.

Saudi Arabia Is Becoming One of Biden's Most Important Swing States

Tom O'Connor

As President Joe Biden prepares to fight for reelection this November across a contentious battleground of U.S. states, the White House also finds itself vying for influence among several increasingly critical players on the world stage, among them a long-standing partner in the midst of groundbreaking changes in its policies at home and abroad.

At just 38 years old, Crown Prince Mohammed bin Salman of Saudi Arabia is one of the world's youngest de facto heads of state and is the driving force behind a nationalist agenda that is taking hold in the kingdom. His father, 88-year-old King Salman, has led since 2015 but has increasingly handed over control to his seventh son since naming him next to rule in 2017 and prime minister in 2022, particularly amid growing concerns over the monarch's health.

The transformation overseen by Crown Prince Mohammed, often referred to simply as MbS, has led to substantial shifts in the kingdom's domestic outlook, which has embraced a more globalized character and a transition away from oil dependence, among other initiatives in line with the youngest-ever heir to the throne's ambitious Vision 2030 plan. It's also prompted a recalibration of foreign relations and the pursuit of more robust ties with other leading powers, including top U.S. rivals China and Russia.

What If Iran Already Has the Bomb?

Arash Azizi

There’s rarely a dull moment in Iranian affairs. The past few months alone have seen clashes with Israel and Pakistan, and a helicopter crash that killed Iran’s president and foreign minister. But spectacular as these events are, the most important changes often happen gradually, by imperceptible degrees.

One such change took a while to register but is now obvious to all: In a sharp departure from a years-long policy, Iran’s leading officials are now openly threatening to build and test a nuclear bomb.

Earlier this month, Kamal Kharazi, a former foreign minister, said that Tehran had the capacity to build a bomb and that, if it faced existential threats, it could “change its nuclear doctrine.”

“When Israel threatens other countries, they can’t sit silent,” he said in an interview with Al-Jazeera Arabic on May 9.

Putin’s Peace Plan

George Friedman

Under President Vladimir Putin, Russia invaded Ukraine under the assumption that Ukraine’s defeat would be rapid and complete, bringing Russia to NATO’s eastern border. Russia has failed to achieve its goals, of course, misreading Ukraine’s defense intelligence and underestimating the intentions of the United States and Germany, which Moscow assumed would accommodate some kind of resolution when Russian oil would stop flowing. Instead, the U.S. sent massive amounts of weapons to Kyiv, Germany made do without Russian energy, and Ukraine continued to hold most of its territory.

The underlying problem was that the Russian military was not prepared to wage the war. For this reason, Putin brought in the Wagner Group, the private defense organization in which he appeared to have more confidence than his own commanders. The Wagner Group and Russian senior staff engaged in progressively intense battles over strategy and the allocation of supplies, culminating in an insurrection and, later, an aircraft crash that killed the Wagner commander. Since then, Putin has had to rely on the regular army’s command, resulting in an inability to impose a decisive victory.

What Ukraine Hawks Miss About the War

Dominick Sansone

Hakeem Jeffries’s recent appearance on 60 Minutes was a perfect encapsulation of present discourse on the war in Ukraine.

The House Minority leader condemned both his Republican counterparts and a major fraction of the country for being “pro-Putin” on account of their aversion to sending further aid to Ukraine while the situation on the U.S. border continues to deteriorate. According to this argument, there was no rational reason to oppose the previously stalled $61 billion funding package, outside of directly supporting the Russian government.

Jeffries specifically discounts Senator J.D. Vance’s argument that the new aid will simply prolong the war. Kiev does not have access to the productive capacity nor the manpower requirements to seriously alter the strategic dynamics of the conflict. Nonetheless, Jeffries offers a convenient if less than erudite counterargument that mixes equal parts gambler’s and sunk cost fallacies: Kiev has been able to hold off Russian forces for more than two years, so they must be able to do it indefinitely.

“This has been a strategic success by any definition,” Jeffries concluded.

Is Putin Preparing for Nuclear War?

Paul Dibb

On 6 May, Russian President Vladimir Putin announced he had authorised a military exercise involving the deployment of tactical nuclear weapons in southern Russia. He claimed there was ‘nothing unusual’ in such a planned training exercise.

But to my knowledge this is the first time such an announcement has been made since the collapse of the Soviet Union in 1991. This exercise also involved the transfer of some tactical nuclear weapons to Belarus. This was also the first move of such warheads outside Russia since the fall of the USSR.

Moscow said it was deploying tactical nuclear weapons after what it said were military threats from France, Britain and the United States. The Pentagon has since said it has seen no change to the alert status of Russia’s strategic nuclear forces—as distinct from tactical nuclear forces—despite ‘irresponsible rhetoric’ from Moscow detailing plans for exercises involving the deployment of non-strategic nuclear weapons.

The day sleeping American patriots woke up - Op-E

William Haupt III 

“I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve.”

– Naval Admiral Isoroku Yamamoto, Japanese Commander at Pearl Harbor December 7, 1941

Seventy-eight years ago, on December 7, 1941, a Japanese strike force unleashed 353 warplanes on Pearl Harbor in Hawaii. Relations between the two nations went south when the U.S. stopped exporting oil, metals and other war items to Japan after they invaded China in 1937. The U.S. had not interfered since Japan was a trading partner. But when Japan and Germany signed their Anti-Comintern Pact in 1936, the U.S. considered this necessary to curtail Japan’s assault against the Chinese and their quest to form a world military empire with Germany and Italy. The U.S. went the extra mile to avoid this conflict and was confident their laissez faire foreign policies were working.

The most devastating strike on U.S. soil in history lasted over two hours. Japanese warplanes sank or severely damaged 18 U.S. warships and demolished 200 military aircraft. Over 3,000 American servicemen and civilians tragically sacrificed their lives on this first day through “the gates of hell” on the high seas for freedom.

The Dangerous Incoherence of US Trade Policy


The United States does not have a coherent trade policy. It has a political strategy masquerading as trade policy that has taken dead aim at China. Unsurprisingly, China has responded in kind. With the two superpowers drawing on their allies for support – the US leaning on the G7 and China turning to the Global South – economic decoupling is the least of our problems.

It is easy to blame US Presidents Donald Trump and Joe Biden for this unfortunate turn of events – Trump for firing the first shot in the Sino-American trade war, and Biden for doubling down on protectionism. Yet the problems predate both presidents – they stem largely from a decades-long misunderstanding of the role foreign trade plays in open economies.

Politicians tend to see trade balances in black and white: surpluses are good, deficits are bad. For the US, where the merchandise trade balance has been in deficit for all but two years since 1970, trade is viewed as bad – a source of leakage in an otherwise strong economy that puts pressure on jobs, companies, communities, and incomes.

Why the Gaza war is tearing the West apart


The recent Gaza war protests and counterprotests roiling universities around the world have attracted vocal supporters and critics alike. Protesters have occupied buildings on campuses from Los Angeles to Paris to Melbourne, and police have intervened to break up encampments, at times with violent altercations.

Clashes between pro-Israel and pro-Palestinian protesters have also become commonplace outside universities, while people on both sides of the debate have been subjected to doxing, harassment and abuse.

US President Joe Biden warned of a “ferocious surge” of antisemitism in the United States, while the Australian government has established an inquiry to report on racism at universities. Hate crimes are on the rise across Europe, as well.

What’s going on? Why has this issue over the war in Gaza – compared to all the other controversies and crises we face – become so fraught, and the debate so toxic?

There are some straightforward reasons why the Gaza war attracts attention and activism.

The lost war in Gaza is not the end of Israel - opinion


Yes, Israel has lost the war in Gaza.

No, it’s not the bitter, bloody end of the Jewish state.

When Israeli Prime Minister Golda Meir famously said that if the Arabs lose a war, they lose a war, but if Israel loses a war, it loses everything, she was right—for her time. The 1973 war threatened Israel’s existence. Heroic Israeli army operations and a huge American airlift of weapons and ammunition saved the Jewish state but left it in a deep, decades-long trauma.

The pogrom of last October 7, when Hamas sent thousands of bloodthirsty terrorists across the border and killed, maimed, mutilated, and raped more than 1,200 Israelis, most of them civilians, taking more than 200 hostages, equally traumatized Israelis. However, the state itself was never in danger of destruction. Israel is many times stronger than it was in 1973. Today, defeat in war is painful, but it does not mean losing everything.

And defeat it is. Israel has failed to achieve its stated goals: wiping out Hamas and returning all the hostages.

Today’s Generals and Admirals, Children of a Lesser God

Gary Anderson

It was 2012 when I first realized that our current group of four star military leaders are largely inept at best and incompetent at worst. I was serving as a Department of State advisor in Afghanistan, and it became obvious that the four star American who commanded all NATO forces (ISAF) was either ignorant or willfully ignoring the fact that the Afghan Army would never be able to take over the war effort. Despite this, he was enthusiastically carrying out the Obama administration's "Afghanization" program which was transferring military responsibility for whole districts and provinces to Afghan Army control despite the actual situation on the ground. That's when I became convinced that we were losing the war. Nearly everyone realized this except the generals who were running it. While home on leave, I accepted an invitation from an old friend who was a high ranking Defense Department official to visit him at the Pentagon and give my impression of the war. When I expressed my pessimism, he was shocked. He had been receiving optimistic reports from the field.

As the decade progressed, this trend continued downhill. It became increasingly obvious that the senior officers of the Navy had lost control of their shipbuilding and ship repair programs and had no idea how to fix the problem. The dysfunction persists today. The recent ignominious return to home port of the USS Boxer just a few days after it had sailed and the problems aboard the aircraft carrier George Washington are emblematic of the dire situation.

The idiotic 2019 decision by the then Commandant of the Marine Corps to shift the focus of the Corps from that of a world-wide force in readiness to a China-centric anti ship organization was met with disbelief by the entire retired community. Dissent in the active duty ranks recently forced his successor to issue a gag order to the students at the Marine Corps Command and Staff College from criticizing the new doctrine.

Ukraine War Maps Reveal Russian Advances Along Whole Front Line

Isabel van Brugen

Russian forces have advanced along the front line in Ukraine, battlefield maps published by a U.S. think tank show, as Ukraine warns that Moscow is preparing for a major offensive in the east.

Maps released by the Institute for the Study of War (ISW), a U.S.-based think tank, on Sunday, show that Russian forces have made progress in Ukraine's Luhansk and Donetsk regions, which together comprise the Donbas.

The Kremlin has been pushing for the total capture of the Donetsk and Luhansk regions since Russia's initial invasion of eastern Ukraine in 2014.

In the Luhansk region, Russian forces advanced northwest of the city of Svatove, and geolocated footage published on Sunday indicates that they recently advanced into the rural settlement of Ivanivka, northwest of Svatove, the ISW said.

Mapping Russia’s Sudden Push Across Ukrainian Lines

Marco Hernandez

All of a sudden, Russian forces are making progress in many directions at once.

In recent days, Russian troops have surged across the border from the north and opened a new line of attack near Kharkiv, Ukraine’s second-largest city, capturing settlements and villages and forcing thousands of civilians to flee.

It may be a feint. The real goal may be to divert already-weakened Ukrainian forces from critical battles elsewhere. But one thing is clear: The map of battle in Ukraine looks a lot different today than it did only a week ago.

Ukraine is more vulnerable than at any time since the harrowing first weeks of the 2022 invasion, a range of soldiers and commanders have said in interviews.

It is too soon to know if the war in Ukraine has hit a turning point. But Russia’s progress isn’t just in the northeast.

Mapping the Regulatory Landscape for New Technologies

Sarah Kreps

In 1950, mathematician Alan Turing wrote a paper that investigated the possibility of machines making decisions like humans. He led with a question—“can machines think?”—and proceeded to unpack the meaning of both “machine” and “think.” He gave an example of a request that a human would pose to a machine: “Q: Please write me a sonnet on the subject of the Forth Bridge.” And he imagined the machine’s deferring: “A: Count me out on this one. I never could write poetry.”

In 2022, OpenAI released a tool that could write an elegant sonnet—or 100 different sonnets—on the Forth Bridge. Public uptake was swift. ChatGPT became the fastest app to reach 100 million users, even beating TikTok in its ascent.

Criticisms of the pace of congressional action on artificial intelligence (AI) regulation were also swift. Brookings Institution fellow Darrell West said that Congress was “way behind on AI regulation.” Others chimed in and observed that “the fact remains that Congress has yet to pass any legislation on AI, allowing the U.S. to cede the initiative on this issue to the European Union (EU), which recently agreed on the AI Act, the world’s most comprehensive AI legislation.”

Can Data By Itself Inform Us About The Real World? – Analysis

Frank Shostak

In order to make the data “talk,” economists utilize a range of statistical methods that vary from highly complex models to a simple display of historical data. It is generally believed that one can organize historical data through quantitative methods into a useful body of information, which in turn can serve as the basis for assessing the economy.

Now, it has been observed that declines in the unemployment rate are associated with a general rise in the prices of goods and services. Should we then conclude that decreases in the unemployment rate trigger price inflation? To confuse the issue further, it has also been observed that price inflation is well-correlated with changes in money supply.

What are we to make out of all this? How are we to decide which is the right theory? According to Milton Friedman, we cannot know the facts of reality. In this way of thinking, the criterion for the selection of a theory should be its predictive power. If the model (theory) “works,” it is regarded as a valid framework assessing the economy. Once the model (theory) breaks down, we look for a new model (theory). If the model fails to produce accurate forecasts, it is modified by adding some other explanatory variables. By this way of thinking, anything goes, as long as the model can yield good predictions.

Unveiling the Future: The Convergence of AI and Strategic Intelligence Operations

Joshua Thibert

The intersection of artificial intelligence (AI) technologies and strategic intelligence operations represents a pivotal frontier in the security landscape. Rapid advancements in AI, machine learning (ML), and data analytics will revolutionize the capabilities of intelligence agencies worldwide, offering unprecedented opportunities for enhanced situational awareness, predictive analysis, and decision-making support.

From counterterrorism efforts to geopolitical forecasting, the applications of AI in strategic intelligence operations span a diverse array of domains, shaping national security strategies and global geopolitics alike. However, alongside these transformative capabilities come complex ethical, legal, and policy considerations that necessitate careful navigation.

Foremost, AI has the ability to continuously monitor news sources, social media feeds, and other open-source intelligence channels in real time, alerting analysts to relevant developments as they happen. Sifting through massive datasets from diverse sources that include both open-source and classified reporting will allow analysts to quickly dismiss the “noise” and more easily discover relevant information that might otherwise be missed by human-driven analysis. Tedious and repetitive tasks, like report generation or data cleaning, can be automated, increasing efficiency and allowing analysts to focus their time and efforts on critical strategic analysis.

Anduril Is Building Out the Pentagon’s Dream of Deadly Drone Swarms


When Palmer Luckey cofounded the defense startup Anduril in 2017, three years after selling his virtual reality startup Oculus to Facebook, the idea of a twentysomething from the tech industry challenging the giant contractors that build fighter jets, tanks, and warships for the US military seemed somewhat far-fetched. Seven years on, Luckey is showing that Anduril can not only compete with those contractors—it can win.

Last month, Anduril was one of two companies, along with the established defense contractor General Atomics, chosen to prototype a new kind of autonomous fighter jet called the Collaborative Combat Aircraft, or CCA, for the US Air Force and Navy. Anduril was chosen ahead of a pack of what Beltway lingo dubs “defense primes”—Boeing, Lockheed Martin, and Northrop Grumman.

“Anduril is proving that with the right team and business model, a seven-year-old company can go toe-to-toe with players that have been around for 70+,” Luckey wrote on social media platform X shortly after the contract was announced. The company declined to make anyone available for this article.

The High-Speed X-Plane That Could Revolutionize Warfare

Martha McHardy

Boeing and its research subsidiary Aurora Flight Sciences have unveiled a new high-speed X-plane that could revolutionize warfare.

Aurora told Newsweek the X-plane, which combines the agility of Vertical Take-Off and Landing (VTOL) aircraft with the speed of a 747 jet, is "game-changing."

"Through our X-plane concept for the DARPA SPRINT program, we aim to demonstrate technologies that will enable the game-changing combination of high-speed flight with the ability to take off and land in austere environments," Larry Wirsing, vice president of aircraft development at Aurora Flight Sciences, said.

The aircraft will not be used in the field but instead will be used to test technologies for military aircraft used for Special Forces missions. The aim is to improve aircraft speed and the ability of the planes to take off from unconventional runways.

Aurora added that such technologies will allow aircraft to cruise at 400 to 450 knots (460 to 518 miles per hour) at relevant altitudes, hover in austere environments, and land in tight spaces.