After AUKUS, Russia sees a potential threat — and an opportunity to market its own submarines

Alexei Druzhinin/AP

Alexey D Muraviev, Curtin UniversityThe global opinions on the new AUKUS security pact between Australia, the US and the UK have been decidedly mixed. China and France immediately blasted the deal, while others, such as Japan and the Philippines, were more welcoming.

Russia, one of the other few nations armed with nuclear-powered submarines, was more low-key and cautious in its initial reaction.

The Kremlin limited its official commentary to a carefully crafted statement that said,

Before forming a position, we must understand the goals, objectives, means. These questions need to be answered first. There is little information so far.

Some Russian diplomatic officials joined their Chinese counterparts in expressing their concerns that Australia’s development of nuclear-powered submarines (with American and British help) would undermine the Nuclear Non-Proliferation Treaty and “speed up an arms race” in the region.

They suggested the construction of the nuclear submarine fleet would need to be overseen by the International Atomic Energy Agency — a proposition unlikely to be acceptable to Canberra.

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‘Prototype of an Asian NATO’

As more became known about the new security pact, the rhetoric of Kremlin officials began to shift.

For instance, former Australian ambassador to the US, Joe Hockey, boldly declared AUKUS was intended to counter not only China’s power in the Indo-Pacific region, but Russia’s, too.

Soon after, the secretary of Russia’s Security Council, Nikolai Patrushev, was calling the pact a “prototype of an Asian NATO”. He added,

Washington will try to involve other countries in this organisation, chiefly in order to pursue anti-China and anti-Russia policies

This change of rhetoric should not come as a surprise to Canberra. Russia has long considered any change to regional security — the creation of new alliances, for instance, or the deployment of new weapons systems — a military risk that would require a response.

Marketing its own nuclear submarines

So, what possible options could Russia entertain as part of its response?

Since Moscow’s view of AUKUS is more of a political and military risk, but not yet a threat, its immediate responses are likely to be limited to political manoeuvring and opportunity grabbing.

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Perhaps most notably, Russia may see the AUKUS submarine deal as setting a precedent, allowing it to promote its own nuclear-submarine technology to interested parties in the region. This is not merely hypothetical — it has been suggested by defence experts with close links to Russia’s Ministry of Defence.

Historically, Russia has held back from sharing its nuclear submarine technology, which is considered among the best in the world, certainly superior to China’s nascent capabilities.

Thus far, Moscow has only entered into leasing arrangements with India, allowing its navy to operate Soviet- and Russian-made nuclear-powered attack submarines since 1987. But this has not entailed the transfer of technology to India.

Should Russia decide to market its nuclear-powered submarines to other nations, it would have no shortage of interested buyers. As one military expert suggested, Vietnam or Algeria are potential markets — but there could be others. As he put it,

Literally before our eyes, a new market for nuclear powered submarines is being created. […] Now we can safely offer a number of our strategic partners.

Expanding its submarine force in the Pacific

In the longer run, Russia will also not disregard the obvious: the new pact unites two nuclear-armed nations (the US and UK) and a soon-to-be-nuclear-capable Australia.

The expanded endurance and range of Australia’s future submarines could see them operating in the western and northwestern Pacific, areas of regular activity for Russia’s naval force.

A Russian Navy destroyer visiting the Philippines in 2019.
Bullit Marquez/AP

Should the strike systems on board these submarines have the Russian far east or parts of Siberia within their range, it would be a game-changer for Moscow.

As a nuclear superpower, Russia will need to factor this into its strategic planning. And this means Australia must keep a close watch on Russia’s military activities in the Pacific in the coming years.

Over the next 12 months, for instance, the Russian Pacific Fleet is expected to receive at least three nuclear-powered submarines.

Two of these fourth-generation submarines (the Yasen-M class) are technologically superior to similar vessels currently being built by the Chinese and are believed to be almost comparable to the American nuclear submarines being considered an option for Australia.

The third is a 30,000-tonne, modified Oscar II class Belgorod submarine converted to carry several nuclear super-torpedos capable of destroying major naval bases.

By 2028, I estimate Russia’s navy will have a force of at least 14 nuclear-powered submarines and six conventional attack submarines in the Pacific.

Should Russia start considering AUKUS a military threat, we could expect more to arrive. Their area of operations could also be expanded to the South China Sea, and beyond.

Deepening naval ties with China

In the most dramatic scenario, Russia and China could form a loose maritime coalition to counter the combined military power of the AUKUS pact.

Given the deepening state of Russia-China defence relations, particularly in the naval sphere, this does not seem unrealistic.

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This possible coalition is unlikely to become an actual maritime alliance, let alone the basis for larger bloc involving other countries. Still, if Russia and China were to coordinate their naval activities, that would be bad news for the AUKUS.

Should tensions escalate, Moscow and Beijing could see Australia as the weakest link of the pact. In its typical bombastic language, China’s Global Times newspaper has already referred to Australia as a “potential target for a nuclear strike”.

This might be a far-fetched scenario, but by entering the nuclear submarine race in the Indo-Pacific, Australia would become part of an elite club, some of whom would be adversaries. And there is the potential for this to lead to a naval Cold War of sorts in the Indo-Pacific.

Sceptics may say Moscow is likely to be all talk but no action and the risks posed by Russia to Australia are minimal. Let’s hope this is correct.

Alexey D Muraviev, Associate Professor of National Security and Strategic Studies, Curtin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Why is southeast Asia so concerned about AUKUS and Australia’s plans for nuclear submarines?

James Chin, University of TasmaniaThe announcement of a new strategic alliance between Australia, the US and UK (AUKUS) has caught many by surprise. Besides France, which reacted with fury over Australia’s scrapping of a major submarine deal with a French company, few countries were as surprised as Australia’s neighbours to the north, the ASEAN members.

In particular, Indonesia and Malaysia have come out strongly against Australia’s plan to acquire a fleet of nuclear-powered submarines with the help of the US and UK. Even Singapore, Australia’s most reliable ally in the region, has expressed concern.

The Afghanistan debacle has left a bad taste among many Indo-Pacific countries, and some are wondering if the timing of the AUKUS announcement was intended as a show of US power in the region to reassure jittery partners.

Fear of a nuclear arms race

To understand the deep anxiety in Kuala Lumpur, Jakarta and other ASEAN capitals requires some context on where they are coming from.

First, many of them think there is no such thing as acquiring nuclear-powered submarines without the prospect of acquiring nuclear weapons in the future.

Australia has not joined the Treaty on the Prohibition of Nuclear Weapons, which requires parties to agree not to develop, test, produce, acquire, possess, stockpile or threaten to use nuclear weapons.

The Morrison government says the treaty would be inconsistent with its alliance with the US, a nuclear weapon power.

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However, Australia did ratify the Treaty on the Non-Proliferation of Nuclear Weapons in 1973 and the Comprehensive Nuclear Test Ban Treaty in 1998. And Prime Minister Scott Morrison said last week Australia has “no plans” to pursue nuclear weapons.

Yet, some ASEAN countries are worried the AUKUS agreement is a clear signal the West will take a more aggressive stand towards China by admitting Australia to the nuclear club.

Both Indonesia (the unofficial leader of ASEAN) and Malaysia fear AUKUS will also lead to a major arms race in the wider Indo-Pacific region.

The potential for conflict in South China Sea

The new agreement also signals that the US, Australia and UK view the South China Sea as a key venue for this contest against China.

The ASEAN nations have always preached maintaining southeast Asia as a “zone of peace, freedom and neutrality”, free from interference by any outside powers. In 1995, the member states also signed the Treaty of Southeast Asia Nuclear Weapon-Free Zone, which committed to keep nuclear weapons out of the region. Not a single nuclear power has signed on to it.

Although everyone knows China, the US, Britain and France have ignored these protocols by manoeuvring armed warships through the South China Sea — not to mention China’s building of military bases on disputed islands there — ASEAN does not want to see this number grow.

A Chinese missile frigate launches an anti-ship missile during a military exercise in the South China Sea.
Zha Chunming/Xinhua/AP

Australian nuclear-powered submarines have the potential to change the dynamics in the South China Sea and make the Chinese much more nervous. There have already been plenty of “close encounter” incidents between the Chinese and US navies in the disputed waters, as well as the Chinese navy and ships belonging to ASEAN members. The region doesn’t need yet another potential “close encounter” to worry about.

The ASEAN states are already very worried about the China-US rivalry playing out in its backyard. And the new AUKUS agreement reinforces the idea that the opinions of the ASEAN members matter little when it comes to the superpowers and how they operate in the region.

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The region has always insisted on the idea of “ASEAN centrality” in their relations with the world — that ASEAN members must decide what is best for Southeast Asia — but as AUKUS shows, nuclear nations play a different game.

Indonesia is especially unhappy with Australia given the new agreement will affect it directly, given their common maritime border.

Morrison had already been forced to cancel his upcoming trip to Jakarta after President Joko Widodo said he would be unavailable to meet — a decision that was made before the AUKUS announcement. This will add another layer to the strained relationship.

Is there anyone happy about the deal?

While in public, most southeast Asian governments have expressed uneasiness with AUKUS, there is a school of thought that says the more hawkish voices in the region will probably accept the agreement in the long term, as it will help keep China’s aggression in check.

For those in the “hawk” camp, the number one long-term threat to regional security is China. Many think the strategic balance of power has been tilting too much in Beijing’s favour in the past decade, especially after China started rushing to build military bases in the South China Sea and using its navy to protect Chinese fishing vessels in disputed waters.

So, they believe any moves to remind China it does not have a carte blanche to do what it wants in Southeast Asia is a good thing.

Japan and South Korea are clearly in this camp and their muted reaction to AUKUS suggests they are in favour of a “re-balancing” in the region. Taiwan and Vietnam are probably on this side, as well.

The only downside is that Australia may use its nuclear-powered submarines to bully ASEAN countries. If Canberra uses its nuclear submarines as a bargaining chip, it will simply turn public opinion in the region against Australia.

Implications for Australia-ASEAN relations

If anything, the AUKUS move reinforced the widely held perception that Australia’s mantra of being “part of the region” is, in fact, “empty talk”. Australia has firmly signalled its intentions to put its Anglo allies in the US and UK first.

AUKUS also reinforces the view that Australia cannot be accepted as a regional partner or player. This, of course, is nothing new. For years, the ASEAN bloc has seen Australia as “deputy sheriff” to the US, though this view would not necessarily be shared in public.

So, while AUKUS came as a surprise to many in the region, an alliance of this sort was probably bound to happen. It’s just that nobody expected it to happen so soon.

James Chin, Professor of Asian Studies, University of Tasmania

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The Philippines passes the 2 million mark as COVID-19 cases surge in Southeast Asia

Mark R. Cristino/AP

Michael Toole, Burnet InstituteSince May, the Delta variant of the SARS-CoV-2 virus has spread rapidly through most of Southeast Asia.

Of the ten member nations of ASEAN (Association of Southeast Asian Nations), all but Brunei have experienced recent surges, most of which have seen the highest number of cases since the pandemic began. However, these nine countries have experienced different COVID-19 trends.

Thailand, Laos, Cambodia and Vietnam reported very low daily cases throughout 2020 but are all now experiencing record surges in cases. Vietnam and Thailand are reporting 13,000-14,000 cases daily.

Singapore had a huge first wave in early 2020, reaching 1,000 cases a day, mainly affecting migrant workers. The country has now fully vaccinated 79% of its entire population but is currently experiencing a spike in new cases.

Myanmar had a surge in late 2020 and a lethal second wave this July, and cases are once again increasing.

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The three outliers that have struggled throughout most of the pandemic are Indonesia, Malaysia and the Philippines. Indonesia’s massive third wave is now in steep decline but more than 80,000 deaths have occurred since early June.

Malaysia began to report an increase in cases in September 2020, which led to a peak in February and then to a huge ongoing third wave.

It’s now the Philippines that is cause for most concern in the region. The country has reported more than two million cases and 34,000 deaths. The daily case rate is the second highest in Southeast Asia, after Malaysia.

Our World In Data/Johns Hopkins University

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The Philippines’ fourth wave

The Philippines has experienced four waves of COVID-19. The first wave was modest, reaching a peak seven-day rolling average of 316 in early April 2020.

From early June 2020, cases began to steadily increase leading into the second wave, which reached a peak of around 4,300 daily cases in late August.

The third wave reached a peak of 11,000 average daily cases in mid-April 2021.

However, it is the fourth wave, fuelled by the Delta variant, which is the most severe since the pandemic began and shows no sign of slowing. By September 8, the daily average had reached almost 19,000 cases.

How has the Philippines responded?

The Philippines government imposed strict restrictions early in the pandemic. In mid-March 2020, President Rodrigo Duterte ordered Metro Manila and adjacent provinces to be put under “enhanced community quarantine” (ECQ).

Under ECQ, mass gatherings were prohibited, government employees worked from home, school and university classes were suspended, only essential businesses stayed open, mass transportation was restricted, and people were ordered to observe social distancing.

When ECQ was imposed on March 15, the country had reported just 140 cases and 12 deaths. Despite the restrictions, the totals reached 5,453 cases and 349 deaths one month later.

The government relied heavily on the police and military to ensure all health protocols were followed. This led critics to denounce its militarist approach. Some civic groups providing assistance to communities faced harassment and attacks.

Philippine President Rodrigo Duterte’s early response to COVID was among the strictest in the world.
Lisa Marie David/Pool/EPA

Others criticised the government for taking a war-like approach that focused on identifying and punishing those who breached the rules rather than working cooperatively with, and providing financial support to, affected communities.

The term “pasaway”, a Filipino word referring to a stubborn person, became a punitive target in government communications. Amid the lockdown, the term pasaway referred to people violating government-imposed health protocols.

At the end of May 2020, restrictions were gradually loosened, entailing the re-introduction of mass transportation and the opening of government offices and certain businesses. At this time, the average had risen to 578 daily cases, the highest since the pandemic began.

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The easing of restrictions was driven by economic factors – the unemployment rate had risen to 17.7% and 26% of businesses had closed.

Amid the gradual easing of quarantine restrictions, the Philippines saw an accelerating increase of COVID-19 cases. By the end of July, 75% of beds in intensive care units, 82% of isolation beds and 85% of ward beds in Metro Manila were occupied.

The fourth lockdown

Fast forward to early August 2021 as daily cases surged past 8,000. A new lockdown was announced in the National Capital District, which comprises more than half the country’s economy.

By August 20, Manila and surrounding provinces had been in either ECQ (enhanced community quarantine) or modified community quarantine for a total of 170 days since the beginning of the pandemic.

On that day, restrictions were eased even as daily cases surged to a record high of 17,231 and 317 deaths. More than 26% of samples tested positive, the country’s highest positivity rate so far.

The Philippines is trying desperately to spur activity in an economy that contracted a record 9.5% last year.

However, this risks having the health system totally overwhelmed. Many hospitals fear a mass exodus of nurses who are overworked, underpaid and constantly exposed to the virus. Filipino nurses are paid the lowest salaries among nurses in Southeast Asia.

What’s needed now?

The response by the Philippines has often been among the strictest in the world. However, the imposition and lifting of restrictions have not always been based on the caseload. The easing of restrictions has been driven by a desire for economic revival.

With only 14% of the population fully vaccinated and case numbers continuing to soar, the country is unlikely to vaccinate itself out of this outbreak before the health system is overwhelmed.

With cases now occurring in all 17 provinces, a clear national “vaccine plus” policy needs to be urgently implemented to save both lives and livelihoods.

This means while accelerating the vaccine rollout, there also need to be other preventive measures, such as mask wearing, physical distancing, attention to indoor ventilation, an effective test-trace-isolate system and, when necessary, localised lockdowns.

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Michael Toole, Professor of International Health, Burnet Institute

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Coronavirus Update: Global

Coronavirus Update: Global

Coronavirus Update: Global

Biden will place Asia back at the centre of foreign policy – but will his old-school diplomacy still work?

Carolyn Kaster/AAP

Nick Bisley, La Trobe University

The election of Joe Biden represents not only a repudiation of Donald Trump and his divisiveness, but an embrace of centrism and a mainstream approach to government and policy.

On the global stage, as at home, Biden is likely to follow a familiar script. Most obviously, he will embrace America’s alliances and strengthen its engagement with multilateral institutions. Rhetorically at least, he will give human rights and democracy a much more prominent role in Washington’s approach to the world.

In short, he is likely to pursue a global role much more in line with how the US has acted globally since the end of the Cold War. While it might be tempting to assume Biden will run foreign policy as a continuation of the Obama administration, there will be some points of continuity but also key changes. And some very significant challenges will remain.

Asia, and particularly China, in focus

One area of continuity, with both Obama and Trump, will be the centrality of Asia to US global strategy. This is in part for the same reasons his predecessors made the region a priority: it will be the most consequential part of the world for decades to come. But it is also because stretched US finances will mean the country will be unable to sustain a significant European presence or the kinds of policies it has pursued in the Middle East.

For Obama, the “pivot” to Asia was a choice about where to focus efforts. For Biden, the scarcity of resources will focus the mind on Asia. It will also mean a scaling back of US activity in those other theatres.

The biggest foreign policy question facing Biden will be how to approach the People’s Republic of China. Under Trump, the US moved toward a posture, on paper at any rate, of full-spectrum strategic competition. The 2017 National Security Strategy described China as intent on eroding Washington’s global advantage, and the US would reorient the instruments of national power to contest that effort.

In practice, Trump’s China policy was incoherent and inconsistent. Trump himself pursued a peculiar relationship with Xi Jinping, even allegedly encouraging the herding of millions of Uyghurs into concentration camps.

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Biden is unlikely to move US China policy back to its “engage but hedge” setting of previous years – the mood in the US has hardened decisively, and not only because of Trump. However, the way the US competes with China is likely to change and there will be a need for co-operation. Biden won’t wind back the trade conflict significantly and moves to delink the two economies will continue, particularly in high-technology areas.

The US will continue to work to limit China’s ambitions to change Asia’s regional order, but it is likely to try to build on some areas of common interest to improve co-operation. The aim will be to advance their shared goals on that issue but also mitigate against the more damaging consequences of geopolitical competition.

This is most like to occur in relation to climate change. The Biden administration will put a very high premium on this vast threat and to advance that agenda meaningfully will require collaboration with China. So expect a more moderated approach to competition with the PRC but not an end to contestation in the region.

… and North Korea, too

North Korea was the scene of Trump’s most high-profile foreign policy gambit. While nuclear testing has stopped, it is increasingly clear that, in spite of protestations to the contrary from the president’s Twitter account, North Korea has a functional nuclear weapon capability.

The US-DPRK relationship, such as it is, has become highly personalised and the move away from Trump raises questions as to whether North Korea will revert to its bombastic past form – it has described Biden as a “rabid dog”. The most likely scenario will be a Biden administration that learns to live with a nuclear North Korea and, in contrast to Trump, works closely with its allies in South Korea to co-ordinate their approach.

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Resuming normal transmission

The return to normality in Washington will greatly hearten America’s allies. They will no longer be ignored or, in some cases, overtly disparaged by the president. The Biden administration will place a strong emphasis on the role allies play in its foreign policy ambitions. It will value the alliances, rather than debase them, and use the reach they allow and political support they create to drive a more strategic approach to managing China.

But this greater value will not come cost-free. A financially constrained US will expect allies to do more to advance their shared security interests than they have in the past. This will be most evident in Asia, where treaty allies like Australia, Japan and South Korea will be under renewed pressure to play a more expansive, risky and expensive role in the region’s geopolitics. For Australia this will be a challenge in terms of both its capacity and its risk appetite.

A Biden presidency will restore dignity to US leadership and bring a much more integrated approach to managing its global interests. It will also act in stable and predictable ways.

But Biden will inherit an America whose power and credibility are in decline. The global institutions that the US built to stabilise international order and advance its interests are in a parlous state, and not only because of the attacks of the Trump presidency. It faces a global stage with ambitious emerging powers that have shrewdly used the incoherence of the Trump presidency to advance their position.

Biden’s election symbolises a return to orthodox ways in Washington. His instincts, and that of his foreign policy team, will be in line with how the US has approached the world for many decades.

We know the Trump approach has undermined US power and prestige. What remains to be seen is whether Biden’s instincts are the right ones in a dangerous and unstable global environment.

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Nick Bisley, Dean of Humanities and Social Sciences and Professor of International Relations at La Trobe University, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

United States’ standing wanes on Lowy Asia power index

Lowy Institute

Michelle Grattan, University of Canberra

The United States has registered the largest fall in relative regional power of any country in the Indo-Pacific during the last year, according to the Lowy Institute’s Asia Power Index.

The index, started in 2018, ranks 26 countries and territories according to the power they wield in the region. It uses multiple indicators across military capability and defence networks, economic resources and relationships, diplomatic and cultural influence, and resilience and future resources.

While the US is still the most powerful country in the region, it has gone from a 10 point lead over China two years ago to five points in 2020, scoring a rating of 81.6.

“Despite its continuing pre-eminence, US standing has waned in all but one of the eight Index measures,” the report says.

It says the closing power disparity with China suggests America, “far from being the undisputed unipolar power, can more correctly be described as the first among equals in a bipolar Indo–Pacific”.

The US lost the most points in measures where China is ahead – economic relationships, economic capability, and diplomatic influence.

Despite the US’s significant advantages, “the current US administration’s unilateral inclinations mean the United States is an underachiever in its ability to wield broad-based power in Asia. In addition, the coronavirus has contributed to a loss of US prestige.

“America has suffered the largest reputational hit in the region for its domestic and international handling of the COVID-19 pandemic.”

The report says while China has been “diplomatically diminished” by COVID it is “holding ground in its overall power”.

“In conditions where most countries are less powerful than a year ago, China’s fast economic rebound from COVID-19 will widen the power differentials between itself and the rest of the region.”

China, which ranks second at 76.1 on the regional power index, has an unchanged score.

“China leads in four of the eight measures of power: economic capability, diplomatic influence, economic relationships and future resources. But the country delivers inconsistent results in the other measures, with stark strengths and weaknesses. By contrast, US performance in the Index still appears more rounded.”

Australia and two other middle powers – Vietnam and Taiwan – were the only countries to gain in comprehensive power in 2020.

“Their competent handling of the COVID-19 pandemic was a necessary, but not sole condition for improving their regional standing.”

Australia ranks number 6 on the index with an overall rating of 32.4. It was previously 7th and has overtaken South Korea. Its greatest improvement was in cultural influence.

“Australia’s comparative advantages as a middle power are most evident in its defence networks, where it ranks second behind the United States. Despite a far more modest military capability, Australia is ranked ahead of the United States for its defence diplomacy with non-allied partners.

“Canberra has led the way in forging variable geometry — bilateral, trilateral, quadrilateral and ‘quad plus’ — defence partnerships with a diverse range of countries, including India, Japan, Indonesia and Vietnam. Australia carries less ‘great power baggage’ and has demonstrated it can be far nimbler in Southeast Asia than its US ally.”

But the report warns of the effect of the contraction of migration to negative levels.

“Dropping out of the demographic ‘Goldilocks zone’ will have adverse implications for Australia’s fundamentals as a young and growing middle power. The failure to reverse this trend in the next few years would result in a smaller, poorer and ultimately less secure nation.”

The report also concludes that Japan will take much of the next decade to recover economically from COVID. It says that of all the countries, “India’s economy has lost the most growth potential through the damage inflicted by the pandemic”.

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

What COVID-19 means for the people making your clothes

Shutterstock

Sarah Kaine, University of Technology Sydney; Alice Payne, Queensland University of Technology, and Justine Coneybeer, Queensland University of Technology

Workers everywhere are feeling the impact of COVID-19 and the restrictions necessitated by COVID-19.

In Australia, retail and hospitality workers have been particularly hard hit. In other countries, it’s manufacturing workers, hit by disruptions to value and supply chains.

A value chain is the process by which businesses start with raw materials and add value to them through manufacturing and other processes to create a finished product.

A supply chain is the steps taken to get a product to a consumer.

Most of the time we don’t think about them at all.

Cotton is complex

Our research project with the Cotton Research Development Corporation is investigating strategies for improving labour conditions in the value chain for Australian cotton.

This is the chain in which our cotton is spun into yarn, woven or knitted into fabric, and turned into garments and other items which are sold to consumers.

When we began our project in mid-2019 the world was a very different place.

The changes brought by COVID-19 have had a significant impact on those working throughout the chain – particularly in garment production, but with flow on effects to other tiers.

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The tiers in the diagram are numbered backwards.

The first is Tier 4, where Australian cotton is grown and harvested. The next is Tier 3 where it is turned into yarn, usually overseas.

Tier 2 is the production of fabric, Tier 1 is the production of garments and other products, and Tier 0 is retailing and selling to retailers.

Alice Payne

Tier 0 (brands and retailers) has been hit by delays in shipments due to factory closures at Tiers 1 and 2.

However this has been matched by a decline in demand as social distancing and lock-down arrangements discourage or prevent consumers from shopping in person.

In Australia retailers such as Country Road, Cotton On and RM William temporarily closed, taking short-term retail job losses to 50,000 or more.

Globally, many multinationals have closed their doors.

Shocks along the chain…

Nike is expecting sales to drop by US$3.5 billion. While seemingly immune from some of the social distancing provisions, online retail is also likely to take a hit due to a drop in demand.

Tier 1 (garment manufacturing) has been hit by falling demand as retailers cancel orders or ask for delays in payment. It has also faced disruptions in the supply of fabric, especially from China.

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Fabric producers in Tier 2 and cotton spinners in Tier 3 have had to contend with a decreased supply of raw materials and demands to retool to produce medical equipment.

For cotton growers in Tier 4, the fall in demand has pushed prices down from US 70 cents at the start of the year to US 50 cents, the lowest price in a decade, before a partial recovery to US 58 cents.

…with human costs

Reports of losses of tens of thousands of jobs in Myanmar and Cambodia paint a bleak picture.

In Bangladesh estimates have 1.92 million workers at risk of losing their jobs as factories receive notice of US$2.58 billion worth of export orders cancelled or on-hold.

Making things worse, many workers in Tiers 1-3 were receiving less than a living wage defined as the minimum needed to provide adequate shelter, food and necessities. This has made it hard for them to plan or save for emergencies.

Many are migrant workers without funds to return home.

Even the workers who manage to hang on to their jobs aren’t in the clear. Programs set up to improve their working conditions have been disrupted.

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The Accord on Fire and Building Safety in Bangladesh is a legally-binding agreement between brands and unions set up in the wake of the collapse of the the Rana Plaza factory in 2013 which killed 1,133 people and critically injuring thousands more.

Inspections under the program have been suspended, as have audits due to the closure of borders.

The problems are cumulative – delays in orders due to interruptions in supplies will need to be addressed when factories scale back up, creating demands from buyers that might result in pressure for workers to work unpaid and involuntary overtime, or even worse, subcontract to the informal market where there is a high risk of human rights violations.

Shoots of hope

Amid the havoc are some shoots of hope.

Companies along the value chain have been asked to produce and supply medical equipment such as surgical gowns, face masks and materials and elastics.

Dozens of brands and retailers have donated funds and activated their logistics networks to support the effort.

As orders slowly start returning, cotton and textile associations have joined forces in calling for greater collaboration throughout the value chain. Governments have announced aid packages for their workers, and the European Union has provided an emergency fund to support the most vulnerable garment workers in Myanmar.

Longer term, the supply risks highlighted by the disruption might cause companies along the value chain to diversify their suppliers and even produce locally.

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The crisis has demonstrated forcefully the importance for manufacturers and retailers to be agile. Yet this can best be done when workers have been well trained and have access to the best technology and equipment.

For now, we watch and see. Cotton is as good an indicator as any other of the brittleness of supply chains and the ways in which what we produce and consume affects the livelihoods of those further down the chain.

In the short-term, a best-case scenario would see a revaluing of garment work as “essential” in order to produce protective/medical equipment that we need in a way that benefits the people who help make them.

Sarah Kaine, Associate Professor UTS Centre for Business and Social Innovation, University of Technology Sydney; Alice Payne, Associate Professor in Fashion, Queensland University of Technology, Queensland University of Technology, and Justine Coneybeer, Research Assistant – Supply Chain, Queensland University of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Asia is set for a difficult year in 2018 – much of it centred around China

China is increasingly viewed by the United States as a full-spectrum adversary.
Shutterstock

Nick Bisley, La Trobe University

In 2017 we finally realised that the four decades of geopolitical stability enjoyed by Asian countries and societies had come to an end. In 2018, the major patterns that will come to dominate the region will become increasingly clear.

China and the United States worked out a way to live with one another in the 1970s, and that paved the way for the region’s remarkable economic growth. The US actively sought to engage China in the belief that Chinese economic integration with the world would eventually lead to the liberalisation of China’s political system.

But as Xi Jinping’s first five years in office have made clear, that optimism was misplaced. A more affluent China has become more authoritarian, more nationalistic, and increasingly intent on changing the international environment to one it perceives better reflects its interests.

In his first year in office, US President Donald Trump surprisingly played a gentle hand with China. In contrast to this campaign rhetoric, his administration approached China with moderation, focusing principally on establishing a good personal relationship with Xi and trying to garner Chinese help to manage North Korea’s nuclear ambitions.

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That is likely to change in 2018. As signalled in the National Security Strategy and the National Defence Strategy, the US sees strategic competition among major powers as the most important feature of the country’s security environment.

The active engagement of China by the US, even one tempered by a degree of containment, is coming to an end. China is viewed now as a country that seeks to mould the international environment in its own image. Expect the US to increasingly contest China’s power and influence, both in the region and globally.

This is likely to take both military and economic forms, as China is increasingly viewed by the US as a full-spectrum adversary. This will mean some kind of action on what the US perceives as China’s predatory trade policy, as well as a ratcheting up of military steps to push back on Chinese activities, particularly at sea.

China will not respond to the likely increase in American pressure with equanimity. Indeed, one real risk in 2018 is that China will overplay its hand. Its lesson from 2017 is that Trump is a paper tiger. Trump is perceived as being neither able nor willing to match his bombastic words with deeds. China could be emboldened to act provocatively because it miscalculates how the US might respond.

Much attention this year will focus on the power struggle between the US and China.
Reuters/Jonathan Ernst

The disputed islands in the East China Sea are probably the most likely place for this to happen. The South China Sea disputes have a slightly lower risk in 2018, as China has largely achieved its objectives in that area, and while the US would prefer that this hadn’t occurred, it can live with the consequences for the time being.

While Sino-American competition will increase the regional temperature, it is by no means the only way in which great power rivalry will shape the region.

Last year’s Doklam crisis reminds us that the extensive border between China and India is highly contested. Expect India’s ambitions and China’s confidence to lead to further tensions in the Himalayas.

China was slightly surprised by India’s response in Doklam, and will have learned from that occasion. When, and not if, China next tests India, it will probably involve a higher level of military risk.

In late 2017, senior officials from the US, Japan, India and Australia met, reviving the “quadrilateral initiative” of a decade ago.

The move is publicly framed as efforts to coordinate policies of countries that value an open and free Indo-Pacific. In substance, it is about collaborating to limit Chinese influence and sustain the liberal order. The “new quad” will take further steps in 2018 and China will respond in ways that will further heighten regional tensions.

This year will also see a further decline in the stock of liberalism in Asia. For a period in the early 2000s, liberalism seemed ascendant. China joined the World Trade Organisation, democracy was on the march in Southeast Asia, and economic globalisation was seen as an unalloyed good thing.

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China’s ambition burns bright – with Xi Jinping firmly in charge

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No longer. There are no democracies in continental Southeast Asia. Rodrigo Duterte is undermining liberalism in the Philippines, shutting down a vibrant news website, and some fear that the martial law he imposed in the restive south may be expanded across the country in 2018.

Cambodia has stripped away its thin democratic veneer, while Myanmar’s democratisation process remains highly limited. Even in Japan and India, liberal ideas are under challenge from thin-skinned nationalists.

In 2018, liberal ideas in Asia will face an increasingly difficult environment, particularly as the geopolitical competition will encourage erstwhile champions of liberal ideas to put interests ahead of values in order to manage that contest.

This year will sadly see the Rohingya crisis linger on, with insufficient political incentives for international actors to help end the crisis. The alignment of interests between the military and the government in Naypidaw will mean the region’s worst humanitarian crisis in decades will continue.

There is also a good chance that in 2018 we will work out how to live with a nuclear North Korea. The US will ultimately realise that it has no options for managing the crisis – or at least none that carry acceptable costs – and that a nuclear north can be managed. Indeed, a North Korea that feels secure may finally undertake the kind of economic reforms that its populace needs, and which could integrate the isolated country into the regional economy.

Contested Asia has become a geopolitical and geo-economic reality. In 2018 we will see just how sharp the contests will become. The wounded nationalism of China, the erratic and unpredictable US, and the weak political leadership in many regional powers mean the coming year in Asia is going to be even more challenging than 2017.

Nick Bisley, Executive Director of La Trobe Asia and Professor of International Relations, La Trobe University

This article was originally published on The Conversation. Read the original article.