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.

COVID vaccines offer the pharma industry a once-in-a-generation opportunity to reset its reputation. But it’s after decades of big profits and scandals

Elsa Olofsson/Unsplash

Ray Moynihan, Bond UniversityJust weeks before the first COVID-19 cases emerged, Gallup published its latest poll on America’s views about business. At the bottom of the list of 25 sectors was the pharmaceutical industry. Below advertising. Below oil and gas. Below the banks.

The pandemic and the new vaccines have of course turned that reputation around, but let’s not forget why the pharmaceutical industry’s credibility sank so low.

Or how the industry got so big. One company, Johnson & Johnson, is currently worth around US$450 billion. About the same as the economy of Norway.

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The birth of the behemoths

The idea of the miraculous potion or cure-all dates back at least as far as Greek mythology. The goddess Panacea even gets a mention in the Hippocratic Oath.

The rise of the modern pharmaceutical industry is more recent, coming through the 19th century. On the eve of the 20th century, the German company Bayer famously launched its early blockbusters, including “Aspirin” and “Heroin.”

Around this time, US drug-makers were arguing for patent protections, or exclusive rights to market a drug for a specific period of time. By the 1950s, they’d won those arguments, and the US soon became the world’s biggest market for medicines.

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In addition to patents, the other special ingredient for success was the right to market pills directly to doctors, and in the US, directly to consumers via television commercials.

At the dawn of the 21st century, in those dark ages before Facebook and Big Tech, pharmaceuticals was among the most profitable industries on the planet.

Wonder drugs, miracle cures

Clearly many medicines extend lives and reduce suffering. And while we need caution with hyperbole, some discoveries are major breakthroughs.

Antibiotics revolutionised the treatment of deadly infections, and gave a boost to science at the same time.

In the 1940s, one of the first-published “randomised controlled trials” was a test of Streptomycin for the treatment of tuberculosis.

Streptomycin inventor Selman Waksman and two associates test the drug.
New Jersey Agriculture Experimental Station at Rutgers University/Wikimedia Commons

In the 1980s, another famous class of wonder drugs was developed, this time to tackle the HIV-AIDS epidemic. The mysterious new virus bringing many people a death sentence would soon become a manageable disease.

And while some cancers remain incurable, others are treated and even prevented with medicines that are simply miraculous.

Extortionate prices, evaded taxes

Yet, in each case, the golden drugs have a dark side. As the World Health Organization notes, overuse of antibiotics helped make antibiotic-resistance “one of the biggest threats to global health”.

Over-pricing and patent protections for HIV medicines put them out of reach of the world’s poorest, and prices only came down after massive global campaigns for greater access.

With cancer, companies have demanded huge prices for products offering sometimes minimal benefits.

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Extortionate prices were feeding drug company mega-profits, and at the same time driving down the industry’s reputation. In a notorious example, the cost of the life-saving Epipen skyrocketed more than 400%, helping make drug prices a big issue in the 2016 US presidential election.

The price of Epipens rose by more than 400%.
Shutterstock

Industry argues high prices fund vital research. Critics say companies can spend more on marketing than research, and their profits sometimes derive from taxpayer-funded science.

To make matters worse, the big pharmaceutical companies are also among the big tax avoiders. A 2015 Senate hearing in Australia heard companies were paying rates as low as one cent in the dollar.

A global report from Oxfam in 2018 concluded the pharmaceutical industry was “cheating countries out of billions in tax revenues”.

Toxic marketing causes harm

The major problem with the drug giants is their unhealthy influence over medical science. The industry dominates research, and there’s strong evidence that company-sponsored studies tend to have a bias which favours the sponsor’s product.

Medical education is also heavily sponsored, with evidence suggesting an association between a doctor accepting just one meal at an “educational event”, and prescribing more of the sponsor’s drugs.

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And the guidelines which can be so influential over a doctor’s prescribing decisions are too often written by medical experts with ties to drug companies.

Central to this marketing effort are these senior medical experts, sometimes called “key opinion leaders”, who claim to be independent yet accept fees for advice, consultancies or “educational” presentations to other doctors.

Just one meal at a sponsored educational event can result in a doctor prescribing more of that company’s drugs.
Shutterstock

A former top-selling drug company sales representative turned whistleblower put it plainly in a 2008 piece in The BMJ:

Key opinion leaders were salespeople for us, and we would routinely measure the return on our investment, by tracking prescriptions before and after their presentations.

If that speaker didn’t make the impact the company was looking for, then you wouldn’t invite them back.

Unhealthy marketing means the latest most expensive pill is too often favoured over older cheaper options, or doing nothing at all, causing much harm and wasting precious resources.

Corporate crime

In 2009 came the biggest health-care fraud settlement in history. Pfizer was forced to fork out a US$2.3 billion fine for illegal promotion, false and misleading claims about drug safety, and paying kickbacks to doctors. That included a US$1.2 billion criminal fine, the largest ever in a US criminal prosecution.

One of the whistleblowers in that case happened to be a member of a special Pfizer sales team promoting Viagra. He revealed doctors were taken to breakfasts, lunches, dinners, Broadway shows, baseball games, golf courses, ski fields, casinos and strip clubs.

In 2013, Johnson & Johnson paid out US$2.2 billion in civil and criminal fines for putting “profit over patients’ health”. The company had illegally promoted powerful anti-psychotic drugs as behaviour control for the elderly and most vulnerable, overstating benefits and playing down dangerous side effects, including stroke.

Drug companies have faced massive fines for putting profits over health.
Shutterstock

Other court documents around the same time exposed how the giant global company Merck used dirty tricks to try and defend its controversial anti-arthritis drug Vioxx. Merck created a fake medical journal and drew up secret lists of academic critics to “neutralise” and “discredit”.

In the end, Vioxx was taken off the market because it was causing heart attacks, with estimates in The Lancet suggesting it may have led to 140,000 cases of serious coronary heart disease.

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Investigation and reform

Scandals like Vioxx tarnished the industry’s image, and brought more intense scrutiny.

The US National Academy of Sciences produced a landmark report arguing the closeness between doctors and drug companies could jeopardise the integrity of science, the objectivity of education, the quality of care, and public trust in medicine.

A series of US congressional hearings on unhealthy marketing produced the Open Payments register, mandated by US law to publicly list every company payment to every doctor.

Many around the world are reforming further, moving from transparency to independence. Italy brought in a special tax on drug company promotion to fund public interest research. Norway doesn’t give doctors full credit anymore for industry-sponsored education.

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But there’s a long way to go. A study in 2020 found 80% of the medicos who run the world’s most powerful doctors organisations still take money from drug and device companies. For research, for consultancies, for hospitality.

Even some agencies which assess drugs, notably the US Food and Drug Administration (FDA), still rely on significant funding from industry, which pays to have its products assessed.

And the harmful marketing has continued. Just last month, a group of drug companies, including Johnson & Johnson, agreed to pay a total of US$26 billion for their roles in fuelling the opioid epidemic.

A prescription for trust

One drug company chief reportedly said last year the industry had a “once-in-a-generation opportunity to reset” its reputation.

Given the dark arts that drove pharma’s credibility to rock bottom, its fanciful to imagine the pandemic will magically end the misleading marketing and the price gouging.

Any post-pandemic recovery requires meaningful reform.

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This article is part of a global Conversation series, The business of pharmaceuticals. You can read the other articles here.

Ray Moynihan, Assistant Professor, Bond University

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

Australia’s new vaccination campaign is another wasted opportunity

Australia’s new ‘Arm Yourself’ COVID-19 vaccination campaign advertisement.
Department of Health/Youtube

Lauren Gurrieri, RMIT University; Amanda Spry, RMIT University; Bernardo Figueiredo, RMIT University; Janneke Blijlevens, RMIT University; Linda Robinson, RMIT University; Marian Makkar, RMIT University; Samuelson Appau, RMIT University, and Torgeir Aleti (né Watne), RMIT UniversityThe Australian government’s new national vaccination advertisements have been described as exciting as a bowl of leftover cereal, with all the urgency of a stubbed toe. “It will be very difficult for Shaun Micallef to send this ad up,” said Opposition leader Anthony Albanese when asked about them on Sunday morning television.

He’s not wrong.

The “Arm Yourself” campaign — featuring various upper arms showing a bandaid and iterations of the same message to arm “yourself”, “your family”, “your community” — could easily come from a presentation by Karsten Leith, the kravat-wearing marketing consultant in the ABC comedy series Utopia.

The adverts have apparently been in the can for months, put on ice due to there being little point encouraging anyone to join an already long queue for vaccines.

Now that they are being wheeled out, it is hard to know exactly what they are meant to achieve. With all the allure of airline safety videos, they fly in the face of decades of research on effective advertising. They do little to engage the hesitant.

Nor is the “graphic” side campaign for Sydney-siders, portraying a distressed young woman on a ventilator in a hospital bed gasping for air, any better. To be persuasive and change attitudes and behaviours, advertising campaigns must astutely balance rational and emotional appeals.

Blending rational and emotional

For decades researchers have studied how advertising can influence people’s decision-making. A cornerstone contribution to this is the “hierarchy of effects model”, which suggests audiences go through both cognitive (rational) and affective (emotional) stages before they act (respond to the advertisement).

The most effective way to motivate behaviour is to blend the rational with an emotional message.

A good example of this is Singapore’s Get Your Shot, Steady Pom Pi Pi campaign.

It addresses safety concerns but in a humorous way — through an
“informative disco” sung by a well-known and beloved character from the popular sit-com Phua Chu Kang Pte Ltd, which aired on Singaporean television from 1997 to 2007.

Singapore’s Get Your Shot, Steady Pom Pi Pi’ music video to promote vaccination.

This layering of emotional and rational appeals through a colourful, slapstick performance drives home the call to action to “faster go and vaccinate”. The video has been viewed more than 1.5 million times on YouTube to date (Singapore has a population of about 5.7 million).

The Victorian government did something similar with its campaign to encourage adherence to hygiene and distancing rules during the state’s lockdown in 2020. That featured Magda Szubanski’s character Sharon from the iconic Kath and Kim sitcom.

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Unity, humour, optimism

Another good example of integrating rational and emotional appeals is New Zealand’s Ka Kite, COVID (“see you, COVID”) campaign. Though without the “star power” of the Singapore campaign, it features instantly likeable and relatable characters — including cheeky teens and jazzercise dancers — to emphasise the idea of ordinary Kiwis coming together to protect themselves and the community.

New Zealand’s Ka Kite vaccination campaign ad.

It also offers a key motivator for getting vaccinated. In the ad, a health worker describes a vaccination centre as “the metaphorical door to freedom”. Scenes frame the different ways a return to normal can be enjoyed — from being reunited with family members to children playing together and a couple planning their wedding.

It drives home the rationale that vaccination benefits the entire community through three highly engaging emotional appeals to New Zealanders — their sense of belonging, humour and optimism. This brings home the campaign tagline to “Unite against COVID-19”.

Getting the balance right

The Australian Government’s vaccination messaging is struggling to find this balance.

Its first vaccination campaign, launched in January, relied too strongly on a rational appeal. In it infectious diseases physician Dr Nick Coatsworth talks about the vaccine being backed by experts, closely monitored for safety by the Therapeutic Goods Association and “free, simple, and the best way to protect ourselves against COVID-19”.

Dr Nick Coatsworth in the Australian government’s first COVID-19 vaccination promotion campaign.

It has been criticised as boring, sterile and too densely informative, making an ineffective call to action. It has been viewed on YouTube fewer than 1,200 times.

The new “graphic” advertisement for Sydney audiences swings in the other extreme, by relying solely on stimulating an emotional response through fear.

Australia has a long tradition of fear appeals in public health campaigns. The most famous is the “Grim Reaper” advert in the 1980s. This campaign was certainly memorable, but the evidence from research in more recent decades about the effectiveness of fear-based messages is mixed. Studies show they don’t necessarily stimulate action.

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The new national “Arm Yourself” campaign is arguably even worse — failing to effectively executive either an emotional or rational appeal. It provides little information beyond a metaphoric battle slogan. Its primary call to action is to visit a website. It lacks the powerful imagery, stirring music or relatable characters needed to engage the audience.

The government’s story is that this phase of the campaign is focused on encouraging Australians to get vaccinated. If that’s the case, it needs to go back to the standard advertising playbook.

This is another missed opportunity to alleviate fears and align with the broader pandemic messaging of community spirit and solidarity to encourage a high uptake of the vaccine by Australians of all ages.

Lauren Gurrieri, Senior Lecturer in Marketing, RMIT University; Amanda Spry, Lecturer of Marketing, RMIT University; Bernardo Figueiredo, Associate Professor of Marketing, RMIT University; Janneke Blijlevens, Senior Lecturer Experimental Methods, RMIT University; Linda Robinson, Senior Lecturer in Marketing, RMIT University; Marian Makkar, Lecturer in Marketing, RMIT University; Samuelson Appau, Senior Lecturer, RMIT University, and Torgeir Aleti (né Watne), Lecturer in Marketing, RMIT University

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

Trump’s photo op with church and Bible was offensive, but not new

Robyn J. Whitaker, University of Divinity

US President Donald Trump delivered an address this week in which he threatened military action on the nation. Then he walked to the nearby St John’s Episcopal Church to pose with a Bible.

Yes, Trump held the Bible like a baby holding a spoon for the first time – unsure which end is which – but the real problem was the complete disconnection between the text in his hand and the force, both verbally threatened and actually used, to clear the way for his stunt. Tear gas and militarised police cleared crowds, including some of the church’s own clergy from its grounds, in order for Trump to pose in front of the church.

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While Christian outrage at Trump’s hypocrisy is genuine, for reasons that several Christian leaders have elegantly articulated, we need to ask ourselves: did Trump do anything new? Has he done anything that powerful “Christian” leaders haven’t done for centuries?

The answer is no.

Co-opting Christianity in the service of power is almost as old as Christianity itself. In the culture war raging in America, the very president who has stoked the flames of racism and white supremacy effectively claimed God is on his side. It is deeply offensive, but it is not new.

In the early fourth century CE, Flavius Valerius Constantine would defeat his brother-in-law, Maxentius, in a battle for control of the Roman Empire. His victory would solidify him as emperor of a vast western empire.

The legend goes that Constantine had a vision before the battle on Milvian Bridge: he saw a cross of light in the sky and heard a voice that said, “in this sign, conquer”. The next morning, Constantine ordered his soldiers to paint crosses on their shields. They marched into battle as the first cross-bearing “Christian” soldiers. When Constantine won, he would attribute his victory to the God of the Christians.

While historians are quick to point out that this “conversion” of Constantine is as much myth as reality, and may have been motivated by either political expediency or sheer superstition, it marked a turning point for Christianity. The new emperor’s adoption of the cross transformed a persecuted, minority sect into a legitimate religion and, eventually, the official state religion.

The use of propaganda and standardised imagery was not new for the Roman Empire. Indeed, they were already experts in using imagery to communicate dominance, power and a certain worldview. The new element in 312 CE was the type of imagery; Christian instead of pagan, a cross representing the death and resurrection of Jesus instead of a god, goddess or symbol from the Roman Pantheon.

We have been left with a legacy in Western Christianity of powerful rulers claiming God for their cause. The Crusaders rode out to fight Muslims with chests and shields adorned with the sign of the cross, popes would wield more power than kings, and God’s name would be invoked in war after war.

Eventually, Christianity became so synonymous with colonial power and whiteness that the two can be hard to distinguish. It is telling that, in the new Western empire, no American president has been elected without explicitly signalling his Christian faith.

Photoshopped images of Hitler with a Bible started to circulate this week following Trump’s stunt. Evidence already exists for the casual way in which Hitler, too, co-opted Christianity for his cause. A 1930s propaganda book titled Hitler as No One Knows Him contains numerous photographs of Hitler designed to make him likeable. One of them has him leaving a church, implying his Christian faith and basic decency, suggesting he is a good Christian just like so many of those who were deceived by his politics and drafted to his cause.

Closer to home, the Bible arrived on the shores of Australia in the hands of those who would colonise this land through violence and domination. Its diverse history here has been described by Meredith Lake. But the Bible was, at least superficially, synonymous with white culture and power. It would be (mis)used to justify colonisation in Australia just as it was to argue for apartheid in South Africa.

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The co-option of Christian symbols by Western Christian empires has meant its core symbols have often been inverted in meaning. The great irony is that the cross worn as a symbol of power and victory by imperial soldiers was first the symbol of the unjust death of Jesus, a brown-skinned Jew killed by the Roman State. It was a shameful symbol in that culture, an image for a humiliating public death.

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The Bible, wielded by Trump and others like him, likewise did not begin its life as the text of the victor. Had Trump read the text he held, he would have found a story of liberation for slaves, a divine preference for the poor, a demand of justice for the marginalised, a cry of lament from those who grieve, and a damning critique of any empire that oppressed its people.

What Trump did was not new. But perhaps we are offended because his delivery was so unsophisticated, an insult to our intelligence for its lack of pretence at genuine faith. He didn’t even attempt to enter the church and pray nor open the Bible and read it.

Both church and Bible were mere backdrops, doing the rhetorical work Trump needed in signalling his virtue and values to his base. Values, to be clear, that are antithetical to both the building and the book in his hand.

Robyn J. Whitaker, Senior Lecturer in New Testament, Pilgrim Theological College, University of Divinity

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

Beyond travel, a trans-Tasman bubble is an opportunity for Australia and NZ to reduce dependence on China

http://www.shutterstock.com

Hongzhi Gao, Te Herenga Waka — Victoria University of Wellington and Monica Ren, Macquarie University

When it comes to our economic over-reliance on China, New Zealand consumers need look no further than their most popular big box chain, The Warehouse. The familiar “big red shed” sourced about 60% of its home brand stock from China in 2017 – and a further NZ$62 million in products directly through offices in China, India and Bangladesh in 2019.

In Australia, many major chain stores as well as online retail giant kogan.com are in a similar position. Reliant on China for much of what they sell, including exclusive home-brand items, they are part of what has been described as the world’s most China-reliant economy.

The COVID-19 crisis has thrown Australian and New Zealand businesses’ dependence on China into stark relief. With countries reportedly competing with and undercutting each other to secure desperately needed medical supplies from China, many are now waking up to their economic exposure to a single manufacturing giant.

Understandably, discussions about creating a “trans-Tasman bubble” between Australia and New Zealand have focused on kick-starting economic activity in the short term, particularly through tourism. But both countries also need to take a longer-term view of boosting economic activity – including through increased manufacturing and trade integration.

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The statistics support this. In 2018, 20% of global trade in the manufacturing of “intermediate” products (which need further processing before sale) came from China. Chinese manufacturing (including goods made from components made in China) also accounted for:

• 35% of household goods
• 46% of hi-tech goods
• 54% of textiles and apparel
• 38% of machinery, rubber and plastic
• 20% of pharmaceuticals and medical goods
• 42% of chemical products.

Australia and New Zealand are no exception, with China the number one trading partner of both. Australia earned 32.6% of its export income from China in 2019, mostly from natural resource products such as iron ores, coal and natural gas, as well as education and tourism.

Inside a Bunnings store in Australia: many of the shelves would be empty without goods sourced from China.
http://www.shutterstock.com

From New Zealand, 23% of exports (worth NZ$20 billion) went to China in 2019, and much of the country’s manufacturing has moved to China over the past 20 years. The China factor in New Zealand supply chains is also crucial, with a fifth of exports containing Chinese components.

Supply shortages from China

The world is now paying a price for this dependence on China. Since the COVID-19 outbreak in early 2020 there has been volatility in the supply of products ranging from cars and Apple phones to food ingredients and hand sanitiser packaging.

More worryingly, availability of popular over-the-counter painkiller paracetamol was restricted due to Chinese factory closures. This is part of a bigger picture that shows Australia now importing over 90% of medicines and New Zealand importing close to NZ$1.59 billion in pharmaceutical products in 2019. Overall, both countries are extremely vulnerable to major supply chain disruptions of medical products.

For all these reasons, a cooperative trans-Tasman manufacturing strategy should be on the table right now and in any future bilateral trade policy conversations.

The big red shed: New Zealand’s Warehouse chain sources 60% of its products from China.
http://www.shutterstock.com

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Opportunities for Australia and NZ

Rather than each country focusing on product specialisation or setting industrial priorities in isolation, the two economies need to discuss how best to pool resources, add value and enhance the competitive advantage of strategic industries in the region as a whole.

Currently, trans-Tasman trade primarily involves natural resources and foodstuffs flowing from New Zealand to Australia, with motor vehicles, machinery and mechanical equipment flowing the other way. Manufacturing is skewed towards Australia, but closer regional integration would mean increased flows of capital, components and finished products between the countries. We have seen this already in the primary and service sectors but not much in the manufacturing sector, especially from New Zealand to Australia.

Medical technologies and telecommunications equipment manufacturing (both critical during the pandemic) stand out as potential new areas of economic integration. In that sense, it was heartening to see major medical tech companies such as Res-Med Australia and Fisher & Paykel Healthcare in New Zealand rapidly scale up their production capacities to build respiratory devices, ventilators, and other personal protective equipment products.

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These brands enjoy a global technology edge, smart niche positioning and reputations for innovation. We need more of these inside a trans-Tasman trade and manufacturing bubble.

China still vital but balance is crucial

Key to successful regional integration will be the pooling of research and development (R&D) resources, mutual direct investment, subsidising R&D and manufacturing in emerging markets with profits from another (such as China), and value-adding specialisation in the supply chain. For example, Tait Communication in New Zealand recently invested in a new facility based in one of Australia’s largest science, technology and research centres.

Together, we can make a bigger pie.

None of this means cutting ties with China, which will remain the main importer of primary produce and food products from Australasia for the foreseeable future. And Chinese exports will still be vital. Fisher & Paykel Healthcare sells its products in about 120 countries, for example, but some of its key raw materials suppliers are Chinese.

Getting this dynamic balancing right will be key to Australia and New Zealand prospering in the inevitably uncertain – even divided – post-pandemic global business environment. And you never know, maybe one day we’ll see a “made in Australia and New Zealand” label in the aisles of The Warehouse and Bunnings.

Hongzhi Gao, Associate professor, Te Herenga Waka — Victoria University of Wellington and Monica Ren, Lecturer/ Assistant Professor, Macquarie University

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

China turns on the charm and angers Trump as it eyes a global opportunity in coronavirus crisis

China has its eyes on a post-coronavirus world.
Ng Han Guan/AP Photo

Klaus W. Larres, University of North Carolina at Chapel Hill

A new “red scare” is developing in the U.S.

While Beijing is busy with a global propaganda crusade following the spread of the coronavirus from China to around the world, foreign policy hawks in Washington are seething.

Donald Trump lashes out at Beijing’s response to the crisis at daily press conferences amid growing reports of anti-Chinese sentiment among Americans. As a scholar of international affairs and former policy advisor to the German Embassy in Beijing, it is clear to me that China is turning the crisis into an opportunity. It is touting its role in the world and praising its governmental system and enormous countrywide surveillance network for successfully battling the coronavirus.

Yet, this is the nature of international relationships. The U.S. or any other great power would be tempted to do the same. China is exploiting the situation while the U.S. and the Western world are occupied with their own problems and have little time for anything else.

Trading insults

During most of Trump’s years in office, relations between China and the U.S. have been tense. Much of this has centered on the huge American trade deficit with China which Trump strongly criticized even before he became president.

In the 2016 election campaign, Trump accused Beijing of “raping” the U.S. and talked about “the greatest theft [of American jobs] in the history of the world.” While referring to Chinese President Xi Jinping as a good friend, Trump has accused China of intellectual property theft, unfair trade practices and lack of market access for U.S. companies.

In late 2018, the U.S. president unleashed a painful trade war with sharply escalating tariffs, but it did little to resolve Trump’s grievances. Neither the U.S. nor China could win this harmful conflict and a provisional trade deal was signed on Jan. 15, 2020.

The truce lasted exactly two weeks. On Jan. 31, Trump announced a travel ban on visitors from China.

Conspiracy theories

In his many remarks on the crisis since, Trump has not hesitated to resort to language criticized as xenophobic and anti-Chinese, such as referring to the coronavirus as the “Wuhan virus” or “Chinese virus.”

Meanwhile, the administration has done little to discourage a conspiracy theory that has the virus originating from a Chinese research laboratory near Wuhan and not from a live animal market in the city – which most scientists believe. On April 15, Trump said the U.S. was investigating the lab claim and ratcheted up the rhetoric further a few days later by suggesting that China would face consequences if it was “knowingly responsible” for the pandemic. Meanwhile Secretary of State Mike Pompeo has said China needs to “come clean” over the emergence of the virus and how it spread.

Certainly there are many questions that need to be answered over the true extent of the disease in China – on April 17 Beijing revised the number of fatalities in Wuhan up by 50% – but the rhetoric from the White House may be contributing to anti-Chinese sentiment directed not at the government in Beijing, but at people in China and of Chinese descent.

On the ground in U.S. cities and towns, Asian Americans are reporting being subjected to verbal and even physical abuse.

Tit-for-tat measures

The Chinese government isn’t blameless when it comes to conspiracy theories. With the likely nod of Beijing’s all-powerful seven-member Standing Committee of the Politbureau, Chinese Foreign Ministry spokesperson Zhao Lijian speculated wildly on Twitter that it might well have been the U.S. army which brought the virus to Wuhan.

There have also been plenty of reports that foreigners, in particular Africans who live in China, have faced severe discrimination and abuse since the coronavirus crisis broke. They are unfairly accused of having imported the virus to China.

Meanwhile, both Washington and Beijing have put in place tit-for-tat restrictions on each others’ media outlets, severely limiting the number of journalists who are allowed to work in their respective countries.

It accompanied growing reports in the western media about China’s slow initial response to the virus and the silencing of the late Dr. Li Wenliang and other doctors who had attempted to alert Chinese authorities about the looming pandemic as early as December 2019.

Saving face

Despite a sluggish start which contributed to the initial spread of the virus, China has since trumpeted the success of its policy of locking down entire cities and provinces. The country has now been able to open up for business again.

Beijing is also praising itself as a benign global hero by donating and selling huge amounts of much-needed face masks, ventilators and other protective gear to countries round the world, including the U.S.

In so doing, China is subtly using the opportunity to expand its global influence, not least its soft power appeal. Beijing has embarked on a global “charm offensive.”

While this may be regrettable from a Western perspective, would any other big country behave differently? If the roles were reversed, I believe the U.S. would also be tempted to exploit its position for political advantage.

It seems this is the instinctive reaction of any great power. But there is no reason for panic about this. Without doubt, relations between China and many of the countries it is helping have become closer. But they still need to be cemented in the long run – this may or may not happen.

Ruling the world?

China, like many great powers, has a track record of not following through with its promises of financial help.

Just ask the countries who have signed up to Beijing’s huge and creative Belt and Road initiative that seeks to pump Chinese money into infrastructure projects around the world, or the 17+1 China-Central Eastern Europe initiative linking China with governments in central and eastern Europe, including many EU countries. There is much disappointment about broken or semi-fulfilled financial promises and agreements.

And some of the face masks and other gear donated to European countries have proven faulty or of inferior quality.

For the time being, the world should be pleased that China is able and willing to help out with much needed equipment as well as doctors and nurses to help fight the coronavirus crisis in the U.S. and elsewhere.

It does not mean that once the crisis is over, China will be able to run the world. In fact, the U.S. should build on Beijing and Washington’s haphazard and sporadic cooperation during the current crisis to improve relations with China in a more lasting way.

[You’re smart and curious about the world. So are The Conversation’s authors and editors. You can get our highlights each weekend.]

Klaus W. Larres, Richard M. Krasno Distinguished Professor; Adjunct Professor of the Curriculum in Peace, War and Defense, University of North Carolina at Chapel Hill

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

Government report provides important opportunity to rethink Australia’s relationship with India

Importantly, the new strategy is ambitious, and will be led by, at least for now, the governments of Malcolm Turnbull and Narendra Modi.
AAP/Ella Pellegrini

Craig Jeffrey, University of Melbourne

By 2060, India may be the world’s largest economy. It will certainly be the world’s most populous country. At that point, Australians will ask, “What did we do in the 2020s to build a relationship with this superpower?” They may also ask: “How did economic cooperation with India benefit both countries in the early 21st century?”

The federal government’s report, An India Economic Strategy to 2035, was launched last week in Brisbane. Written by University of Queensland Chancellor Peter Varghese, it is an excellent basis for reflecting on these questions and the wider issue of Australia-India cooperation.

The strategy identifies numerous sectors – health, education, and tourism, for example – that can help enhance economic cooperation, and in which Australia has some comparative advantage. It also specifies ten Indian states as targets for collaboration based on their economic heft, commitment to reform, and relevance to the sectors in which Australia has competitive advantages.

Importantly, the strategy is ambitious. It sets itself the goal by 2035 to lift India into Australia’s top three export markets. It intends for India to become “the third largest destination in Asia for Australian outward investment”, and for it to be brought “into the inner circle of Australia’s strategic partnerships.”

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Read more:
Why it’s the right time for Australia and India to collaborate on higher education

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The strategy emphasises two areas that need attention in order to meet these objectives. First, Australia needs to leverage the strengths of the Indian diaspora, which now numbers about 455,000.

The rapid growth of the Indian diaspora population can be a spur to economic cooperation. The Indian population in places like Silicon Valley drive the IT and biotech booms in India and the US. Canada is highly adept in enrolling its Indian diaspora in projects of national and international development.

Second, Australia needs to build more knowledge of India and support organisations that work on the bilateral relationship. While Australia made a pivot towards China in the last quarter of the 20th century, businesses, governments, and the public developed comparatively little knowledge about India.

The emphasis on China led to a neglect of India in education, media, and the policy sphere. There is a need to rebuild public understanding of India and the institutions that can activate this understanding to achieve lasting impact. Culture and arts will be very important here, both as a sector and enabler – points implicit in the strategy.

Varghese says we need to move beyond constantly drawing comparisons between India and China. “India is not the next China,” he writes. India is a distinct opportunity for engagement that merits discussion in its own terms.

The base from which Australia is working with respect to cooperation is certainly different: Australian exports to India are less than a sixth of those to China.

Two further issues will be crucial for the strategy’s successful implementation. The first concerns the relationship between growth and wellbeing. It is clear that the India Economic Strategy imagines enhanced cooperation not as a basis for economic growth as such, but also higher standards of living.

There is a need to reflect carefully here. We must think not only about spurring growth in the Australian and Indian economies, but also ensuring that growth is meaningful in four ways: that it addresses social and economic inequalities, creates jobs, is environmentally sustainable, and fosters opportunities to lead fulfilling social and cultural lives.

This is where the comparison between India and China is important. Since 2000, India’s economic growth has been not much more than half as effective at lifting people out of poverty as China’s economic growth. This means that for every 1% growth in Gross Democratic Product in China nearly twice as many people are elevated out of income poverty as in India. This partly reflects the depth of social inequalities in India.

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Read more:
Australia and India: some way to go yet

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In the context of rising concern over inequality in Australia as well, the key question is: How can international economic cooperation create growth that reduces inequalities, generates jobs, and protects the environment in the countries concerned? It is a question that puts Australia and India on the same side of the table.

A second issue concerns the term “navigation”, which is in the title of the strategy. As the Danish anthropologist Professor Henrik Vigh has pointed out, navigation is a great metaphor. It connotes plotting and re-plotting a course on a moving plane. The complexity of that plane in this case calls to mind the six degrees of motion of a boat: pitch, roll, yaw, sway, heave, and surge. The strategy’s recommendations and ideas are excellent, and can be re-calibrated as India and Australia pitch, heave, and yaw.

The India Economic Strategy is an exciting document written with confidence and ambition. It provides a foundation for reflecting on economic cooperation and striving for meaningful growth.

Craig Jeffrey, Director and CEO of the Australia India Institute; Professor of Development Geography, University of Melbourne

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

Morrison’s budget tax plan is another missed opportunity

Richard Holden, UNSW

Even though this year’s budget is pretty good politics and reasonable economics, on almost every front, it is a missed opportunity to be bold.

Last year’s budget was a bank-bashing bombshell, with 4-5% of profits for five of Australia’s biggest banks yanked away, not for financial stability reasons, but because, as Treasurer Scott Morrison hinted at the budget press conference, people don’t like the banks very much.

With that populist mission accomplished, this year’s budget is more mundane.

The much-vaunted return to surplus is now planned for 2019-20 at just 0.1% of GDP. In 2017-18 we are told to expect a deficit of 1% of GDP ($18.2 billion). That’s before the forecast 3% real GDP growth from 2018-19 onward kicks in. An heroic assumption.

Compare that to an actual of 2.1% in 2016-17. That topline forecast is not insane, but it is certainly bullish. One is tempted to ask the Treasurer whether he would bet a year’s salary that real GDP will be above 3% compared to below that. I suspect he wouldn’t.

A new personal income tax plan

Having previously introduced, but not wholly managed to get through the Senate, a 10-year plan to reduce the company tax rate from 30% to 25%, this year the government has a seven-year “Personal Income Tax Plan”.

Under the “PIT plan” (pun absolutely intended) the number of tax brackets will be reduced from five to four. By 2024-25 the tax-free threshold will remain at $18,200 and a 19% tax rate will apply up to income of $41,000, at which point the 32.5% rate will kick in. The top marginal rate of 45% will apply to incomes above $200,000.

One good thing the plan does address (at least in part) is “bracket creep,” where wage growth coupled with fixed tax thresholds, leads taxpayers to pay more. Under the new plan, 94% of Australians will pay no more than a 32.5% marginal tax rate. That compares to 63% of Australians who pay that rate or less, under existing policy settings.

In terms of tax relief, it’s relatively modest. A person earning $50,000 will be $530 better off in 2018-19. Because of changes to the Low and Middle Income Tax Offset, this falls to $215 for someone earning $120,000 (and less still beyond that).

Now $530 post-tax dollars, for someone on $50,000 a year, isn’t nothing. But it doesn’t really make up for wage growth so sluggish (2.2% on average last year) that it barely keeps up with inflation.

This is all part of the government’s newly announced, but thoroughly leaked, mantra that taxes should be no more than 23.9% of GDP. The rationale is, as the budget papers put it “so we do not unfairly burden Australians, nor allow taxes to chase ill-disciplined spending”.

In some sense that’s a fair point, but the 23.9% is completely unscientific. It appears to be the average of what tax as a share of GDP was during the Howard government, which has left most economic commentators wondering “so what?”

The black economy and superannuation

There’s a “crackdown” on the black economy with a $10,000 limit on cash transactions. Who knows how that will be enforced. Perhaps our good friends the banks will start complying with anti-money laundering provisions.

In any case, I prefer a $0 limit on cash transactions by transitioning over three years to a cashless Australia. That would likely raise $5-6 billion a year every year, maybe more.

The sneakiest thing of all is taxing tobacco 12 weeks earlier upon entry into Australia, rather than at present when it leaves the warehouse. That will boost tax receipts once, and once only, in 2019-20 by $3.27 billion. Without that timing trick the return to surplus would be pushed back a year to 2020-21.

Having attacked retirement savings last year, the government is now “reuniting Australians with lost super”. Hard to be against that, but hard to get too excited either. Exit fees on superannuation accounts will also be banned, which is a very good idea and should help consolidation of accounts.

One step better would be making it a net zero cost to transfer all banking arrangements (mortgage, accounts, credit cards, etc) from one bank to another, through a mandate on banks and a subsidy for customers. That would help with competition in the banking sector, which has come under recent scrutiny.

Another small but sensible initiative is increasing the Pension Work Bonus from $250 to $300 per fortnight, which permits pensioners to earn up to that amount without affecting their pension eligibility.

On a more disappointing note there is a reasonably large amount of fanfare but very little substance about “backing regional Australia”. There is $200 million for a third round of the Building Better Regions Fund to support infrastructure on top of the $272 million from the Regional Growth Fund.

That’s fine but falls well short of a systematic plan for regional infrastructure and does not address regional unemployment, particularly youth unemployment, in a meaningful way. Tackling that would require the kind of place-based policies like targeted wage subsidies and reduced payroll taxes that I have advocated before.

There are a host of so-called “integrity measures” to do with taxation. There’s the oft-talked about tightening of thin capitalisation rules, whereby companies load worldwide debt onto an Australian entity to increase interest charges in Australia, instead of in low taxing jurisdictions like Ireland. This is in addition to other attempts to get multinationals to pay more tax. These are more likely to get multinationals to pay lawyers more, but it’s now customary padding in every budget.

The forecasts are pretty rosy in this year’s budget, but they always are. Overall, it’s a hard budget to hate, and a hard budget to like. But it is a classic political pre-election budget.

Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW

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

Syria: Latest Persecution and Uprising News

The link below is to an article that describes the situation in Syria, where Islamists are using the rebellion as an opportunity to attack Christians and Iraqi refugees.

For more visit:
http://www.christiantelegraph.com/issue16970.html

Judge Exonerates Jailed Evangelist in Bangladesh

Judge rules Christian did not ‘create chaos’ by distributing literature near Islamic event.

DHAKA, Bangladesh, March 31 (CDN) — A judge this week exonerated a Christian sentenced to one year in prison for selling and distributing Christian literature near a major Muslim gathering north of this capital city, his lawyer said.

After reviewing an appeal of the case of 25-year-old Biplob Marandi, the magistrate in Gazipur district court on Tuesday (March 29) cleared the tribal Christian of the charge against him and ordered him to be released, attorney Lensen Swapon Gomes told Compass. Marandi was selling Christian books and other literature when he was arrested near the massive Bishwa Ijtema (World Muslim Congregation) on the banks of the Turag River near Tongi town on Jan. 21.

On Feb. 28 he was sentenced for “creating chaos at a religious gathering” by selling and distributing the Christian literature.

“Some fundamentalist Muslims became very angry with him for selling the Christian books near a Muslim gathering,” Gomes said, “so they harassed him by handing over to the mobile court. His release proves that he was innocent and that he did not create any trouble at the Muslim gathering.”

The judge reviewing the appeal ruled that Marandi proved in court that he sells books, primarily Christian literature, for his livelihood.

“I am delirious with joy, and it is impossible to say how happy I am,” said his brother, the Rev. Sailence Marandi, a pastor at Church of Nazarene International in northern Bangladesh’s Thakurgaon district. “I also thank all those who have prayed for my brother to be released.”

After processing the paperwork for Marandi’s release from Gazipur district jail, authorities were expected to free him by the end of this week, according to his lawyer.

“My brother is an innocent man, and his unconditional release proved the victory of truth,” Pastor Marandi said. “I am even more delighted because my brother’s release proves that he was very innocent and polite.”

The pastor had said his brother did not get the opportunity to defend himself at his original trial.

Marandi’s attorney on appeal argued that his religious activities were protected by the religious freedom provisions of the country’s constitution. The Bangladeshi constitution provides the right for anyone to propagate their religion subject to law, but authorities and communities often objected to efforts to convert people from Islam, according to the U.S. Department of State’s 2010 International Religious Freedom report.

Every year several million male Muslims – women are not allowed – attend the Bishwa Ijtema event to pray and listen to Islamic scholars from around the world. Some 9,000 foreigners from 108 countries reportedly attended the event, though most of the worshippers are rural Bangladeshis. About 15,000 security personnel were deployed to maintain order.

Bangladeshi Muslims equate the annual event with the Hajj, the Islamic pilgrimage to Mecca in Saudi Arabia. This year the Bangladesh event was held in two phases, Jan. 21-23 and Jan. 28-30.

At the same event in 2009, Muslim pilgrims beat and threatened to kill another Bible school student as he distributed Christian literature. A patrolling Rapid Action Battalion elite force rescued Rajen Murmo, then 20, a student at Believers’ Church Bible College, on Feb. 1, 2009.

Bangladesh is the world’s third-largest Muslim-majority nation, with Muslims making up 89 percent of its population of 164.4 million, according to Operation World. Christians are less than 1 percent of the total, and Hindus 9 percent.

Report from Compass Direct News
http://www.compassdirect.org