Tag Archive for: Ukraine

Putin’s persistent nuclear bluster

Russian President Vladimir Putin continues to demonstrate not only his strategic shortfalls, but his persistent bluster. His latest announcement that he will deploy tactical (non-strategic) nuclear weapons to Belarus is but another example of fear-mongering with no substance and no coherent escalation of the nuclear threat.

Putin may deploy non-strategic nuclear weapons to Belarus—and in fact he may have already—but that does next to nothing to increase the level of risk or improve Russia’s strategic or tactical situation in the war in Ukraine. Russia possesses a wide array of platforms for launching non-strategic nuclear weapons that can strike targets within Ukraine and Europe from Russian soil, including air-to-surface missiles, short-range ballistic missiles and gravity bombs. Positioning these weapons in Belarus won’t alter the threat landscape. So, what’s behind this move?

Putin’s nuclear rhetoric has so far proven to be exactly that: pure rhetoric designed to strike fear in those who still believe his threats. He has a history of making or signalling threats through the production of modernised weapon systems that do little if anything to enhance his strategic position. Putin clearly feels the need to continually remind the West that Russia possesses nuclear weapons and hence the ability to escalate the war in Ukraine.

In the case of Belarus, Putin is yet again reminding the West not only that he has nukes, but also that he still has friends. This is a desperate ploy to frighten the West by an autocrat who has lost his geostrategic credibility and dispelled any remaining myths that he is a mastermind. Putin’s continued nuclear bluster only serves to further illustrate the limitations and ineffectiveness of the conventional Russian military, which has suffered setback after setback in Ukraine.

Speaking on a state television program, Putin likened his actions to those of the US stating: ‘There is nothing unusual here either: firstly, the United States has been doing this for decades. They have long deployed their tactical nuclear weapons on the territory of their allied countries, NATO countries, in Europe.’ This is true. The US has long deployed limited non-strategic nuclear weapons in Europe in bases in Belgium, Germany, the Netherlands, Italy and Turkey. They are the B61 variants, which are gravity bombs that can be dropped from aircraft such as the F-16 Fighting Falcon and PA-200 Tornado.

The difference in this case is that, with the exception of the relatively new low-yield submarine-launched ballistic missile (SLBM) warhead, the W76-2, the US platforms based in Europe are the only US weapons capable of fulfilling a non-strategic nuclear-strike option to counter the threat from Russia. The low-yield SLBM, although offering an extremely credible non-strategic option, lacks operational flexibility without the addition of forces based on NATO soil. This is in contrast to the vast variety of non-strategic nuclear weapons that Russia already deploys, ensuring complete flexibility of warhead delivery options.

The other difference is that of the US commitment to transatlantic security. The nuclear weapons based in Europe act to assure NATO allies that the US is committed to the alliance with tangible escalatory and deterrent options. In the face of Putin’s aggression and brutality, this commitment is critical to sending a message not only to allies, but also to Putin. Bullies exploit weaknesses. By forward-positioning non-strategic nuclear weapons, the US is signalling to Putin that it will stand by its allies and use nuclear weapons if push comes to shove. Belarus, on the other hand, is under no realistic threat from NATO. The deployment of Russian nuclear weapons in Belarus only acts to make it a potential target for non-strategic nuclear strikes in the event of escalation to the point of having to neutralise this threat. It’s foolish of President Alexander Lukashenko to agree to position Putin’s nuclear weapons in Belarus in exchange for an increase in his nation’s vulnerability without any military advantage.

Through his actions, Putin poses a threat to NATO and the region. He has demonstrated his complete brutality in his ongoing war in Ukraine, which is blatant imperialist-style territorial expansion. His desperation is apparent as he continues to find ways to rattle his nuclear sabre in an attempt to frighten the US and allies so that they withdraw support for Ukraine. This desperation and associated bluster don’t by any means rule out the potential for Putin to actually use non-strategic nuclear weapons, but it does demonstrate his conventional military weakness and his fear of continued allied support of Ukraine.

The US and its allies, including NATO and Australia, must continue to support the Ukrainian people who valiantly fight this wanton aggression. They must continue to show resolve and a united front against a bully who has proven his contempt for the rules-based international order.

Russia’s nuclear arsenal is capable, immense and dynamic. It can be countered, however, with appropriate US deterrence. The deployment of Russian nuclear weapons to Belarus will not swing the advantage to Putin.

Why are so many Western companies still doing business in Russia?

Fewer than one in 10 Western multinationals with subsidiaries in Russia has quit any of them in the year since the Ukraine invasion began.

This finding by two highly regarded academics, Simon Evenett from University of St Gallen and Niccolo Pisani from IMD Business School, contradicts earlier reports of a mass exodus by Western businesses and points to a lack of alignment between the geopolitical strategies of Western governments and the commercial realities of Western businesses.

The study identified 1,404 companies headquartered in EU and G7 countries with a total of 2,405 subsidiaries in Russia before its February 2022 invasion of Ukraine. Only 120 of these companies, or 8.5% of the total, had ‘exited’ at least one of their subsidiaries by the end of November.

Moreover, some of the companies that have trumpeted their withdrawal from Russia, such as McDonald’s and Nissan, have buy-back options. Russia’s anti-monopoly agency says McDonald’s can repossess its Russian operations within 15 years, while Nissan, which sold its business to a Russian state-owned enterprise for €1, can buy back within six years.

The study is at odds with earlier work by Yale University’s Jeffrey Sonnenfeld, which said more than 1,000 companies had pulled out, threatening Russia with ‘economic oblivion’, but it is broadly consistent with research by the Kyiv School of Economics. The latest research double-checked the prior-data bases to see whether companies that said they were withdrawing had in fact done so.

The researchers acknowledge that there are many sound reasons why companies might fail to withdraw. ‘A Western firm operating in a sector excluded from official sanctions may decide that it is inappropriate to abandon its Russian customers, who may have played no part in the decision to invade Ukraine or in the prosecution of the armed conflict,’ they wrote.

‘In other cases, Western firms may not want to abandon long-term relationships with employees or suppliers or decide to cease operations because of the societal relevance of their products and services (for instance, the supply of lifesaving medicines).

‘Even when a Western firm has decided to exit and committed to do so publicly, it may still ultimately fail to do so. For instance, it may not be able to find a buyer for its subsidiary that is prepared to pay a high enough price. And even when a buyer is found and the price agreed, the Russian government may have put in place obstacles that impede or anyway delay the sale, or ultimately prevent transfer of proceeds abroad.’

It can take time to conclude such sales in adverse circumstances so it is likely that the percentage quitting will rise, however the evidence shows the overwhelming majority of Western companies with operations in Russia are staying put.

US Treasury Secretary Janet Yellen has repeatedly called on the US business sector to strengthen the resilience of its supply chains by ‘friend-shoring’, or redirecting investment to allies. In the context of the risk of conflict in the Taiwan Strait, she urged US businesses to pay greater heed to geopolitical realities. ‘We are seeing a range of geopolitical risks rise to prominence, and it’s appropriate for American businesses to be thinking about what those risks are.’

However, the latest study suggests that those pressures may not translate into meaningful changes in the international footprint of companies. It is reasonable to conclude that the high cost of exiting an operation that may have taken years and billions of dollars to establish has restrained companies from following their country’s wishes, even if that means they are effectively ‘trading with the enemy’.

The authors note that, if the immense geopolitical pressure on companies to decouple from Russia has been resisted, it’s unlikely that the similar pressure for companies to pull out of China will gain traction. For every US$1 invested in Russia, Western multinationals have US$8 invested in China.

They argue that the Russian economy is large enough to be a good test of the willingness of companies to respond to geopolitical pressure, while not being so large (as China’s economy is) that Russia’s future economic prospects are decisive for the global strategies of most companies.

The study found wide variation in both national and sectoral responses to the geopolitical pressure to withdraw from Russia. About 16% of US firms have closed subsidiaries, compared with 15% of British firms, 7% of Japanese firms and 5% of German firms.

Companies were more likely to close loss-making subsidiaries than those with healthy profits. The 120 companies that have shut subsidiaries in Russia represent 15.3% of the pre-invasion workforce of Western multinationals in the country but only 6.5% of the profits. The inclusion of large service firms like McDonald’s and Starbucks among the exiting firms would help to explain this difference.

In the manufacturing sector, the 50 subsidiaries that were sold or closed were responsible for 18.6% of the workforce of Western operations in the sector but only 2.2% of the profits.

The study said its finding that 8.5% of Western multinationals had exited their Russian operations was almost certainly an overestimate. Companies were counted if they had withdrawn one or more subsidiaries but not necessarily all their operations in Russia. The presence of buy-back options casts doubt on the finality of exits.

The study says greater attention should be given to the costs of decoupling and friend-shoring.

‘If the write-offs announced by publicly traded Western companies are anything to go by, divestment, decoupling, and supply chain reconfiguration are likely to be costly to firms, their employees, and their shareholders.

‘If those costs must be borne on geopolitical grounds, who should bear them? Answering this question is of the essence since to date Western corporate retreat from Russia has been limited.’

Peace by exhaustion in Ukraine

While wars invariably end, the underlying disagreements often remain. The peace is tenuous and interrupted by spasms of violence. The way a war ends—whether through outright victory, exhaustion or mutual deterrence—might make a difference, with exhaustion less likely to prevent future flare-ups than, say, the wholesale defeat of one party. But this is not guaranteed. It certainly does not mean that some types of peace are not worth pursuing.

There is no shortage of examples of once-warring parties—North and South Korea, Ethiopia and Eritrea, and Serbia and Kosovo come to mind—now balanced in a fragile peace. Japan and Russia have yet to conclude a formal end to World War II hostilities, owing to their enduring dispute over the Kuril Islands. And despite signing a truce in 1994, Armenia and Azerbaijan have not reached a permanent peace agreement on Nagorno-Karabakh; fresh clashes occurred as recently as last year.

While enduring tension and intermittent violence is obviously not an ideal outcome, the brutal, bloody, often prolonged wars that preceded these periods of fragile peace were worse. In fact, those who resist imperfect peace—remaining committed instead to a ‘just peace’ achieved, presumably, through the outright defeat of their opponents—often end up worse off. This has been true for the Palestinians. And Ukraine seems set to meet the same fate.

During his short visit to the United States last month, Ukrainian President Volodymyr Zelensky reiterated that his country will accept nothing short of Russia’s total withdrawal from Ukrainian territory, including Crimea. But, despite Ukraine’s extraordinary battlefield successes, and the West’s continued support for Ukrainian forces, it is unlikely to defeat its much larger invader outright.

This is partly because the West continues to calibrate its arms supplies to Ukraine. Yes, the US has now decided to deliver advanced Patriot missile-defence systems to Ukrainian forces—a move once viewed as too risky. And earlier this month, the US agreed to send an additional package that includes offensive weapons. But, to safeguard NATO unity and avoid escalation, President Joe Biden’s administration is avoiding delivering weapons that far exceed the capabilities of those already on the Ukrainian battlefield, including those provided by other NATO countries.

Decisions about arms supplies to Ukraine presumably also reflect the evolution of war politics in Russia. In recent months, a schism has formed within the Kremlin, with hardliners calling for a bolder strategy in Ukraine. This could push President Vladimir Putin—who has appointed yet another new commander, possibly in response to growing criticism—to escalate the conflict, cross red lines vis-à-vis the West and intensify repression at home. News about Russian units at breaking point, willing to desert or surrender, could also have a major impact on Putin’s domestic standing.

As the year began, Zelensky noted that Russia’s ‘bet may be on exhaustion’ of Ukraine’s people, air defence and energy sector. He is probably right. What he seems not to recognise is that the support of the US and its NATO allies can keep his forces going for only so long. As admirably as the Ukrainians are fighting, they are closer to exhaustion than their Russian opponents.

For starters, Russia’s pool of potential fighters is much bigger. Yes, Putin’s ‘partial mobilisation’ was met with public protests and an exodus of hundreds of thousands of potential conscripts. But Ukraine’s recruitment efforts have not been free of problems, either. Many who fled the war refuse to return to fight, and unwilling fighters are reportedly being recruited on the streets. In any case, Russia’s population is more than three times the size of Ukraine’s.

Perhaps more important, the war is being conducted overwhelmingly on Ukrainian soil. So, while relentless drone and missile attacks have demolished Ukraine’s infrastructure (resulting in direct losses of about US$130 billion as of last September) and inflicted untold misery on its civilians (leaving some 40,000 dead and 15–30 million displaced), Russians have continued to live their lives largely unaffected.

This is despite Western sanctions, whose immediate impact on the Russian population has been limited. In 2022, Russia’s economy contracted by just 3–4% and unemployment barely budged. By contrast, the Ukrainian economy has shrunk by 32%, and unemployment has surged to 35%. Given that Russia, like its Iranian ally, has plenty of experience circumventing sanctions targeting its defence industry, it has also managed to safeguard its defence industrial base and replace lost military equipment.

While sanctions will erode Russia’s economy in the longer term, time is on Putin’s side. He trusts that relentless strikes on infrastructure and civilian targets will erode Ukraine’s morale and capacity to fight, as domestic economic and political considerations weaken the West’s resolve. He likely views fiscal brinkmanship by US Republicans—including a deal that could limit defence spending next year—with considerable satisfaction.

Late last year, General Mark A. Milley, chairman of the US Joint Chiefs of Staff, urged Ukraine to take advantage of moments of Russian weakness to negotiate a solution, as pushing Russia out of Ukraine completely would be ‘a very difficult task’. His comments triggered a backlash among those who interpreted them as a sign that Putin’s strategy was working. But Milley’s advice is worth heeding.

Ukraine’s war endurance is likely to run out first. If Ukraine’s leaders refuse to negotiate until after they cross that threshold, they will end up far worse off than if they attempt to negotiate while they still have chips to bargain. Given the two sides’ deep and fraught shared history, it’s unlikely that any agreement will preclude further eruptions of violence. But as the US can attest, the era of glorious victories is over. Peace by exhaustion is better than no peace at all.

Russia’s post-Putin possibilities

Now that Russia has been so greatly damaged and diminished by President Vladimir Putin’s reckless war of choice in Ukraine, what might the country’s future hold? Plausible scenarios range from a power grab by a hard-line security adviser like Nikolai Patrushev to an election victory by a dissident like Alexei Navalny. But one thing is almost certain: Putin’s regime will not survive the war he started.

After all, Putin’s so-called power vertical may span many economic and political domains, but it is fully dependent on tight control from the top. The entire structure will invariably start to fracture as that control is weakened, and as different groups and interests start manoeuvring to scoop up the spoils from the inevitable collapse. The system’s main strength—all-powerful top-down control— will become its fatal weakness.

This new ‘time of troubles’—a recurring theme in Russian history—will follow immediately from Putin’s departure. But which political forces will assert themselves as he falls remains to be seen. My guess is that the impetus to continue Putin’s Ukraine misadventure will be quite limited. Putin started the war himself, and we know that even his top security officials were never enthusiastic about it. That was obvious as early as the famous televised Kremlin security-council meeting held on 21 February.

Even after a year of relentless repression and propaganda, Russian public support for Putin’s war is lukewarm, at best, with opinion polls showing that a majority favours peace talks. Any leader or faction that emerges after Putin will have to make it a priority to end the war rapidly.

True, this does not mean that it will be easy to stop the fighting, let alone return to the pre-invasion status quo ante. There will inevitably be some voices calling for an even more aggressive imperialist agenda, and they will be desperate to prevail, for fear of their lives and livelihoods. But in a situation where public opinion clearly supports ending the war, Putin’s power vertical is disintegrating and the Kremlin’s repressive machinery is in disarray, the jingoists will be fighting an uphill battle.

Times of troubles have historically produced demands for more representative governance. The final decades of tsarism, for example, were dominated by calls for a democratic constitution, and similar projects were pursued in the years following the collapse of the Soviet Union. There is no reason to think that this time will be different.

Yes, it is not especially likely that Russia’s democratic opposition will emerge from prison and exile to sweep to power. But that does not mean this movement should be neglected. Even under highly repressive and unfair circumstances, Navalny supporters have managed to win 20–30% of the popular vote, and his support from younger and more urban voters has grown only stronger with time. The Navalny YouTube channel reaches tens of millions of people with news and current-affairs programming, and that number is even larger when one adds broadcasting by other independent media.

One exceedingly unlikely outcome is a breakup of the Russian Federation. In its efforts to gin up support for the war, Putin’s regime has presented this scenario as an explicit Western goal. In fact, the West aims for nothing of the kind. When Chechnya declared its independence in 1991, there was never even a hint that Western governments would support it. And though the Chechnya issue will remain contentious, a Western endorsement of Chechen independence still would never happen.

Speculation about independence for the Far East and Siberia is equally groundless. Recall the large public protests in Vladivostok in 2020. One could see Belarusian (opposition) and Ukrainian flags being flown as symbols of democracy; but the protesters had no illusions about achieving independence for a massive, thinly populated area so close to China.

In any case, there is now every reason to assume that elites within the Russian power structure are already discreetly exploring their country’s post-Putin possibilities. With another presidential election coming in 2024, the country’s political future is a legitimate and urgent topic for debate.

Russia’s fate ultimately will be decided by its people. Bringing about regime change is a task for them alone. But that does not mean the West should refrain from influencing the outcome. On the contrary, Western policymakers should be seeking ways to create the conditions and incentives for more democratic-minded forces to prevail. Putin is not immortal—and his political frailty is becoming more evident by the day.

The 14th Madeleine Award: a table, a lettuce and a smartphone

The autocrat sits at his hu-u-u-u-u-u-uge table.

Vladimir imagines power and pomp.

But the picture the world sees is Putin isolated and unable to hear.

If the man wasn’t a war criminal brandishing nukes, the image would be risible (think Charlie Chaplin strutting in The great dictator).

With Putin marooned amid megalomania at his massive table, it’s time for the 14th Madeleine Award for symbol, stunt, prop, gesture or jest.

The annual award is inspired by the late Madeleine Albright, the US ambassador to the United Nations (1993 to 1997) and US secretary of state (1997 to 2001) who sent diplomatic messages via her lapel brooches.

For Albright, it wasn’t ‘read my lips’ but ‘read my pins’. She wore a golden brooch of a coiled snake to talk to the Iraqis, crabs and turtle brooches to symbolise the slow pace of Middle East talks, a huge wasp to needle Yasser Arafat, and a sun pin to support South Korea’s sunshine policy. Her favourite mistake was wearing a trio of monkey brooches to meet Putin, causing him to go ape.

The Madeleine Award leans more to whimsy than war, so Putin and his giant table don’t get the top prize. Instead, they get a minor gong, the ‘Diana’, marking ‘the utility and force of photographs’. The trophy is named for Diana, Princess of Wales, a princess who understood pics: ‘As Diana used to say, the picture is what counts,’ former UK prime minister Tony Blair wrote.

And that picture of Putin defines him in so many ways the Russian leader doesn’t comprehend. A Karl Marx line comes to mind: ‘Men make their own history, but they do not make it as they please.’ What would please Putin about the image is what Marx described as the effort to ‘conjure up the spirits of the past to their service, borrowing from them names, battle slogans, and costumes’. The picture of Putin posing as czar is as bleak as it is bizarre.

The next of the minor trophies is the OOPS! Award for blooper and blunder, also known as a ‘Boris’, saluting a British prime minister who proved that blunders could build a career. When sacked from shadow cabinet, many moons ago, Boris commented: ‘There are no disasters, only opportunities. And, indeed, opportunities for fresh disasters.’ And didn’t he give that philosophy a helluva ride …

Because he so expressed the spirit of the OOPS!, Boris Johnson won the award for a second time last year, for a zanier-than-usual speech—the judges noted the betting that the tow-haired tyro wouldn’t occupy 10 Downing Street much longer, and embraced one last burst of Boris.

This year, the Boris award stays in London. The OOPS! goes to Liz Truss, the shortest-serving prime minister in the history of the United Kingdom. In the contest between Truss and a lettuce about who’d last longer, the lettuce triumphed.

The next honour is the George Orwell prize for double-think and euphemism. This year’s Orwell goes to the readers of Russia, who have turned anew to Orwell’s novel 1984, which describes a dictatorship oppressing its people to wage senseless war.

Orwell used Stalin as a model for the personality cult of the all-seeing Big Brother. Raging against ‘thoughtcrime’ and proclaiming ‘doublethink’, Big Brother preaches that ‘WAR IS PEACE’, ‘FREEDOM IS SLAVERY’, ‘IGNORANCE IS STRENGTH’ and ‘2 + 2 = 5’ (drawn from a Soviet poster about the first five-year plan). With that plot, you can see why Russian downloads of a new translation of 1984 made it one of their top novels of 2022.

Before announcing the big award, we salute the woman who inspired this annual bit of silly-season whimsy with serious purpose. Madeleine Albright, America’s first female secretary of state, died in March at the age of 84, lauded as ‘a political and feminist icon’.

I launched the Madeleine Award after Albright published her 2009 book Read my pins: stories from a diplomat’s jewel box; I didn’t approach her about the idea (better to ask forgiveness than permission). But during an online event with a bunch of Australians in Washington in 2021, Albright was told about the Madeleine Award and responded with customary brio: ‘I love it!’ Take that as enthusiastic acknowledgement, if not endorsement.

After Albright’s death, The Interpreter’s Daniel Flitton had the perfect Australian tribute, in an interview with Australia’s first female foreign minister, Julie Bishop: ‘We shared a love of jewellery,’ Bishop said. ‘She often used her jewellery to make a diplomatic statement.’

Bishop took inspiration from Albright: ‘I at times wore a brooch that would hopefully send a message.’ On a visit to Israel and the Palestinian Territories, for instance, Bishop wore a peace dove. ‘I didn’t do it to the extent of Madeleine Albright. I wore brooches and people could read what they liked into it.’

My favorite Albright line is from her book Fascism: a warning: ‘I am an optimist who worries a lot.’ Her life and thoughts make this year’s winner a simple pick: the country of the year, Ukraine, for its heroism, ingenuity, resilience and inspiration, and the person of the year, Ukraine’s President Volodymyr Zelensky.

Zelensky is credited with what must be the quote of the year, responding to the US offer to help him escape from Kyiv at the start of the Russian invasion: ‘The fight is here; I need ammunition, not a ride.’ This, surely, is a modern-day version of, ‘I have not yet begun to fight.’

Back in February, when the world feared Russia would be victorious within days, Zelensky went out on the streets of Kyiv and posted a 26-second video with this message: ‘I am here. We are not putting down arms. We will be defending our country because our weapon is truth.’

Zelensky and his smartphone were a lot smarter than Putin. Ukraine’s president and his smartphone smarts get the 14th Madeleine Award. Madeleine Albright would surely give her thumbs-up approval.

Can Australia’s munitions supplies stand up to the demands of war?

In the first part of this series, I discussed the high rates of ammunition expenditure in the war in Ukraine and emphasised that this is a question not just of expensive missiles but also of explosive ordnance—traditional, ‘dumb’ munitions, like artillery shells, unguided bombs and rockets, and small-arms and medium-calibre ammunition.

I should correct a detail in that first post where I mentioned munitions company NIOA’s Maryborough forge. This facility is now producing 155-milimetre projectiles for export. The firm is also contracted to produce 30-milimetre ammunition for the Boxer vehicle, as well as 155-milimetre components for the Australian Army under Land 17.

In my previous piece I noted that, while the term ‘explosive ordnance’ appears in the name of the Australian Defence Department’s munitions program (the ‘Guided Weapons and Explosive Ordnance Enterprise’, or ‘GWEO’), it doesn’t appear to have been part of the program’s original design and the focus remains on guided weapons supplies. In this second part, I identify some questions about our EO supply arrangement and identify some of the policy challenges.

As Defence leaders rightly point out, we can’t manufacture all the components, let alone finished munitions, our weapons platforms need. That means we face a constant task of balancing an assessment of where the greatest need is against the art of the possible. Where are the greatest risks that existing stockpiles and supply chains will fail us, and which of those risks can be addressed quickly?

Conversations with industry unsurprisingly convey a gamut of frustrations. One prominent view is that Defence needs to communicate a clear assessment of what guided weapons and ammunition are a priority. That assessment needs to be genuinely joint, and reflect a blunt appraisal of what response options the government considers non-negotiable. Put differently, the chain of logic needs to ultimately flow from broader preparedness settings. This also relates directly to the much-cited claim that Australia can no longer count on 10 years of warning time for a crisis or conflict in our region: if we have truly dispensed with that assumption, our approach to munitions should match.

The ammunition consumption rates observed in Ukraine cannot genuinely be described as ‘extraordinary’ because every major conflict forces militaries to relearn this lesson. The salient question here is: have the assumptions about expected consumption rates and quantities been interrogated against what is being experienced in Europe?

Even the US, with its enormous domestic small-arms industry, ran low on small-arms ammunition during the Iraq War, which was hardly of the same intensity as the fight in Ukraine. Some reports have suggested that the US is now ‘close to the limit’ of what it can continue supplying to Ukraine. They also say that expenditure has been higher than pre-war US planning assumptions.

In a genuine regional or international crisis, therefore, how valid is any assumption that the US or other key allies could stop-gap our ‘dumb’ munitions shortfalls? It seems highly unlikely that such overseas sources could be relied upon.

Another difficult-to-answer question goes to the realities of the surge capacity at Australian Munitions’ Benalla and Mulwala facilities. These are crucial establishments: among other reasons, they are Commonwealth-owned facilities on Commonwealth land because a strict regulatory framework applies to manufacturers of guided weapons and explosive ordnance. But it means that the commercial custodianship of these facilities (Australian Munitions is a subsidiary of Thales) underwrites a critical national capability.

Is the Commonwealth equipped with the expertise and experience to engage in genuine due diligence about what these facilities are capable of producing should ‘the flag go up’? Our confidence in manufacturing capabilities that may lie dormant and unexercised in the Commonwealth-owned facilities, for example, should be low until proven otherwise.

And does the Commonwealth have a good understanding of what other (if any) facilities could be retooled under extreme circumstances to play a role in EO supply chains?

Conversations with industry also describe other frictions that policymakers are acutely aware of—like workforce. At this stage, the talent pool is shallow across relevant industry, and firms often have little choice but to shuffle staff among competitors, not to mention Defence, which can quickly become self-defeating. This is certainly true for players in the guided weapons industry, but it is also a constraint on those attempting to make progress on other munitions types.

There are no quick fixes for issues like this, but policy needs to be crafted that provides incentives for industry approaches that address some of the workforce challenges. For example, consideration could be given to some kind of preferential treatment for firms that can commit to and demonstrate that they are training and retaining their own workforces.

In sum, there is one open question and one reliable generalisation. First to the former: if ‘dumb’ munitions haven’t been prioritised by Defence to date because it was assessed that existing domestic sources will be reliable under pressure, is that assessment still valid? The answer may well be ‘yes’, and we can’t publicly scrutinise the question well because of the sensitive nature of the data, but it’s a question worth re-asking.

The reliable generalisation is that this costs money—lots of it. A 2016 Australian National Audit Office report on Defence’s management of the Mulwala Propellant Facility found that between 1999 and 2015, Defence ‘paid $526 million for munitions produced by the Mulwala and Benalla Facilities, and has paid $1.874 billion in order to build, operate and maintain the facilities’. That is, Australia paid more than three times as much to maintain the Commonwealth-owned munitions facilities as it did for munitions acquired from them. The overheads are enormous.

In this light, the enterprise approach signalled in the GWEO is indispensable. Economies of scale must be sought to whatever extent they are achievable. Finding a way to join up the investments being made under the GWEO (in its at least superficially expanded form beyond guided weapons) and the traditional way that munitions are funded, through the services’ sustainment budgets, surely makes sense.

These issues go to the heart of the idea that credible defence capability must rest upon a coherent relationship with the national support base, as David Beaumont and others have advocated. Among other things, the accountabilities for munition supply arrangements must be aligned between the different stakeholders inside and outside of the defence organisation.

There are a lot of smart people inside Defence working alongside industry on the GWEO Enterprise as a whole, and Defence’s leaders are anything but naive about the importance of ordnance, munitions and explosives to go into the weapons Australia purchases. Let’s hope the ‘EO’ part of GWEO is getting due attention.

Starlink satellite support of Ukraine shows value of government–private sector cooperation

Technology mogul Elon Musk hasn’t won himself many new fans in the national security community over the past fortnight with his suggestions about pathways forward on Ukraine and Taiwan. He would do well to stay out of peace negotiations on Twitter and stick to his brilliance at engineering and entrepreneurialism.

Musk has, however, secured a hardcore fan base among Ukrainian and American military planners who are relying heavily on his Starlink satellite network. (Over the past weekend, however, he caused both confusion and consternation by initially suggesting that Starlink couldn’t continue to fund satellite technology for Ukraine, only then to issue an apparent backflip—albeit in sarcastic tones. Recent reports indicate that Starlink is talking to the Pentagon about funding.)

Starlink satellites are providing reliable, high-speed internet to Ukraine, helped by the US Agency for International Development. The technology is enabling Ukraine’s leaders to win the information war and its troops to communicate and target Russian enemy forces.

One Ukrainian commander told The Economist last week: ‘Starlink is our oxygen. You can’t just turn it off. If we tell Musk [to] piss off and take his Starlinks with him, our army would collapse into chaos.’ And Dave Tremper, a top Pentagon electronic warfare official, has said the way Starlink fended off Russian cyberattacks was ‘eye-watering to me’.

There are plenty of ongoing lessons from the Ukraine war. But one issue not receiving anywhere near enough focus is the role of the private sector. Ukraine should be prompting a deep look at how governments and the private sector work together to enhance Western countries’ operational capability—not just after a conflict begins, but importantly over the long term to underpin the credibility and effectiveness of deterrence.

Our strategic rivals and potential adversaries should know that any aggressive actions will be met not just with the might of our militaries—or materiel support provided by them—but also by our technological and industry power, with all their commercial clout and entrepreneurship.

If there’s any doubt about the importance and urgency of this conversation, consider the fact that technological competition is at the centre of the strategic rivalry between the United States and China. Beijing is putting enormous effort into technological predominance—including through its military–civil fusion strategy that aligns government, defence, industry and civil society—while the clock ticks on its ambition to integrate Taiwan into the mainland (forcibly if needed), which would likely spark direct military confrontation with the US.

The West will need to compete with a Chinese state that is considerably stronger than Vladimir Putin’s Russia and which has securitised its entire industry sector. An effective and responsible combination of private sector and government capabilities must be brought to bear to deter conflict and, if required, win in modern war.

There has been an understandable tendency in the past to question the private sector’s involvement in conflict—not helped by the conduct of some private contractors in the Middle East since 2003 and the exorbitant costs of major weapons programs led by prime defence firms. There is a natural hesitance about the very idea of commercial profit from conflict and mercenary behaviour.

But there are good answers these days to this objection, not least that in an age in which connectivity and communication are everything, no country can afford to ignore the decisive role of commercial cyber, space and other technology providers.

Musk’s capricious messaging in recent days only reinforces the benefits of deliberate planning with commercial actors. And it’s not just Starlink. Palantir is providing a unique and secure software backbone to the Ukrainian government. Maxar and Planet Labs are supporting Ukraine with commercial satellite imagery. Google has used its platform to enable alerts to UN resources for humanitarian purposes. Meta has blocked Russian state media in Europe and fact-checks content on the conflict on its platform, and Microsoft has blocked Russian propaganda is helping detect and advise on cyberattacks.

Preserving the benefits of free-market enterprise and useful separation of the state and private sectors should be central in our strategy. We do not want to integrate our private sector into the state in a way that replicates Beijing’s and Moscow’s models, suffocates innovation and entrepreneurship, and stifles leadership and creativity.

But we do need a whole-of-society enterprise. Governments need to encourage the private sector to work in closer alignment with state policies that aim to protect individual, social, economic and national security, as patriotic firms did in previous eras to great benefit.

Business decisions should be made with geopolitics, international security and human rights firmly in mind, even if this comes at a short-term cost to firms’ bottom lines. The long-term benefit of companies making strategic choices about where and how they do business should be clear. In fact, companies such as Palantir have demonstrated that taking a principled approach to their business model can be a great driver of success and profit, and a useful market differentiator.

To deter most effectively, it must be clear that open, democratic nations are pursuing responsible and accountable use of technology, that major corporations and technology leaders are aligned with that approach, and that our adversaries would therefore be pitting themselves not just against the technologies themselves, but against institutionalised values that are anathema to the malign intents they might pursue.

Those who remain worried about the idea of increasing private-sector partnerships in national security should understand that a key part of this approach would be to instil principles into agreed rules on technology—values such as transparency, human rights and privacy protections. Consider the retention and use of genetic data by governments. Open societies transparently regulate how it is stored, protected and used. In authoritarian societies, this data feeds artificial intelligence and machine-learning algorithms to provide population-control mechanisms.

For these partnerships to be most effective, they will need to operate across coalitions of likeminded countries. Many of the key private-sector players are already global, or would benefit from global connectivity if they are not. It makes sense for them to work closely not just with the government of the nation in which they are headquartered, but with that nation’s allies and partners as well. As far as incentives go, opening markets across borders must be a key part of the approach. It works for business, it works for deterrence, and it helps shore up consensus on underlying principles, rules and norms.

Space and cyber are two immediate areas in which liberal governments can leverage existing technical superiority. Space launch and AI-enabled software development platforms both have histories of highly secretive, government-led development. Yet in both cases, the commercial sector has flipped the old paradigm and is now delivering continuously innovating capabilities faster, more cheaply and at a greater scale than almost any government.

The United States’ convening power, innovation and ability to set standards make it indispensable in progressing these conversations. Its partners—government and commercial—will need to consider their roles and potential investments under a common framework driven both by interests and values.

They should all be thinking now about what they can contribute, and how they benefit, from a strengthened consensus on the use of technology for collective good. The deterrence benefits and the options for crisis response will follow.

Russia’s invasion of Ukraine has been a brutal reminder that major war is not a thing of the past. And if we have a challenge in Russia, the problems presented by China are far more complex, more advanced and less well-understood. The commercial sector has proven it is a player that must be brought into governments’ strategy and planning as we face the difficult period ahead.

The most dangerous days of Russia’s war in Ukraine lie ahead

Whether it wins or loses its war on Ukraine, Russia is likely to become more dangerous and unpredictable, and Australia needs to prepare better to deter an increased threat of nuclear conflict.

That grim conclusion is contained in a report by a top Australian analyst of Soviet and Russian affairs, Paul Dibb, emeritus professor of strategic studies at the Australian National University, who writes that the risk of nuclear conflict is now higher than at any time since the Cold War.

He warns that the Pine Gap intelligence-gathering base near Alice Springs in the Northern Territory could become a priority nuclear target and says Australia should begin serious discussions with the United States about the status, purpose and credibility of extended nuclear deterrence in this much more worrying strategic environment.

Russia’s war on Ukraine is at an extremely dangerous moment for global security because Europe’s security order is being fundamentally challenged, Dibb says in the report, The geopolitical implications of Russia’s invasion of Ukraine, released today by ASPI.

Russian President Vladimir Putin’s invasion of Ukraine has triggered the worst international crisis in decades and there’s a real risk of escalation into a major war involving Russia and the US, he says. ‘The ugliest days of this war are in front of us, not behind us.’

In both the Cold War and more recently, Russian authorities have made it clear that Pine Gap is a priority target. Australia needs to understand what the implications of that are for Alice Springs, a town of 32,000 people just 18 kilometres from the base. It has long been supposed that major Australian cities—such as Sydney and Melbourne—wouldn’t be targeted, Dibb says.

He says the invasion has brought the spectre of a new cold war but also the prospect of a wider general war in Europe erupting, while an increasingly authoritarian China is working with its strategic partner in Moscow to remake the international order. ‘This deeply disturbing picture is made all the worse by Putin’s now frequent references to the potential use of nuclear weapons,’ he says.

‘We need to plan on the basis that Pine Gap continues to be a nuclear target, and not only for Russia. If China attacks Taiwan, Pine Gap is likely to be heavily involved. We need to remember that Pine Gap is a fundamentally important element in US war fighting and deterrence of conflict.’

The most dangerous scenario for America would be a grand coalition of China and Russia united by complementary grievances. Washington could for the first time face the threat of a two-front contingency of nuclear war.

‘We need to focus on the friendship between the authoritarian leaders of those two countries, their mutual disdain for what they see as a rapidly declining West, and their shared sense of historical grievances,’ Dibb says.

‘The conjoining of the strategic ambitions of Beijing and Moscow highlights the differences in the current global competition for power with the West and increases the potential for miscalculation and conflict.’

Whatever the outcome in Ukraine, Dibb says, ‘Russia will continue to exist as a geopolitical entity unless it’s totally destroyed by an all-out nuclear war.’

Russia’s attack on Ukraine demonstrated that Putin intends to re-establish Russia as a major power at almost any price, says Dibb. He notes that as the Soviet Union disintegrated, Ukraine was effectively the world’s third-largest nuclear weapons power after Russia and the US. Its nuclear weapons were destroyed by agreement in 1994.

Under Russia’s ‘escalate to de-escalate’ strategy, it could use relatively small tactical nuclear weapons if it faced an overwhelming threat from a superior conventional military force that threatened the existence of the state. And Dibb says it’s of more concern that Putin might do so either in Ukraine or against NATO allies supplying Ukraine’s armed forces with conventional weapons. Putin might use a tactical nuclear weapon for its demonstration effect in Ukraine or to show that he’s had enough of NATO’s interference. Much of the munitions NATO supplies to Ukraine pass through Poland.

‘My view is that there’s little doubt that Putin is the sort of person who won’t resile from the use of nuclear weapons, particularly if it looks as though he’s losing this war,’ says Dibb. ‘But he must surely realise that there’s no such thing as the limited use of tactical nuclear weapons in isolation from their escalation to a full-scale strategic nuclear war.’ Washington needs to make that much plainer to Putin and his advisers.

‘Once we enter the slippery slope of even limited nuclear exchanges, the end result will be escalation to mutual annihilation—something about which both Vladimir Putin and Xi Jinping may need reminding.’ Unlike in the Cold War, Russia and the US no longer enjoy the extensive confidence-building measures such as nuclear arms control agreements, the Anti-Ballistic Missile Treaty, the Intermediate-Range Nuclear Forces Treaty and the Open Skies Treaty.

The habit of talking to each other has largely disappeared, which can only add to the risks of nuclear miscalculation, says Dibb.

A severely weakened, isolated and smaller Russia might then become more—not less—dangerous for the world. If the war in Ukraine extends to a direct conflict with NATO, all nuclear bets will be off, Dibb says.

European members of NATO, such as Poland, might seek additional protection by stationing US nuclear weapons on their territory.

Dibb says Australia should continue to help Ukraine as much as possible with further supplies of military equipment, but he stresses that there’s ‘little compelling reason’ for the Australian Defence Force to structure its forces for ‘high-intensity land warfare operations in Europe against Russia’.

NATO and Australia have recognised China as a major strategic challenge and that’s now combined with the threat from the de facto alliance of Russia and China. So, Dibb says, Australia and NATO should more closely share strategic analysis.

Australia needs to put much more effort into examining Russia’s military intentions in the Indo-Pacific and replace skills that were downgraded at the end of the Cold War, Dibb says. ‘Today, in the Australian intelligence community, there’s little expertise on Russia (for example, the Office of National Intelligence has only one officer dedicated to analysing Russia).’ A review into how Australia can repair this serious policy and intelligence gap should include what roles universities can play in training relevant academic and policy expertise about Russia. Australia also needs to strengthen intelligence and policy engagement with European countries that maintain high-quality analytical assessment capabilities about Russia, he says.

Australia also needs to be much better informed about the scale and depth of the relationship between China and Russia and how they aim to change the balance of power in the region, including their regular joint military exercises in the region and Russia’s supply of advanced weapons to China that may be used against us. Russia’s exports of military equipment to India, Vietnam, Malaysia, Indonesia and, to a lesser extent, Fiji need closer scrutiny and analysis.

Dibb doesn’t believe that the Ukraine war is likely to be stopped by a coup among Russia’s leaders to topple Putin. Unlike in the former Soviet Union, there’s no politburo in the Kremlin now to organise a challenge among the leadership, he says.

As the world burns

It is often said that no one wins a war, just that some lose less than others. Russia’s war against Ukraine promises to be no exception. One clear loser is already evident: the planet.

The war has become the international priority for policymakers and publics. And rightly so: Russian President Vladimir Putin’s aggression against Ukraine threatens a pillar of international order, namely the prohibition on changing borders by force. But the war has also triggered a global scramble for sufficient supplies of energy in response to sanctions against Russian energy exports and the possibility that Russia will cut off supplies. Many countries have found that the easiest and quickest route is to secure greenhouse-gas-emitting fossil fuels.

But even before Putin launched his war, the battle against climate change was being lost. It has been hard to generate any sense of urgency about a problem widely viewed as real (denial of climate science is fading) but seen mostly as something that can be dealt with in the future. Record-high temperatures in Europe and elsewhere, droughts, wildfires, more severe storms and increased migration may change this perception, but so far they haven’t.

Moreover, any government acting alone will not solve the problem. There is thus a sense in many countries that doing the right thing won’t matter, because others will continue to do the wrong thing, and all will suffer.

Then there’s the related question, most often heard in the developing world: ‘Why should we do the right thing when we didn’t cause the problem?’ Poor countries reject as a double standard being asked by wealthy countries—which industrialised at a time when climate considerations didn’t count for much and are responsible for far higher historical carbon emissions—to develop in a manner that denies them access to the cheapest form of energy. Adding to the problem is that several countries (Brazil in particular) aren’t doing what they can to prevent the destruction of rainforests, the earth’s natural carbon sponge.

Speaking of double standards, international efforts to slow climate change are hampered by opposition to greater reliance on nuclear power, even though it releases no carbon dioxide into the atmosphere. Since the 2011 Fukushima disaster in Japan, operating existing nuclear reactors or building new, safer plants has become an uphill political battle.

Efforts to slow climate change still suffer from the perception that they must come at the expense of employment and economic growth. That is increasingly untrue: climate change is proving to be costly, while introducing alternatives to fossil fuels can create jobs and reduce energy costs over time. But resistance to going down this path is intense, especially in areas that have long depended on the production of fossil fuels.

For all these reasons, international efforts to slow the pace of global warming have accomplished little. World leaders will convene again this November (in Egypt) for the next UN Climate Change Conference (COP27), but there’s no reason to be optimistic that it will accomplish much more than the 26 meetings that preceded it.

The United States, traditionally a leader of international efforts to rein in climate change, is increasingly sidelined. Its previous president, Donald Trump, withdrew the US from the 2015 Paris climate accord, while his successor, Joe Biden, is increasingly limited in what he can do because Congress (above all, its Republican members) won’t subsidise development of alternative energy sources, and the Supreme Court has sharply curtailed the federal government’s authority to regulate CO2 emissions. There is also little or no political support for taxing emissions or entering trade agreements that would discourage coal or oil consumption by placing tariffs on products that use them intensively.

The result is that the earth’s surface temperature is an estimated 1.1°C above pre-industrial levels and will grow warmer because of previous activity, even if the world stopped emitting greenhouse gases today—which it obviously will not. On the contrary, our current trajectory leads to a much warmer climate, affecting ice sheets, rainforests and tundra. In a virtuous cycle, good developments lead to better developments; when it comes to climate, the cycle is vicious: bad leads to worse.

Is there any cause for hope? There is, but for the most part not from governmental efforts, whether alone or in tandem. Political leaders are unlikely to act at a scale commensurate with the problem until it is too late.

One area of potential progress could come from corporations, which have financial incentives to introduce more fuel-efficient products. National and local governments can increase companies’ stakes in doing so by enacting regulations that encourage investment in innovation.

A second area for positive change is adaptation. Governments can build infrastructure to help manage the effects of climate change, such as flooding, and financial institutions can use lending and insurance policies to discourage people from building homes in flood- or fire-prone areas.

The best hope of getting ahead of climate change may well come from technology, primarily those that enable us to stop or even reverse climate change, whether by removing some atmospheric carbon or by putting reflective particles in the atmosphere to reduce the amount of sunlight that reaches earth. Developing such technologies needs to be a priority.

There is a recent precedent for such an effort: Covid-19. While the global death toll is somewhere between 15 million and 18 million, what saved us from an even greater catastrophe was government and business coming together to develop a new generation of highly effective vaccines in record time. With climate change, too, we will have to rely more on physical science than political science to save us from ourselves.

Will the war in Ukraine fuel nuclear proliferation?

When the Soviet Union collapsed in 1991, Ukraine inherited part of its nuclear arsenal. But in the 1994 Budapest memorandum, Ukraine agreed to return these weapons to Russia in exchange for ‘assurances’ from Russia, the United Kingdom and the United States that its sovereignty and borders would be respected. Russia brazenly violated this promise when it annexed Crimea in 2014 and tore up the memorandum with its full-scale invasion of Ukraine on 24 February. Many observers have concluded that Ukraine made a fateful mistake by agreeing to surrender its nuclear arsenal (once the world’s third largest). Are they right?

In the early 1960s, US President John F. Kennedy predicted that at least 25 states would have nuclear weapons by the following decade. But in 1968, United Nations member states agreed to a non-proliferation treaty that restricted nuclear weapons to the five states that already had them (the US, the Soviet Union, Britain, France and China). Today, just nine states have them—the five named in treaty signatories plus Israel, India, Pakistan and North Korea—but there are more ‘threshold states’ (countries with the technological ability to build nuclear weapons quickly) considering the option.

Some analysts suggest that proliferation might be a good thing, because a world of nuclear-armed porcupines would be more stable than a world of nuclear wolves and unarmed rabbits. In their view, Russia would not have dared to invade a nuclear-armed Ukraine. They also question why some states should have a right to nuclear weapons while others do not.

Others advocate the abolition of all nuclear weapons, a goal enshrined in the 2017 UN Treaty on the Prohibition of Nuclear Weapons, which entered into force in 2021. It currently has 86 signatories and 66 parties (though none of the nine states with nuclear weapons have signed up).

Sceptics of this approach argue that while nuclear abolition may be a worthy long-term aspiration, efforts to get there too quickly could increase instability and the likelihood of conflict. The real ethical challenge, they maintain, is not nuclear weapons’ existence but the probability of their use. It might be better if humanity had not learned to harness the power of a split atom in the 1930s; but that knowledge cannot be abolished, so it is better to focus on reducing the risks of its use in warfare.

Suppose that you live in a neighbourhood that suffers continuous devastating break-ins, burglaries and assaults. One day, some of your neighbours decide to equip their houses with massive explosive devices and trip wires, and post warning signs to deter intruders. The problem is that if these devices are used, your house will be damaged, too. Yet there are also considerable dangers in trying to dismantle the system in the short run.

What would you do? You might ask your neighbours to use the system only to defend against intruders and not to threaten others. You could encourage them to install devices to reduce the risk of accidents, and demand compensation for the risk they impose on you by including your house under their warning signs. And you might persuade them to take steps to dismantle the system sometime in the future, when relatively safe means can be found to do so.

By rough analogy, these are the types of conditions enshrined in the 1968 Treaty on the Non-Proliferation of Nuclear Weapons, and that is why the Russian invasion of Ukraine is so damaging. Russia has not only violated its explicit security guarantee under the Budapest memorandum; it has also hinted at nuclear escalation to deter others from coming to Ukraine’s aid. It is thus weakening the taboo against treating nuclear weapons as normal war-fighting weapons—a convention that the Nobel laureate economist Thomas Schelling called the most important global norm since 1945.

But it would be a mistake to exaggerate the harm that the invasion of Ukraine has done to the non-proliferation regime. For one thing, those who think the invasion will teach other states that they would be more secure if they had nuclear weapons are oversimplifying history. One cannot assume that nothing would have happened if Ukraine had kept its Soviet-era nuclear weapons.

After all, such weapons do not come ready to use ‘off the shelf’. The fissile material in the long-range Soviet missiles stationed in Ukraine would have had to be removed, reshaped and repurposed. Not only would that have taken time and expertise, but it might have accelerated Russia’s intervention. When states approach the nuclear threshold, they enter a ‘valley of vulnerability’ that may reduce their security and increase general instability. Even when stable deterrence is imaginable in a region, it may be highly risky to try to get from here to there.

Some theorists argue that just as nuclear weapons encouraged prudence among great powers, by giving them a ‘crystal ball’ with which to foresee the devastation that would follow from nuclear war, the spread of nuclear weapons would similarly produce stability among smaller regional rivals. Nuclear porcupines would act like rabbits, not wolves.

But not all regions are equal in terms of escalation risk, and it cannot be assumed that all leaders would have the wisdom to use their crystal balls. Regions differ in terms of the number of civil wars and overthrown governments, civilian control of the military, security of communications, and weapons-control protocols. If new proliferators have a higher risk of using nuclear weapons—even inadvertently—they and their neighbours will become even more insecure in the ‘valley of vulnerability’.

Ultimately, when nuclear weapons proliferate, the chances of inadvertent or accidental use tend to increase, managing potential nuclear crises becomes more complicated and establishing controls that may someday help to reduce the role of nuclear weapons in world politics becomes more difficult. In short, the greater the spread of supposedly defensive weapons, the higher the risks of blowing up the whole neighbourhood. The real lesson from Russia’s war in Ukraine is that we must reinforce the existing non-proliferation treaty and refrain from actions that erode it.