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The Australian Cyber Security Centre released its second annual Threat Report today, providing a useful breakdown of the number and type of cyber incidents that the Centre has dealt with in 2016, and some interesting case studies. The report notes that between January 2015 and June 2016 the Australian Signals Directorate managed 1,095 serious cyber secuirty incidents on government systems, compared to 1,131 in 2014. An additional 14,804 incidents affecting businesses were managed by CERT Australia between July 2015 and June 2016. Of those incidents, 18% targeted the energy sector and 17% targeted the banking and finance sector. Keep an eye on The Strategist in the coming days for more analysis of the report from the ICPC team.

The ACSC Threat Report was released during Australia’s Stay Smart Online week. As part of the festivities, an updated Stay Smart Online Small Business guide and two new Security Awareness Implementation guides—one for businesses and one for individuals—have been released. Stay Smart Online week began in 2008, and now has 1,700 partners from the government and private sector. The 2016 event has been timed to coincide with Cyber Security Awareness Month in the US, ConnectSmart week in New Zealand and the European Cyber Security Month.

In the US, the Department of Homeland Security and the Office of the Director of National Intelligence issued a joint statement on election security. The statement declares the US intelligence community’s confidence that the hack and subsequent leak of information from the Democratic National Committee was directed by the Russian government (and definitely not a 400 pound hacker). Reflecting on ‘the scope and sensitivity’ of the efforts,’ the statement noted that ‘only Russia’s senior-most officials could have authorized these activities’, which are similar to Moscow’s public-opinion influencing activities across Europe and Eurasia. It isn’t unusual for the US to publically attribute cyber incidents to other countries, but the implication that Russia is attempting to interfere in the US election may complicate the response. Adam Segal from the Council on Foreign Relations, and David Sanger and Nicole Perlroth in The New York Times have written some good analysis to this end.

Just a few short weeks after Donald Trump’s bizarre comments about ‘the cyber’, he has released his campaign’s cybersecurity policy. Trump proposes to fight cybercrime with federal, state and local joint task forces (just like the US fights the mafia), and to turn offensive cyber capabilities into America’s ‘greatest weapon against the terrorists’. Over at CFR, David Fidler notes that the policy is broadly consistent with current US cyber policy, albeit short on specifics. See here for a comparison of Trump and Clinton’s cyber security policy statements.

Staying in the US, the sale of Yahoo! to Verizon has apparently hit a snag, with the company’s massive data breach apparently prompting Verizon to ask for a US$1 billion discount off the agreed US$4.8 billion sale price. What isn’t yet clear is how much Yahoo! knew about the 2014 breach, which wasn’t discovered until this year, during the negotiations with Verizon. One US senator has called for the Securities and Exchange Commission to investigate Yahoo! to uncover whether the company was untruthful in its public disclosures.

Russia and India are set to sign a new cyber agreement next week when Vladimir Putin visits Goa for the annual Indo-Russian summit. Indian media reports suggest that the agreement will focus on fighting online extremism from groups including Islamic State and Pakistani groups such as Lashka-e-Taiba. Israel is also apparently waiting in the wings to assist India with strengthening its cyber security capability.

And finally, Singapore’s government announced its new cyber security strategy this week, developed by the Cyber Security Agency of Singapore. The strategy has four key components: hardening security, educating people, creating jobs and working with friends. The strategy comes shortly after the establishment of two new government digital services agencies last week. The Government Technology Agency (GovTech), will provide the engineering and data skills required to accelerate the provision of e-government services. Current projects include a digital vault for personal data and big data analysis of indicators—electricity consumption and public transport, for example—to identify precise locations of business growth or contraction.

The creation of GovTech was announced shortly after the merger of the Infocomm Development Agency and the Media Development Authority on 30th September The new Info-communications Media Development Authority will work with the private sector to facilitate improved digital economic outcomes for the city state through incentives and streamlined regulations. Singapore’s PM Lee Hsien Loong arrived in Canberra yesterday evening for a three day visit to discuss the first tranche of work under the bilateral Comprehensive Strategic Partnership, including defence,trade and law enforcement. The importance of cybersecurity to both countries means that cyber issues will likely be a key point of discussions between Turnbull and Lee.

Welcome to The Strategist Six, a feature that provides a glimpse into the thinking of prominent academics, government officials, military officers, reporters and interesting individuals from around the world.

1. Since Narendra Modi became the prime minster of India in May 2014, he has sought to reorient India’s international posture from ‘Look East’ to ‘Act East’. How successful has he been in doing so?

The broad direction of India’s foreign policy—its reengagement with the major powers, its reconnection with Asia, its expanded profile in the Indian Ocean—was set in 1991 as India embarked on economic reforms. But because of the weakness of various coalition governments in New Delhi, there has previously been a certain ambivalence and tentativeness to reengaging with the world. Prime Minister Modi has brought a lot more energy and purposefulness to India’s international engagement through the Act East policy, which has seen India ramp up coordination with the US, Japan and Australia, among others. So while the weakness of Act East can be seen in the economic realm, particularly on trade-related issues, the initiative has brought about much more political engagement, a greater emphasis on security cooperation, and a recognition that India must develop physical connectivity with East Asia.

2. What is the state of the US–India relationship?

The Modi government’s most rapid and intense engagement has been directed at the United States. Never have we seen such frequent meetings as we have in the last two years, nor such determined attempts to resolve many of the outstanding issues and to keep expanding US­­–India strategic cooperation. Washington and New Delhi have wrapped up the remaining issues that had previously hobbled the nuclear deal; they’ve renewed and expanded defence cooperation; they’ve released a document outlining a new broad vision for the Indian Ocean and the Indo–Pacific; and the US recently recognised India as a ‘major defence partner’, including a mutual technology access agreement. So it’s clear that the Modi government really has put a special weight on expanded strategic cooperation with the US.

3. In balancing its security and economic interests, how should India manage its relationship with China?

The traditional Indian policy has been to proclaim friendship with China but to actually do very little business with them because of deep historical suspicions. Prime Minister Modi has sought to break that cycle by being upfront and standing firm on security issues, rather than fudging or hiding differences—be it on the Nuclear Suppliers Group or on Sino–Pakistan relations. At the same time, Prime Minister Modi continues to be practical in welcoming Chinese investment in the country, as he’s well aware of the economic benefits that can flow from that sort of engagement.

4. Japan is now a permanent member of the US–India Malabar naval exercise. Do you see a role for Australia in this engagement, and should the four countries look to reconstitute the Quadrilateral Security Dialogue?

The fact that Australia walked out of the Quad still rankles people in India. But I wouldn’t worry too much about Australia being in either the Quad or in Malabar. Frankly there’s so much that India and Australia can do bilaterally and of course we must do more trilaterally with Japan. So we should look at building up multiple networks rather than returning to the Quad. Any framework involving Washington will lead Beijing to claim a US-led plot to contain China. It also has the potential of leading to domestic objections in all of our countries. So there’s a lot less resistance to doing things with Australia and Japan either bilaterally or trilaterally, so let’s not get fixated on form but instead develop substantial military and strategic cooperation between India, Australia and Japan, trilaterally and in the three bilateral groupings.

We can also look at the Five Power Defence Arrangements as a good framework for expanding our network. And beyond that there are possibilities for cooperation with Indonesia or with Singapore. So there are huge opportunities borne of the fact that India and Australia operate in the same maritime space.

5. You’re the inaugural director of Carnegie India, the sixth international centre of the Carnegie Endowment for International Peace. What will the centre focus on and what do you want it to achieve?

India has a lot of think tanks but the significant benefit of being part of the Carnegie operation is that we can leverage the resources of a larger global network in order to consider India’s changing approaches to both development and strategy. Carnegie India will be a small operation in the near term, but tapping into that international network will allow us to do more interesting things.

Instead of replicating what others are doing, Carnegie India will carve out niche areas of research. For example, we’ll be looking at the intersection of technology, law and policy concerning new tools like artificial intelligence, 3D printing and robotics. These developments have potentially significant economic and strategic implications for India so we must make sure we have appropriate national policies. And even though it’s called Carnegie India we are interested in the whole region and will be looking to develop a framework for accelerating regional economic integration. There are also some important questions we will be exploring around India’s role in the region as well as the international system.

6. What is the biggest threat to global security?

I believe that we’ve reached a point where there’s no clarity around how we integrate China’s rise into the international order. I think that any hopes that we could do this in a peaceful manner and that the Chinese would be part of the international system have faded as China has taken a more aggressive position. The problem is larger than the South China Sea; it expands to China’s approach to international law and to a range of items which are creating tensions. China’s legitimate demands have to be accepted because China is destined to be a great power—and it has a right to be a great power—but the question now is around how we negotiate the terms of China’s rise.

It’s been a big few weeks in the South China Sea. After months of internal debate, the US finally conducted a Freedom of Navigation Operation on 27 October, sailing within 12 nautical miles of the disputed Subi and Mischief Reefs. A couple of days after the patrols the Hague’s Permanent Court of Arbitration (PCA) delivered its long awaited first verdict in The Republic of Philippines v. The People’s Republic of China, which found that the court has jurisdiction to hear the case; proceedings can now move forward to assessing the claims put forward by The Philippines. As we wait to see how things play out in the South China Sea, it’s worth taking a moment to look westward to see how India (another great and rising power in the region) has approached its maritime disputes with its smaller neighbours—and the lessons China can draw from India’s resolution tactics.

In July 2014, The Hague’s Arbitration Tribunal on the India–Bangladesh Maritime Delimitation delivered its final verdict on a 40-year-old maritime dispute between India and Bangladesh in the Bay of Bengal. The delimitation dispute began in the early 1970s when an island, named New Moore in India and South Talpatti in Bangladesh, first emerged in the mouth of the Hariabhanga River separating India and Bangladesh in the Bay of Bengal. Both India and Bangladesh laid claim to the island, leading to ongoing tensions over the maritime boundary between the two countries and the rights to the island’s Exclusive Economic Zone (EEZ) and continental shelf. After eight rounds of failed bilateral negotiations between 1974 and 2009, on 8 October 2009 Bangladesh started arbitration proceedings against India under the United Nations Convention on the Law of the Sea (UNCLOS).

The two countries’ claims were based on different interpretations of international maritime law. India’s claim to the island, which disappeared in 2011 due to rising sea levels, was based on the UNCLOS principle of equidistance, which is generally obligatorily applied in the absence of an agreement, historical titles or special circumstances. For example, Article 15 UNCLOS 1982 declares the principle valid;

‘Where the coasts of two States are opposite or adjacent to each other, neither of the two States is entitled, failing agreement between them to the contrary, to extend its territorial sea beyond the median line every point of which is equidistant from the nearest points on the baselines from which the breadth of the territorial seas of each of the two States is measured.’

Bangladesh’s counter claim was based on the principle of equity; that if the court sided with India, Bangladesh would be left with a disproportionately small EEZ locked in by the intersecting maritime zones of India and Myanmar. The tribunal noted in its judgement that India was potentially entitled to both zones but ultimately sided with Bangladesh, breaking precedent to rule that equidistance wouldn’t lead to an equitable solution given the geographical circumstances, and awarded 19,467km of the 25,602km EEZ to Bangladesh.

That interpretation of the equity principle in Bangladesh’s favour could have led to a rapid deterioration in relations between the two countries, particularly given their long history of border tensions. But despite over 40 years of bickering, the binding verdict  was embraced by India as benefiting both states by ushering in a new period of cooperation and mutual understanding. Bangladesh commended India’s willingness to resolve the conflict through peaceful means and international law, and its respect for arbitration by upholding the tribunal’s verdict. As a result of the ruling, India and Bangladesh have been able to resolve other long-standing land and border disputes.

When it comes to the South China Sea, China repeatedly stresses it wants to resolve the current disputes peacefully. New Delhi’s positive response to the 2014 Bay of Bengal ruling offers Beijing some valuable lessons they would do well to apply in the South China Sea.

First, like China vis-à-vis the Philippines, India is a much larger country than Bangladesh. At the time of the ruling, India was widely praised for not bullying its much smaller neighbour Bangladesh into a decision, declaring that even though India might have been the stronger country, they’re still subject to international law and need to abide by internationally agreed principles. As China seeks to win friends and influence states in the region, Beijing could take a leaf out of India’s book by responding to the tribunal proceedings. But by refusing to acknowledge the ongoing tribunal proceedings, China undermines the credibility of UNCLOS and the entire international legal system, something naturally alarming to its neighbours.

Second, China should take India’s lead in abiding by whatever ruling (binding under UNCLOS Article 288) the PCA hands down. Despite China’s economic and military might, if China loses the arbitration (which it’s expected to—see James Kraska’s legal analysis of the case) and ignores the ruling, the damage to China’s reputation and standing as a regional and global power would be irreversible. In this scenario, it isn’t difficult to imagine the US significantly ramping up its presence in the South China Sea and a dramatic increase in regional pressure on China to uphold the ruling.

If China’s long term strategic goal is for closer relations with its neighbours and ongoing peace in the region, China will need to follow India’s lead in the Bay of Bengal by engaging with the Philippines tribunal proceedings and abiding by the tribunal’s decision.  While that won’t be easy for Beijing, China will need to evaluate whether the short-term gains in the South China Sea really serve its long-term strategic goals.

Recent comments made by Australian Defence Minister Kevin Andrews regarding the possibility of four nation naval exercises involving Australia, India, Japan and the United States suggest that there might be some interest in Canberra in dusting off the ‘Quadrilateral’ security framework. The Minister didn’t invoke the Quad explicitly and he’d understand the likely negative response from Beijing if he had done so. But such an exercise would closely resemble Exercise Malabar from 2007, an activity that paralleled a security dialogue between the four countries in the same year.

Japanese Prime Minister Shinzo Abe originally initiated the Quad in 2006, which was followed by a brief flurry of interest and a 2007 meeting before it was quietly removed from the international agenda. That was due in no small part to vociferous objections from China, which issued diplomatic protests to all four participants. Early in his tenure as PM, Kevin Rudd unilaterally opted out, consistent with his view that Australia shouldn’t tie itself to North Asian security. Since then, the Quad hasn’t been pursued at the government-to-government level, although second track dialogues between academics and think tanks have explored the pros and cons of reinvigorating the arrangement.

Despite the Quad’s demise, there’s been plenty of activity between the four countries in various combinations, including bilateral and trilateral (‘not-quite-Quadrilateral‘) discussions, exercises and security arrangements. That’s not surprising—economic and security interests overlap significantly, and the four tend to see the world through a similar lens. The problem, of course, is that a grouping of liberal democratic states interested in sustaining the rules-based regional order naturally comes into competition with China—a non-democratic state that has increasingly made its desire for change obvious.

A Quad resurgence will get the same angry response from Beijing as it did the first time around. At the time there was a flurry of unconvincing denials that the Quad was intended as a counter to China, and there’s no doubt that Chinese diplomatic efforts to stymie it paid off pretty well. But that was then and this is now. China’s trajectory was much less clear in 2007 than it is today. Then there was a credible argument for not being unnecessarily antagonistic but in light of Chinese assertiveness in the South China Sea, that line of reasoning is less compelling now. The Quad’s time might have come.

The Quad has increasingly been up for discussion over recent years. Shortly after his return to the top job in December 2012, Abe’s by-line appeared on an op-ed that extolled the positive contribution that ‘Asia’s democratic security diamond’ could make to regional security. It has been claimed that the piece was conceived solely in the Prime Minister’s Office, which effectively sidelined the Ministry of Foreign Affairs as Abe promoted a failed foreign policy initiative from his first term.

Indian PM Narendra Modi was reported to have raised the Quad with Australia’s then-PM Tony Abbott in New Delhi last September. Modi is also said to have spoken to US President Barack Obama about the Quad at India’s Republic Day celebrations in January this year. That speaks not only to Modi’s eastward tilt towards the US, but also to how Indian strategic thinking is changing as it feels pressure from China at the disputed Himalayan border and in the Indian Ocean.

As Opposition Leader, Abbott believed that Rudd got it wrong when he backed out of the Quad to assuage Beijing. While Abbott’s unseating earlier this week brings a degree of short-term uncertainty to Australia’s foreign and defence policies, it does nothing to change our national interest in a peaceful and stable regional order; our values of democracy, freedom and rule of law; or our increasing unease at the challenge China is mounting to the regional status quo.

While the Quad partners largely see eye-to-eye on core interests and values, it’s the growing collective concern with China’s behaviour under Xi Jinping that continues to tighten the alignment. So we shouldn’t be coy: if it wasn’t for China, or if we thought China might be content to settle into a place as a major player in the established order, Quad members would be happy just to send each other Christmas cards. Instead, the spectre of the Quad—including military activities involving the four countries—has been raised, and it’s all about China’s bellicosity, bluster and brinksmanship.

Of course, getting the Quad back up is one thing, but moving it beyond being a piece of strategic signalling and making it an effective player in regional security will be much harder. ASPI is one of the second track ‘Quad Plus’ dialogue partners, and in the lead-up to the next dialogue in February we’ll be thinking about the pros and cons, and the practical possibilities for the Quad.

The slow and stuttering course of the Australia–India relationship over the last 70 years has been troubled by the Curse of the Cs.

The Cs are about what the two Indian Ocean states seem to have in common: cricket and Commonwealth, and a common elite language from a colonial past.

The Cs suggest nearness and understanding where little exists. The Curse of the Cs is to conceal what India and Australia actually know of each other. Even the greatest shared value—democracy—misleads about the meeting of minds, because the two democracies are so extraordinarily different in every dimension.

One other of the Cs doesn’t get as many mentions as the Commonwealth or cricket, but it has been part of the promise and part of the curse—leadership chemistry.

The shared will of leaders has never been enough to get India and Australia together. The differences of history and beliefs and systems have easily defeated determined leaders pushing in sync in New Delhi and Canberra.

The latest chemistry experiment is Tony Abbott’s embrace of Narendra Modi ‘as more than a kindred spirit, as almost a brother.’

Leaders dabbling with their charismatic chemistry can produce strange experiments, even explosions. Kissinger’s barb is that nothing is more dangerous in diplomacy than two leaders getting together and thinking they can solve stuff with personal chemistry and a chat—the stuff they think they’re solving turns into a higher-order stuff-up delivered from the summit.

As a journalist, I’ve written a couple of times about the aspirations sparked by surprising personal chemistry between Indian and Australian prime ministers. The oddest odd-couple: Moraji Desai and Malcolm Fraser in the late 1970s—a meeting of minds between an octagenerian leftist and a conservative patrician grazier. Desai and Fraser joined in an attempt to deepen the bilateral relationship and to broaden the remit of the Commonwealth to give it a stronger Asian focus. Both efforts faded fast as they left the scene.

In the 1980s, the chemistry between Rajiv Ghandi and Bob Hawke was even stronger. Hawke radiated exuberance and warmth in talking about Rajiv.

They bonded during battles inside the Commonwealth over sanction against South Africa’s apartheid regime. Fighting Margaret Thatcher stirred Hawke’s battle lust and sparked an unusual fire in Rajiv.

In one of the last great formal dinners in Canberra’s Old Parliament, Rajiv Ghandi and Bob Hawke stood together and bathed in mutual affection. The personal warmth given off by the two Prime Ministers one night in October, 1986, proclaimed that anything was possible in reaching across the Indian Ocean. After the avocado, roast lamb and fruit salad, the two leaders devoured a feast of shared admiration.

Rajiv Gandhi toasted Hawke: ‘I am repeatedly asked, by the Australian media, what there is to the special relationship between you and me, Bob. Of course, you’re a delightful person, but there is much more to it than just that.’

Gandhi said Australia and India had confined their relationship to cricket and the Commonwealth, and his trip marked a turning point:

‘In earlier years, it was not entirely clear whether Australia was an antipodal outpost or belonged to our part of the world. Australia’s policies and influence are now centre-stage in international affairs. We see that the destinies of our countries are tied-in with the Indian Ocean which laps both our shores. Arising out of our shared democratic values, we have a common interest in justice, fair-play and human rights.’

Nearly two decades earlier, Rajiv’s mother, Indira Gandhi, as the first Indian prime minister to come to Canberra, stood in the same building and spoke of Australia as a bridge:

‘Australia looks out on the world in two directions. On the one side lies the Indian Ocean and the developing monsoon lands of Asia. On the other lies the Pacific and the affluent “new world”. Australia does not have to choose between these two worlds. It can act as a bridge between them. We are glad that it is doing so.’

Indira Gandhi seldom walked over that Australian bridge ever again. And for all his enthusiasm, her son couldn’t build much beyond that ‘antipodal outpost’ line.

Indira and Rajiv, at least, didn’t maintain a family grudge against the land of Oz because of the diabolically bad chemistry between Jawaharlal Nehru and Robert Menzies.

When the pair clashed at the United Nations in 1960, arguing over the Cold War, Nehru took the rostrum to savage Menzies, denying that the Australian’s views could be taken seriously. Menzies’ version was that Nehru was poisonous, sneering and grossly offensive: ‘All the primitive came out in him.’  This was personal chemistry as explosive device.

John Howard was extremely positive about India’s growing importance. In the last stanzas of his memoirs, Howard predicts that India will prevail over China in the great contest of the 21st century. Howard’s attempts at chemistry got little response, with New Delhi taking the view that such efforts were merely Australia paying proper tribute.

When, in retirement, Howard reached for the top administrative job in international cricket, he was vetoed by India; even cricket can be a metaphor for conflicting institutional ambitions.

The next column will look at the opportunity for Tony Abbott to reach beyond personal chemistry with his ‘brother’ in New Delhi.