Insights February 2022 by Synergia Insights

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IGHTS LOOKING BEYOND THE CURVE

FEBRUARY 2022 | MONTHLY EDITION

PROSPECTS & OUTCOMES THE ONGOING WEST VERSUS RUSSIA FACE OFF HAS THE POTENTIAL TO TRIGGER A NEW COLD WAR

INSIGHTS is a strategic affairs, foreign policy, science and technology magazine that provides nonpartisan analysis of contemporary issues based on real-time information. To subscribe, contact sambratha@synergiagroup.in

EDITORIAL Dear Reader, Greetings from the Synergia Foundation! As we bring to you yet another edition of INSIGHTS, the shadow of the Ukrainian crisis looms large. With Russian President Vladimir Putin launching a full-scale ‘special military operation’ of the country, Europe is facing, arguably, one of the biggest security threats since World War II. Setting aside the rationality that the West, (and the Ukrainians caught in the middle of this larger contestation) was banking upon, President Putin has gone ahead with his hard irrational startegy. It is now amply clear that this has been a well-thoughtout gambit on his part, having been checkmated by the West earlier in many of their confrontations - in Libya, in Armenia, in Syria and so on. Russia wants to drag back the strategically located state of Ukraine into its sphere of influence, whatever the cost, human and economical, before the window of opportunity is closed by its impending NATO membership. In our lead story, we situate this conflict within its historical context, attempting to examine the prospects for peace and stability in the region. Faced with the Russian Bear, European countries are trying to present a brave and united front. But under the surface, conflicting currents are evident. Their inability to stitch together a consensus on the implementation of the Northern Ireland Protocol remains a cause for concern. With little progress to show after months of negotiations, the two sides are caught in a bureaucratic logjam, as argued by John Bruton - the former Prime Minister of Ireland. Closer home, we examine the implications of the Union Budget 2022, especially in relation to virtual digital assets. We also break down the growing tensions between China on the one hand and Lithuania and Slovenia on the other, as the two European countries seek to bolster their relations with Taiwan. As a think tank, we consider it our primary duty to

ideate on security-related issues and align our national leadership with respective strategies for the future. In this regard, we have probed the emerging trends in 21st-century warfare, with a focus on future weapons systems. The evolving contours of espionage and cyber sovereignty have also been the subject of our enquiries. Some of the other issues explored in the edition include the future of digital voting technologies, the festering economic crisis in Sri Lanka, the role of private institutions in financing green initiatives, the growing strategic ambitions of the CSTO, the legality of data scraping, the expanding Chinese footprint in Latin America, the successive coups in Africa, Turkey’s ambitions in the Dark Continent and the failure of international law in holding war criminals to account in the Middle East. In our February 2022 edition, we are pleased to introduce a new section titled ‘Industry Risk’, which undertakes horizon scanning for key strategic industries around the world. This month, we have examined the pressing need for fintech firms to identify and manage extinction risks in an increasingly tumultuous market prone to geopolitical disruptions. Finally, we have launched a special ‘Author’s Column’ in the INSIGHTS edition that reviews some of the cutting-edge books on strategic affairs, with exclusive insights by the author. This time around, it has been our pleasure to interview Mr James Borton, author of the highly-regarded book ‘Dispatches from the South China Sea: Navigating to Common Ground’. We hope that our esteemed readers will continue to support us as we strive to further evidence-based research on strategic issues with global resonance.

Maj. Gen. Ajay Sah Chief Information Officer

EXCLUSIVES P 2 GEOPOLITICS

P 4 GEOPOLITICS

P 6 GEOPOLITICS

PROSPECTS AND OUTCOMES

DECODING THE UKRAINE CRISIS

THE PROTOCOL WOES

The ongoing West versus Russia face off has the potential to trigger a new Cold War, unless better sense prevails.

The Ukraine crisis is the closest that NATO forces have come to a shooting war with Russia after the collapse of the USSR.

Competing perceptions about the Northern Ireland Trade Protocol by the UK and EU are creating a bureaucratic log jam.

P 8 BUSINESS AND FINANCE

P 10 GEOPOLITICS

P 12 DEFENCE AND SECURITY

MOMENT OF GLORY?

DAVID VERSUS GOLIATH?

EMERGING SECURITY TRENDS

The announcement of a tax slab on virtual digital assets does not necessarily imply legalisation of crypto in India.

Despite China’s coercive trade measures, tiny Lithuania and Slovenia continue to bolster relations with Taiwan.

Charting the nation’s security environment is a veritable conundrum in today’s complex web of threats.

P 16 DEFENCE AND SECURITY

P 18 A KALEIDOSCOPIC VIEW

P 19 GENERAL

21ST CENTURY WARFIGHTING

SHIFTING SANDS IN THE MIDDLE EAST

SPY VERSUS SPY

Future weapon systems must cater for joint all-domain operations by strategically inducting new capabilities.

Mr. Krishnan Srinisavan, former Indian Foreign Secretary, discusses the changing geopolitical dynamics in the Middle East and beyond.

Britain’s fascination with the spy tradecraft has not diminished, as evident from the latest reports about a likely Chinese spy in government.

EXCLUSIVES P 21 NEIGHBOURHOOD WATCH

P 23 ENVIRONMENT

P 25 GEOPOLITICS

PEARL IN DISTRESS

FINANCING A GREEN FUTURE

A RESURGENT CSTO?

Faced with a slew of grim economic indicators, the tiny Island of Sri Lanka battles stoically to restore its equilibrium.

As rich governments fail to adequately finance green initiatives, private investors are being sought to pick up the slack.

For long dismissed as a poor imitation of NATO, the CSTO has grown in ambition over the past few years.

P 27 CYBERSPACE

P 29 GEOPOLITICS

P 31 GEOPOLITICS

REINING IN DATA SCRAPING

INFILTRATING U.S.’ BACKYARD

IT’S RAINING COUPS!

As web scraping becomes commonplace, better safeguards are necessary to protect data integrity and intellectual property rights.

As China makes a push for global primacy, the Latin American region is emerging as a keen site for contestation.

The recent spurt in military coups in Africa has gravely weakened the drive for a true democracy in the continent.

P 34 INDUSTRY RISK

P 36 GEOPOLITICS

P 38 CYBERSPACE

HORIZON SCANNING

TURKEY: MISSION AFRICA!

DEMYSTIFYING CYBER SOVEREIGNTY

In an increasingly tumultuous market, Fintech companies need to proactively identify and manage ‘extinction risks’.

Since 2002, Turkey has emphasised engagement with Africa as one of the country’s main pillars under its foreign policy.

Defining the contours of cyber sovereignty is an extremelycomplex exercise that requires global deliberation.

P 42 HUMAN SECURITY

P 44 AUTHOR’S COLUMN

A DEADLY HARVEST

DISPATCHES FROM THE SOUTH CHINA SEA

After the initial euphoria of the Arab Spring, millions across the Middle East suffer from gross violations of their human rights.

China’s reckless transformation of small reefs and rocks into artificial islands with military structures is a concern.

PROSPECTS & OUTCOMES The ongoing West versus Russia face off has the potential to trigger a new Cold War, unless better sense prevails. Maj. Gen. Moni Chandi is the CSO at Synergia Foundation& a former Inspector General of the elite National Security Guard.

HISTORY OF CRIMEA & SEVASTOPOL

n 1783, Empress Catharine-2 of Russia laid the foundation for the modern city of Sevastopol on the Black Sea. Since then, the port-city on the peninsula of Crimea has remained a strategic naval base. During the Crimean wars (1854-55), the city was contested between French, English, Italians, Turkish and Russian forces. During World War-2, Nazi Germany captured the city, in 1942, after a protracted siege, and, two years later, it was liberated by the Red Army. During the Soviet Era (1945-91), the city was further developed into a key naval base for the Black Sea Fleet. Post the collapse of the USSR (1991), Sevastopol with Black Sea Fleet assets remained contentious issues between the governments of Ukraine and Russia. In 1997, by mutual agreement, Crimea and Sevastopol were awarded to Russia on a longterm lease. De-facto, the Black Sea Fleet, retained control over the port city, and the strategic fleet has always maintained loyalty to Moscow. In the whole of Ukraine, people of Russian ethnicity constitute the largest minority (approx. 30 per cent of 44 million population). However, in the peninsula of Crimea, people with Russian ethnicity constitute the majority (60 per cent of 2.4 million population). Russian ethnicity gets further accentuated in Sevastopol, where they constitute 72 per cent of a 3.4L population.

ANNEXATION OF CRIMEA

In March 2014, after a popular uprising against the Government of Ukraine, the Republic of Crimea & the City of Sevastopol, declared independence from Ukraine. The declaration was followed by a referendum, in which apparently, 96 per cent of the population voted in favour of unification

It is doubtful if either the U.S. or EU will enter into a direct conflict with Russia. However, such an action would polarise Ukraine’s 44m people further. with Russia. In March 2014, 100 nations of the UN voted in favour of UNGA resolution 68/262, which condemned Russia’s annexation of Crimea. India and 57 other nations abstained from voting, 11 nations voted against the resolution, and 24 nations were absent when the voting took place. Seven attempts were also made to introduce resolutions in the UN Security Council, all of which were vetoed by Russia.

UKRAINIAN CRISIS

The current Russian-Ukrainian crisis precedes the annexation of Crimea by Russia (2014). Since 1991, many political & business leaders in Ukraine have been favourably inclined to the joining the EU. The issue of Ukraine joining the EU remains a contentious and polarizing debate, leading to the Euromaidan protests of 2014, in which pro-Russian President Viktor Yanukovych was ousted from power, resulting in civil war. In the elections which followed, Petro Poroshenko was elected the 5th President of Ukraine and served full term of office from 2014-19. In 2019, in a surprise turn of events, Volodymyr Zelenskyy, a former actor, defeated the incumbent and was elected the 6th President of Ukraine, and he currently holds office. Ukraine remains a deeply divided country in the midst of civil war, which has reportedly claimed more than 14,000 lives. From Nov, 2021 onwards Russian forces began build-up on the Ukraine-Russia and Ukraine-Belarus borders. By Feb, 2022, an estimated 1.75 Lakh troops had been mobilised and US President Joe Biden, warned of imminent Russian invasion. What were Russia’s Conditions for Scaling Down? Vladimir Putin has repeat-

PROSPECTS FOR RESOLUTION

P.S. Raghavan is a former Chairman of the National Security Advisory Board, India.

How can India manage the dual pressure it faces from Russia, who has been our traditional ally and the U.S., with whom we have partnered for the Quad? Geopolitics is a long game. Our media unfortunately treats it like a T20 match. Our relations with the U.S. are very strong, and the Quad is an important strand of the relationship. A strategic underpinning of the India-U.S. relations is the U.S. perspective that a strong India in South Asia is a useful counterpoise to an aggressive China. The U.S. is well aware that, in addition to the maritime challenge that the Indo-Pacific initiatives address, India also has major security and strategic challenges on its continental flank. Partnership with Russia is important in dealing effectively with these challenges. In addition, our defence cooperation with Russia includes sophisticated military equipment that bolsters our defence capabilities (which is in U.S. interest). We are diversifying the sources of our defence acquisitions, but it is a long-drawn-out process. Therefore, while rhetoric and media narratives paint black and white pictures, diplomacy has to pursue a more nuanced approach.

”

edly called for restraint in NATO’s progressive occupation of former soviet republics (15 countries have joined NATO, since the demise of the USSR, in 1991). He wants NATO to stop expanding Eastwards, which he refers to as ‘five waves of NATO expansion’. Interestingly, the PRC spokesperson has endorsed this view. On 21 Feb, 2022, President Vladimir Putin recognised Donetsk and Lugansk, as independent republics (Donbass); separate from Ukraine. Two days later, on the morning of 24 Feb, 2022, he announced the commencement of military operations, in Eastern Ukraine. Initially, Russian cyber & missiles attacks were launched on Ukrainian military bases, Air Defence assets and other critical infrastructure. Thereafter, Russian armour and infantry columns crossed the Ukrainian Border

to the Donbass region and consolidate the newly created republics of Donetsk and Lugansk. The Pro-European Zelenskyy government remains in power in Kyiv and Western Ukraine. Western Ukraine consolidate steps towards joining the EU and seek participation in NATO. NATO and U.S. move combat forces into the former soviet-bloc country. This time, civil unrest by pro-Russian groups is likely to turn into an insurgency war. NATO and U.S. troops will be drawn into counter-insurgency conflict, which will be unpopular in Ukraine, the U.S. and the EU. ES-3 - Diplomacy Wins the Day - A credible peace in Ukraine can still be diplomatically achieved, if parties to the conflict respect the following three Red Lines: (a) Russia agrees to withdraw from Eastern Ukraine. (b) NATO & U.S. agree NOT to deploy combat forces in Ukraine. Existing elements to be withdrawn. (c) Ukraine commits NOT to join either the EU or NATO. However, countries may equip the Ukrainian armed forces, for self-defence purposes. ES-3: Diplomacy Wins the Day, bears strategic resemblance to the U.S. Policy of Strategic Ambiguity with the PRC & ROC. That creatively crafted diplomatic policy was built on the basis of a red line each for the three stakeholders (PRC would NOT invade Taiwan, Taiwan would NOT declare independence, and U.S. would NOT recognize Taiwan). The policy earned for its stakeholders 75 years of peace, making the region one of the most prosperous parts of the planet. More than three decades have passed since the collapse of the USSR and the erstwhile Warsaw Pact. In the 21st Century, is NATO relevant anymore? The U.S. can no longer afford to foot NATO’s bills, and the EU needs justification to meet continued military expenditure. Despite the Russian invasion (liberation) of Eastern Ukraine, is there realism in the threat of Russian invasion of Europe? Would that perceived threat be mitigated, if Russia joins the NATO; they have applied three times! ES 1 and ES2 could usher in a new Cold War, with Asian countries (led by PRC & Russia) aligned against the U.S. and EU. UKRAINE-RUSSIA CRISIS

Russia and Ukraine at a glance

Russia and Ukraine are the two largest countries in Europe. The neighbours were part of the 15 Soviet republics that made up the USSR.

POSSIBLE END STATES (ES) ES-1 - Russian Roulette - Russian armed forces overwhelm the Ukraine Armed Forces and install a pro-Moscow government in Kyiv. It is doubtful if either the EU or the U.S. will enter into direct conflict with Russia. However, such an action would polarize Ukraine’s 44M people further. Civil unrest in Ukraine by pro-EU groups is likely to turn into an insurgency war. Further, Russia will be at the receiving end of more economic sanctions, driving Russia into the PRC camp. A new Cold War, with US & EU aligned against Asian powers PRC & Russia, is likely to emerge. ES-2 - Balkanise Ukraine - Russian troops remain confined

LATVIA

MOSCOW

LITHUANIA

RUSSIA

Population: 144 million

BELARUS POLAND

KYIV

UKRAINE

SLOVAKIA

Population: 44 million

LUHANSK

DONETSK

HUNGARY ROMANIA SERBIA BULGARIA

CRIMEA Black Sea Annexed by Russia from Ukraine in 2014

Source: © Mapbox, © OpenStreetMap

KAZAKHSTAN

Separatist-held areas of Donetska and Luhansk

GEORGIA SYNERGIA FOUNDATION

DECODING THE UKRAINE CRISIS

The Ukraine-Russian faceoff is the closest that the NATO forces have come to a shooting war with Russia after the collapse of the USSR. Geopolitical Strategist Mr. Brunello Rosa, was interviewed by Manasa S. Murthy of the Synergia Foundation.

ndeterred by Western sanctions, Russia has launched a full-scale ‘military operation’ in Ukraine. The countries on NATO’s eastern flank, especially the Baltic states of Lithuania, Latvia and Estonia, are on high alert, with the U.S. deploying its first batch of military troops and equipment there.

CASUS BELLI FOR WAR

Since Ukraine allied itself with the western powers with its publicly expressed desire to join both EU and NATO, its relations with Russia, never on the best of terms, speedily went south. “Moscow has been trying to assert itself in an old-fashioned geopolitical stance. It needs to ensure that there is enough geopolitical depth between itself and Central Europe. In other words, Russia wants to have a sort of ‘cushion’ in case of a NATO invasion, so that the Motherland is always protected” explains Mr. Brunello Rosa, CEO and Head of Research, Rosa and Roubini Associates, London. A glimpse of the map of Eastern Europe will make it amply clear. As Russia shares no border with any NATO country. An economically weak but militarily still formidable country, Russia deems this buffer critical to its security. Russia’s relations with these so-called buffer states fluctuate - from close relations with the beleaguered Alexander Grigoryevich Lukashenko of Belarus to openly hostile with President Volodymyr Zelenskyy of Ukraine.

Russia is a country which will leverage its influence with one country to assert itself over another - remember the war with Georgia a few years ago and, more recently, the country’s intervention in the Kazakh crisis. This is its way of pressuring NATO and other European countries to abandon their idea of inducting Ukraine into their folds. However, considering Russia-Belarus relations in the past, Mr. Rosa opines that there is no direct relation between the presence of troops in Belarus and what is happening in Ukraine. There have been a number of bilateral tensions between Russia and Belarus over the past few months. “Russia is a country which will leverage its influence with one country to assert itself over another - remember the war with Georgia a few years ago and, more recently, the country’s intervention in the Kazakh crisis. This is its way of pressuring NATO and other European countries to abandon their idea of inducting Ukraine into their folds,” says Mr. Rosa.

CRIMEA 2.0?

Haunted by the 2014 Russian annexation of Crimea, which caught the West by surprise, NATO this time over is more circumspect over Ukraine. Given its history and geography, Ukraine is vulnerable to both an actual military invasion by a powerful Russian armoured juggernaut as also to hybrid warfare, including cyber-attacks, something at which Moscow has gained considerable expertise. In addition, there

DECODING THE CRISIS

are internal differences within Ukraine, which can be easily exploited. Russia is aware that a blatant military invasion will attract immediate retribution from the West, both in terms of severe sanctions and even military intervention in some form as a worst-case scenario. On the other hand, a grey zone/hybrid/ cyber-attack may not be so easy to respond for NATO.

Mr. Rosa calls President Putin a realist, “a man not driven by a particular ideology, only taking action when he is assured of success. Therefore, if Putin believes he has good incentives in invading Ukraine, he shall choose to do so. The ultimate decision belongs to him”. Other than economic sanctions, a military response by NATO would be extremely challenging. Article 5 of NATO clearly states that member nations can extend help only when one of them is attacked. Ukraine, not being a NATO member, complicates the situation. This brings to the fore the need to redefine the UN Security Council to make it more effective and better representative of the larger global community. Even if the current Permanent Five are unlikely to give the veto power to newly inducted members, an expanded UNSC would be more effective in discussing global flashpoints where the P5 have vested interests.

There are others, however, who argue that the decision to denuclearise was the right one, given the regional instability surrounding the newly independent post-Soviet states in 1991.

UKRAINE-RUSSIA CRISIS

Timeline since Crimea annexation

2014

Some key milestones since Russia annexed Crimea from Ukraine in 2014. February - Anti-government protests peak in Ukraine and spark a counter-revolution in the Donbas region. February/March - Russia invades and annexes Crimea. September - The Minsk Agreement is signed in Belarus calling for a ceasefire. The deal collapses within days of signing.

2017 2015

With respect to energy, the Russians could potentially lose big contracts and clients, thereby hurting their own economic interests. In the past, former German Chancellor Angela Merkel had warned President Putin that clear violations would result in sanctions. Her successor, while initially denying weapons to Ukraine has done a dramatic turnaround. Germany has for the first time decided to supply weapons to a combatant and will significantly increase its defence budget. This is bound to change the entire dimension of the security structure in Europe, a move that will be highlighly welcomed by the U.S. who has always been critical of Europe’s conservative and pacifist defence policy.

Termed as the Budapest Memorandum on Security Assurances, the accord had assured that in the event of any aggression, the signatories would seek immediate action from the United Nations Security Council to aid Ukraine. In return, Kyiv had to surrender about one-third of the nuclear arsenal left on its soil, in the aftermath of the Soviet Union collapse. In light of recent events, many speculate if this was a historic mistake on the part of Kyiv.

February - A new Minsk agreement is signed with a new OSCE-monitored ceasefire and the withdrawal of heavy weapons from both sides.

2020

For one, there is the issue of energy for European powerhouses like Germany. At its heart is the 1230 km undersea pipeline running from Vyborg in Russia to Greifswald in Germany. Germany has already invested billions in the project and is keen to put it online to accelerate its post-COVID economic recovery. “Clearly, the energy shortage puts Russia in a much better position and Europe in a vulnerable place,” says Mr. Rosa. Nonetheless, Europe has shown in the past that in certain exceptional cases, no economic interests can prevail over the international order. More provocations or attacks of limited nature can probably lead to immediate compromise by the West. Minor deviations may be excused, which can prompt Mr Putin to test the waters and gauge the threshold of the West, but major violations will not be tolerated. This is similar to what the Chinese are doing in Hong Kong and Taiwan.

With Russia initiating a full-scale ‘military operation’ against Ukraine, a top Ukrainian politician has regretfully recalled how his country disarmed its nuclear weapons in the 1990s. It is worth remembering that Kyiv had done so, in exchange for security guarantees about its territorial integrity from Moscow, London and Washington.

September - Ukraine’s President Volodymyr Zelenskyy approves a security strategy laying foundations for a partnership with NATO.

June - Ukranian Parliament adopts legislation to restate its intention to join NATO.

March - Russian troops begin amassing at the Ukraine border.

2021

While the U.S. and UK have been unequivocal about their determination to impose ‘crushing sanctions’, there are many aspects that make such a move fraught with dangers for NATO unity.

July - Vladimir Putin publishes an article “On the historical unity or Russians and Ukrainians”, where the delineates the historical ties between Russia, Ukraine and Belarus. December - An estimated 100,000 Russian troops are concentrated along the Ukraine border.

2022

WESTERN RESPONSE

GHOSTS OF NUCLEAR PAST?

January - Russia, NATO and the OSCE hold diplomatic talks. The US and Russia meet in Geneva to de-escalate tensions in Ukraine. NATO puts troops and standby.

Source: Al Jazeera

SYNERGIA FOUNDATION

THE PROTOCOL WOES

Competing perceptions about the Northern Ireland Trade Protocol by the UK and EU are creating a bureaucratic log jam.

CLASH OF MINDSETS

The fundamental problem is that the British negotiating strategy is being driven by old fashioned, populist, and simplistic notions about trade. The EU strategy, on the other hand, is driven by a legal imperative to protect the most advanced form of economic and commercial integration between sovereign nations that have ever been achieved. It is fundamentally a clash of mindsets.

The fundamental problem is that the British negotiating strategy is being driven by old fashioned, populist, and

simplistic notions about trade. The EU strategy, on the other hand, is driven by a legal imperative to protect the most advanced form of economic and commercial integration between sovereign nations that have ever been achieved. It is fundamentally a clash of mindsets. The arguments of either side are based on basically incompatible assumptions.

John Bruton is the former Prime Minister of Ireland (Taoiseach) and a member of the Synergia Foundation Advisory Board.

otwithstanding the positive sounds emanating from Monday’s meeting between Liz Truss and Maros Sefcovic, the talks between the European Commission and the UK government over the Protocol on Northern Ireland (NI) are probably heading to a major crisis in the next month. There has been no movement of the UK side, and immovable deadlines are approaching.

The UK agreed to the Protocol as part of their Withdrawal Treaty with the EU. The Protocol was an intrinsic part of the Treaty. The UK Parliament ratified the Treaty, including the Protocol, but now the UK government is trying to scrap it altogether, under this pretence of “renegotiating” it.

CONSERVATIVE BRITAIN ALWAYS PRETENDED TO SEE THE EU AS A SIMPLE FREE TRADE AREA. BUT THE REST OF THE EU MEMBERS REALIZED ONE COULD NOT HAVE TRULY FREE TRADE UNLESS THERE WERE FOUR OTHER THINGS:

Common rules on the quality of products

Freedom for people and money to move from country to country,

Common trade policies vis a vis the rest of the world, and a shared set of political goals that facilitated day-to-day compromise.

A big segment of English opinion never accepted this latter concept of the EU. This makes it difficult for them to even understand the necessary implications of the Protocol.

THE PROTOCOL WOES

There is the added complication that the negotiations between Liz Truss and Maros Sefcovic are taking place in the midst of a political crisis in Britain, in which any compromise is liable to be used as a political weapon in a struggle to lead the Conservative Party.

port for NI goods into Europe, one of the biggest markets in the world. The role of the ECJ is, of course, confined to EU rules applying to goods. It will have no general jurisdiction in NI on other matters. There the final arbiter will be the UK Supreme Court.

EU VERSUS NON-EU GOODS

LOGJAM IN NEGOTIATIONS

Goods produced in Northern Ireland are being treated as EU goods, whereas goods produced in Britain are non-EU goods. In the case of goods made up of parts, ingredients or components coming from different countries, the parts, ingredients or components produced in Northern Ireland qualify, for rules of origin purposes, as ‘European’. Meanwhile, parts, ingredients or components originating in Britain are of non-EU origin. This distinction can be very important in deciding whether a final product is sufficiently ‘European’ to benefit from duty-free access to the EU market. If one wants to ensure that a sufficient percentage of a final product is ‘European’, it makes sense to source ingredients or parts in Northern Ireland rather than in another part of the UK. Goods coming into Northern Ireland will be subject to EU Customs rules and tariffs, whereas goods coming into Britain will be subject to (potentially very different) UK Customs rules and tariffs. This gap has to be policed if there is not to be abuse. In the Protocol, the EU and the UK agreed on how this gap is to be policed. The gap will become progressively wider if the UK seeks to exploit the freedom it won by Brexit by making new (and different) British standards to replace the old standards that it might claim had been “imposed by Brussels”. The more the standards diverge, the more will checks be needed on goods entering the EU market through Northern Ireland to ensure that they comply with EU requirements.

ROLE OF THE ECJ

Then there is the question of the European Court interpreting EU rules as they apply to Northern Ireland goods circulating freely in the EU Single Market. The UK agreed to this but now is objecting to it. For Northern Ireland businesses to be free to export their products within the EU Single Market under the Protocol, they have to be able to convince their competitors and customers in France and Germany that Northern Ireland goods are fully compliant with EU rules. These rules are interpreted, in the final analysis, by the European Court of Justice (ECJ). That ensures consistency. The rules must be interpreted in the same way for Northern Ireland goods, as they are for goods produced in France or Germany. The role of the ECJ in the Protocol is the pass-

There is a logjam in the negotiations because the UK side keeps repeating the same talking points, pocketing EU concessions without reciprocity, and withholding cooperation with the EU authorities on access to data. It is also stalling on building installations in Belfast Port that would allow customs officials there to do their work safely and conveniently. The UK is using “grace periods” to defer indefinitely controls it agreed to. It is almost as if the UK does not want to face up to the implications of Brexit.The UK, and some unionists, talk about using Article 16 as if this would allow the ending of checks in Belfast port. That is not legally possible. Article 16 only allows limited and temporary derogations. To use it to go beyond that would be a straightforward breach of international law. We are facing a moment of truth.

This article was first published in the Irish Independent.

PROCESS FOR TRIGGERING ARTICLE 16 OF THE NORTHERN IRELAND PROTOCOL Party A must notify Party B of its intention to implement safeguard measures

No measures may be taken within one month of notification except in exceptional circumstances

Immediately

UK and EU enter consultation in the Joint Committee

Consultation successful?

Yes

Party A adopts safeguard measures Party B is notified and may respond with rebalancing measures

Safeguard measures are reviewed every three months, or when requested by either party

Agreed soultion found

After three months

UK and EU Joint Committee reviews safeguard measures Review successful?

Yes

Agreed soultion found

Unilateral safeguard measures retained

Source: Institute for Government analysis of Article 16 and Annex 7 of the Protocol on Ireland/Northern Ireland.

SYNERGIA FOUNDATION

The Protocol makes Northern Ireland part of the EU Single Market for goods produced in Northern Ireland. Meanwhile, Britain has left the EU Single Market. Britain has no more than a bare-bones trade agreement with the EU. This makes a big difference. But it is what the UK government and Parliament agreed.

MOMENT OF GLORY?

The announcement of a tax slab on virtual digital assets has been welcomed by the crypto industry, even though taxation does not necessarily mean legalisation. SYNERGIA FOUNDATION RE S E A RCH

T E A M

s the 2022 Union Budget was presented in the Indian Parliament, the focus on digitisation was apparent. While many significant announcements were made, what captured global attention was the proposed taxation scheme for digital assets, including cryptocurrencies and non-fungible tokens (NFTs). According to Union Finance Minister Ms. Nirmala Sitharaman, there had been such a phenomenal increase in the magnitude and frequency of virtual asset transactions in India that it was imperative to provide for a specific tax regime. Accordingly, the government declared a flat 30% tax on income from digital assets, with an additional one per cent TDS (tax deducted at source) on payments made using such assets. Ms. Sitharaman clarified that no deductions in respect of any expenditure or allowance would be permitted while computing the income, other than the cost of acquisition. Moreover, any loss incurred during transfer could not be set off against other income. Despite the imposition of such a steep levy, much of the crypto industry welcomed this move. This is because the government had hitherto been ambivalent about the future of digital assets in India. It was generally feared that a prohibitive bill would be introduced in Parliament. Now, by bringing it under the umbrella of taxation, there is much optimism that the government has effectively legitimised the trade in private cryptocurrencies and NFTs. Only time will tell if the new tax indeed implies regulation of crypto, as opposed to a blanket ban that was proposed earlier.

While cryptocurrency investors and coin exchanges have hailed the taxation measure as the first step towards legitimising the digital asset class, Finance Minister Nirmala Sitharaman has been quick to clarify that this is not necessarily the case. According to her, the Crypto bill is still under consultation with various stakeholders, and any inference about the legal status of cryptocurrencies would be premature at this stage. All that the Budget has sought to do is recognise the peer-to-peer (P2P) nature of crypto, taxing it like any other source of income. Indeed, taxability and legality have no direct connection. Merely because something is taxed does not make it legal. There are a number of court judgments that buttress this principle. For instance, in the 2008 case of Commissioner of Income Tax v. K Thangamani, the Madras High Court had confirmed that income from illegal activities could be taxed. The income tax authorities were not necessarily concerned with the manner or means of acquiring income in order to bring it within the ambit of taxation. Given this reality, the proposed 30 per cent tax does not automatically translate to legal recognition of digital asset transactions. The same will be left to the provisions of the upcoming ‘Cryptocurrency and Regulation of Official Digi-

MOMENT OF GLORY?

tal Currency Bill, 2021’. However, if such legitimisation and mainstreaming of the virtual asset class indeed comes to pass, it will be a major shot in the arm for the Web 3.0 start-up ecosystem in India. It will also be a major source of encouragement for millions of cryptocurrency investors in the country, who have staked around $10 billion in digital currencies, according to the Credit Rating for Exchanges Blockchains and Coin Offerings (CREBACO). Moreover, the levying of TDS has been projected as a ‘masterstroke’, as it will help the government to keep track of transactions. As opposed to relying on exchanges for securing data about crypto investors, it can obtain the necessary information about transactions from the reporting of TDS for each trade.

TEMPERING EXPECTATIONS

Contrary to popular opinion, the introduction of a hefty taxation scheme may actually prove to be punitive in the long run. It could act as a deterrent in trading, with many people disincentivised from investing in virtual digital assets. The higher tax rate could bring down the net gain in the hands of investors, thereby reducing the appeal of cryptocurrencies and NFTs. Moreover, the restrictions on setting-off losses and deducting transactional expenses could motivate them to look for greener pastures, as it is a significant deviation from existing tax principles pertaining to business income and capital gains. Similarly, the TDS provision is perceived as an impediment to trading, as it can erode capital and discourage traders and market-makers. The position on levying TDS for trading in international exchanges also remains unclear. In this context, the volume on exchanges is expected to diminish, with the Budget provisions heavily dampening day-to-day transactions and trading. As articulated by Harish Prasad, the Head of Banking with FIS fintech -“The position of the government is clearly to minimise the attractiveness of crypto-assets, and this is evident from the highest slab tax rate of 30 per cent”. The mere fact that the administration has acknowledged the digital asset class by providing tax guidance should not blind the industry to this reality.

ASSET VERSUS CURRENCY

One significant stride made by the 2022 Budget, however, is that it has settled the long-standing debate on the classification of private crypto. The Indian Finance Minister has confirmed that cryptocurrencies will be treated as digital assets, as opposed to currencies. According to her, the Reserve Bank of India (RBI) will issue an official digital currency, and everything that prevails outside of it will be assets created by individuals – “Currency rests only with the RBI, everything else is crypto-assets.” This means that if cryptocurrencies are introduced as financial assets, they cannot be used to make payments but will have to be held like shares or gold. Such a position is in line with the long-standing view of the Indian establishment that crypto cannot be treated as legal tender. In other words, one cannot compel a cryptocurrency to be accepted by another person in the absence of an identified issuer. As per many experts, crypto-assets like

bitcoin, for example, cannot be treated as currency, as they do not depict a stable source of value. Rather, they are highly speculative instruments that one can trade like commodity assets in the hope that their value increases. In fact, the Finance Bill has introduced a new definition for ‘virtual digital assets’, covering any information or code or number or token that provides a digital representation of value exchanged. In doing so, it has also lumped cryptocurrencies and NFTs under the same category. According to some experts, it would be more prudent to treat crypto tokens separately from digital NFT tokens, as they are fundamentally different. Since NFTs are still classified as non-taxable assets worldwide, it is argued that industries like gaming, interactive immersive museums or other edutainment platforms should be free from tax burdens. For now, however, the higher tax rates on private crypto, coupled with the government launching its own Digital Rupee, could portend a difficult few years for trading volumes.

HOW GAINS FROM SALE OF CRYPTOCURRENCY TAXED? Classification of Nature of crypto-transaction

Volume - frequent Purpose - short term trading

Volume - low Purpose - long term investment

Business Income

Capital gains

Taxable at slab rates (GST applicability to be examined)

Holding <=3 years

Holding >3 years

STCG

LTCG

Taxable at applicable slab rate

20%

with indexation

Assessment While the proposed tax scheme does remove some ambiguity around digital assets, its steep rates can discourage people from investing. The government’s enthusiasm for blockchain-powered technologies appears limited to the Digital Rupee. In all likelihood, the upcoming bill will enact strict regulations in relation to private cryptocurrencies, citing national security and financial stability concerns. At the same time, the government’s move to issue a central bank digital currency may familiarise reluctant investors and non-investors with virtual currency. It remains to be seen if this will build an appetite for the entire asset class, irrespective of whether it is private or sovereign-backed.

DAVID VERSUS GOLIATH? Despite China’s coercive trade measures, tiny Lithuania and Slovenia continue to bolster relations with Taiwan. SYNERGIA FOUNDATION RE S E A RCH

T E A M

lose on the heels of Lithuania, another member of the European Union – Slovenia has established reciprocal representative offices with Taiwan. The decision itself is nothing out of the ordinary, as most major countries have an unofficial diplomatic relationship with the self-governed island. In fact, Slovenia is one of the very few countries in the EU which does not have a Taiwanese mission to speak of. What has been controversial, however, is the choice of a name. As opposed to calling it the office of ‘Chinese Taipei’ to appease Beijing, certain reports have suggested that Slovenia might follow Lithuania’s example in designating it as the ‘Taiwanese Representative Office’. Slovenian Prime Minister, Janez Jansa, has also stirred up a hornet’s nest by calling Taiwan a ‘democratic country’, in a clear snub to China. It remains to be seen whether this sparks yet another trade embargo or economic retaliation by China, as was seen in the case of Lithuania.

The fact that smaller countries are defying the carefully orchestrated Chinese Wolf Warrior policy vis à vis Taiwan is a worrying factor, especially when the military is flexing its muscles in the Taiwan Straits. per of a formal diplomatic exchange is strongly contested, with punitive action being meted out. Not surprisingly, only fourteen nations, mostly in South America and Asia, have continued to maintain some kind of formal relations with the East Asian Republic. No major powers, including the U.S. and even India, have tried to breach this Beijing-stipulated protocol.

APPLICATION OF SOFT POWER

Therefore, when the small state of Lithuania allowed Taiwan to open a controversially named ‘Taiwan representative office’ in its territory, all hell broke loose. A visibly enraged Beijing viewed it as an affront to its ‘One China’ principle, prompting it to downgrade diplomatic relations with Vilnius and expel the Lithuanian ambassador. It also reportedly imposed a customs block on exports from the Baltic nation by revoking its status as a ‘country of origin’.

Leveraging its significant economic heft, with its growing military power smouldering in the background, Beijing has laid down clear ground rules for those wishing to interact with Taiwan commercially or diplomatically. Any whis-

However, as opposed to targeting the Central European country alone, Beijing also inflicted comprehensive sanctions on the entire industry supply chain. It threatened to prevent any European products that had elements made in Lithuania to enter the country, thereby affecting EU traders in the region. Against this backdrop, the recent move by Slovenia is expected to invite similarly stringent actions by China. In fact, the Slovenian-Chinese Business Council has already reported that partners in China are terminating contracts and exiting previously agreed investments.

The unification of Taiwan with mainland China remains very much on the cards; in Beijing’s perspective, it is only a matter of time before a historical anomaly is corrected, irrespective of global opinion. It is all part of a narrative about the Middle Kingdom coming of age and taking its rightful place in the international order.

DAVID VERSUS GOLIATH?

CROSSING A RED LINE?

At a time when global trade is at a premium, the fact that China has risked its commercial relations with the whole of Europe by targeting industry supply chains has come as a surprise. In this context, it becomes critical to examine the strategic thinking in China. Firstly, the diplomatic overtures by Lithuania and Slovenia have been bad for optics. The fact that smaller countries are defying the carefully orchestrated Chinese Wolf Warrior policy vis à vis Taiwan is a worrying factor, especially when the military is flexing its muscles in the Taiwan Straits. It takes the shine out of China’s power projection on a global scale. More importantly, it is also conveying a message to NATO, already engaged in a faceoff with Russia over Ukraine, as both these Baltic countries are part of the security bloc. Secondly, China appears to have recalibrated its red lines over Taiwan for the past few years. Since the election of Taiwanese President Tsai Ing-wen in 2016, it has consistently sought to rein in the expansion of Taipei’s international space, whether it is political, military or economic. Therefore, for Beijing it is not the size or influence of a nation that diplomatically rehabilitates Taiwan on its soil that matters; it is the gesture that needs to be nipped at the bud. Finally, Beijing apprehends that Lithuania and Slovenia may set the wrong precedent for other Central and East European Countries (CEEC), with whom it has been seeking to scale up economic cooperation as an entry point to the EU. Lithuania has already pulled out of the 17+1 initiative, which was intended to promote business and investment relations between China and the CEEC. Now, if Slovenia follows suit, the group will dwindle to 15+1, hampering China’s ambition to woo smaller European nations through market access and land connectivity. As it is, many states are actively seeking to diversify their supply chains away from the Asian giant. The much-publicised EU-China investment accord has also been stalled for quite some time. In this context, unless a strong warning is issued about the consequences of decoupling from China, the PRC fears that the 16+1 forum may be irreparably tarnished.

WEIGHING THE COST

For Lithuania, the political and economic consequences of opting out of the China-CEEC forum and bolstering relations with Taiwan are not necessarily dire. In its view, the 17+1 partnership had done little to improve market access with Beijing, and there was no significant improvement in its existing trade balance. In fact, China was a relatively small export market for the country, accounting for only 1.18 per cent of its exports, unlike bigger EU countries such as France and Germany. The same is true for Slovenia. As per 2019 data, its exports to China had been four times lower than its imports. Given this limited economic exposure, it had no qualms about taking a hardline stance against Beijing. In other words, it had relatively little to lose from China’s settling of scores. At the domestic level, both Lithuania and Slovenia stand

to gain politically by taking a stand. Having been under the Communist yoke of Moscow and Belgrade respectively, until the last century, standing up to a Communist PRC has its own appeal for certain sections of the population. The Lithuanians take pride in being the first Republic to have declared their independence from the USSR, paving the way for a democratic transition. For them, facing up to an authoritarian China and supporting a democratic Taiwan had an almost romantic fervour to it. It is a nostalgic reminder about their own national history, comparable to the proverbial ‘David versus Goliath’ story. FUTURE COOPERATION BETWEEN CHINA AND CEECS In a keynote speech of Chinese President Xi Jinping while chairing the China-CEEC Summit via video link in Beijing on February 9, 2021, several cooperation areas were marked between China and Central and Eastern European countries (CEECs) China intends to import, in the coming five years, more than $170 billion of goods from CEECs.

The two sides will deepen agricultural cooperation, in a bid to double CEE countries’ agricultural exports to China and raise two-way agriucltural trade by 50% over the next five years. China supports establishing a university in Hungary by Fudan University. China will work towards the establishment of a China-CEEC customs information center and focal point for customs clearance coordination for countries along the China-Europe Land-Sea Express Line. China supports setting up a dialogue mechanism on e-commerce cooperation between China and CEECs. China supports setting up a China-CEEC alliance in the public health industry. China stands ready for vaccine cooperation with CEECs. Source: Xinhua

SYNERGIA FOUNDATION

Assessment As the international community laments the global backslide in democracy, there may be some lessons to be learnt from the world’s newer democracies. Countries like Lithuania and Slovenia have demonstrated that even smaller nations have diplomatic heft against hegemonic powers. It is, however, important to acknowledge that their limited economic exposure to China affords them the luxury to take such risks, whereas bigger powers like the U.S. or Western Europe shy away from it. If Lithuania and Slovenia emerge relatively unscathed from their political and economic confrontation with China, it could be a dampener for the latter’s long-established selfdictated foreign policy norms. Therefore, Beijing will do all in its power to discourage such actions, even if it means devastating sanctions on industry supply chains which in the long run will be costly to its own economic outreach. In imposing harsher sanctions, however, Beijing will risk an even more fraught relationship with the EU. Although there are those within the bloc who favour a stronger economic partnership with China in the name of strategic autonomy, the latter’s resort to economic coercion has served to alienate them. In fact, EU foreign ministers have overcome their strategic differences to pledge solidarity with Lithuania in its trade dispute with China. It appears that Beijing’s strategy of playing EU member states off against each other is no longer working.

EMERGING SECURITY TRENDS

Charting the nation’s security environment is a veritable conundrum in today’s complex web of threats. SYNERGIA FOUNDATION RE S E A RCH

T E A M

This article is based on the 113th Forum on the ‘Future of Warfare’, organised in collaboration with the Ministry of Defence.

s a think tank, we consider it our primary duty to ideate on security-related issues and align our national leadership, the military leadership, the defence research community and the defence production sector to their respective strategies for the future. All decisions concerning procurement of strategic weapons and decisions that have a bearing on indigenising production must be anchored around what, where and how conflicts will be fought in the future. More importantly, companies that are at the forefront of 21st-century warfare must be helped to better understand the nature of conflicts in the region.

CATCHING THE TREND

The past is not a very good model to predict the future because the future turns out always in ways that we do not anticipate. No wonder militaries are always blamed for preparing for wars that have already been fought and then getting surprised in the next one! However, if security pundits look at current trends and extrapolate them for the future, they may be able to foretell future conflict outcomes with a degree of accuracy. Future conflicts are unlikely to arise out of a clash of ideology, say like the Cold War when communism was pitched against capitalism. Even the so-called ‘clash of civilisations’ being propagated by those who predict radical Islam trying

To overcome the domestic abhorrence for combat mortalities and returning body bags, western military powers are investing heavily in private military contractors. The Iraq war and Afghanistan witnessed the private military contractor business reaching record highs - with the ratio of regular military to private contractor crossing over 75 per cent. to overwhelm the so-called ‘civilised’ world is more of an idea that has been on the wane, once Al Qaeda and ISIS were decisively crushed. The conflict is more likely to be over regions that are stores of valuable resources. Water and clean air themselves may become a source of conflict if their scarcity threatens civilisation. Rising water levels or shrinking habitable and cultivable areas may also spark conflicts. As global power dynamics change, friends and allies will shift loyalties. Pakistan, which was staunchly in the American camp during the Cold War, is today a close ally of China. Even if we look at India, from maintaining a strong strategic autonomy (with a perceptible tilt towards the USSR) for over four decades, it now looks at the U.S. to anchor a strategic partnership in the Indo-Pacific to counter the Chinese. However, one sphere where conflict will rage across all regions and spectrums unabated will be the battle to win perceptions and minds of the global audience. Social me-

EMERGING SECURITY TRENDS

Lt. Gen. PJS Pannu is the Former Deputy Chief of the Indian Integrated Defence Staff.

“

Today, Industry 4.0 sets the benchmark on how future warfare will be fought. Very quickly, we have moved from analogous to autonomous applications through digital transformation. Many countries have shifted to autonomous applications through artificial intelligence. Over the past 20 years, the way countries have been thinking of, and preparing for warfare has largely revolved around digitalisation, remotisation, and hybridisation.

”

dia will rule the wave of influence operations, creating perceptions of victory in an era of indecisive wars. The devastating power of modern arsenal, both conventional and nuclear, has made wars too expensive and destructive to be waged on a large scale between major combatants. War as a means to achieve political ends is getting far more difficult and complex. Of course, small states are fair game for bigger powers in a one-sided unequal contest of arms- the U.S. in Granada, Panama and even Iraq; Russia in Georgia, Crimea and now in Ukraine. Even the Gulf Wars and the Global War on Terrorism waged in Afghanistan, fought with the concurrence of the UN, saw the military might of the developed world being concentrated on a solitary lesser power. Even major countries would prefer to use multinational efforts to deal with evolving security situations rather than going it alone so as to spread the risk and the cost. More importantly, public opinion, especially in democracies, needs to be turned in favour of war. This trend is very clearly visible in the ongoing confrontation in Ukraine between NATO and Russia, with both sides making aggressive manoeuvres but actually shying away from firing the first shot. Of course, miscalculations, especially on the part of authoritarian regimes, cannot be ruled out, which can result in the breakout of large-scale conventional fighting. President Saddam’s misreading of international signals to launch his ill-fated invasion of oil-rich Kuwait is not too far back in human memory. To overcome the domestic abhorrence for combat mortalities and returning body bags, western military powers are investing heavily in private military contrac-

tors. The Iraq war and Afghanistan witnessed the private military contractor business reaching record highs - with the ratio of regular military to private contractor crossing over 75 per cent. Outsourcing combat is big business today, unlike what we saw in the Congo in the 1960s when unemployed troopers of Special Forces from South Africa, Belgium, Portugal, France and England were hired for a pittance to fight for African despots, skimming the mineral resource pile of their impoverished nations. Today companies like Black Water (reflagged as Academi since 2011) are run professionally as corporations. The Russians, too, have entered the market with their Wagner Group active in Syria and Libya. Military expeditionary forces are expensive to maintain for a sustained period of time. The Americans, whose entire force structure is based on fighting overseas, are finding it difficult to foot the bill for their overseas commitments. At a conservative estimate, Afghanistan has cost more than $14 trillion to the American taxpayer! With the costs rising, it is unlikely that big powers are going to directly get involved in open wars in other countries, especially if you are already carrying a burden of a huge national debt. Nuclear arms remain attractive as it convinces smaller powers that it gives them immunity from an all-out invasion from stronger enemies. North Korea clearly gives strength to this perception, and perhaps it is this protection that Iran is striving for. However, nuclear arms will mean more frequent nuclear sabre rattling, something which occurs very frequently in India’s neighbourhood with Pakistan. Even some undeclared nuclear powers like Israel can convey an unsaid threat to its potential aggressors to keep them at bay. So while major nuclear powers, including new entrants like India and Pakistan, have established a sort of nuclear equilibrium/ stability, it is these rogue powers and those that have nuclear devices in their closet that pose the gravest threat to global peace. The rules-based international order is under siege. The UNCLOS has been totally ignored by China in its maritime disputes with the Philippines, which had international law on its side. With weakening international structures, weaker

EMERGING SECURITY TRENDS

countries will have greater difficulty in safeguarding their rights, especially in erstwhile global commons like deep sea and outer space.

REGIONAL THREAT ENVELOPE

Since its independence, India’s security concerns have been guided largely by two of its militarily strong neighbours, with both having a formidable strategic capability at their disposal. The fact that India has fought a number of wars with both and continues to have at best an adversarial relationship sums up the nature of India’s security dilemma when it has to count the cost of a conventional and nuclear deterrent to keep its sovereignty intact. Apart from the conventional and nuclear threat, there is an actual hybrid conflict also being waged in India’s periphery as also in its hinterland - proxy war, terrorism, drug and counterfeit currency operations at a vast scale, influence ops through social media and cyber-attacks on Indian institutions. There is a blurring between combat along the LoC and the hybrid/grey zone war being waged in the hinterland. In fact, the conflict is in a continuum, in perpetuity. The threat thresholds are being lowered, and many an adversary that may pop up may not even be our security risk management matrix. The last two years of the pandemic and the vast destruction caused globally both in terms of life and treasure have opened fresh fears of bioweapons. Such a weapon can cause devastation beyond imagination amongst India’s teeming millions. While all combatants showed exemplary restraint from indulging in chemical warfare after the First World War, the threat has not disappeared. Saddam had used it against his own citizens, and so has President Assad of Syria. In fact, any country which has a basic pharmaceutical industry can develop chemical weapons, which like bioweapons, also have a disclaimer attached because you do not know from where they are delivered.

The next frontier for global contestation will be the deep oceans whose untold riches lie untapped in their dark depths. However, every day, we are getting closer to new technology that can ensure their commercial exploitation. Once this stage is reached, the fight for EEZs and the right to secure the mineral resources on the sea bed will become a bone of contention between competing corporations backed by powerful nations. Conflict will be the logical conclusion. India, with its 2.37 million sq miles of EEZ, will be hard-pressed to protect its ocean wealth. In our frenzy to digitise all aspects of our lives, we have lost track of the vulnerabilities that we are creating for ourselves. Propped up by electric power, which itself is generated, transmitted, distributed and accounted for through digital processors, our digital world is thoroughly enslaved to the vagaries of power outages. Our critical infrastructures are prone to cyber-attacks from distant shores with little or zero attributes. Even in those rare cases where attribution is possible, there is no set of formal laws to act on them.

THE SPACE DOMAIN

Space is no longer a neutral, global commons as stipulated by various UN treaties. The recent Chinese test of a spacebased hypersonic missile is indicative of how destructive technologies are exploiting space for military superiority. Says Lt Gen PJS Pannu (Retired), former Deputy Chief of Integrated Staff Operations, “The Chinese have invested hugely on space. In fact, 40 per cent of the orbital space over India is being occupied collectively between the U.S. and China. 15 per cent of the orbital spaces over India is with China.” “Space is a new domain, and defence budgets in Asia particularly are giving it more credence through enlarged allocations,” says Mr Craig McGilvray, the Regional Director of Lockheed Martin Space. “You see a tremendous amount of future spend in Korea. You see increasing budgets in Thailand as well as in Japan, all focusing on space resiliency.” To build a comprehensive space catalogue, data integrity

OVERVIEW OF ELECTRONIC WARFARE ELECTRONIC ATTACK Use of electromagnetic energy, directed energy, or antiradiation weapons to attack personnel, facilities, or equipment with the intent of degrading, neutralizing, or destroying enemy combat capability and is considered a form of fires. l Electromagnetic Jamming (e.g., CounterRCIE, standoff jamming) l Electromagnetic Deception

ELECTRONIC PROTECTION Actions taken to protect personnel, facilities, and equipment from any efforts of friendly or eney use of electromagnetic spectrum that degrade, neutralize, or destroy friendly combat capability.

ELECTRONIC WARFARE SUPPORT Actions tasked by, or under direct control of, an operational commander to search for, intercept, identify, and locate or localize sources of intentional and unintentional radiated electromagnetic energy for the purpose of immediate threat recognition, targeting, planning, and conduct of future operations.

l Antiradiation Missile

l Spectrum Management

l Threat Warning

l Directed Energy

l EM Hardening

l Collection Supporting EW

l Expendables (e.g., Flares and active decoys)

l Emission Control

l Direction Finding

LEGEND

RCIED: Radio Controlled Improvised Explosive Device EW: Electronic Warface EM: Electronicmagnetic

EMERGING SECURITY TRENDS

is key for facilitating sharing of geospatial intelligence. The space domain gives rise to many questions – the applicability of the OODA loop principle to decision making in space, around cognitive warfare, manoeuvre detection, threat detection and space object identification. The key question is one of interoperability in space between partner countries. Therefore, it is important that like-minded countries collaborate through existing initiatives like the Quad. Together, space and cyber will become combined technology enablers for future warfare, as a huge amount of cyber applications will be going through space than through terrestrial media.

GROOMING FUTURE LEADERS

Future operational leadership will have to be up to speed to keep up with all the developments and disruptions taking place across all domains, the constantly changing rules of engagements, especially in the space domain. “What is now required is a 360 degree rounded personality in terms of leadership construct,” says Col KPM Das (Retd), National Cyber Security Officer at Cisco. Irrespective of the physical result of tactical engagements on the ground, in space or in the depths of the ocean, the outcome is decided by the perception and the narrative around that tactical engagement. India has a great deal to catch up in relation to its Northern neighbour on this account. A major responsibility that military leaders have to bear is the need to prepare their million-strong soldiers to be prepared for the next war, and not the one which was fought a decade back. The future operational construct must be translated down through doctrine, training and evolving tactical and operational philosophies.

ROAD TO SELF-RELIANCE

With this security environment, it is obvious that India’s defence expenditure has been climbing over the years. Sadly, despite a significant manufacturing base and a large government-financed R& D infrastructure, India continues to have the dubious distinction of being one of the largest arms importers in the world. For a nation aspiring to great power status, such a situation wherein you are dependent upon an external supply of high-tech weapons is no longer acceptable or affordable. The Indian industry, especially those related to defence production, must quickly advance to Industry 4.0 standards and move rapidly from analogous through digital transformation to autonomous. Many leading militaries are already on the cusp of shifting to autonomous applications through artificial intelligence (AI). It may be recollected that China is today accepted as one of the leaders in AI. Imported technology is never cutting edge; it is like paying a premium for an expensive insurance policy which turns out to be a dud when things start collapsing. In the field of defence, you may spend billions in importing arms which may turn out to be second best in a war. However, if the technology is homegrown and is world-class, potential adversaries will think twice before applying kinetic measures against us. The secret of American power lies in its

ability to stay far ahead of the pack in the technology curve; it is only now that it fears that this edge is slowly being nibbled at by China. Around 40- 50 per cent of a nation’s comprehensive national power will go into science and technology, research and development and ensuring that its industry is empowered with the latest technology. Col KPM Das (Retd) has a word of caution on the rapidity with which technology gets obsolete these days. “The technology cycles are so fast that procurement cycles of the services just cannot keep up. The budgets have to be so modelled that they can sustain technology which can last for at least 15 to 20 years,” he says. Therefore, there is clearly a solid rationale for the government to seriously consider the civilian sector industry as an equal partner in taking defence programs forward. This will require an injection of people from the private sector, who are willing to lead some of these missions for the battlefield.

Craig McGilvray is the Regional Director & Asia Business Leader at Lockheed Martin Australia.

“

The more we invest in space in Asia, greater will be the quality of data obtained. Better precision and data sharing will also become possible. But in order to do so, we need technology transfer. Sharing in geospatial intelligence is also key.

”

MEANS OF HYBRID WARFARE

War Use of Proxies Conventional Conflict Low-Level Use of Force Terrorism Cyber & Infrastructure Attacks

Psychological Operations Demoralize

Organized Crime

Destabilization

UIndirect conflict Lawfare

Political Infiltration & Subversion

Sanctions & Economic Coercion Cultural & Social Manipulation

Media & Info Operations

Peace

Intervention

21ST CENTURY WARFIGHTING Future weapon systems must cater for a joint all-domain operations capability, integrating existing systems and strategically inducting new capabilities. SYNERGIA FOUNDATION R E S E A RCH

T E A M

This article incorporates key insights from Lockheed Martin India.

he pace of technology is moving so quickly that it is fast outstripping existing concepts. Unless countries leverage artificial intelligence (AI) and machine learning, they will be left with platforms that will be quickly outclassed.

BREACHING THE AIR DEFENCES

While conventionally manned aircraft remains a potent threat, even more worrisome is a host of risks posed by UAVs, cruise missiles, ballistic missiles and hypersonic missiles. The capacity to launch long-range missiles is no longer the exclusive domain of traditional military forces; even rogue nations, through their non-state proxies, are regularly indulging in long-range destruction through guided missiles and long duration, long-range drones. Therefore, most defence manufacturers are focused on finding a suitable antidote in the form of a credible, affordable and foolproof air defence system that takes into account threats across the entire spectrum - from lowspeed off-the-shelf drones armed with explosives to high tech cruise missiles and even long-range ballistic missiles. Two market leaders immediately come to mind, which can be considered as the industry standard for such weapons systems. One is the Russian S-400 that has created much furore globally and attracted the wrath of the U.S. through its 2017 Countering America’s Adversaries through Sanctions Act

Most defence manufacturers are focused on finding a credible, affordable and fool-proof air defence system that takes into account threats across the entire spectrum - from low-speed off-the-shelf drones armed with explosives, to high tech cruise missiles and even long-range ballistic missiles. (CAATSA). The S-400 Triumf is reportedly effective against all sorts of aerial platforms, including missiles, rockets, drones and manned aircraft. Unlike the Israeli Iron Dome system, it provides a shield over a much larger area, like an anti-access/ area-denial asset to protect military, political and economic assets. Some experts compare it with the U.S. Patriot, which is more attuned towards intercepting highspeed ballistic missiles. The second system is the American Terminal High Altitude Area Defence (THAAD). THAAD defends against short, medium, and intermediate-range ballistic missiles. It provides a unique endo-and exo-ballistic defence capability and was specifically designed to provide a robust capability against a mass raid. The system uses proven technology to destroy a threat with direct impact – providing ensured negation of weapons of mass destruction, enhanced reliability and safety. As air defence systems get more advanced and assure a degree of safety from a volley of ballistic missiles, the counter to them is sought by military designers. One solution to the ever denser anti-aircraft defence environments is the hypersonic vehicle.

21ST CENTURY WARFIGHTING

The term ‘hypersonic’ refers to an attribute of flight where a vehicle travels at speeds over Mach 5, which is five times faster than the speed of sound. Using hypersonic systems allows for more speed and manoeuvrability when it matters most, that is, at the ground defence interception stage. The high speeds of hypersonic missiles enable them to travel a great distance and quickly penetrate heavily defended air space. All the major powers, U.S., Russia and China, have been engaged in an intense race to operationalise the hypersonic missile system. Last year, a news report in the Financial Times claimed that “China tested a nuclear-capable hypersonic missile in August that circled the globe before speeding towards its target, demonstrating an advanced space capability that caught U.S. intelligence by surprise.” China rejected this claim, dubbing it as propaganda. Chinese spokesperson, Zhao Lijian said that the August test was a ‘spacecraft and not a missile,” to test routine reusable technology. China’s hypersonic glide vehicle, the DF-ZF, has reportedly been tested nine times since 2014, but China insists that none of the tests was in space. Russia has also been successfully testing a hypersonic missile, although details are not available in the public domain. As per American market leaders Lockheed Martin, their scientists and engineers are developing a range of hypersonic solutions. This technology provides capabilities important in this current threat environment but also comes with unique technical challenges. In the bigger picture of national security, hypersonic systems will need to communicate with other assets to maximise safety, performance and situational awareness across air, space, sea, land, and cyber. Highlighting the problems associated with developing such an advanced system, Mr Robert Lightfoot, executive vice president of Lockheed Martin Space says, “One of the challenges to fully communicating the bigger integration value is that the innovations that are taking place are intangible. Artificial intelligence, machine learning is more amorphous and ambiguous in terms of how the technology allows us to do things.” The synthesis of data is key. Says Mr. Lightfoot, “By developing these integrated systems that allow the satellites, aircraft, and ships to seamlessly communicate with one another, while not quite as interesting as seeing the actual platforms, will be the differentiator going forward.”

DIGITAL CONNECTIVITY FOR JOINTNESS

Many of today’s military systems and platforms were designed to operate in a different technological era and are behind the digital connectivity found in everyday life. All major platforms of the 21st Century must be networked to enhance their performance. Every day, the boundaries of science are being pushed to define new frontiers. The challenges, and opportunities, lie in enabling joint all-domain operations by providing situational awareness, command and control across land, sea, air, space and cyber. Modern military assets perform best together across these domains and also across allied nations. For this to be achieved, both legacy and future systems

must be integrated to bring cutting edge technology to the modern, highly contested battlespace. The Americans are working on a concept called the Joint All Domain Operations (JADO) that will connect all existing and future platforms to bring a joint operational concept to reality. In such a networked battlespace, data dominance would be the crucial element. Data will become a strategic asset as it will be instrumental in leveraging a host of technologies open system architecture, directed energy, AI and machine learning to dominate the battlespace. Military 5G or 5G.MIL technology will be in the forefront to connect all assets and enable prompt and decisive action across domains. 5G MIL is expected to be faster, more reliable with low latency and ideal to meet the stringent demands of a 21st Century battlefield. Modern Western nations have already put this into practice through high tech platforms like the F-35, which is now in service with the U.S. and many of its allies. The platform uses advanced sensors and connectivity to gather, analyse and seamlessly share critical information across platforms, services and allied nations. As regards legacy platforms that do not have this 21st-century connectivity designed into them, there are stand-alone pods. These pods make available dedicated data links for pod-to-pod communications, establishing near-instantaneous range to targets and reducing the workload on hard-pressed combat pilots. Their data links allow pilots to share infrared data across a secure network, further reducing the timelines for engaging fleeting targets by multiple platforms. While data collection, analysis and sharing are important in a networked battlespace, protecting it is equally vital for the success of the mission. Cyber protection has to be embedded in all modern platforms in the design stage itself, from the component up to the overall system architecture. Called ‘Hardened Security’, these systems provide the edge to cloud protection to vital information and defend them from complex cyber threats.

CONCLUSION

21st Century Warfare brings together the technologies being developed in the physical world – where the defence industry excels – and augments and accelerates those advancements with digital world technologies available in the commercial industry. A synthesis between the two will lead to accelerated growth in designing and the fielding of ever more modern platforms in the shortest development cycles. WHAT IS KNOWN ABOUT THE HYPERSONIC MISSILES OF THE US, RUSSIA AND CHINA? USA

RUSSIA

CHINA

AGM-183 ARRW

3M22 Zircon

DF-17

Top speed Mach20 (15345.4mph)

Top speed Mach9 (9,800mph)

Top speed Mach5 (3,806 mph)

Fractional Orbital bombardment Sys

Range 1,000 miles

Range 621 miles

Range 1,600 miles

Range Unlimited

Cruising altitude unknown

Cruising altitude 91,863ft

Cruising altitude 196,850ft

Cruising altitude low earth orbit

Launch platform B1-B bomber

Launch platform Ground vehicle

Launch platform land based rocket

Top speed (21,000mph)

A KALEIDOSCOPE VIEW SHIFTING SANDS IN THE MIDDLE EAST

SHIFTING SANDS IN THE MIDDLE EAST

In a conversation with the Synergia Foundation, Mr. Krishnan Srinisavan, former Indian Foreign Secretary discusses the changing geopolitical dynamics in the Middle East and beyond. Q. How do you see the U.S.’ interests in the Middle East evolve, considering that the Biden administration has signaled disengagement from regional conflicts?

expect the current energy consumption patterns to last for more than 50 years. Clean energy is going to be the order of the day.

A. American interests will remain intact, however much they may withdraw from the region. Mr. Biden may not speak to the Crown Prince of Saudi Arabia on the telephone. But that does not mean that his interest is any less. In Yemen, for example, he has undertaken to underwrite the Saudis against the Houthis. I presume he is keen to protect oil installations and other assets in Saudi Arabia, but it does not mean that he will allow the Saudis to destroy Yemen in its entirety.

Q. How do you see the role of Pakistan in the Middle Eastern mosaic, especially in context of its relationship with Iran?

In terms of Israel, the American perspective is clear in that it will not allow any dilution of its support for the legitimate rights of the Israeli government and people. As far as Saudi Arabia, Iraq and the Gulf States are concerned, the Americans have not withdrawn any of their military from these countries, though we hear rumours from time to time that they will do so in the near future. So I think that their investment in the region remains as strong as ever, though they may not have a publicity-conscious front man like Mr. Jared Kushner to articulate those interests. There are many who say that once the JCPOA is revived, the Americans might lose a great deal of interest in the Middle East. I do not think that this will be the case. I believe that the revival of the nuclear accord would make no difference to American interests. When you are a superpower, you have global interests, and those global interests will remain. They could be in a magnified or minimised form, but they will always remain.

A. I am sure that Pakistan would like to play a more active role in the Middle East. They have always felt that their interests and their destiny lies to the west of Pakistan, not to the east. Their relationship with Saudi Arabia has atrophied to some extent, juxtaposed with India’s own better relationship with the Arab state. Recently, Riyadh had invited an Islamabad general to be in charge of its operations in Yemen, but they declined, maybe because they did not want to get involved in the Shia-Sunni problem. But this might prove to be a long-term disadvantage for them. On the other hand, the Pakistanis have looked to the Saudis for financial assistance to sort out their budgetary problems. Despite the Saudis being forthcoming, the extent of engagement was lesser than anticipated, driving Pakistan into the hands of the IMF. So, I think that with Saudi Arabia, a key linchpin in the Middle East, Pakistan seems to have lost credibility. I think their relations with Iran, to the west of Pakistan, is a little more complicated because the Baluchistan problem seems to have emerged again. I would not rule out the possibility that the Balochs get some support from the west, rather than from a person sitting in New Delhi.

Q. When do you expect a post oil-world to pan out? A. Most oil exporting countries are diversifying their economic portfolios by investing in tourism, high technology and even sports. However, considering that the demand for oil remains high and so do the prices, I think that we are in for a slightly longer horizon than earlier anticipated. At the same time, even the most optimistic oil exporters do not

Pakistan would like to play a more active role in the Middle East. They have always felt that their interests and their destiny lies to the west of Pakistan, not to the east. Krishnan Srinivasan, Former Foreign Secretary

SPY VERSUS SPY

Great Britain’s fascination with the spy tradecraft has not diminished, as is evident in the latest media stories on a likely Chinese spy at the highest echelons of the government. Maj. Gen. Ajay Sah is the CIO at Synergia Foundation, with experience in conflict resolution, peacekeeping & counter-terrorism.

reat Britain has been an eager participant in the great game of spying since its heydays as the ‘Empire on which the sun never set’. Then it was the Tsarist Russian Empire spreading its wings across Central Asia into the guts of the British Empire - India, which Rudyard made legendary in his books on the ‘Great Game’. The four decades of the cold war was the apogee of the espionage duel when both sides let loose a bevvy of domestic and foreign agents to mine information. Many such shady personalities have today become subjects of legends perpetuated by popular fiction and Hollywood. Therefore, the delight of the British press was not at all surprising when the contents of a drably worded ‘security services interference alert’ (SSIA) issued by counter-intelligence agency MI5 was leaked to the press. The SSIA drew attention to one Christine Lee working for the United Front Work Department (UFWD) of the Chinese Communist Party (CCP) ‘seeking to covertly interfere in UK politics through establishing links with established and aspiring parliamentarians across the political spectrum.’ The name of Labour MPs started making the rounds, and it was alleged that the Labour party had been the benefactor of funds donated by the UFWD. Reportedly, Ms. Lee has been a long-term Labour funder, especially of its MP, Mr. Barry Gardiner and over half a million pounds have been allegedly transferred to the Labour party since 2005. It sounds straight out of the 1960s press which was regularly full of such scandalous allegations and rumours.

Blind political belief based on idealism, bitter disillusionment with their own political system, greed and the allure of glamour and romance have been cited as obvious motivations for spies to turn against their country. SPIES AND POLITICIANS

The UK political scene has been a hotbed of sleazy scandals involving politicians and spies with dazzling beauties thrown in for good measure. Blind political belief based on idealism, bitter disillusionment with their own political system, greed and the allure of glamour and romance have been cited as obvious motivations for spies to turn against their country. Cold war Britain appeared riddled with moles, many of whom were exposed, some fled to USSR, and many obviously remained undetected. The Cambridge Five (Donald Maclean, Guy Burgess, Harold “Kim” Philby, Anthony Blunt and John Cairncross) are the most famous. Three Cambridge undergraduates were recruited by the Soviets in 1934 through their Cambridge professor Ludwig Wittgenstein, and two more joined them later. With their redoubtable Cambridge degrees, they were able to infiltrate the British government and intelligence agencies during World War 2 and after it with little effort during the Cold War. Maclean, Burgess and Philby fled to the USSR, while Blunt and Cairncross were not detected till 1970 and 1990, respectively. None of them were ever prosecuted; Blunt working for the Royal household, was stripped of his knighthood. The most famous of them was Kim Philby, who worked

SPY VERSUS SPY

with MI 6 and almost became the head of MI, till he defected to the USSR before he could be jailed. He is also a bestselling author of a book narrating his exploits as a master spy. Another notorious sleeper agent was Alan Nunn May, a Cambridge educated nuclear physicist working with UK’s nuclear weapons programme in the 1940s. Nun was a closet communist and secretly sent data and samples from the developing nuclear programme. He is credited for enabling the USSR to catch up with the west in nuclear weapons within a short span of time after WW2. He was arrested and imprisoned in 1946. Yet another famous case was that of the ‘MicroDot Five’ which included Gordon Lonsdale (a Soviet agent named Konon Molody) , Henry Houghton (a civil servant) and his girlfriend Ethel Gee and an American couple (Ethel and Peter Kroger) who used photographic equipment hidden in their house to convert information provided by Houghton and his girlfriend into microdots for easy transfer to their Soviet handlers. All five were arrested and imprisoned, although Molody was later sent back to the USSR in a prisoner exchange swap. He quickly became a national hero with his face immortalised in a commemorative postage stamp in Russia. Perhaps the spy scandal which gained the most notoriety was the Profumo affair. John Profumo, an upcoming British politician and Secretary of State for War in Harold Macmillian’s conservative government of the 1960s, was exposed for an extramarital affair with a model and glamour girl Christine Keeler. Incidentally, Keeler was also romantically linked to Captain Yevgeny Ivanov working as a Naval Attache in the Soviet Embassy in London but known to be an intelligence agent. The Macmillian government collapsed as a result of the scandal when Harold Macmillian was forced to resign in 1963, followed by an electoral debacle in the 1964 general elections. A famous Russian spy who worked for the West was Oleg Penkovvskiy, a military hero. In 1950, disillusioned by the excesses of Stalin and his successors, he became a western agent providing strategic intelligence on Soviet missiles and military plans to a British handler. Exposed, he was put through a swift trial and a prompt execution by a firing squad.

TECHNOLOGY REPLACES HUMINT

Western spies were exposed in Russia also, although the frequency in modern times has drastically reduced as spy satellites and electronic intelligence collection superseded human intelligence. Today, a surveillance satellite can collect more strategic information in one of its sweeps than years of laborious efforts by a deep sleeper agent. In 2006, FSB, the Russian counter-intelligence agency, accused four employees of the British Embassy in Moscow of collecting intelligence using high tech listening devices and financing NGOs for anti-Russian activities. In fact, the Russian claimed that the British were using a ‘fake rock’ for video surveillance in Moscow, a claim which earned a lot of derision in the western press but years later was accepted as true.

Technology started replacing all other types of spycraft once the Americans had gained expertise in space. Most successful were the Key Hole series of satellites whose single frame could cover a swathe of territory over 680 km. In the early days, the exposed films were ejected and collected in mid-air by aircraft or by submarines. As the U.S. spent a huge amount in upgrading its surveillance satellite constellations, the Soviets started falling back, lacking the funds to stay in the game. By the 1980s, Moscow was virtually out of the league in space surveillance. Today, Imagery Intelligence (IMINT) dominates not only the battlefield but every aspect of our lives from space and through autonomous drones capable of long-duration flights. There is no place to hide from their sharp sensors and no secret too deep to remain so.

THE RISING CHINESE PHOBIA

The issuance of the alert by MI5 and its release in the public domain was most unusual for the British counter-intelligence agency. It is clear that it was not an offhand gesture but a calculated move at the end of a thorough investigation. While Russian influence operations have been grabbing headlines both in the UK and across the Atlantic, China has now become the top priority for British sleuths. Since there was no effort to collect state secrets but merely to covertly gain influence over lawmakers in the instant case, the agency thought it prudent to make public its findings to disrupt any risk that the Chinese interference may entail in the short term. Following the cue of its larger ally, the U.S., UK’s relations with China have steadily been on the downslide, especially after the chaos in Hong Kong since 2019. Last year, MI5 had issued public warnings, asking vigilance on the part of British citizens as it regarded spying efforts by Russia, China and Iran at par with terror plots. In fact, in Feb 2021, a report in the Daily Telegraph reported the deporting of three alleged Chinese spies posted as journalists in the UK. In an article written in December 2020, the British newspaper The Mail reported that a significant number of diehard CCP members had infiltrated western governments and corporations dealing with sensitive military technology. The report claimed that over 100 members of the CCP are employed by vaccine giants Pfizer, AstraZeneca and GlaxoSmithCline. Even larger numbers, some putting it in hundreds, hold sensitive appointments in Boeing, Airbus and Rolls Royce. Many have wiggled their way through to sensitive research establishments and western universities where they have access to the latest research. The U.S. Director of National Intelligence, John Ratcliffe, is on record calling Beijing the “greatest threat to freedom” since World War II seeking to “dominate the planet economically, militarily and technologically.” Thus one can rest assured that the classical cloak and dagger battle has only just begun.

PEARL IN DISTRESS

Faced with a slew of grim economic indicators, the tiny Island of Sri Lanka battles stoically to restore its equilibrium and secure a future for its people. SYNERGIA FOUNDATION R E S E A RCH

T E A M

ince the start of the pandemic in 2020, the Sri Lankan economy, like all other economies around the world, has been faced with distress. However, the situation has taken a turn for the worse with the dawn of 2022. The double trap of low growth compounded by the rising debt burden has raised its ugly head. Sri Lanka has been facing twin deficits — fiscal deficit and trade deficit — during the major part of the last decade. Since 2014, its foreign debt level has been on the rise and reached 42.6 per cent of GDP in 2019. Towards the end of last year, Sri Lanka had declared an economic emergency after a steep fall in the value of its currency, the rupee, caused a spike in food prices. Authorities tried to take control of the supply of basic food items, including rice and sugar and set prices in an attempt to control rising inflation. The army was roped in to assist the civil administration, while poverty and unemployment levels rose to unprecedented levels, threatening a law-and-order situation. Despite the slow trickling in of foreign loans from friendly countries, the food and fuel crisis continues. The island nation stays blacked out for hours, as the National Electricity Board conserves precious fuel supplies, further impacting the struggling export-oriented industry.

A GRIM SITUATION

All economic parameters indicate a grim struggle looming ahead. As per World Bank estimates, nearly 500 000 citizens have slipped below the poverty line since the onset of the pandemic. This is rare for a country where the overall living standards were better than most other South Asian nations. Apart from the economic drag down of COVID-19, which shut the door on its flourishing tourism industry, experts call out the high government spending, tax cuts and debt re-

Apart from the economic drag down of COVID-19, which shut the door on its flourishing tourism industry, experts call out the high government spending, tax cuts and debt repayments, especially to China, as having further eroded state revenues. payments, especially to China, as having further eroded state revenues. The foreign exchange reserves dipped to their lowest levels in a decade. It must be recalled that China is a major investor in infrastructure and other projects in Sri Lanka, leading to a significant servicing obligation for an estimated $5 billion debt. To ease the situation, Beijing has agreed to smaller instalments being paid over a longer period. In order to save on the fertiliser bill, which adds to the import burden, the government decided to stop the use of fertilisers and pesticides in favour of going organic. The transition in these troubled times has not proved successful and has contributed to the rising food prices and rationing of staples like sugar and lentils. The rationing, however, led to hoarding in the black market, and the military had to be engaged to seize goods from warehouses and enforce sale to state agencies. Even though the restrictions on imported fertilisers were lifted, the damage had already been done to agriculture production. In an effort at damage control, the government has promised to pay 40,000 million rupees ($200m) to farmers whose harvests were affected by the chemical fertiliser ban. As a country heavily dependent on tourism, Sri Lanka has suffered acutely from the pandemic’s two-year-long travel bans. The World Travel and Tourism Council estimated that

PEARL IN DISTRESS

more than 200,000 people lost their livelihoods in the travel and tourism sectors, leading to a 2-per cent contraction in the GDP. The Island nation’s economy is largely sustained by imports. However, with foreign exchange reserves drying up, the shortage was not restricted to food items but also encompassed essentials like medicines and fuel. As per the Sri Lankan Central Bank, inflation was at 12.1 per cent at the end of 2021, with food inflation rising to 22 per cent.

ages of essentials via imports from India,” explains leading economist WA Wijewardena. All these efforts by the neighbours are aimed at winning some breathing space for the Sri Lankan government, while it implements economic reforms. The IMF is also expected to agree to a bailout package which could be a part of a long-lasting solution.

A COOPERATIVE APPROACH TO RECOVERY

In response to Sri Lana’s economic distress, many neighbouring countries have stepped up to offer assistance through financial schemes as well as trade deals. China is Sri Lanka’s biggest lender and has invested heavily in infrastructure projects, including roads, an airport and ports. Critics have questioned the financial durability of these schemes by pointing out that the money was put away in ‘unnecessary schemes with low returns.’ The government defends these Belt and Road Initiatives (BRI) as the only way the country can grow in the future, when investments anywhere close to Chinese commitments are not forthcoming from the West or even its neighbour, India. Other countries have stepped in too, including Bangladesh, which extended $200 million in a currency swap arrangement, making it a lender in the global economy for the first time. Iran also joined the party by signing an oil-tea pact which would settle off debt for past oil imports from Iran by paying off in tea. It is very encouraging that South Asia’s major power, India, has stepped forward to economically support Sri Lanka, despite a troubled year that saw Sri Lanka calling off a major Indo-Japanese deal to develop the strategically important Colombo port. The Reserve Bank of India has agreed to a USD 900 million deal which includes the “deferment of Asian Clearing Union settlement of over USD 509 million and currency swap of USD 400 million”. “India’s economic package has averted an immediate economic crisis after settling of international sovereign bonds due on January 18. The swap of USD 400 million helped improve the gross reserves to an extent. The Indian credit line of USD 1.5 billion will also ease short-

Asanga Abeyagoonasekera is an international geopolitical analyst and strategic advisor from Sri Lanka.

Is Sri Lanka at risk of a sovereign bond default? With foreign reserves enough to finance a few months of imports, the reserves fell from $7.5 billion to $3.1 billion. In the present, with $1.6b foreign reserves for imports with $7.3b required for debt repayment within the next year, many are even predicting the country may slide down even further in the months ahead. Moody’s downgraded Sri Lanka’s credit rating to CAA2 from CAA1, and the road ahead to attract investment will be challenging. Nishan de Mel, a Colombo based economist, assess ‘it may take up to 5 years for Sri Lanka to get its rating back up’. With the enormous foreign debt service burden to China to the tune of $5 billion, including many other nations and markets, the Sri Lankan economy will not be able to repay even with the present assistance from India, China and other countries. Given that the emergency assistance provided by neighbouring countries are short-term relief measures and the loans will have to be paid back at high-interest rates, will it add to Sri Lanka’s debt load? Yes, it will add to the present debt load. The bigger concern is if the present condition continues. There could be a people’s uprising, with signs already of heavy militarisation.

Assessment Milinda Moragoda is the Sri Lankan High Commissioner to India

“

Tourism sector is the lowest hanging fruit and Indian tourists are biggest in number and contributing to the Lankan economy’s recovery after the pandemic. But it is not just the high-end tourism, Lanka has provisions for every type of tourists. We are inviting Indian investments in the tourism sector like real estate and port sectors.

”

An overreliance on tourism and imbalanced trade and debt issues have placed Sri Lanka in a fragile position. With the eyes of the world on it, Sri Lanka does not have any easy answers out of this imbroglio, and a serious economic revamp is on the cards as the government attempts to navigate the current situation. Steady borrowing and financial assistance by its neighbours make the region heavily interdependent, with many countries having a stake in the country’s future. It could be a positive fallout as hopefully, it would nurture closer and more mutually beneficial relations between the countries of South Asia.

FINANCING A GREEN FUTURE

As rich governments fail to adequately finance green initiatives worldwide, private and institutional investors are being sought to pick up the slack. SYNERGIA FOUNDATION R E S E A RCH

T E A M

t will be recalled that at the 2009 UN Climate Summit in Copenhagen, rich countries had made promises to fund developing countries in their transition to green processes that reduced greenhouse admissions. By 20102012, this assistance was to be to the tune of US $30 billion and was to increase exponentially to US $ 100 billion by the next decade. In a 2020 report, the UN had concluded that the 100 billion target was ‘out of reach’. This has seriously jeopardised efforts to meet the 2015 Paris agreement goal of restricting global warming to “well below” 2 °C, if not 1.5 °C, above pre-industrial temperatures.

UNREALISTIC PLEDGES

International pledges and agreements have not kept up to the original intent. The US$100 billion a year commitment left many unanswered questions. There was no agreement on how to measure the pledges of individual countries. The Organisation for Economic Co-operation and Development (OECD) estimates that countries contributed $80 billion in climate finance to developing countries in 2019, up from $78 billion in 2018. The pandemic has ushered in a new era of uncertainty. Investments are now prioritised in areas such as public health, challenging the wider universe of climate finance. The true measure of success or failure, analysts point out, will be whether climate finance pledges are translated into actual projects. Others criticise that even these suggested numbers are vastly inflated. Oxfam estimated public climate financing at only $19 billion–$22.5 billion in 2017–18, around one-

Much of climate finance has gone towards projects to reduce greenhouse gas emissions, despite the Paris agreement calling for a balance between these ‘mitigation’ projects and those that help people ‘adapt’ to the effects of climate change third of the OECD’s estimate. The difference is attributed to the scope of projects assessed as well as accrued value from development loans. They argue that only the ‘benefit accrued from lending at below-market rates should be counted’ and not the full value of the loan itself. Similarly, it would be incorrect, they argue, to assess aid projects as ‘climate relevant’ when they do not target climate action primarily. Without a common methodology for allocation of resources and assessment of projects’ effectiveness, divergent estimates are bound to flourish. Thus far, much of climate finance has gone towards projects to reduce greenhouse gas emissions, despite the Paris agreement calling for a balance between these ‘mitigation’ projects and those that help people ‘adapt’ to the effects of climate change. These mitigation projects clearly find favour with donors since the impact is measurable, whereas it is less easy to define successful adaptation. Private finance, in particular, has consistently favoured mitigation projects which generate quantifiable returns on investment, such as solar farms and electric cars. The expectations from rich countries have risen since. “By the time we get to Glasgow, if they haven’t given us another $100 billion [for 2021], then

FINANCING A GREEN FUTURE

they are completely unable to meet their obligations,” says Saleemul Huq, director of the International Centre for Climate Change and Development in Dhaka. In the midst of climate financing falling short on its promise, new deals have been pouring in. In the G7 meeting held last June, Canada, Japan and Germany announced their renewed commitment to contribute $100 billion annually through to 2025. The EU pledged an extra $5 billion by 2027, and U.S. committed to providing $11.4 billion in annual financing by 2024, making it the largest single climate-finance contributor.

GREEN MONEY

Finance will play a major role in making the shift towards a green future. Credible climate action needs dependable and sustainable financial sources, and therefore, climate finance by private investors, long a buzzword, is now appearing to be a life saviour if it gains widespread favour. Shifting the economy from fossil fuels to clean sources of energy requires a vast reallocation of capital. The European Union has devised a new labelling system, or taxonomy, which helps categorise activities it deems as environmentally sustainable. This is expected to assist funds and firms to disclose what share of their activities qualify as green, and that clarity will further boost capital inflow. The EU system has put together a ‘Green Deal’ for sustainable finance, but even this is not foolproof. It results in an elaborate taxonomy that covers 70 activities and educates investors on what is green and what is not, with an aim to make it easier for investors to track the carbon footprint of their investment deals. The financial sector has a crucial role in fighting climate change, but a far more rigorous approach is needed to agree on measurable and quantifiable indicators. A green boom is underway, as shown by the rise of Tesla and the explosion of shares in electric vehicle makers. The private sector is enthused as many other industries have also taken to boasting about their green credentials. This global effort to ensure sustainability is not without hiccups. ‘Greenwashing’ has become a point of concern as U.S. companies and ESG funds have invested in questionable industries, including ‘alcohol, gambling and tobacco and fossil-fuel producers. Limited success thus far has got critics exclaiming that green finance suffers from ‘woolly thinking, marketing guff and bad data’. There is a new class of climate savvy asset owners, asset managers, banks and insurers who see a future in green projects such as the Glasgow Financial Alliance for Net Zero (gfanz). The alliance, which represents $9trn in assets, consists of leading financial institutions that are committed to an accelerated pace of decarbonisation of the global economy. In this context, the ‘role of green banks and local development finance institutions’ gain critical importance. The green bank model has proven effective in using limited public funds to mobilise large amounts of private capital. The green banks have provided a tested method to ‘derisk projects, provide patient capital, create new financial instruments, build local capacity and help demonstrate new technology’. NRDC estimates that “members of the Green Bank Network have invested or committed US$50.4 billion in climate projects since the first green bank was founded in 2012, leveraging private investment in projects valued at US$134.7 billion”.

Joe Phelan is the Director of the World Business Council for Sustainable Development, India.

Climate finance projects have mainly been targeted at mitigation projects as opposed to those that help people adapt to the effects of climate change. Lack of a common methodology for allocation of resources and assessment of projects’ effectiveness has led to divergent estimates which do not help the cause. So how can we better measure the effectiveness and impact of climate finance projects? Climate-related risk needs to be brought into the heart of all financial decision-making. Existing enterprise-risk management principles and approaches can be applied but they must evolve. WBCSD has worked with the Committee of Sponsoring of the Treadway Commission (COSO) to develop guidance on understanding and managing ESG risk. We also supported the Task Force on Climate-Related Financial Disclosures (TCFD) in the development of their guidance on risk management integration and disclosure. Clear, consistent, comparable and decision-useful information is also required as limited data and clarity on transition pathways hinders action. The TCFD recommendations provide a valuable basis especially for the advancement of strategy and risk disclosures. The new TCFD guidance will also aid the development of communication related to metrics, targets and transition planning. Those recommendations and guidance must then be standardized under the direction of the financial standard setters (IFRS, ISSB) with considerations given to the connections with financial accounting and reporting standards. Investing in nature-based solutions can be a way to integrate mitigation of climate change, with resilience to climate change, as well as promoting health and sustainable livelihoods, maximizing co-benefits and avoiding the trade-offs of mitigation vs adaptation.

Assessment Amidst the deluge of fuzzy statistics and contestable figures provided by individual countries, the goals of climate change has suffered a big blow. Global climate action needs trusted financial data in order to meet its objectives and indeed to assess progress made by member countries in meeting their stated pledges. Green banks act as important mediators in facilitating and scaling-up financing for the environment. It is equally important to invest in projects that help communities to ‘mitigate’ as well as ‘adapt’ to the perils of climate change.

A RESURGENT CSTO? For long dismissed as a poor imitation of NATO, the CSTO has grown in ambition over the past few years. Mary Kavita Dominic is a Policy Research Associate with the Synergia Foundation. She is a Rhodes Scholar from Oxford University.

ith Kazakhstan engulfed by mass protests, the Collective Security Treaty Organisation (CSTO) has emerged from the ash heap of history to “restore order” in the country. The Russia-led security bloc did not hesitate to provide assistance when President KassymZhomart Tokayev issued a call for help. Of course, many regional observers were taken by surprise, as this was the first time in its 30-year history that the organisation exercised collective security powers to militarily intervene in a member state. Predictably, the events in Kazakhstan have triggered speculations about Russia extending its reach in Central Asia through a military alliance of ex-Soviet states. The growing chaos in Afghanistan, spurred by the withdrawal of U.S troops, has only fuelled these conjectures even further. It remains to be seen if the CSTO will indeed move beyond its image as a ‘symbolic anti-Western body’ to exercise more powers in the coming years.

A TEPID HISTORY

The timing of the CSTO actions in Kazakhstan is significant, as 2022 marks the 30th anniversary of the Collective Security Treaty. As can be recalled, the defence pact had been signed by members of the Commonwealth of Independent States in 1992, when the Soviet Union collapsed, and the Warsaw pact was dissolved. Ten years later, the member-states had declared themselves a full-blown military alliance, leading to the formation of the CSTO. Currently, the bloc enjoys observer status in the United Nations, with a membership of six countries - Russia, Tajik-

With the looming prospect of a war in Ukraine, Russia may have sensed this as an opportunity to show off the might of the CSTO. Through its swift deployment of troops, it has sought to demonstrate the Kremlin’s readiness to muster force when former satellite states drift away from its sphere of influence. Only time will tell whether the CSTO will indeed be instrumentalised by Moscow to tip more such regional events in its favour. istan, Kyrgyzstan, Armenia, Belarus, and Kazakhstan. Like NATO, it is based on the principle of collective defence, whereby an attack on one member state is taken as an attack on the entire alliance. Critics, however, write it off as a paper tiger, owing to its repeated failure to come to the aid of member states. For instance, in 2010, when Kyrgyzstan’s acting premier appealed for help to control the clashing Kyrgyz and Uzbek ethnic mobs in his country, the organisation had not intervened in the situation. Similarly, it had rebuffed Armenia’s appeal for assistance during the Nagorno-Karabakh conflict in 2020. Given this reality, there is much scepticism about the effectiveness of CSTO, even among regional players. The organisation has very few deliverables to speak of besides periodic military exercises and roundtable discussions on political/military issues. In fact, many member states view it as a mere forum to negotiate the purchase of discounted weaponry from Russia. It is no surprise, therefore, that

A RESURGENT CSTO?

the recent intervention in Kazakhstan has captured global headlines.

THE KAZAKH INTERVENTION

Belying its history of inaction, the CSTO has been prompt in deploying peacekeepers to Almaty this time around. In doing so, it has invoked Article 4 of the security pact, which permits interventions in the event of any aggression against member states. To trigger this clause, however, Kazakh President Kassym-Jomart Tokayev had to argue that the country was under siege from “foreign-trained terrorist gangs” - a standard narrative used to scapegoat protesters around the world. The very next day, around 2500 military personnel were flown into the Central Asian country to protect strategic facilities, comprising troops from Russia, Belarus, Tajikistan, Kyrgyzstan, and Armenia. Naturally, the question uppermost in everyone’s minds was why the organisation had exercised its collective security provisions, especially in the context of a domestic political clash. According to some experts, it might have been an attempt by Russia and Belarus to prevent these popular protests from spreading like wildfire across the entire region. After all, leaders like Putin and Lukashenko can ill-afford to have any more pro-democracy movements or ‘colour revolutions’ that undermine the legitimacy of their rule. Moreover, with the looming prospect of a war in Ukraine, Russia may have sensed this as an opportunity to show off the might of the CSTO. Through its swift deployment of troops, it has sought to demonstrate the Kremlin’s readiness to muster force when former satellite states drift away from its sphere of influence. Only time will tell whether the CSTO will indeed be instrumentalised by Moscow to tip more such regional events in its favour.

times very difficult to get them to leave”. The peacekeepers who are still deployed in the breakaway regions of Georgia and Moldova are often cited as cases in point, as they have been there since the 1990s. In this context, all eyes will be on the CSTO to see if it plays a more proactive role in the region. Already, the organisation has been growing in ambition since the late 2000s. For instance, in December 2010, it had adopted new rules on interventions, which allowed the bloc to deploy peacekeepers in dealing with domestic unrest. Similarly, it had held its first joint peacekeeping exercise in 2012 under an ‘anti-terror’ framework. With the recent deployment of troops in Kazakhstan, analysts are now portending a more active presence of the organisation in regional affairs. KAZAKHSTAN

CSTO alliance

The Collective Security Treaty Organization (CSTO) is an alliance made up of Russia, Belarus, Kazakhstan, Tajikistan, Armenia and Kyrgyzstan. Kazakhstan invoked Article 4 of the Treaty on January 5. The CSTO peacekeeping force totals about

3,600 people

2,500 DEPLOYED TO KAZAKHSTAN

= 10 troops MILITARY SPENDING 2020,% OF GOVERNMENT SPENDING 11.4%

30.8%

16.7%

4.6%

Russia

Belarus

America

Kazakhstan

$61.7bn $844.5m Source: CSTO, SIRPI

$634m

$1.7bn

4.5% Kyrgyzstan

3.3% Tajikistan

$127.5m $80.4m SYNERGIA FOUNDATION

A MORE PROACTIVE CSTO?

Since its very inception, the CSTO has been envisioned as a counter to NATO’s eastward expansion. Within Eurasia, it not only ensures that the Moscow-accommodating administrations remain in power but also secures them from Western and Chinese encroachments. Moreover, it allows Russia to expand its military facilities in member countries while vetoing other foreign bases in the region. With the recent Taliban takeover in Afghanistan, the CSTO has been provided with an additional opportunity to exert its influence. Given the humiliating withdrawal of U.S. and NATO forces from the country, it can portray itself as a superior security force in the region. Apprehending this, perhaps, Washington is visibly jittery about the latest intervention in Kazakhstan. For it, the deployment of Russian troops is reminiscent of the Soviet Union’s intervention in the domestic affairs of Warsaw Pact countries. This is why Secretary of State Antony Blinken has expressed concern over the possibility of troops lingering on in Kazakhstan. As articulated by him - “one lesson of recent history is that once Russians are in your house, it is some-

Assessment Apart from Russia, the members of the CSTO are military featherweights and either singly or collectively do not pose any significant threat to the U.S. or its NATO allies. It is only the Russian military might that is propping up this organisation. There is a possibility that the CSTO will merely function as a ‘protective integration’ tool, while ostensibly serving a military purpose. In other words, it might restrict itself to fostering a culture of collective political solidarity (especially among autocratic nations), as opposed to serving as a defence mechanism against truly external threats. If this is indeed the case, then it will be in line with an ongoing global trend, whereby regional organisations bolster autocratic regimes and illiberal values under the garb of sovereignty. For Russia, the intervention signals the ability of the bloc to quickly mobilize forces if the regimes favoured by Moscow are under threat. It is also an opportunity to flex its muscles, amidst a border dispute with a recalcitrant Ukraine.

REINING IN DATA SCRAPING

As commercially-driven data scraping becomes commonplace, better safeguards are necessary to maintain data integrity and protect intellectual property rights. SYNERGIA FOUNDATION R E S E A RCH

T E A M

outed as the ‘new oil’, data has taken on commercial value as companies rely on statistical tools and data analysis to take operational decisions. Not surprisingly, the practice of web/screen scraping is gaining prominence in business circles. Data scraping is nothing but dipping into the huge amount of data available in public spaces like websites and programmes, which are then used as basic feed to predict industry trends and conduct market research, including industrial espionage. Despite its perceived benefits, the use of scraping software has not been without controversy. Most recently, this was demonstrated in a lawsuit filed by Facebook’s new corporate identity, Meta Platforms Inc. As can be recalled, the tech conglomerate had sued Social Trading Ltd, a Hong Kong-based social media analytics company, for allegedly scraping account profiles from the former’s social media websites. The collected data was then reportedly sold as “demographics and insights about influencers and their audiences” to various interested parties. Meta considers this unauthorised scraping of data a breach of contract, embodied by the ‘Terms of Use’ of its family of apps. Social Trading was also accused of engaging in illegal hacking and unjust enrichment by circumventing the anti-scrapping blocks imposed by Meta. Although the final judgement, in this case, is yet to be delivered, it has already resurrected the debate on the legality of data scraping.

Most businesses derive immense economic value from automated external data acquisition. From discovering new market needs to evaluating the competition, scraping technology helps them to overcome informational asymmetry in a highly data-driven world. TECHNOLOGICAL ARCHITECTURE

The practice of data scraping has been around for quite some time. It came into prominence a few decades back when computing transitioned from being the province of a few to being ubiquitous. This dramatic shift had meant that there was a considerable amount of data lying in old, difficult-to-access systems. In this veritable milieu, screen scraping technology emerged as a popular method to interface with older apps that did not have data exporting capabilities. Today, the most common use of data scraping is web scraping, whereby information is grabbed from a website using software or script, mostly with the help of a scraper bot. The extracted information is then stored in various formats like SQL, Excel or HTML. Indeed, there are many different types of scrapers that can be used for different purposes. While some scrape data in bulk, others collect content on-demand or structured data without human interaction. Of course, data parsing forms a critical part of this technology. It goes hand-in-hand with web scraping by converting the raw data collected into readable text. In fact, most

REINING IN DATA SCRAPING

good web scraping tools have a built-in data parser, which automatically converts the extracted code to a user’s chosen format.

A DOUBLE-EDGED SWORD

Most businesses derive immense economic value from such processes of automated external data acquisition. From discovering new market needs to evaluating the competition, scraping technology helps them to overcome informational asymmetry in a highly data-driven world. It also assists in monitoring product sentiment, improving brand management, bolstering cyber security and facilitating informed decision-making. For start-up companies, such tools are particularly useful, as they can optimise their entry points and design realistic growth strategies. As benign as these applications may appear to the uninitiated, scraping tools also have a potentially dark side to them. For instance, they can be deployed to steal protected content, violating many copyrights and intellectual property (IP) laws in the process. They may also be used to extract confidential information about a company, adversely impacting its growth and future business plans. Of course, privacy is yet another concern. In April 2021, for instance, around 533 million Facebook users were compromised when their information was scraped from the social media website and published on a hacking forum. Given this reality, it has become extremely important to define the legal contours around data scraping.

available data. As far as India is concerned, there have been a few cases where data scraping was classified as a violation of copyright law. For instance, in 2016, OLX – the online marketplace company- had obtained a permanent restraining order against the data scraping practices of another firm. However, barring a few such IPR-related cases, the courts have not dealt with the legality of web scraping per se. At best, there is a provision in the Information Technology (IT) Act, 2000, which penalises the unauthorised extraction of data from a computer resource without the owner’s permission. However, it can always be argued that this does not apply to the scraping of publicly available information. After all, information that is freely available or accessible in the public domain is excluded from the definition of sensitive personal data in the IT Act. Owing to this legal uncertainty, the recent lawsuit against Social Trading will be watched keenly not just in the U.S. but also in other jurisdictions. The importance of foreign precedents in shaping the trajectory of data governance cannot be ignored, especially in countries like India, where personal data protection laws are yet to be finalised.

DATA SCRAPING APPLICATIONS MARKETING: l Collating data from popular websites to create engaging content and SEO monitoring l Leading generation l Reputation monitoring l Competitive analysis. RETAIL: l Competitor price monitoring l Fetching product descriptions from multiple manufacturers l Monitoring consumer sentiment l conducting market research l Sending product data from an e-commerce site to another online.

LEGALLY MURKY?

Facebook’s lawsuit against Social Trading is not the first high-profile case dealing with the legality of data scraping. As early as 2000, the American e-commerce corporation eBay had filed a preliminary injunction against Bidder’s Edge - an auction data aggregator, seeking to prevent the latter’s use of bots in gathering data from eBay’s website. By claiming that it had violated the ‘Trespass to Chattels’ law, the plaintiff was able to successfully obtain a preliminary injunction. In 2001, however, when a travel agency sued a competitor for scraping pricing data from its website, the judge had ruled that it was not necessarily “unauthorised access” for the purpose of federal hacking laws. The mere fact that a “do not scrape us” clause was inserted in the website’s terms of service was not deemed enough to warrant a legally binding agreement. Since then, the legality of scraping has been subject to numerous debates, implicating copyright laws and personal data regulations. Most recently, the U.S. Court of Appeals ruled that any data that is publicly available and not copyrighted is fair game for web scrapers in the controversial case of hiQ Labs, Inc. v. LinkedIn Corp. In doing so, it has opened Pandora’s box of questions about the privacy rights of social media users and the rights of businesses to protect themselves from data hijacking. What is certain, however, is that the unauthorised scraping of non-public data is almost always illegal. Meanwhile, in Europe, all personal data is protected under the General Data Protection Regulation (GDPR), irrespective of whether it is publicly available or not. In fact, a data analytics company in the EU was fined a pretty hefty amount for scraping public data from the Polish business register. Although the fine was later overturned, the court explicitly upheld the prohibition on the scraping of publicly

FINANCE: l News aggregation to draw insights from external sources l Market data aggregation l Risk assessment l Financial health assessment by processing financial statements.

ACADEMIA: l Collecting data for research and follow-up studies l Content analsis

DATA SCIENCE: l Predictive analysis l Natural language processing, including sentiment analysis l Collecting data for training of machine learning models.

Source: sciforce

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Assessment While data scraping may afford businesses the opportunity to make informed decisions and enhance customer satisfaction, it can also result in the wrongful exploitation or infringement of IPs. Unauthorised exposure of personal data is also a significant risk. In this context, it becomes exceedingly critical to bring legal clarity around this practice. Even as the law tries to catch up, companies are still having their data stolen and abused. The need of the hour, therefore, is to scale up investments in anti-bot and antiscraping technology. Limiting the maximum number of access requests made by one IP address, coding IP content in non- extractable formats and recording server information for easy traceability can also go a long way in protecting data.

INFILTRATING THE U.S.’ BACKYARD

As China makes a definite push for global primacy, the Latin American and Caribbean regions are emerging as a keen site for contestation. SYNERGIA FOUNDATION R E S E A RCH

T E A M

hina’s rapidly growing investments and strategic coverage of the LATAM markets marks a shift in global trade and power. Not surprisingly, these moves in what the Americans consider as their backyard, are raising red flags in the U.S. China’s engagement with Latin America has always been spearheaded by its economic heft and soft power since it first started courting LATAM in early 2000. Latin America’s natural riches in fuels, energy, foodstuffs, and basic products, and the LATAM market appeared as a lucrative destination for Chinese-made industrial products and, consequently, Chinese investments. Beijing’s LATAM strategy has been worked around specific axes; economic and commercial dependency, which carve out market space for Chinese companies; influencing local policies and bureaucratic administration, and turning public attitudes to combat widespread anti-China sentiments in the region. The strategy integrates both domestic and foreign policy through two complementary prongs— the so-called Going Global strategy and the Belt and Road Initiative (BRI).

GEOPOLITICS OF TRADE

China’s trade with Latin America and the Caribbean (LAC) grew 26-fold between 2000 and 2020. This came at the cost of LATAM’s historically strong trade relations with the United States and Europe, which are witnessing a diversification towards China’s growing economic presence. As per World Economic Forum data, at the current rate, LAC-Chi-

The pandemic provided an opportunity for Beijing to reach out to the worst-affected LAC countries with a soothing touch, providing much needed medical assistance. The goodwill generated has enabled China to further advance its interests through various bilateral agreements with countries throughout LAC, including “comprehensive strategic partnerships” with Argentina, Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela. na trade is expected to exceed $700 billion by 2035, more than twice as much as in 2020. China has quickly replaced leading western countries to become the top trading partner in Brazil, Chile, Peru and Uruguay and has a free trade agreement with Chile, Costa Rica and Peru. Through the trade route, the Chinese footprint has been fast expanding. Today China is an observer/ member in all major LATAM multilateral organisations like the Organisation of American States, Inter-American Development Bank and the Caribbean Development Bank and the Asia Pacific Economic Cooperation forum. The pandemic provided an opportunity for Beijing to reach out to the worst-affected LAC countries with a soothing touch, providing much needed medical assistance,

INFILTRATING U.S.’ BACKYARD

Chinese vaccines, including easy loans to procure these medicines/ vaccines. Over a dozen countries were happy recipients of this aid. The goodwill generated has enabled China to further advance its interests through various bilateral agreements with countries throughout LAC, including “comprehensive strategic partnerships” with Argentina, Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela.

CHINESE CHECKERS

China has extended its Belt and Road Initiative (BRI) into the LATAM region, offering trade and infrastructure opportunities. Thus far, nineteen countries in Latin America and the Caribbean have signed up for the BRI, including Chile, Peru, Costa Rica, Panama, Jamaica, Trinidad and Tobago, and Antigua and Barbuda. These economic measures have been effective in blocking Taiwan, as evidenced by Panama’s defection to China in 2017. El Salvador and the Dominican Republic followed in 2018, and now also Nicaragua. Though seldom publicised, since 2004, the Chinese Ministry of Education has been spreading its language and culture throughout the world via its Confucius Institute (CI) initiative called ‘Hanban’ in Chinese. It partners with universities around the globe to finance the establishment of CIs, thus showcasing its own culture and enhancing its soft power. In an October 2021 article for the William J Perry Centre of the U.S. National Defence University, Jake Gilstrap has claimed that presently there are 548 such CIs all across the world and has listed 43 in 19 LAC countries. Meanwhile, 2021 witnessed major Chinese inroads into LATAM, including a new deal to share nuclear tech, build 5548G networks, develop space programmes, and pump cheap loans into the region. China is obviously looking at a multidimensional engagement strategy, officially called the ‘Joint Action Plan for Cooperation in Key Areas’. The deal was signed between China and CELAC, an alliance of Latin American and the Caribbean States that includes major players such as Brazil, Argentina, Colombia, Venezuela, Uruguay and Chile.

2020 U.S. strategic framework clearly spelt out the changed outlook calling for ‘countering economic aggression and malign political influence from external actors, such as China.’ The Biden administration has followed an identical line on this ‘strategic competition’. The Americans have been quick to respond. In June last year, the Senate recommended, among its LAC provisions, a capital increase for the IDB, increased exports of U.S. goods and steps to bolster U.S. economic competitiveness in the region. It also emphasised the promotion of good governance, human rights and rule of law as well as an assessment of China’s engagement with international organisations and the defence sector in LAC. Clearly, China’s moves have not gone unnoticed in the Pentagon. The American military has been at the forefront in cautioning its political masters about the inherent danger to American hegemony with China’s steady ingress into the region. The Florida based U.S. Southern Command, responsible for LAC, has expressed strong reservations about Chinese activities across a wide spectrum in the region cyber dominance, space, extractive and energy industries, transportation infrastructure and hubs, telecommunications, fishing (both legal and illegal), agriculture and military-related activities like training and supply of weapons. To counter the 2013 Chinese BRI, the U.S. has conceptualised a ‘Build Back Better’ World (B3W) project, which originated as a plan to reconstruct the U.S. after the COVID-19 pandemic. The B3W mega-project has set aside $40 billion for infrastructure development in Latin America, Africa, and Asia by 2035. The overall focus will be on four main areas: climate, health and health security, digital technology, and gender equity and equality. The announcement of B3W as a new possible strategic alternative to BRI will help G-7 countries form a new relationship with developing nations.

Assessment

AMERICAN RESPONSE

The pandemic has highlighted the importance of ‘hemispheric relations’ —especially those which involved deep supply-chain integration as essential for sustained and robust economic growth. Severe disruptions in global supply chains have reinstated calls for ‘reshoring’ or ‘nearshoring’ and for greater regional integration. This has implications for Chinese ambitions in the region provided the U.S. can muster these sentiments to develop credible and attractive regional options to China-based supply chains through a regional cooperative effort. The U.S. administration’s view towards China’s growing presence in the region has evolved over time. Bush and Obama administrations viewed it positively as a useful contributor to the region’s economy. Then, as China started to demonstrate its technological and military muscle in the global arena through its geopolitical manoeuvres in the Indo Pacific, warning bells began to ring in Washington. The Trump administration was blunter and started warning countries hobnobbing with the Dragon in the region. The

The post 9/11 U.S. shift in focus on the Middle East and Asia was at the cost of LAC. China was quick to fill this vacuum which was widely welcomed by LAC nations, desperate for investments for their sustained development. Countries like Argentina have failed to draw loans from U.S.-controlled multilateral organisations like the World Bank and IMF, and China has, in turn, invested boldly. Therefore, for the U.S. to expect its B3W strategy to defeat BRI would be a tall order. Based on experience from the pandemic and global supply chain issues, it would be to the advantage of the U.S. to reinvigorate hemispherical trade. The pandemic has reemphasised the importance of regional linkages, and LATAM would do well to keep this in context. For LAC, this plurality of choice offers a rich harvest of investments, provided they do not let it all go to waste through their innate deep-seated institutional corruption and wasteful investments in grandiose schemes, as they have done in the past.

IT’S RAINING COUPS? The recent spurt in military coups in Africa has gravely weakened the drive for a true democracy in the continent. SYNERGIA FOUNDATION R E S E A RCH

T E A M

he last 18 months saw a series of coups in Africa, which belied the popularly held belief that coups as an accepted method of regime change were no longer de rigueur. As per a study, ‘African Military Coups d’etat’ published by Patrick J McGowan in the Journal of African Studies, Saharan Africa witnessed nearly 200 coups (80 with a successful outcome) between 1956 and 2001. In the next two decades, these figures were reduced by over 50 per cent, as democracy seemed to be taking root. But recent events seem to have turned these deductions on their head.

A LITANY OF COUPS

There are gaps in the efforts of regional organisations and major powers, especially when military usurpers are seen as expedient in getting rid of odious civilian tyrants. While Western democracies may have taken a step back in this matter, newer global powers with an autocratic political DNA and hunger for the resources of Africa continue to create a space for ex-generals and military cliques to thrive in power.

The trend was triggered by the Sahelian trio of Mali, Chad and Burkina Faso, all three plagued by a serious Islamic insurgency. The military in Mali deposed President Ibrahim Boubacar Keita (reputed to have purchased a $40 million presidential jet) in two successive coups. This was followed by an unusual coup in April 2021 in Chad, where the incumbent President died on the battlefield, and when his son assumed his chair, the military threw him out. The latest coup was in January this year in Burkina Faso. All these three countries have been unable to handle the rampaging Islamic insurgency in their region, despite help from foreign countries like the U.S. and France under a UN-sponsored programme.

over in Sudan in October, which put to rest any hopes of a power-sharing deal under which the country was to see its first-ever free elections. This has sent shivers down the spine of many African civilian leaders who fear a similar fate as a coup has an uncanny proclivity to spread like a virus. Let us not forget that regional politics are interconnected through the exchange of populations, sharing of ethnic and linguistic roots, by trade and by geographical proximity. The Sahelian example is ample proof of the same as all three countries are suffering similar economic and political distress due to the ongoing Islamic insurgency. Therefore, the UN Secretary-General, Mr Antonio Guterres was not exaggerating when he called it “an epidemic.”

Across the impoverished Sahel, millions have been displaced, with politicians being accused of corruption and an uncaring attitude.This trend is spreading to other parts of Africa also. There was an unsuccessful coup in Niger in March 2021, a successful one in Guinea in September last year, followed by another successful military take-

WHY IS AFRICA SO COUP-PRONE?

The causes have not changed very much from the 1960s when most of these countries were grappling with their newfound independence - misgovernance, nepotism, corruption, falling living indices etc. The very same causes continue to find resonance even today, at least with the

IT’S RAINING COUPS?

military protagonists who engineer them. Obviously, the democratic experiment has failed to bloom in the continent, although there are a few rare exceptions. An already serious economic situation was further battered by the COVID-19 pandemic. As per the Guardian (16 Mar 2021), even West Africa’s largest economy Nigeria saw its unemployment rates rise from 27.1 per cent to 33.3 per cent in 2021. South Africa, the industrial heart of Africa, is in the same dire straits. As regards the rest of the continent, the picture gets grimmer, with over 500 million in sub-Saharan Africa labelled as extremely poor. With a median age of 20 years, Africa is just not able to exploit its youth dividend as there are very few opportunities. Not surprisingly, many Africans are increasingly getting disillusioned by electoral democracies. They see their elected leaders as part of the problem, thus creating space for the military, the only organised organ of the state, to step in. The trend amongst many African leaders is to manipulate ‘constitutional coups’ by pushing in constitutional amendments to extend their tenure, term after term.

The external influences took on a different hue during the Cold War when both sides - the U.S. and the USSR sought influence in the African continent. Just like South East Asia, many bush wars in Africa were sponsored by both sides of the Iron Curtain till the collapse of the Soviet Union in 1989 - Angola, Namibia, Mozambique, Zimbabwe are a few well-known examples. The answer could partly lie in demilitarising the politics of African countries and creating institutions that balance the military’s power. This is easier said than done when the space for the growth of democratic institutions is limited in such countries. We only have to look at India’s neighbourhood to visualise how the military, once attuned to playing a pivotal role in the nation’s future, cannot be displaced with ease, despite the presence of a reasonably strong civil society and other democratic institutions.

THE WORLD WATCHES HELPLESSLY

As mentioned earlier, during the Cold War, a display of bias towards one ideology was enough to attract the attention of rival camps. There were few regional organisations that

This gives rise to the term ‘Good Coups’, a justification bandied around by many western powers, especially erstwhile colonial masters, when they recognise the new coup leaders. The military is the biggest benefactor in the entire process. As the praetorians of the deposed regime, they have generally taken a major chunk of the resource pie, and when falling economic conditions turn off the tap on their perks and privileges, they change the regime. A fledgling civil society and labour unions in a few countries have tried to muster some kind of opposition to the military, but in vain.

EXTERNAL STIMULI

In the past, former colonial powers played a pivotal role in the internal politics of their former colonies, especially if there was significant corporate investment from the mother country in the newly independent nations. The most vivid example was Congo, whose 1960 independence from Belgium resulted in secession by copper-rich Katanga province, where Belgian companies had heavy investments. Tshombo, the breakaway leader, was militarily propped up by white mercenaries from South Africa, Rhodesia, Great Britain, Belgium, France, and even CIA-paid Cuban mercenaries. It was the military intervention by the UN, in which India played a pivotal role, which unified the country after a heavy loss of life for UN peacekeepers. In fact, the high death toll discouraged the UN from military peace enforcement till the 1990s, when UN again went to war in the Bosnian conflict.

MILITARY COUPS IN AFRICA OVER THE DECADES n Successful n Failed

26 24 22 20 18 16 14 12

Today, foreign influences still exist, although these are not as blatant as it was in the past. The leverage is in a more subtle form - economic aid and, more importantly, catering to the military’s requirement for weapons, funds and occasional training jaunts in foreign lands. The local public opinion is definitely turned against external players now, thus reducing the space for foreign powers to play their geopolitical games.

10 8 6 4 2 0 1960-69

1970-79

1980-89

1990-99

2000-09

2010-19

2020-22

*2022 up to 1 February Source: Al Jazeera

SYNERGIA FOUNDATION

IT’S RAINING COUPS?

A DECADE OF COUPS IN AFRICA 2012

2012

OCTOBER 25 Sudan Armed forces take over the country

MARCH MALI Armed forces stage a coup against President Amadou Toumani Toure after an insurgency in the north APRIL Guinea Bissau Troops oust interim president Raimundo Pereira and former president Carlos Gomes Junior between two rounds of a presidential poll

SEPTEMBER Guinea Troops take over the country and arrest President Alpha Conde. The junta unveil a “transitional charter” that it says will steer the country back to civilian rule, without spelling out how long the transition will last

2013

MAY Mali The military again takes over after the civilian leaders of an interim government remove soldiers from some key posts APRIL Chad After the death of President Idriss Deby Itno, his son seizes power as president and head of a transitional military council while dissolving parliament and the government

2020

AUGUST Mali President Ibrahim Baubacar Keita is overthrown after several months of street protests. An interim government, formed in Oct, pledges to hand back power within 18 months

2019

APRIL Sudan Dictator Omar al-Bashir’s 30 years in power are terminated by the army after a fourmonth street revolt

2017

NOVEMBER Zimbabwe President Robert Mugabe is ousted by the military and members of his own party, after 37 years in power

could intervene in the political upheavals of individual countries to act as honest brokers. Nudged by Western powers, African countries came together in 2000 to make the Lome Declaration which sought to discourage the ‘unconstitutional seizure of political power.’ This was followed by the ‘African Charter on Democracy, Elections and Governance of 2007’. Today, the 15-member Economic Community of West African States (ECOWAS) is quick to step in to investigate and impose economic sanctions. To an extent, they are successful in extracting commitments from the military junta to set out clear timelines for relinquishing power, even if, at times, these timelines are ignored. Since regional summits are dominated by elected officials, there is a unity in their desire to discourage military-led political subversion. Even for major western powers, cohabiting with military regimes is inconvenient in their domestic political environment. However, there are gaps in the efforts of regional organisations and major powers, especially when military usurpers are seen as expedient in getting rid of odious civilian tyrants. While Western democracies may have taken a step back in this matter, newer global powers with an autocratic political DNA and hunger for the resources of Africa continue to create a space for ex-generals and military cliques to thrive in power. China, for one, which is Africa’s largest trading partner, has a non –interference policy in the internal politics of its client nations; only long-term commercial ties matter. Kremlin is also testing the waters with its Wagner Group reportedly present in Libya, Central African Re-

2015

SEPTEMBER Burkina Faso President Michel Kafando is overthrown in a coup led by his own presidential guard, then returned to power a week later after coupleaders fail to gather support

MARCH Central African Republic Rebels from a Muslim-dominated coalition called Seleka storm the capital Bangui and oust Francois Bozize, a Christian who had seized power a decade earlier. Seleka leader Michel Djotodia declares himself president JULY Egypt The military ousts Egypt’s first democratically-elected leader, the Islamist Mohamed Morsi, after huge demonstrations against his one year in charge Source

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public and Mali, which were earlier Francophone countries. When it suits them, even Western democracies come out in support of military dictatorships - Abdel Fattah el-Sisi’s of Egypt is a glaring example. Similarly, when Robert Mugabe was eased out in 2017 by the Zimbabwean Military, the U.S and UK could not hide their glee. France has been equally prone to support military coups when it suits its interests. It welcomed President Idriss Deby when he came to power in 1996 through a coup and then continued to rule ruthlessly for the next three decades. President Macron of France is on record calling him ‘ a loyal and courageous friend’.

PROGNOSIS FOR FUTURE

Since strong democratic institutions cannot be created overnight and an active civil society can only be spawned if the economic indices are in the positive, the eventuality of more coups plaguing Africa is a reality that the world must be prepared to face. Of course, there are bright spots - South Africa, Ghana, Botswana - that inspire confidence and hope. At the same time, with 15 African countries topping the list of 20 nations in the 2021 Fragile States Index, the possibility of a violent political landscape cannot be ruled out. Sadly, there are no clear cut or easy solutions except that the fledgling African democracies need reliable international pro-democracy partners who make a military coup that much more difficult to succeed. The Africans will surely support such sentiments.

INDUSTRY RISK

HORIZON SCANNING

In an increasingly tumultuous market, Fintech companies need to proactively identify and manage ‘extinction risks’. SYNERGIA FOUNDATION R E S E A RCH

T E A M

ccelerated by the COVID-19 pandemic, the global fintech industry has been booming, attracting billions of dollars in investments. In a sector previously dominated by traditional institutions and processes, it has expanded financial access for millions of unbanked customers, leveraging technological innovation and societal demand. It has also become a key enabler of more efficient and competitive financial markets by increasing transparency, reducing costs and boosting the speed of service. Besides app-based banking services, fintech promises to revolutionise online lending, wealth management as well as investment and trading platforms. However, while the future looks promising for the industry, it will have its fair share of risks to manage, mitigate and hedge. In fact, fintech businesses have a unique combination of exposures that are not necessarily applicable to traditional financial services, such as cyber events, technology failure, political sanctions and regulatory compliance. In this context, it will be critical for them to monitor real-time events and adopt risk management practices.

Today, it is important to understand that geopolitics and technology are inseparably intertwined, with critical implications for the regulatory architecture. Without comprehending the geopolitical context of regulatory changes, the approach adopted by fintech firms will be reactive, as opposed to being proactive. Data Protection Regulation (GDPR) and Payment Service Providers Directive (PSD2) have established clear requirements for protecting data and securing system infrastructures. This will naturally be applicable to fintech companies operating in the EU. In addition to this, national jurisdictions have imposed their own regulatory requirements like the Autorité des Marchés Financiers (AMF) in France or the Federal Financial Supervisory Authority (BaFin) in Germany.

For long, fintech companies have prided themselves as industry disruptors, unconstrained by the regulatory principles that govern banks and other traditional financial institutions. However, with an increase in reach and exposure, they are being subject to more scrutiny from domestic and foreign regulators who have taken cognisance of their operations and products.

If such regulations are not followed carefully, fintech businesses run the risk of being caught in noncompliance and fined heavily. They may also lose their good reputation on the market, making it imperative for the industry to seamlessly adapt to regulatory changes. In many cases, however, the regulatory scope in jurisdictions fails to keep up with the pace of technological change. This makes the standardisation of compliance processes difficult, increasing the risks for fintech businesses. Moreover, the differing regulations in multiple territories pose a challenge for internationally operating businesses.

In Europe, for example, legislations like the General

Given this reality, fintech companies will have to be

REGULATORY EXPOSURE

HORIZON SCANNING

prepared to tackle disruptions that arise from regulatory oversight. The constitution of a Compliance, Investigations and/or Financial Crime unit, tasked with monitoring regulatory changes, may be helpful in this regard.

GEOPOLITICAL INCIDENTS

While most fintech companies are aware of the need to track regulatory changes that impact their businesses, the underlying geopolitical events are often ignored. This is in stark contrast to industries like oil and mining, which often have an informed appreciation of political risks, owing to their operations in volatile markets. Today, it is important to understand that geopolitics and technology are inseparably intertwined, with critical implications for the regulatory architecture. Without comprehending the geopolitical context of regulatory changes, the approach adopted by fintech firms will be reactive, as opposed to being proactive. For instance, with the United Kingdom exiting the EU, fintech businesses in the country have witnessed several changes in relation to licensing requirements, data protection etc. It would have been difficult to anticipate these regulatory risks without engaging in a non-linear horizon scanning of the political events surrounding Brexit. Similarly, the use of sanctions as a political tool can disrupt fintech businesses around the world. This was seen when President Trump invoked sanctions against Iran as part of his maximum pressure campaign in 2016. By announcing that organisations doing business with Iran would face the imposition of sanctions, he had dragged the Belgium-based fintech company SWIFT into the geopolitical standoff. Given that SWIFT had provided the fundamental infrastructure for the international banking system, its ability to disconnect a whole country from the global financial community was an attractive weapon for the U.S. Owing to such factors, a comprehensive understanding of geopolitical events is absolutely imperative for fintech firms to analyse the full scope of risks and opportunities they face on a daily basis. This is particularly true in the context of a shifting power landscape and fractured global alliances.

FINTECH RISKS STRATEGIC

REGULATORY

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The success of fintech companies is predicated on the deployment of innovative technologies. But this heavy reliance on technology infrastructure is also a point of vulnerability. Any sort of technology failure can result in a disruption of services, which translates to reduced income and a loss of customers for the fintech company. Similarly, increased dependence on the Internet can lead to greater security threats. Advanced covert surveillance techniques can be manipulated by cybercriminals and other malicious actors to monitor and steal data. Breach of network security and a denial-of-service attack is also major concern. Against this backdrop, it is critical to bolster the cybersecurity infrastructure of fintech firms. From devising a comprehensive data security policy to hiring experienced IT and cyber risk management teams, there are a

Evolving regulation issues Over -egulation and regulatory uncertainty

CONDUCT

PEOPLE

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Reputational risk Behavioural risk Anti Money Laundering Specifications

OPERATIONAL l l l l l l

MISCELLANEOUS RISKS

IPOs Mergers & Acquisitions No substantial operational

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Cyber Fraud Clients, Products & Business Practice Buisness Disruption & Systems Failures Governance Processes Service Provision Data provision and privacy Complexity of IT ad reliance on this IT

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Attraction and retention of talent Wellbeing & Performance of staff Staff Competency

FINANCIAL l l l l l l l

Volatility Risk Interest Rate Risk Asset Values Cash Flow & Liquidity Valuation Competition to generate investment from ventre capital firm Credit Risk

number of options that fintech firms can explore. Finally, the unpredictability of market events constitutes a major operational risk for fintech firms. A sudden incident can cause the financial system to overreact, leading to serious liquidity and solvency problems for fintech companies. Factors like contagion, pro-cyclicality or excess volatility in the market can also disrupt services. In this context, the operations and customer support teams must be prepared to think on their feet and develop rapid risk-containment practices. The 2021 short squeeze of GameStop, which caused tremors in the global finance and regulatory policy, should serve as a cautionary tale for the industry.

TURKEY: MISSION AFRICA! With its expanding economic presence in Africa, Turkey is sending strong signals to other extra-regional players of its will to venture out of its traditional sphere of influence. SYNERGIA FOUNDATION R E S E A RCH

T E A M

urkey is living through an economic nightmare, with soaring prices of essentials pushing inflationary trends and leading to rapidly declining purchasing power of citizens. The long lines outside discounted bread kiosks have led to a public outcry, and clashes have erupted on the streets. The rapidly depreciating lira underscores the deep dependence of the Turkish economy on international financial markets. While the roots of Ankara’s economic worries go deep, the immediate trigger for the current crisis appears to be President Erdogan’s insistence on lowering interest rates in the face of soaring inflation. His pro-growth strategies, based upon exorbitant infrastructure projects financed by foreign investments, had placed Turkey in an enviable position in the past. But a relentless push to expand based on steady borrowing has become unsustainable. Now, when the economic situation does not present a rosy picture anymore, all other parameters are under question too.

EYES ON AFRICA

Turkey has traditionally been a major international trading partner, but its growing footprint in Africa, in particular, has drawn global attention. Its links with the Continent go back in history, right from the times of the Ottoman Empire when it had controlled the entire coastline of Northern Africa from Cairo to Algiers. The Ottoman Empire had provided Turkey with routes into both the Middle East as well as North Africa. However, these ties fluctuated with the rise and fall of its own fortunes and reigning economic realities of the period.

The Ottoman Empire had provided Turkey with routes into both the Middle East as well as North Africa. However, these ties fluctuated with the rise and fall of its own fortunes and reigning economic realities of the period. Since 2002, Turkey has emphasised its engagement with Africa as one of the country’s main pillars under its humanitarian and multi-dimensional foreign policy. It declared 2005 as the ‘Year of Africa’ within the framework of the Africa Action Plan adopted in 1998. Its expansion into the Continent worked through three main pillars: Economic policies, expansion of diplomatic missions, and humanitarian assistance. This soft power approach has paid dividends; its spontaneous humanitarian response to the COVID-19 afflicted African countries, despite its own serious infection rates, reinforced trust and mutual support. The Turkey-Africa Partnership Summit in Istanbul in December 2021 was attended by more than a dozen African countries, reflecting the country’s significance. Currently, Turkey’s Foreign Economic Relations Board (DEIK) has 45 business councils in African countries with a focus on promoting bilateral trade and mutual investment. Turkey’s total trade volume with Africa has expanded from 3 billion dollars in 2003 to 26 billion dollars in 2021.

‘MUTUAL GAIN AND EQUAL PARTNERSHIP’

President Recep Erdogan’s statement - “a fairer world is possible”, is symbolic of Turkey’s approach to Africa as a partnership based on an ‘equal and humanitarian basis.’ This relationship is based on a host of motivations, from

TURKEY: MISSION AFRICA!

cultural to economic to geopolitical. The fast-growing trade has been centred in Northern Africa, but now is being spread Southwards to Sahara. Turkey’s first military base in Somalia - its first in Africa and the largest of its overseas bases is a sign of intent. Somalia isn’t the only troubled African state where Turkey is showing support. Sudan has also received strong support from the country.Soft diplomacy has made active inroads into Africa. Turkish diplomatic presence has increased fourfold from 12 embassies (in 2009) to 42 (in 2019). These embassies work to enhance its diplomatic missions and make swift progress in ‘trade, investment, cultural projects, security and military cooperation, development projects.’ Turkish African overtures have worked through schools and mosque diplomacy—two core instruments of Erdogan’s Islamic soft power. Turkey is presenting a strong alternative to Western countries that have colonial overtones in their engagement with Africa. “The Ottoman’s struggle against the colonial powers is well known and appreciated by the African people,”’ claims Mr Ibrahim Alegoz, from Ibn Haldun University, Istanbul. In economic terms, Turkey is bargaining on the strength of its products being ‘cheaper than the West and yet more durable than China.’ It is an effort to establish a ‘win-win’ proposition for both Ankara and Africa, based on a mutual partnership.

GEOPOLITICAL COMPETITIONS

Africa has emerged as a site of keen global competition with major powers vying for a share in the continent’s natural resources and development story. This focus, along with the shifting big power alignments, has catapulted Turkey’s reputation as a near rival for China in Africa, outpacing even the U.S. How the U.S. responds to such assertions is yet to be seen. In hindsight, it may appear that the U.S. might have faltered by excluding both Turkey and Zimbabwe from the Democracy Summit held earlier. As Africa moves away from an era of global U.S. pre-eminence, Biden is coming to terms with the repercussions of keeping a low priority on Africa for decades. Turkey is filling this gap. Ankara’s growing footprint in Africa marks a geopolitical realignment of powers in the region. Its strategy is more akin to China’s efforts in the Continent, as it focuses on mutual partnership as opposed to efforts by the U.S. and Europe who focus on democratic violations. China stands out through its aggressive investments and financing of mega projects in the region. Angola is an example of a country that has at least 20 billion in debt and is struggling to repay and has instead given concessions to China in its agriculture, animal husbandry and tourism sectors. This growing footprint has not gone unnoticed by others, but is not a policy that other countries can easily imitate. Now there are more to the party as Japan, China, and Russia have increased interests in the region, along with the Western powers. In its prominent international avatar in Africa, Turkey is increasingly taking its place on the world stage as a bigger actor and remains ‘an indispensable ally of the United

States’, U.S. Ambassador to Turkey Jeffrey Flake recently said. This, despite the host of disagreements on various issues between the two countries.Turkey has also cemented its global stature with the role it has played in Syria and Libya, where it took Russian military might head-on and humbled it considerably. This was further reinforced last year when its active support to Azerbaijan won the latter a distinct victory over Armenia in the conflict over Nagorno-Karabakh and forced Russia to invite Turkey in the subsequent peace talks. Even in the ongoing Russian-Ukraine faceoff, Turkey’s support to Ukraine has been welcomed by the western world. As Turkey tries to manage its economy and fragile condition domestically, it would be apt to say that ‘Turkey is in search of itself—at home and abroad.’

Turkey-Africa trade volume expands nearly 5-fold

Turkey’s trade potential with African countries, which are expected to play a more active role in the international system from the second half of the 21st century, is increasing day by day. TURKEY’S DIRECT INVESTMENT IN AFRICA

$6 BILLION TURKEY-AFRICA FOREIGN TRADE VOLUME

2003

$5.4 billion 2020 $25.3 billion Sudan

Top 5 Sub-Saharan Countries in Turkey’s Exports (2020, US Dollar)

$630 mn

TRADE WITH SUB-SAHARAN COUNTRIES

2003

$1.35 billion 2020 $10 billion TURKISH CONTRACTORS’ INVESTMENTS

Ivory Coast

$630 mn

Ghana

$630 mn

Source: ANADOLU AGENCY

Nigeria

$630 mn

South Africa

$630 mn

$71.1 BILLION SYNERGIA FOUNDATION

Assessment With approaching elections and an economy teetering on the edge, Turkey’s president has considerable problems to tackle. Whether Turkey will be able to maintain its soft diplomacy in Africa amidst its internal squabbles remains to be seen and much depends on how the economic situation pans out. But the question remains, in a region beset with global competition, will Turkey be able to maintain its grip over a continent that is plagued by coups and brutal self serving dictators? More so, when it is pitted against global powers including the U.S., UK, France, and China. However, there is hope for the Turks, as despite its internal contradictions, Ankara has been successful in projecting its influence far beyond its shores, thanks to its geography. Even while openly opposing the U.S. and Russia on several counts, both major powers have sought its concurrence in various international matters. Not surprisingly, Turkey was to be given the responsibility of securing the Kabul airport for the safe exit of the U.S. from Afghanistan, if the Ashraf Ghani government had not collapsed so suddenly.

DEMYSTIFYING CYBER SOVEREIGNTY

Defining cyber sovereignty, in the context of the Westphalian concept of state sovereignty, is an extremely complex exercise that requires global deliberation. SYNERGIA FOUNDATION R E S E A RCH

T E A M

This article is based on the 114th Synergia Forum titled ‘Demystifying Cyberspace Sovereignty’.

he concept of state sovereignty, which can be traced back to the Westphalian Peace Treaty of 1648, is an unequivocal principle in international law. Each State has exclusive sovereignty over its territory, a space that includes its geographical territory, its citizens and national assets. The Treaty has not only established the territorial delimitation of state authority, but also the principle of non-intervention.

The UN Charter is itself based on the principle of sovereignty as guaranteed in Article 21, which speaks of the States and the sovereign, as well as equality and freedom from intervention by other States (articles 2, 4 and 7). However, as human civilisation has evolved from one stage to another - agriculture, industrial and information - the disruptions have been so profound that the entire connotation of national sovereignty had undergone transformation. When mankind transitioned to the Industrial Age from the Agricultural era, human enterprise had extended beyond terrestrial zones to the sea and aerospace. Accordingly, the concept of territorial waters, exclusive economic zones and national airspace were recognised and ratified by international bodies. With the dawn of the Information Age, however, it became clear that the cyber world did not occupy any specific physical space, making it difficult to delineate

All major countries are taking huge strides towards strengthening their deterrence capacities in cyberspace. Military commanders worldwide are talking of projecting power into the cyberspace, because only on acquiring such power can they enforce responsible behavior in this space. the sovereignty of nations. However, most nations extended the principle of sovereign equality to cyberspace, as per the UN Charter. Fast forward to the 21st century, and today we have some interesting interpretations of sovereignty It applies to not only physical territory and people, but in some ways to body politics too and can be linked to terms like autonomy, absolute power over a particular space, resisting/constraining external influences etc. Cyber sovereignty is a strong, yet nebulous concept, usually referring to the assertion of state control in the digital realm. However, without a very clearcut definition, many questions abound around the concept and practice of sovereignty in cyberspace.

THE SPECTRUM OF CYBERSPACE

“Cyberspace is a superset of interconnected information and communication technology, hardware, software processes, services, data and systems. You can view cyberspace from different angles,” says Lt. Gen. Rajesh Pant (Retd), Na-

DEMYSTIFYING CYBERSPACE SOVEREIGNTY

spots around the world. The most prominent is the developing faceoff between NATO and Russia in Ukraine and other parts of Eastern Europe, where there is as much activity in cyberspace as on the ground.

EXISTING GLOBAL LEGAL STRUCTURE Latha Reddy is the Co-Chair of the Global Commission on the Stability of Cyberspace and a former Deputy National Security Adviser of India

“

Digital wealth seems to be concentrated in the hands of a few U.S. and China-based platforms. This narrative has created two polarising concepts - Digital Colonialism and Digital Sovereignty. As emerging economies in Asia and Africa participate in norm making processes and express their priorities, it is important to discuss these ideas and the misconceptions that often prevail.

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tional Cybersecurity Coordinator, National Security Council of India. “If you view it from the lens of layers, we see the physical, the logical information and the social layers. If you view it from the lens of assets and the functions performed, then you find that there is infrastructure, data, digital entities and services,” he elaborates. There is no doubt, therefore, that it is the most critical asset of our national power. It includes everything - data centres, utilities, the operational technology aspects, industrial IoT, etc. From the physical or the infrastructure layer point of view, the concept of sovereignty can easily be extended to include cyberspace. A nation must, therefore, be able to identify its internet egress points. This can be done for, say, the undersea cables, where a boundary can be drawn for the physical infrastructure. But the tricky question is what happens to data, both personal and non-personal, which are stored on-shore and offshore. In other words, what is the territory of cyberspace? Is it a global common like the environment, climate etc.?

THE GREY ZONE OF CYBERSPACE

Col KPM, Das (Retd), National Cyber Security Officer at Cisco, exposes the inherent contradictions in our understanding of cyberspace sovereignty by raising four questions; a) Can the concept of sovereignty as we understand with regard to land, sea and air be extended to cyberspace and can ideas of ingress/ egress as understood in land/air/ sea be applied in cyberspace? b) If yes, then what would be the boundaries/ thresholds of national digital space, which, if violated, could be considered as an assault on its sovereignty? c) While we have a law of armed conflict defining the behaviour of combatants in conflict over the known dimensions of warfare, how will it apply in an emerging world where geopolitics and cyberspace are all-pervasive and in perpetuity, as far as the time dimension is concerned? d) Lastly, how can the increasing interplay between nations, non-state actors, proxies and private parties in cyber conflicts be governed? These questions are not theoretical but are being confronted on a daily basis in existing conflict zones and hot

The first UN Group of Governmental Experts (UNGGE) had convened in 2002, but it was only last year that the eleven norms of responsible behaviour by states were accepted by the 25 nations of the UNGGE. But these UNGGE norms are non-binding, rendering implementation difficult. In the Indian context, as per Lt. Gen. Rajesh Pant (Retd), the concerned agencies are interacting with a number of regional forums and other agencies on how to implement these norms. The UN Group of Governmental Experts (UNGGE) on promoting responsible behaviour of states in cyberspace has been convening since 2004. It has discussed state sovereignty and international norms and principles that flow from sovereignty, applicable in relation to ICT activities and infrastructure. It has also discussed, how in their use of ICT, states must adhere to principles of sovereignty, sovereign equality, settlement of disputes by peaceful means, and non-intervention in the internal affairs of other states. However, this was only adopted by members of the UNGGE. While it has been endorsed by a number of regional groups and countries that are outside of the GGE, it has not been universally accepted. As per Ms. Latha Reddy, former Deputy National Security Advisor, Government of India, “The principle of state sovereignty in effect encapsulates the supreme authority of a state to its territorial integrity, sovereign equality, and political independence within its territory. No interference in another state is permitted.” In the West, traditionally, there are two different schools of thought. The first is that non-intervention does apply to certain State-sponsored cyber activity, but below a defined threshold, it will not be a breach of international law. The other is that all such cyber operations

Lt. Gen. R.S. Panwar is Distinguished Fellow at the United Services Institution of India, with four decades of military experience in technology-based warfare.

“

Physical effects such as making electoral cyber infrastructure nonfunctional or even slowing down electoral computers is not the only type of intervention possible in the cyberspace. Cognitive effects like the proliferation of malicious propaganda on social media platforms, which affects electoral outcomes, can also amount to interference.

”

DEMYSTIFYING CYBERSPACE SOVEREIGNTY

eignty and sovereign equality. Russia and China were notably vocal on this front, and similar concerns were raised by India, South Africa, Syria and the Philippines.

OVERCOMING SOVEREIGNTY ISSUES Lt. Gen. Raj Shukla is the current General Officer Commanding-in-Chief Army Training Command (GOC-in-C ARTRAC).

“

“If today strategic ascendancy is primarily in the gray zone, which is a hypothetical space between peace and war, there is no other space which lends itself so much to the grey zone as the cyberspace, because it is essentially non-kinetic in nature.

”

are unlawful. This is the approach taken by the Tallinn Manual 2.0 on the application of sovereignty and the intervention rules to operations in cyberspace. This raises the question, is there a ‘De minimis’ rule? According to the legal definition, cyberattacks on critical information infrastructure, malware intrusions, surveillance are usually remote attacks. It is not necessary for the perpetrators to be in the same country where attacks are targeted. Therefore, conventional ideas of jurisprudence and jurisdiction would not apply here. But they do have a territorial dimension, and attackers do violate sovereignty.

CYBER COLONIALISM FEARS

Applying traditional concepts of sovereignty in cyberspace has been confounded further by the architecture of the overall ecosystem. Mankind had hoped that the digital revolution would usher in a techno-utopian era with few boundaries and barricades. Nothing could be further from reality as we continue to argue over an exaggerated sense of asymmetries of access to and control over data, information infrastructure, intellectual property, as well as financial and human capital. Then there is a clash between digital sovereignty and ‘digital colonialism’. Digital wealth seems to be concentrated in the hands of a few U.S. and China-based digital platforms. This awareness is only getting more acute, as emerging economies in Asia and Africa participate actively in international norm-making processes and express their own priorities. The UNGGE, when it had formulated its two specific definitions on the applicability of international law and sovereignty in cyberspace, had a very poor representation of the developing world - Africa was totally absent and Asia was represented by only India and Malaysia. As cyberspace emerged as a crucial element of individual expression, economic growth and national security, these geographies are also now working on building block-style norms and legislations, both at a national and at a regional level. This would have a symbiotic relationship with the two clashing narratives of digital colonialism and cyber sovereignty. At the February 2020 meeting of the Open-Ended Working Group (OEWG), a group of States did specifically call for the inclusion of stronger statements on state sover-

As a start, states are looking at re-housing data within their borders through localisation and enhancement of domestic agencies. Many countries have also signed on to regional agreements like the ASEAN Framework on Digital Data Governance. India, unfortunately, is not specifically part of such large regional groupings. Cyber sovereignty can have a positive connotation, when it implies taking back control from technology giants. However, there is also a negative one, wherein the State alone dictates the definition of digital rights and duties. In the latter case, any overreach can take the form of internet shutdown, great firewalls and surveillance. This dual connotation lends itself to confusion, as some analysts say that when you accept the concept of cyber sovereignty, in effect, you endorse the authoritarian China model. Incidentally, the China model predates and will outlast any development of the cyber sovereignty narrative. We have already seen a shift in perception by Western countries, many of whom had initially insisted that the cyberspace was outside the control of nations. Now, they are arguing for more regulation by states. However, it must be remembered that a country’s stance on cyber issues is determined by a complex interplay of economic, social and political factors. Amplifying this, Ms. Reddy says, “I think the varied ways in which we are using the term cyber sovereignty, particularly in developing countries within Asia and Africa, implies that not every aspect of cyber norms falls under the U.S.-China dichotomy. So I would urge that we have a more global understanding about what is cyber sovereignty, and when it is deemed to have been violated under international law”. Mr. Aaron Shull, CEO, Centre for International Governance Innovation, Canada, opines that the concept of sovereignty has already been extended to cyberspace. This is obvious from the manner in which there is censorship of contents, restrictions on the Internet, regulation and laws related to the Internet content takedown, blocking and removal of data, localisation of storage in the context of connected devices etc. Governments are using data surveillance devices within their jurisdiction, and some also outside their borders. Countries like Vietnam, Kazakhstan, Indonesia and Iran are reportedly exerting greater control over the content, circumventing virtual private networks.

MILITARY’S ROLE IN CYBERSPACE SOVEREIGNTY

It is imperative to understand the potency of cyberattacks, lest we club all of them as a breach of cyberspace sovereignty. While a large percentage of them falls under the category of cybercrime, there are an increasing number of instances where they impinge on national security through cyber espionage, cyber terrorism, or attacks on critical infrastructure. The military battle space is also changing in character,

DEMYSTIFYING CYBERSPACE SOVEREIGNTY

en on such charters, and they should perhaps be given an exclusive charter for offensive cyber operations,” advocates Lt Gen RS Panwar (Retd).

Aaron Shull is the Managing Director and General Counsel at The Centre for International Governance Innovation (CIGI), Canada.

“

Can the concept of sovereignty be extended to cyberspace? Well, the short answer is that it already has. Today, we are increasingly seeing censorship of content, restrictions on the Internet, the enactment of laws and regulations relating to content take down, blocking and removal of data, localisation and storage in the context of connected devices. If this is not sovereignty, I don’t know what it is. When it comes down to the cybersecurity dimensions of sovereignty, one only needs to look at the U.S. government’s position on this, especially as it relates to critical infrastructure. According to it, if someone comes after its critical infrastructure with a cyber weapon, everything is on the table, including a kinetic response. So again, if this is not an exercise of sovereign jurisdiction over one’s territory in cyberspace, it would be unclear to me what is.

”

with cyberspace becoming an important warfighting dimension in a five-dimensional battlespace. It is essential that countries develop adequate capabilities for full spectrum offensive cyber operations. “The armed forces need to play a pivotal role in cyber conflicts. If you look at other countries, the U.S. Cyber Command and the National Cyber Force of UK, the Strategic Cyber Force of China, all have already tak-

STRATEGIC PRIORITIES

MISSION

In the traditional domain, since the consequences of violating any red lines are far graver, there is a perception that one can get away with lesser consequences in the cyberspace. Therefore, the cyberspace is one domain where India must really bolster her deterrence posture. All major countries are already making huge strides towards strengthening their deterrence capacities in cyberspace. Military commanders worldwide are talking of projecting power into the cyberspace, because only on acquiring such power can they enforce responsible behavior in this space. Adding a word of caution, Lt Gen Raj Shukla says, “Theatre commands can wait; cyber command cannot.” However, to prevent a turf war from erupting, there need to be clear cut direction from the government as to who will be responsible for offensive cyber operations - intelligence agencies, law enforcement or the armed forces.

STRENGTHEN DATA ECOSYSTEM | HARMONISE LEGAL AND REGULATORY FRAMEWORKS | FOSTER DATA INNOVATION

DATA LIFE CYCLE & ECOSYSTEM OUTCOMES l Data governance through the data lifecycle (e.g., collection, use, access, storage) l Adequate protection for different types of data INITIATIVE l ASEAN Data Classification Framework

ENABLES

India has formed its Defence Cyber Agency, a tri-service organisation tasked with handling cyber security threats. As of 2021, DCA is fully operational with the Army, Air Force, and Navy establishing their respective Cyber Emergency Response Teams (CERT). Says Lt Gen Rajesh Pant (Retd), National Cybersecurity Coordinator, National Security Council of India, “The physical, logical, information and social layers of cyberspace are all affected by sovereignty. And in fact, within our national cyberspace, we take sovereignty as a rule. We feel that any adversarial activity that threatens our national sovereign cyberspace impinges on our national sovereignty, triggering the right to defence under Article 51 of the UN Charter.”

CROSS BORDER DATA FLOWS OUTCOMES l Business certainty on cross border data flows l No unnecessary restrictions on data flows

INITIATIVE l ASEAN Cross Border Data Flows Mechanism

DIGITALISATION AND EMERGING TECHNOLOGIES OUTCOMES l Data capacity (infrastructure and skills) l Leveraging new technologies

INITIATIVE l ASEAN Digital innovation Forum

LEGAL, REGULATORY AND POLICY OUTCOMES l Harmonised legal and regulatory landscapes in ASEAN (including personal data protection) l Development and adoption of best practices INITIATIVE l ASEAN Data Protection and Privacy Forum

CYBERSECURITY | CAPACITY BUILDING | ENFORCEMENT COOPERATION

A DEADLY HARVEST

After the initial euphoria of the Arab Spring, millions across the Middle East suffer from gross violations of their human rights, with their oppressors on both sides immune from any accountability. SYNERGIA FOUNDATION R E S E A RCH

T E A M

he Tunisian inspired ‘Arab Spring’ that spread like wildfire to Egypt, Yemen, Bahrain, Libya and Syria in the early months of 2011 promised much to the long-suppressed masses of these countries. However, soon the euphoria turned into distress as the unexpected upheaval brought with it destabilisation and disruptions in existing political, economic and administrative ecosystems, followed by bloodshed and unending civil wars. Worse, despite all the sacrifices, the much-coveted transition to democracy remained a mirage. The peaceful protests quickly degenerated into armed struggles across the region as rival rebel groups took control of their respective ethnic areas and fought pitched battles with each other and the government, turning whole cities into a mountain of rubble. Extra regional players and nonstate entities entered the fray as proxies of regional powers, adding to the mayhem. The tragedy was that what began as a campaign to restore human rights ended up with mass perpetration of some of the worst human rights violations in Libya, Syria and Yemen. The whole world cheered from the sidelines as the international media beamed images of enthusiastic crowds toppling authoritarian regimes in Tunisia and Egypt and besieging well-entrenched tyrants in Syria and Libya. However, when the killings started and the despots struck back with vengeance and little remorse, there was silence in the galleries. The human rights violations by all sides seemed out of control and beyond the judicial reach of the international community.

The Koblenz verdict is a morbid reminder of the fact that victims of state persecution often have no recourse to justice. Similarly, international law is weak, when it comes to establishing attribution and accountability for foreign powers fuelling the conflict The recent case of Anwar Raslan, a former colonel in Assad’s army, sentenced to life in prison (with a chance for parole after 15 years) by a German court comes as a flash of hope in an otherwise bleak landscape. As the head of the investigative unit in the notorious Damascus detention centre (Branch 251), he was convicted for 4000 cases of torture, 27 cases of murder and other violations, conducted in a systematic manner under state control. But the question remains, is this too little and too late?

THE USUAL SUSPECTS

As the first legal action taken on the global fora, demanding accountability from one of the parties committing crimes against humanity (this time a sovereign state), it raises the hope that at long last, the victims on all sides of the conflict will be delivered justice. After all, the rebel forces opposing tyrants like Assad and Ghaddafi, supported by regional and extra-regional powers, have been equally ruthless in their military campaign, making little concessions for the civilians caught in crossfire. This is true for the entire stretch of Middle Eastern trouble spots - from Iraq to Syria to Yemen and elsewhere too. Even powerful states like Saudi Arabia and its partner UAE have a lot of blood on their hands in Yemen, as have the western-supported rebels in Syria - the Free Syrian Army (FSA)/ Supreme Military Council (SMC).

A DEADLY HARVEST

The list of organisations and states which need to be called to account for human rights violations is long and convoluted. In Syria, it includes the Assad regime (already impugned in the German court), and the opposition FSA/ SMC combine and the civilian Syrian National Coalition, supported by the West, Turkey, Qatar and Saudi Arabia. In the killing fields of Yemen, the two major fighting factions are—Iranbacked Houthi rebels who were initially loyal to Mr Abdullah Saleh (the first President of Yemen against whose regime the Arab Spring protests began) and the multi-national coalition backed by Saudi Arabia and UAE. In Libya, the two major warring parties are – the UN-backed Government of National Accord (GNA) supported by the West, Qatar, Italy and Turkey and warlord Khalifa Haftar’s Tobruk government backed by Russia, Egypt, UAE and Saudi. Ever since these countries descended into chaos and bloodletting, they have faded from global consciousness. Having degenerated into ‘forgotten wars’, external powers with vested geopolitical interests and avarice for their natural resources, are adding fuel to the fire.

ESTABLISHING ACCOUNTABILITY

If the sentencing of Anwar Raslan in Koblenz, Germany, has brought the systemic abuse of people, by the Assad regime, to the fore, Yemen under Saleh and Libya under Gaddafi’s brutal rule were no different. However, like Shakespeare would put it, “from smoke to smother”- all these countries descended into greater mayhem. Unfortunately, the state actors are not the only oppressors there are. Non-state actors and fringe elements have taken advantage of the political disarray to organise and re-group into powerful terrorist factions of all hues, known for their inhumane barbarity. The economy of each of these conflict-torn countries is in shambles, and the fighting is sustained by their external sponsors. The Iran-Saudi battle in Yemen and the Russian and American affiliates in Syria and Libya lay bare the hypocrisy of the larger international community. Yemen and Syria have witnessed incessant airstrikes in civilian areas from countries like the U.S., Russia and Saudi Arabia under the garb of fighting “terrorist groups.” Land, sea and air blockades imposed by coalition forces have also obstructed the flow of food and medicines. As a result, almost the entire citizenry is dependent on humanitarian aid for survival - 1.3 million people in Libya, 20.7 million in Yemen and 13.4 million Syrians - making these countries the site of the worst humanitarian catastrophe of the century. The Koblenz verdict is a morbid reminder of the fact that victims of state persecution often have no recourse to justice. Similarly, international law is weak, when it comes to establishing attribution and accountability for foreign powers fuelling the conflict. This is especially true when the states involved are rich, powerful and influential. The trial that took place in Germany was under the pretext of “Universal Jurisdiction” – under it, countries can prosecute international crimes that take place outside of their boundaries. While it may have shone a bleak light of hope for civilians, it has taken a decade of war and a prior defection by the said convict to hold him accountable for his misdeeds.

10 YEARS LATER: KEY NUMBERS BEHIND THE WAR IN SYRIA

Human and economic cost of the war in Syria as of 2021

387,000

200,000

Number of people killed Instances where chemical weapons have been used

60%

Number of people missing

Instances of regime using chemical weapons

Highest number of people killed in a single chemical attack

Share of Syria controlled by the regime in March 2021

Number of Syrian refugees

5.6m

1,400

Number of Syrians requiring humanitarian assistance

13.4m Number of Syrians Internally displaced

6.1m Source: RTE

Economic cost of the war

€1 trillion SYNERGIA FOUNDATION

Assessment The fighting will inevitably stop when the warring parties run out of resources like money and arms. But the onus of cutting the supply off lies on larger global powers who are responsible for fuelling these conflicts. Despite widespread knowledge about the inhumanity of some of these ruling regimes, they tend to find recognition and collaboration, as was recently seen in the case of outreach by Saudi Arabia, UAE and Jordan to Bashar Al-Assad. The Raslan conviction may create a temporary chimaera of a just world, but it is not an achievement in the larger scheme of things. Demand for accountability, a decade into the war, thousands of miles away from the region of action, makes a mockery of justice in itself. This, coupled with the consistent blocking of resolutions by the U.S.U.K. camp and the China-Russia axis in the UN Security Council, has not led to any concrete action on the global fora. The World Food Program is slowly running out of resources to feed the starving millions, considering that the situation has only deteriorated over the decade.

AUTHOR’S COLUMN DISPATCHES FROM THE SOUTH CHINA SEA

MR. JAMES BORTON

is a veteran foreign correspondent who has been reporting on South Asia for over 30 years. He is a past non-resident fellow at the Stimson Center and is currently a non-resident Senior Fellow at the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies (SAIS).

DISPATCHES FROM THE SOUTH CHINA SEA R

James Borton, author of Dispatches from the South China Sea: Navigating to Common Ground was interviewed by Tanya Vatsa of the Synergia Foundation.

Q1.

You’ve covered Southeast Asia as a writer for over 25 years. What is it that drew you and continues to captivate you as a writer and what are the biggest changes you’ve seen in your time covering the region?

I came to Vietnam in 1997 to witness the nation’s renovation or Doi Moi especially following the arrival of the Internet. I was invited by Nguyen Anh Tuan, the founder of Vietnam Net to meet with his energetic young bilingual staff, who expressed interest in speaking with an American journalist and learning more about western reporting methods. I realized that the new generations of educated young Vietnamese consumed news online and that the government was ill prepared for the arrival of social media and its impact on Millennials and Gen Xers. During this time, Internet cafes were quickly opening up throughout the country and the region. The biggest change I have witnessed over the decades in South East Asia is the success of economic reforms that have lifted millions from poverty and prompted a rising optimism about the future. This is especially true in Vietnam. From Hanoi to Ho Chi Minh City, I engaged with the nation’s new entrepreneurs, who were starting businesses from software companies to spas. It was the Viet Kieu (overseas Vietnamese) optimism in Vietnam’s future that brought to me this New Vietnam. So through my lens I had a front row seat in chronicling how this country, one of the poorest in the world, joined the world to become a developmental success story.

DISPATCHES FROM THE SOUTH CHINA SEA

Q2.

Your book mainly focuses on Vietnam and the South China Sea. Before we get into the details of Vietnam, I’d like to get a little bit of context. Why did you focus on Vietnam for this book and how does Vietnam’s maritime policies, (defense, fisheries, eco-tourism, etc.) compare with other Southeast Asian players like Thailand, the Philippines and Indonesia?

Over the course of the past twenty-five years, I developed close friendships with some of Vietnam’s leading writers and journalists. As a result, this led me to examine and gain access to sources, many of them subsequently became close friends. Since I am a sailor and waterman, I was propelled to seek out fishermen to hear their stories taken from the East Sea. Several of my Vietnamese friends encouraged me to travel to the coastal areas to gather stories. The South China Sea (East Sea) is one of the richest fishing grounds in the world. This was initially not part of my rising development story but satisfied a personal desire to learn how the fishing industry was responding to Vietnam’s entry into the global markets. I also knew that industry’s fast paced development often took its toll on the environment. So coastal environment and ecosystems in Vietnam are under pressure from both the rapid industrialization and climate change. The drive from Da Nang to the historic UNESCO recognized Hoi An is lined with resorts and abandoned projects damaged from erosion because they were built too close to the sea. The timing for me to speak with the fishing community reflected a convergence of geopolitics and marine environmental issues. Conversations with both policy experts and marine experts inspired me to better understand the two fold threats they faced - increasing number of Chinese vessels on the sea and the escalation of extreme weather in the form of typhoons and coastal disas-

ters. The rising challenges from the destruction of coral reefs associated with China’s purposeful and reckless transformation of small reefs and rocks into artificial islands with military structures was too big a story to ignore. The mounting crisis related to sovereignty claims driven largely by the intersection of political and ecological features led me to meet the marginal coastal fishermen. I reached out to the fishers from Haiphong, Da Nang and Can Tho .I was generously invited aboard fishing trawlers and listened to their sad tales of attacks from China’s brutish offensive in the South China Sea, where Beijing’s steel hulled vessels rammed, and sunk Vietnamese wooded fishing boats. Other claimant nations, like Thailand, the Philippines and Indonesian fishers are all responding to the grave threats of attacks, piracy, climate change, including ocean acidification and coral reef loss. Vietnam’s ASEAN leadership role offers a steady hand at the helm to insure peace and stability in the region. Also, Vietnam’s marine scientists are fully engaged in establishing more marine protected areas to ensure that fish habitats are not destroyed. They understand that oceans matter for everyone.

Q3.

We hear quite a lot about China’s naval power. It has maximum naval ships. Lesser known is that China has the most fishing vessels too. Could you give us an overview of the evolution of China’s fishing fleet?

China has been trying to turn the South China Sea into a Chinese lake for the better part of a decade. Beijing’s naval strategy has brought into the disputed sea a flotilla of coastguard vessels, and maritime militia to insure its control of the once fertile fishing waters. As part of this development, China is the recognized world leader in shipbuilding. China’s enhanced national directive includes at least 3000 reported blue water trawlers and somewhere up to 200,000 fishing boats. The armada of distant fishing vessels enables one boat alone to scoop up as many fish in a week as a local fishing trawler does in a year. China is the world’s leading seafood exporter and the country’s population also accounts for more than a third of all fish consumption worldwide. Since they have already defined their own coastline, their fishing boats must sail farther into neighboring waters and as a far away as Africa, South America and the Pacific to exploit the waters of island nations. Despite making some reduction in subsidies for their domestic fishery, it has not reduced those for their global fishing fleet. It’s equally important to note that although the South China Sea accounts for 12 percent of the global catches, more than 50 percent of China’s global fishing fleet operates in this region. The predatory nature of Chinese fishing practices continues to destabilize the region and upset the fragile marine ecosystem.

DISPATCHES FROM THE SOUTH CHINA SEA

Q4.

Let’s look at solutions. You’ve called for Science Diplomacy in the South China Sea. You propose this as a way of reducing threats to both the political and ecological security in Southeast Asia. Could you explain the practicality of this solution?

I do believe that protecting marine environments and ensuring the ocean’s sustainability is a global issue, and becomes extremely valuable in the South China Sea. Science-based voices are vital to protect the region’s oceans, as coral reefs decline, industrial run-off continues, plastics pollution circulates, and overfishing escalates—all this risks irreversible damage. Science diplomacy can establish a useful starting point for regional cooperation to deal with environmental and perhaps geopolitical problems. At the moment, there are increasing science-based conferences and webinars, where marine biologists and policy experts are communicating with one another. What I am witnessing among biologists and oceanographers alike is that the sea must unite rather than divide. Science is a common and apolitical language that brings allies and adversaries together with technology and innovation to address cross-border challenges. We see the need for this in our climate change crisis and in the current pandemic since no one nation can address this alone. For years, science has been adopted as a diplomatic tool for peace building by many countries. Science can and does inform policy and has been used in scientific collaboration. It has been effective in the contested Arctic and in Antarctic. For example, the International Geophysical Year in 1957, paved the way for the Antarctic treaty, an accord achieved during the cold war that continues today to reserve an entire continent for peaceful discoveries. So my book argues that science diplomacy through conferences and webinars can and does provide a solid bridge that links science and policy. It provides a mechanism for long-term sustainable scientific collaboration for improving ocean governance and avoiding conflict. More often the marine scientists and oceanographers also built trust and confidence in shared marine surveys. In the past two years both Hanoi and Beijing have held such science-based conferences to address myriads of environmental challenges in the disputed South China Sea. The Philippines and Vietnam, planning to renew their joint oceanographic marine science surveys in the South China Sea, is a real-time example of science diplomacy.

Q5.

Southeast Asia is often thought of as ‘Maritime Southeast Asia’ (The Philippines, Malaysia, Indonesia, Singapore, etc.) and ‘Continental Southeast Asia’ (Thailand, Vietnam, Cambodia, Laos and Myanmar). It seems the major geopolitical contests in both spheres center around water, be it maritime ‘South East South China Sea’ for the maritime sphere or the Mekong Delta for the continental sphere. Your book also examines water issues in the Mekong Delta. What do you think local governments can do to rehabilitate the delta?

The Mekong Delta in southwestern Vietnam is home to over 20 million people and has been regarded as the “rice-bowl” for Vietnam. It’s unique natural habitat with its thousands of animal species, plants and rice paddies are challenged by accelerating climate change. In fact, its river ecosystem is on the verge of irreversible collapse due the accumulative impact of climate change with increased droughts, floods, saltwater intrusion, and human-made activities like deforestation, pollution, upstream dams, sand mining and disappearing mangroves. This is not just a local or provincial government environmental problem; it must be seen as a multidimensional and multinational crisis.

CONCLUDING NOTE FROM THE AUTHOR With these dramatic changes affecting the livelihoods of millions, there’s a need to draw upon international and global science cooperation. It’s a problem that cannot be solved any longer by a simple unchallenged government edict or a “top-down” policy declaration. The rising sea level intruding into the rice fields continues to cause damage to thousands of hectares especially along the coastal provinces. The problems must be broken down and the first is to take immediate steps to limit sea-level rise, particularly at high tides. The replanting of mangroves and the protection of those already in place must be given priority. I have witnessed young student volunteers from Can Tho University go out into the provinces with their environmental science backgrounds and set up field workshops in citizen science to better inform locals about the documentation of several environmental or water challenges through free downloadable science apps for measuring water quality. These volunteers are part of the Mekong Environment Forum, a local-based non-government organization (NGO) based in Can Tho that offers Citizen Science or community-based workshops. I am proud to have co-founded the MEF, along with Nguyen Minh Quang. This grassroots participation to address environmental issues involves an active collaboration between scientists and interested local citizen to broaden the scope of research and to help compile data through community-based monitoring and Internet driven crowdsourcing strategies. While we may not be able to stop the Mekong Delta from sinking, we can slow it down with creative and transparent community-wide participatory environmental actions.

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