September 15, 2018

3 Mistakes that Led to the 2008 Financial Crisis (All of Which We're Repeating)

Foundation for Economic Education


So long as the people in charge insist on governing the financial system through rules that no individual or group of individuals can hope to master, they will continue to overlook looming crashes.

Wednesday, September 12, 2018


Diego Zuluaga

Economics 2008 Financial Crisis Great Recession Money and Banking Regulation

It is a decade since the financial crisis, and no one is happy. Progressives like Elizabeth Warren and John McDonnell think the guilty bankers went unpunished. Free-marketeers despair over the absence of meaningful reforms to discourage risk-taking on the taxpayer’s dime. Ordinary people across much of the West have only seen tepid growth since 2008. In response, they are turning to political extremes that promise protection from competition and change.

There is broad consensus that three key factors led Western economies astray in late 2008.

It might have been different. People of good will may disagree on how free financial markets should be, but among those who have studied the crash, there is broad consensus that three key factors led Western economies astray in late 2008.

First, bank regulation was too complex, which encouraged gaming the system, complicated supervision, and raised barriers to competition. Second, government programs to extend credit to disadvantaged groups were poorly conceived and ended up hurting the people they were meant to help. Third, governments lacked the wherewithal to stand by their commitment not to bail out financial institutions once the crisis hit.

Did Anything Get Fixed after 2008?

An adequate regulatory response to these failings would have simplified the regulation of banks, eliminated interest and deposit subsidies on mortgages and other forms of credit, and credibly affirmed that taxpayer funds were not for the banks to take during bad times.

Unfortunately, that is not the response we got. Not long after the crash, the Bank of England’s Andy Haldane bemoaned the relentless growth in the number of regulators per financial services worker. But it has carried on unabated. In the United States, the Dodd-Frank Act introduced an estimated 27,000 new regulatory restrictions. Europe has not been far behind, with a slew of EU-wide new bodies to monitor financial institutions. The Eurozone, too, has birthed its own additional alphabet soup of regulators.

The US mortgage market, where the banking system’s troubles originated, is little-changed from ten years ago.

A simpler regulatory structure this one is not, even though complexity can cloud rather than illuminate regulators’ judgment. For example, research shows that detailed risk-based capital requirements are not sound predictorsof bank failure. By contrast, simple leverage ratios did a good job of forecasting which banks would fail in the crash.

The US mortgage market, where the banking system’s troubles originated, is little-changed from ten years ago. It is true that lending rules are tighter, which banks report have made it more difficult to extend credit, even to perfectly good borrowers. But the central role of the government in buying and packaging mortgages, and the concomitant public guarantee, are undiminished.

It's Not Just a US Problem

Worse, some of the most damaging features of the pre-2008 mortgage market, such as the promotion of low-cost loans to vulnerable borrowers, are surfacing in other credit markets, notably student lending. In Britain, the Conservatives must not fool themselves that they are not repeating America’s pre-crisis mistakes with schemes like Help to Buy. The only and perverse way in which the final reckoning is postponed is by continuing to push up prices through planning restrictions.

Taxpayers remain exposed to private-sector losses, and governments continue to use the financial system for political aims.

How about the infamous sovereign-bank nexus? This refers to the implicit transfer of risk from financial institutions onto governments, which led to large increases in the national debt of many countries when bank loans went sour. This problem preoccupied financial regulators for years after the crash, but it is not clear that it has been resolved.

On the one hand, there has been an attempt by governments to bolster capital buffers, reinforce supervisionwith an eye on the credit cycle, and make banks pay for the guarantee they effectively enjoy from taxpayers. On the other hand, the role of the state in resolving failed financial institutions and compensating their creditors has only grown. The nexus may be changed, but it was hardly severed.

The crisis response fell short of addressing the poor incentives and hidden risks abetted by regulation. Today, taxpayers remain exposed to private-sector losses, and governments continue to use the financial system for political aims.

It's Not All Bad

But that is not to say that the Great Recession compares unfavorably to previous panics, as far as its policy impact is concerned. Notably, the response to the Great Depression, against which 2008 is often set, sowed the seeds for future crises by creating deposit insurance and a government-sponsored mortgage market. The aftermath of the Depression also ushered in controls on bank deposit interest rates and the separation of retail from investment banks, which while not a source of systemic risk made the financial system less competitive and efficient. Both of those interventions took decades to unravel.

Research shows fintech firms are beating banks in their bread-and-butter business of mortgage and consumer credit.

But the point remains that we entered the crisis with an opaque financial system, where incentives were misaligned and risks concentrated, and we mark its decennial without having resolved those underlying issues.

The bright spot in a bleak picture is the recent rise of financial technology, which is bringing credit to excluded groups, lowering the cost of borrowing and investment, and helping financial institutions cope with the mire of new rules. Indeed, research shows fintech firms are beating banks in their bread-and-butter business of mortgage and consumer credit, not least because these non-bank innovators can operate beyond the regulatory fence erected by governments.

But It's Not Really That Good, Either

Regulation has failed to grapple with the causes of the crash. That is not surprising since the crash was primarily a failure of regulation. Yet so long as the people in charge insist on governing the financial system through rules that no individual or group of individuals can hope to master, they will continue to overlook looming crashes.

One cannot help thinking that it will probably take another crash to heed the lessons of the last one.

So long as governments believe that they can allocate credit more productively than the market, people will borrow beyond their means and eventually suffer. So long as politicians regard certain interest groups as too important not to rescue, banks will remain too big to fail.

Today, the world economy and financial system are in a better place than they found themselves during the feverish late months of 2008. But one cannot help thinking that it will probably take another crash to heed the lessons of the last one.

This article is reprinted with permission from CapX.

September 13, 2018

Sino-Japanese ties keep warming


Sino-Japanese ties keep warming

Frosty relations with Japan have shown marked improvement in recent months.

The latest sign of warming came on Wednesday, when Xi Jinping met with Japanese Prime Minister Shinzo Abe on the sidelines of the Eastern Economic Forum in Vladisvostok.

Xi was positive (Xinhua):

“'China-Japan relations have entered the right track and are facing an important opportunity for improvement,' Xi said.”Abe was similarly upbeat (Asahi Shimbun):“’The horizon for cooperation between Japan and China has widened as exchanges and dialogue over a large number of areas have become much more active…,’ Abe said.”Xi said the Belt and Road offers opportunities to deepen ties (Xinhua):"The Belt and Road Initiative has provided a new platform and experimental field for China and Japan to deepen their mutually beneficial cooperation.”But don’t get too excited. Relations remain far from perfect (Xinhua):“'The Japanese side in particular needs to properly address sensitive issues such as issues relating to history and Taiwan,' [Xi said].”

Up next is an official visit from Abe to China, probably next month. That would be the first visit by a Japanese prime minister since 2011.

The bigger picture: Both countries are reassessing their foreign policies in light of the Trump presidency.

CPC: 习近平会见日本首相安倍晋三
Xinhua: Xi, Abe meet on further improving China-Japan ties
Asahi Shimbun: Abe, Xi agree on further talks for visit to Beijing in October

September 12, 2018

China's political influence and Interference activities in US universities

REPORT: A Preliminary Study of PRC Political Influence and Interference Activities in American Higher Education


Over the past two decades, PRC diplomats stationed in the United States have infringed on the academic freedom of American university faculty, students, administrators, and staff by:

● Complaining to universities about invited speakers and events;
● Pressuring and/or offering inducements to faculty whose work
involves content deemed sensitive by the PRC authorities (hereafter,“sensitive content”); and
● Retaliating against American universities’ cooperative initiatives with
PRC partner institutions
PRC diplomats have also infringed on the personal safety of people at
American universities by:
● Probing faculty and staff for information in a manner consistent with
intelligence collection; and
Employing intimidating modes of conversation A small number of PRC students have infringed on the academic free- dom of American university faculty, students, administrators, and staff in
recent years by:
● Demanding the removal of research, promotional and decorative materials involving sensitive content from university spaces;
● Demanding faculty alter their language or teaching materials involving sensitive content on political rather than evidence-based grounds;
● Interrupting and heckling other members of the university community
who engage in critical discussion of China; and
● Pressuring universities to cancel academic activities involving sensitive content

PRC students have also acted in ways that concerned or intimidated faculty, staff, and other students at American universities by:

● Monitoring people and activities on campus involving sensitive content;
● Probing faculty for information in a suspicious manner; and
● Engaging in intimidation, abusive conduct, or harassment of other
members of the university community

By documenting numerous cases in which PRC diplomats and a small number of students have infringed on university community members’aca- demic freedom and personal safety, the study offers several insights, among them that:

● PRC diplomats engage in a range of activities to monitor, influence and
induce the cessation of academic activities involving sensitive content
on American campuses

● PRC students are not a homogeneous group; they can be both perpetrators and victims of politically-motivated attempts to infringe on the academic freedom and personal safety of university
community members
● PRC students have employed language typically associated with progressive campus activist movements to oppose academic activities involving sensitive content
● There is great diversity among China Studies faculty and university
administrators in terms of exposure to and concern about PRC influence and interference activities

The PRC students documented in this study likely represent a tiny propor- tion of the more than 350,000 PRC nationals currently studying in the United States*

🔴 Recommendations

American universities should adopt practices to make the campus environment less hospitable to PRC influence and interference activities, including:

● Experience-sharing among universities to develop a collective awareness
of challenges arising from engagement with the PRC
● Collaboration with federal law enforcement to report instances of PRC
diplomatic pressure and retaliation
● Procedures for rebuffing pressure tactics from PRC diplomats
● Reaffirming universities’ traditional commitment to academic freedom
and resisting attempts to limit campus speech or activity on the basis of
whether that speech or activity gives someone offense
● A school-wide orientation about appropriate behavior in the American
university at the beginning of the academic year for students from
every country
● New faculty practices to turn moments when PRC students articulate
the party line into learning opportunities, and to intervene when students from any country interrupt or heckle others
● Channels for faculty to report troubling incidents to higher administration
● Education for university police departments so that officers are better-
equipped to handle disruptive students and un-enrolled visitors
● Creating a reporting system for universities that experience PRC  influence and interference incidents
● Declaring persona non grata PRC diplomats who pressure universities
that extend invitations to figures like the Dalai Lama or threaten faculty pursuing sensitive research topics
● Putting issues of influence and interference in academia on the agenda
when meeting with PRC interlocutors
● Imposing a cost on the PRC when it punishes American institutions for
upholding academic freedom on their own campuses
● Clarifying the circumstances under which a group is considered a
“scholastic” or “academic” entity exempt from the Foreign Agent Registration Act, with an eye toward regulating the activities of the Chinese Students and Scholars Association


Jul 16, 2018



Corneliu Bjola

In the introductory chapter to the edited volume on Digital Diplomacy: Theory and Practice that Marcus Holmes and I published four years ago, I asked the question of whether digital technologies could be seen as a harbinger of change for diplomacy by revolutionizing the way diplomats perform their traditional functions of representation, communication and negotiation.

As the question remains valid today, it might be useful to take stock of the common conceptions and misconceptions of digital diplomacy so that we can get a better picture of how digital technologies have shaped expectations about diplomatic practice in the past decade and how digital diplomacy may continue to evolve in the coming years.

The Superman Myth

The first and surprisingly common misconception about digital diplomacy is the Superman myth, which claims that digital technology can grant extraordinary powers to those using them, and in so doing, it can help them increase their diplomatic clout to levels they might otherwise not be able to reach.

It is largely for this reason that small- and medium-sized states (e.g., Sweden, the Netherlands, Mexico, Israel, Australia) have proved so keen adopters of digital diplomacy, as it presented itself to them as a great opportunity to “punch” diplomatically above their political or economic weight. It is thus assumed that by being able to directly reach and engage millions of people, MFAs and their network of embassies could positively shape the views of the global public about the country of origin, and in so doing, they could increase the diplomatic standing of the country in bilateral or multilateral contexts.

The argument has a seductive logic, not least because of the scope, scale and reach that digital diplomacy affords MFAs to pursue. At the same time, it suffers from a structural flaw, namely, that digital technologies constitute a distinct source of power, which, if properly harnessed, can offset deficiencies in hard or soft power. In fact, the way in which digital technologies operate is by creating a platform through which other forms of power can be projected in support of certain foreign policy objectives. In short, the digital cannot give MFAs Superman strength, but it can help them channel the strength they already have more efficiently and productively.

The “Walk in the Park” Myth

The second and fairly entrenched misconception is the “Walk in the Park” myth, which supports the view that “going digital” is easy and that MFAs can successfully pursue their digital diplomatic ambitions with relatively modest investments in training and resources.

The speed by which the global public has migrated to the digital medium reinforces the idea of accessibility of social media platforms and the notion that anyone with basic technical skills can take part, shape and influence online conversations. What this view neglects, however, to acknowledge is the fact that with no clear direction or strategic compass, the tactical, trial-and-error methods by which MFAs seek to build their digital profile and to maximize the impact of their online presence cannot demonstrate their value beyond message dissemination. In other words, the adoption of digital tools without an overarching strategy of how they should be used in support of certain foreign policy objectives runs the risk of digital diplomacy becoming decoupled from foreign policy.

With 3.02 billion people or 38% of the world population expected to be on social media by 2021, a fast-growing rate of global mobile penetration and the anticipated launch of 5G technology in the next few years, the potential for positive and meaningful digital diplomatic engagement is strong and substantial.

The strategic use of digital platforms imposes order on digital activities through the definition of measurable goals, target audiences and parameters for evaluation. The goals determine the target audience, which in turn, determine the platforms, methods and metrics to be used. This implies that training cannot be limited to the art of crafting messages, but it must professionalize itself and focus on developing skills by which digital diplomats can strategically harness the power of digital platforms toward achieving pre-defined and measurable goals.

The Extinction Myth

The third and growing misconception is theExtinction myth, according to which digital diplomacy will gradually replace or make redundant traditional forms of diplomacy.

On the weaker side of the myth, there is the perception that digital technologies have the capacity to fundamentally change how diplomats perform their traditional functions of representation, communication and negotiation to the point that they may even put an “end to diplomacy,” as Lord Palmerstone once similarly quipped when he took notice of the arrival of the telegraph.

Stronger versions of the myth go a step further and acknowledge the possibility of having physical embassies and even diplomats replaced at some point by virtual reality (VR) and artificial intelligence (AI), respectively. While digital technologies have demonstrated clear potential for revolutionizing how diplomats conduct public diplomacy, deliver consular services or manage crises, one should nevertheless be mindful of the fact that the core function of diplomacy that is relationship-building and management cannot be accomplished without close and sustained human contact.

The myth may thus be right about the fact that by increasing efficiency, digital technologies would likely reduce the number of diplomats required to perform certain routine functions. At the same time, the “extinction” hypothesis is hardly credible as the negotiation of human values and interests cannot be delegated to machines, and the amount of trust and mutual understanding that makes the “wheels” of diplomacy turn cannot be built without humans.

The Darth Vader Myth

The fourth and rather dark misconception of digital diplomacy is the Darth Vader myth, which sees the positive potential of digital platforms for engagement and cooperation at risk of being hijacked by the “dark side” of the technology and redirected for propaganda use.

The digital disinformation campaignsattributed to the Russian government, which has allegedly been seeking to disrupt electoral processes in Europe and the United States in recent years, offer credible evidence in support of this view. More worryingly, the digital medium operates in such a way that makes it an easy target for propaganda use.

Algorithmic dissemination of content and the circumvention of traditional media filters and opinion-formation gatekeepers makes disinformation spread faster, reach deeper, be more emotionally charged, and most importantly, be more resilient due to the confirmation bias that online echo chambers enable and reinforce. That being said, one should be mindful of the fact that any technology faces the problem of double use, as the case of nuclear energy clearly illustrates.

Trends are also important to consider. With 3.02 billion people or 38% of the world population expected to be on social media by 2021, a fast-growing rate of global mobile penetration and the anticipated launch of 5G technology in the next few years, the potential for positive and meaningful digital diplomatic engagement is strong and substantial. As long as the prospective benefits of digital diplomacy outweigh the risks, the pollution of the online medium by the “dark side” would likely stay contained, although its pernicious effects might not be completely eliminated.

As we look forward to the digital transformation of diplomacy in the next decade, it is also important to keep in mind the technological context in which MFAs are expected to operate. The 3G mobile technology made possible, for instance, the development and spread of social media networks. The 5G technology, which is due to arrive in just a few years, will likely usher in a whole new level of technological disruption, which could lead to the mass adoption of an entire range of tech tools of growing relevance for public diplomacy, such as mixed reality, satellite remote sensing or artificial intelligence.  

To a certain extent, the future is already here, as the appointment of the first-ever ambassador to the Big Tech industry by Denmark in 2017signaled the arrival of a new form of diplomatic engagement between state and non-state actors and the key role that technology is playing in this transformation.


AfricaAmericasAsia PacificEuropeMiddle EastSouth AsiaDigital DiplomacyDigital TechnologyCommunication DiplomacyInformationSocial MediaCommunication Technology


CPD Blog Contributor and Faculty Fellow

Associate Professor in Diplomatic Studies, University of Oxford



A PD Goes Local Event

From summit diplomacy to sports diplomacy, the role of public diplomacy continues to grow when it comes to security challenges on the Korean Peninsula. In the Western hemisphere, many questions arise: How does the American public view U.S. policy toward North Korea and the core issue of denuclearization? How critical is public diplomacy in dealing with these tensions? What diplomatic options exist for furthering dialogue and rebuilding peace in the region?

The USC Center on Public Diplomacy, the Indiana University School of Global and International Studies and The International Center will bring together leading experts in public opinion and public diplomacy for a timely discussion to broaden our understanding of the critical issues in this volatile region.

Panelists include:

Ira Helfand, MD, Physicians for Social Responsibility, Co-Chair, Nuclear Weapons Abolition Committee, and member of the steering committee at the International Campaign to Abolish Nuclear Weapons (ICAN)Emily Metzgar, Indiana University, Associate Professor and Director of Undergraduate Studies, The Media SchoolMark MintonIndiana University, School of Global and International StudiesJacob PoushterSenior Researcher, Pew Research Center


Reception to follow.

This program is part of CPD's "Public Diplomacy Goes Local" initiative. It explores the global public diplomacy landscape from a local vantage point. The inaugural program was held at the University of Oklahoma in fall 2018.

This program is made possible by a grant from the Korea Foundation. Read more here.


Wednesday, October 10, 2018 - 6:00pm



Indiana University; Shreve Auditorium (355 N. Jordan Ave., Bloomington)

September 11, 2018

Italy’s Diplomacy Is Floundering in the Mediterranean

OPINION - September 4, 2018

By Enrico Trotta

There’s no doubt that the Mediterranean Sea has played a decisive role in elevating Italy’s stature on the world stage. The Romans referred to it as “Mare Nostrum” (“Our Sea”), a rather self-explanatory term that attested to Rome’s quest for maritime dominance. Throughout the Middle Ages, Italian merchants staked generous amounts of money and energy on this maritime crossroads of civilizations, eventually dominating it for many years. The resulting emergence of the Maritime Republics (e.g. Venice, Genoa) represented the capstone of Italy’s commercial and diplomatic thrust in the Mediterranean.

In recent years, several Italian political figures urged to parlay Italy’s historical symbiosis with the Mediterranean into a leading role in the region. Former Italian Foreign Minister Angelino Alfano asserted that Italy “knows better than any other country the language of the Mediterranean.” The term “Mare Nostrum” was dusted off by Former Italian Prime Minister Paolo Gentiloni, who statedthat the Mediterranean is “a geopolitical priority” for Italy which should, therefore, “take on a leading role in the framework of an international stabilization effort” of the area.

In the aftermath of the Arab Spring, Rome could emerge as a leading actor in the Mediterranean by successfully dealing with the migrant crisis. However, the humanitarian emergency found Italy largely ill-prepared. As the tide of migrants engulfed the country, a heated confrontation ensued between former Italian Prime Minister Matteo Renzi (who was in office when the migrant crisis began in earnest in 2015) and his major political rivals, including incumbent Minister of Interior Matteo Salvini, the leader of Euro-skeptic and once-secessionist Northern League.

Renzi made a point of helping migrants, eliciting harsh criticism from Matteo Salvini. The latter’s rising popularity eventually led Renzi to play the anti-EU card and reconsider his stance on immigration. He turned pugnacious vis-à-vis Brussels, lambasting it for leaving Rome alone in bearing the brunt of the migrant emergency. Significantly, Renzi went so far as to threaten to veto the EU’s budget.

As a result, the migrant crisis was culpably mishandled by Italy. Because the humanitarian emergency served as ammunition for political skirmishes (both domestic and against Brussels), Italy’s migration policies lacked coherence and efficacy. Such defects are best epitomized by Renzi’s about-face on immigration, prompted in large measure by the rising of the right. Furthermore, the drawn-out confrontation with the EU reduced the scope of Italy’s diplomacy in the Mediterranean, which gradually came to focus completely on immigration.

Flash-forward to August 2018. Italy’s attention is on the “Diciotti” coastguard vessel, which remained docked in Catania for days before disembarking 177 people it rescued off the island of Lampedusa. True to his tough stance on immigration, incumbent Interior Minister Matteo Salvini held off granting the vessel authorization to disembark the migrants, thus igniting a standoff involving the Italian coastguard vessel, protestors and, not surprisingly, the European Union. Eventually, all the migrants were disembarked. However, following in Renzi’s footsteps, the incumbent Italian government is now threatening to suspend EU funding should Brussels continue to overlook Rome’s calls for a more even-handed redistribution of migrants across the Union.

It is clear that Matteo Renzi and Salvini don’t stand on the same end of the political spectrum. However, when it comes to issues that involve the Mediterranean region as a whole (like the migrant emergency), they are both prone to not see the forest for the trees. Indeed, as it repeatedly feuds with Brussels, Rome fails to comprehend that dealing with immigration presupposes acting on North Africa’s festering political and economic instability.

For example, Libya is to this day a political and socio-economic basket case, crippled by an internecine war that shows no signs of abating. As a matter of fact, in July 2018 Matteo Salvini visitedthe country to meet Libyan deputy Prime Minister Ahmed Maiteeq. However, Salvini’s visit revolved around the migrant emergency, as he called on Sarraj’s to cooperate with Rome in stemming migration influxes. Little to no mention was made to Libya’s political tribulations. No concrete economic and diplomatic measures to pacify the war-torn country were announced. Rome’s diplomatic initiative seems shortsighted mainly because, as Libyan ceasefires routinely collapse, Sarraj will likely concentrate on maintaining his grip on Tripoli rather than on containing migration. As a consequence, Italy will come away from Libya empty-handed.

Furthermore, while Rome’s dialogue with Sarraj is in place, its relations with Haftar have soured. Importantly, Rome-Tobruk relations took a major downturn when Italy’s ambassador to Libya suggested postponing the Libyan general elections scheduled for December. The Tobruk-based House of Representatives reacted vehemently, declaring Italy’s ambassador to Libya persona non grata.

Showing a better grasp of the situation, Italy’s prime minister Giuseppe Conte attempted to steer Italy’s diplomatic focus back to one of the root causes of increased immigration: Libya’s fragmentation. In July 2018, Conte stated that Italy should act as Europe’s “main interlocutor” vis-à-vis the Libyan crisis and, to this aim, he vowed to organize an international conference on Libyafocused on its stabilization. Arguably, the conference is also aimed at patching up Rome’s relations with Tobruk so to as to diversify Italy’s Tripoli-centered policy in the war-torn country.

However, as Rome has yet to deliver a roadmap of the proposed conference, Paris appears to have outpaced Italy. With an eye towards securing its oil interests in Libyan National Army-controlled Sirte Basin, Paris has not shied away from playing both sides of the fence: while supporting the UN-backed Government of National Accord, Paris aims at a working relationship with Haftar. Furthermore, Paris is aware that reaching a modus vivendi with Haftar is key to achieving another critical objective in the region: endearing itself to Egypt which, in turn, cooperates with the Tobruk-based House of Representatives to stabilize its western frontier.

Indeed, Macron’s scheme came away from the Paris summit (where, under his aegis, Sarraj and Haftar agreed to hold peaceful elections in December) as the sole credible go-between in the intractable Libyan conflict. Such diplomatic credentials might enable Paris to play a critical role in post-war Libya, whatever the winner, and promote its reconstruction along pro-France lines.

Moreover, Macron is eager to follow up the Paris summit with a France-sponsored conference on the Mediterranean, to be held in 2019. The bottom line is that, while Italy is still trapped in the Libyan labyrinth – with no fall-back position should the Tripoli-based GNA collapse – France has already moved to the next step: capitalizing on the momentum built by the Paris summit to the accelerate the emergence of a France-centered order in the Mediterranean.

Italy appears to struggle with Tunisia as well. So far in 2018, Tunisians constitute the majority of the immigrants arrived in Italy. Importantly, Tunisia’s political situation is far from consolidated, as tension between secularists and Islamists within the incumbent coalition government is building up.

Nevertheless, Italy’s diplomacy vis-à-vis Tunis appears tentative, if not bumbling. Importantly, Matteo Salvini’s undiplomatic remarks on Tunisian immigrants (“Tunisia often exports convicts”) created a stir in the North African country. Considering that Italy will attend the upcoming “Futurallia Tunisia 2018” business forum, and Salvini himself has recently pledged to spend “at least” € 1 billion to stabilize North Africa, such diplomatic missteps can only dilute Italy’s efforts in Tunisia.

While Rome’s historical heritage still garners respect throughout the Mediterranean, it is doubtful whether Italy can now be regarded as the key to the region’s stability. Of late, Italy appears to lack a farsighted outlook toward the Mediterranean, hence its inability to take the lead in constructing both collective and cogent policies designed to stabilize and pacify the region.

Significantly, Italy has limited itself to stemming the domestic repercussions of the region’s instability (principally, the influx of migrants). On the other hand, France has grasped the bigger picture. Specifically, Paris is addressing the root causes of the Mediterranean quagmire (i.e. North Africa’s economic doldrums, the fragility of its political institutions, and the protracted vacuum of power in Libya) as a means of navigating its ramifications for Europe. The added benefit of this long-term effort is the enhancement of France’s diplomatic standing in the Mediterranean. Paris is cultivating ties with both Eastern and Western Libya, while retaining its privileged position in its former colonies of Algeria, Tunisia and, Morocco. Furthermore, Paris’ flirtation with Haftar has been well-received in Cairo.

As Rome’s “Mare Nostrum” paradigm founders, the stage is being set for the emergence of a France-aligned Mediterranean order.


September 09, 2018

Book Release: "Story of the Baluch"

Donya-e-Eqtesad Publications, based in Tehran, is going to release a 7-volume anthropological work on Baluch tribes in southeastern Iran, written by researcher, anthropologist and author Mahmoud Zand-Moqaddam.

Titled “Story of the Baluch,” the work will be released next week. It is the outcome of 50 years of research of the Baluchis living in Sistan and Baluchestan, according to the public relations of Donya-e Eqtesad Publications.

Zand-Moqaddam’s study of the Baluchis started in 1963 when the Statistics Center of Iran sent him to the southeast region on a mission to prepare a report on the livelihood of Baluch households.

The mission led to Zand-Moqaddam getting closely involved in the lives of the famous Baluch tribes. Later he undertook his own research on the people and kept traveling to and across the region at his own expense.The 7-volume work covers various aspects in the lives of the Baluchis, including culture, tradition, rituals, beliefs, livelihood, habits, history and myth, sayings and proverbs.

A passage on the back cover of the work describes the Baluch as honest people with no deceit or bad intention behind their words. The work “is the account of the author’s long journey that started half a century ago and lasted until now. He searched village by village, house to house and met people one by one.”

Source: Financial Tribune, Iran

Allah Bux's darkest afternoon didn't end yet.

Art work by Zakir Sheran Baloch for the abducted women 

It was the evening of 22nd July 2018, and the horrifying text messages from Balochistan were bombarding at my cell phone as usual. A message from them was of Allah Bux's life darkest afternoon, mentioning the abduction of his family members which included Allah Bux's wife Noor Malik, his two daughters Haseena and Sameena by Pakistani forces. The incident which took place made me awake all night, all I was thinking possibilities which can take place in military custody, reflecting Pakistan's terror war in Bangladesh in 1970's. Later I sought for their relatives so that through them I could reach Allah Bux and know the whole happenings of that day, and could make people aware about it too, Somehow I succeeded to contact Mr. Allah Bux and came to know what really happened that afternoon. It was the afternoon of 22nd July when Pakistani military surrounded and raided Allah Bux's house leaving a horrifying atmosphere in the neighborhood. The neighbors of Allah Bux witnessed the military personnel enter the house, pointing the barrel of their riffles toward the present members of the family, asking them to lay down and started hitting the women with their riffles and forced them to lay down and searched their whole mud house, where they found nothing except the basic households. Later on, they dragged the women present in the house into a military vehicle and moved from there. Since then their is no news of Noor Malik, Haseena and Sameena. 

Following the incident it came to my knowledge that a 10 years old boy Zameer Baloch who was abducted on his way from Panjgur to Mashkay belonged to the same family and is Allah Bux's son who too is missing till date.

Zameer Baloch 

-- Allah Bakhsh, Noor Malik's Husband and father of two disappeared daughters and a son says he has confirmed information that where his family is forcefully held hostage, but the authorities deny to take any action against the Pakistani forces.

According to Allah Bakhsh, his son Zameer Baloch was abducted on his way back from Panjgur to Mashkay Balochistan, by Pakistani security forces on 3rd of July, and on 22nd July 2018 Pakistani forces raided his house along with some masked men believed to be members of a Pakistani military death squad led by Ali Haider, a tribal chief in Mashkay. After the abduction of Allah Bux's family, the abductees were transferred to Ali Haider's residential compound and since then there is no news of the abductees.

Allah Bux and other family members kept struggling for the release of their family members by approaching the authorities but that ended up without any outcome, after which they (Allah Bux and other family members) tried to bring this to international attention by appealing the social media activists and humanitarians to raise voice for them. Allah Bux, the head of the house whose entire family has been abducted, recorded a video with numb eyes and pleaded for his family's release:

"I am a resident of Nok Abad. I have been abducted and detained at hands of the army, by the directions of Ali Haidar. I was released after a month. I used to remain at home in Mashkay because of illness. The army once again came to my place by the directions of Ali Haidar and took away my cattle, those were the only income source of mine, after that I became helpless, I had nothing to feed my family. I moved to Panjgoor to work as a labourer to feed my children. My 10 years old son Zameer managed to escape and joined me here, Zameer was abducted by the army and he is still missing. I request from government to release my children. My wife Noor Malik and two daughters Haseena and Sameena are also missing. Many innocent women are missing also. I request from government to show leniency and release them. If I go back and stay with my family, the army will kill me, that’s the reason army kept my family. I want to know what sins and crimes did I commit?"

A similar video was recorded by Zeba Baloch, Allah Bux's daughter saying,

"My name is Zeba, I am a resident of Mashkay district Awaran. My ten-years old brother Zameer has been abducted at the hands of Pakistani army. Later my mother, two sisters Haseena and Sameena were also taken away by Pakistani army and Sardar Ali Haider. I want to ask what is their crime, why were they abducted ? I request for their safe release, Thanks"

On the eve of Eid "A Islamic yearly festival" Zeba Baloch published another video of her saying,

"My name is Zeba, my brother's name is Zameer, my mother's name is Noor Malik sisters name Haseena and Sameena, it was Eid we were happy that my mother will get released, but my mother didn't get released, she is still missing. We will be thankful if Pakistan release them"

But unfortunately the pleading of their family members couldn't attract the attention of international media nor the international community and till date there is no news about the abductees nor any action has been taken for their safe release.

This incident isn't the first of it's kind in Balochistan. Thousands of Baloch have been abducted and later killed by Pakistani military, where there are reports of rape too. 

Since there is a complete media blackout in Balochistan such incidents fail to get international attention, but during all this the local activists on social media are trying to reach a wider audience and prevent such actions by Pakistani military. It's very important for the human rights organisations and media to pay attention on such acts conducted by Pakistani military in Balochistan. I am totally hopeful towards the people around the globe along with the Human Rights organisations and international media that they will play their role in highlighting and preventing such acts.



JANUARY 16, 2018


Editor’s Note: This is the first installment in “Ministry of Truth,” a special series on state-sponsored influence operations.

A series of scandals from Russian meddling in the U.S. elections to China’s influence over Western politicians, like Australian Sen. Sam Dastyari and U.S. Sen. Steve Daines, has brought American attention back to the Cold War-style fight for influence and narratives. Congress has started to act, incorporating counter-propaganda funding into the FY2017 National Defense Authorization Act and proposing reforms to the Foreign Agent Registration Act and the Committee on Foreign Investment in the United States. The United States finally may be waking up to the challenge that its NATO allies and Taiwan have been facing for years. As Americans try to make sense of modern political warfare, the struggle to polish the rust off of the Cold War toolkit for countering foreign influence has run into the problem of insufficient to explain the challenges now faced by the United States and its allies.

In a series of presentations, conferences, and phone calls over the last year the discussion of Chinese intelligence and information operations invariably raises the question: “How do the Chinese compare to the Russians?” I have attempted to describe the differences with three distinctions between Russian and Chinese influence operations: set-piece operations vs. playing the man; service-led operations vs. service-facilitated operations; and agents of influence vs. influenced agents. These are not perfect distinctions, and both systems can and do draw on a wide variety of means. Beijing’s methods also appear to be evolving over the last year to incorporate Russian techniques, if its operations on Taiwan can be viewed as the leading edge.

The operational differences, for all their practical implications, may be less important than the simple recognition that Beijing and Moscow both approach influence operations and active measures as a normal way of doing business. The United States approaches covert action as something distinct from the routine business of foreign policy, requiring special authorities and oversight or legal argumentsover whether Title 10 or Title 50 applies. This is simply not the case for the contemporary Chinese or Russian states.* They still bear the hallmarks of their totalitarian and Leninist pasts.

Set-Piece Operations vs. Playing the Man

The strength of the Russian disinformation system has been executing set-piece operations of varying degrees of sophistication. These have ranged from forged or otherwise manipulated documents being used to discredit a target to planting rumors that the United States unleashed the AIDS virus as a biological weapons program. The objective may be as specific as an individual or as broad as poisoning the environment. These are discreet operational acts to achieve those objectives.

As Kevin McCauley noted in his book, Russian Influence Campaigns against the West, the Soviets developed what they believed was an objective, scientific framework for evaluating information operations: reflexive control theory. This theory developed out of research into psychology and cybernetics as the Soviet Ministry of Defense sought to incorporate the techniques of operations research into decision-making. By mapping how an adversary’s system framed problems and processed information, Russian planners could design operations to shift that adversary’s decisions in an advantageous direction.

The Chinese, however, seem to focus on individuals rather than effects, on shaping the personal context rather than operational tricks. It is person-to-person relationships that carry the weight of Chinese information operations. Many of China’s first-generation diplomats and negotiators — including Zhou Enlai, Wu Xiuquan, Li Kenong, Xiong Xianghui, Liao Chengzhi, and many others — worked for some time as intelligence officers. For example, Li Kenong was Beijing’s chief negotiator at the Panmunjom talks with the United Nations during the Korean War and a vice foreign minister. His party career, however, began in intelligence where he was one of the “Three Heroes of the Dragon’s Lair” and rose to become a deputy director of the party’s intelligence service. The evidence of this training also can be found in available transcripts. For example, in Zhou’s conversations with Henry Kissinger in 1971, the techniques of a case officer are on display: playing to the ego, elicitation, switching between dominance and deference, and controlling the tone and tempo of the conversations.

The history of the Chinese Communist Party (CCP) provides important examples of how the party manipulated an adversary into assisting it. If anything proves the value of playing the man, the Xi’an Incident of 1936 provides the clearest proof according to party accounts — even if historians justifiably can dispute the CCP version. In December 1936, as the Kuomintang under Chiang Kai-shek closed around the CCP, two of Chiang’s generals, Zhang Xueliang and Yang Hucheng, kidnapped him and forced him to agree to the second CCP-Kuomintang united front to fight the Japanese. The public story for many years was that Zhang and Yang were motivated by patriotism and a desire to unite the Chinese people against the foreign threat. Earlier that year, the CCP had dispatched future premier Zhou Enlai and espionage specialist Li Kenong to open a channel and negotiate with Zhang, whose forces posed a more immediate danger and was the senior of the two. Thanks to a long-time friend and former aide of Yang, Nan Hanchen, Zhou and Li possessed inside information on both generals’ motivations that helped them exert pressure internally without revealing the CCP’s hand. As a result of these efforts, Zhang and Yang slowly turned against Chiang as the year went on. Then, in December, without communist prompting or knowledge, they decided to kidnap him to a force a CCP-Kuomintang truce that Zhou then negotiated. The lesson? By building the relationships, unexpected opportunities will arise.

Service-Led Operations vs. Service-Facilitated Operations

Another key difference between the Chinese and the Russians is the role of their respective intelligence services. For Moscow, intelligence services play a leading role, in part because they possess the skills to operate clandestinely. For the Chinese, intelligence services seem to facilitate meetings and contacts rather than handling the dirty work of influencing foreign targets themselves.

The KGB’s First Chief Directorate for foreign intelligence operations included “Service A,” an operational unit of 50 to 70 officers responsible for active measures. This was one of the three key units, according to Soviet Bloc defectors and Western observers, managing Moscow’s program to influence foreign governments, societies, and events. Much of the Soviet Union’s capacity for grey and covert propaganda operated under the KGB’s direct hand, while the overt side resided in the party’s International Department and International Information Department. Even though resources like clandestine radio stations and international front organizations might be under the International Department’s authority, the KGB still played a role in the handling and management of the Soviet front organizations abroad.

The Chinese intelligence services, however, seem to play a secondary role in influencing external actors and events. The principle organizations — the Liaison Department of the PLA’s Political Work Department and the United Front Work Department — report to the Politburo through a completely separate chain of command that deals mostly with party affairs. In the past, the Central Committee’s International Department (previously the International Liaison Department) may have played in important role, not dissimilar from its Russian counterpart. However, the International Department slowly evolved through the 1960s away from Soviet-style active measuresand toward being primarily the party’s diplomatic arm.

The services and influence organizations — particularly the Liaison Department and the United Front Work Department — do play a role in setting up and facilitating the activities of a multitude of friendship and cultural associations. These range from the vast China Association for International Friendly Contact that has provincial and municipal affiliates to smaller veterans affairs group like the Huangpu (Whampoa) Alumni Association. The Chinese participants in exchanges organized in these groups are rarely intelligence officers themselves, but rather party elite who understand the party’s international objectives and have been trained in managing foreigners. One contemporary example is Xu Jialu, formerly a vice chairman of the National People’s Congress and a leader in the promotion of Chinese culture. Xu was enmeshed in a web of ties to the Liaison Department and its Taiwan-focused operations, and he also played a role in establishing the Confucius Institutes — still another set of institutions closely connected to China’s influence apparatus.

Agents of Influence vs. Influenced Agents

In keeping with the differences in the roles of intelligence services, Russia relies heavily on intelligence officers, their ability to pound the pavement and socialize, and their recruited agents. The Russian services appear perfectly willing to recruit agents simply for active measures, and they also cultivate collaborators who may not understand with whom they dealing or why.

Ladislav Bittman and Gen. Ion Mihai Paceba describe two notable Soviet approaches to putting out disinformation. The first was simply to hire or recruit individuals to produce manipulative cultural products to discredit political figures and hostile institutions. The second was ever-more sophisticated ways of producing doctored or forged documents that could then be passed discretely to newspapers or researchers. One of the public examples Bittman highlighted was the case of Pierre Charles Pathé, a French journalist sentenced to five years in prison in 1980 for his distribution of Soviet disinformation through his newsletter. Pathé’s subscribers included roughly 400 French parliamentarians, 50 foreign embassies, and another 50 journalists and publications. On at least one occasion, the Soviets handed Pathé an entire draft that he went on to publish in his own name. The recruitment of journalists and writers is echoed from other sources, such as KGB defector Stanislav Levchenko. He claimed to have handled four journalists among the ten agents he handled during his tour in Tokyo in the late 1970s. Sergei Tretyakov also described handling a Canadian environmental lawyer to agitate U.S.-Canadian relations in the 1990s as well as the continuing Russian efforts to sow mischief through other agents and propaganda materials unattributed to Russian intelligence.

Gen. Paceba describes the use of both approaches to undermine the moral authority of the Roman Catholic Church by attempting to discredit Pope Pius XII (1939–1958). In 1963, a long-time Soviet disinformation agent Erwin Piscator edited the manuscript and directed the play The Deputy: A Christian Tragedy. The play told a fairytale about the pope’s silence during the Holocaust, insinuating the pope could have acted to end or mitigate the worst abuses of the Nazi regime. The tragedy relates to a young Jesuit attaché’s efforts to alert the pope to German atrocities, not the pope’s silence. Pope Pius XII, however, was emphatically not silent or inactive during the war, but, because The Deputy was not a history, Piscator and the playwright Rolf Hochhuth dodged this inaccuracy by claiming to have produced a fictional work. Soviet disinformation agents and collaborators in France and the United States also translated, produced, and publicized the play. Doctored and forged documents produced by the Yugoslavian secret police also were used against the Church, first in a trial of Croatian Archbishop (later Cardinal) Alojzije Stepinac who had refused to subordinate his diocese to Tito’s communists and subsequently provided to Italian writer Carlo Falconi. Falconi’s book, The Silence of Pius XIIinformed many later attempts to smear Pope Pius XII.

The CCP approach generally appears much softer, perhaps because the formal intelligence organizations play a less visible role. Gatekeepers who facilitate inroads and make connections to open the door for foreigners in China are more common than intelligence officers. People like Sheri Yan (now jailed for bribery) and Chau Chok-wing of Australia or Chinese-American Katrina Leung fulfilled this kind of role. Leung also reportedly served as a conduit for the Chinese leadership to feed information through the FBI to the White House. The kind of elite relationship-building that these individuals demonstrate and seem to be the hallmarks of Chinese influence are what make flirtations with ethics violations difficult to dismiss out of hand. From then-ambassador to China Gary Locke’s rushed sale of his Maryland home to Chinese businesspeople to the trademark grants to Ivanka Trumpor her husband’s backchanneling to Beijing, the activity may be completely innocent or routine. Or it may be something more devious. The surface-level indicators are the same.

Mao Zedong and the party exploited foreign contacts from the very beginning to shape the story of China’s revolution, gain support, and discredit their adversaries. Journalists Edgar Snow and Theodore White presented the CCP of the 1930s and 1940s to Americans as charismatic, peasant-focused revolutionaries who brought self-government and genuine resistance against the Japanese. If, as White wrote, they could be brutal, it was because “men who sacrificed themselves so cruelly to an ideal were equally cruel to opposition.” They were not the only ones duped by the communists’ selective openness. As Yu Maochun chronicled, U.S. officials in China erred in exaggerating the Kuomintang’s faults and corruption — Chiang and the Kuomintang sacrificed the cream of their army in 1937 in an attempt to unify China and rally the warlords — as surely as they misjudged the CCP’s noble resistance. The reality was far different. The transcripts of Snow’s interviews with Mao were edited by the CCP. Rather than fighting an all-out war against the Japanese, the CCP often collaborated, providing intelligence to the Japanese army on the Kuomintang while husbanding their own strength. To the best of our knowledge, none of those who misjudged the CCP based on their managed contact with communist leaders, including controversial or sympathetic figures like John Service, was a spy or did so under CCP direction.

Concluding Thoughts

Undoubtedly, more can be said about how to understand the distinctions between Chinese and Russian influence operations and political warfare. Perhaps the best way to describe the differences between the two approaches is that the Chinese are human- or relationship-centric while the Russians are operation- or effects-centric. The points outlined above, however, should be treated at best as hypotheses to explored rather than definitive judgments.

The importance of explicit comparisons cannot be understated. Today, more than 25 years after the end of the Cold War, the default position for most Western security officials when discussing an unnamed or potential adversary is to use the Soviet Union or Russia as an implicit proxy. Those of us engaging in these discussions should be able to do better. If these judgments of Chinese and Russian information operations are accurate, the necessary policy responses vary quite dramatically. Comparisons will help cross-fertilize ideas on how to respond as well as show what has worked (or not) in the past.

* I will confess no special expertise on Russian disinformation techniques, but only a perspective informed by reading through some of the classics on Soviet intelligence operations, accounts by Warsaw Pact defectors, and more recent analyses. Among these sources are:

Christopher Andrew and Vasili Mitrokhin, The World Was Going Our Way: The KGB and the Battle for the Third World (Basic Books, 2005) .Ladislav Bittman, The KGB and Soviet Disinformation: An Insider’s View (Pergamon Press, 1985).Kevin N. McCauley, Russian Influence Campaigns against the West: From the Cold War to Putin(CreateSpace, 2016).Ion Mihai Pacepa and Ronald Rychlak, Disinformation: Former Spy Chief Reveals Secret Strategies for Undermining Freedom, Attacking Religion, and Promoting Terrorism(WND Books, 2013).Richard H. Schultz and Roy Godson, Dezinformatsia: Active Measures in Soviet Strategy(Pergamon-Brassey’s, 1984).


Peter Mattis is a Fellow at The Jamestown Foundation and a contributing editor at War on the Rocks. He also is the author of Analyzing the Chinese Military: A Review Essay and Resource Guide on the People’s Liberation Army.

Image: Wikimedia Commons