A Coalition Of The Waning.

The Sunset Of Anglo-Saxon Imperialism: To join this “Coalition of the Waning”: this AUKUS pact composed of the three military aggressors of the Iraq War; would not only be folly – it would be criminal folly.

THE FORMATION OF AUKUS, the new military pact linking Australia, the United Kingdom and the United States, is a mirage. It’s most important element, the arming of the Australian Navy with 8-12 nuclear-powered attack submarines, will almost certainly never happen. The Chinese Government, against which the agreement is aimed, will not be daunted. Indeed, in a shrewd diplomatic manoeuvre, Beijing has applied to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) from which the USA remains self-excluded, and of which New Zealand remains the “secretary”. What other word except “mirage” is fit to describe this latest, rather desperate, fantasy of Anglo-Saxon imperialism? Long-term strategic decline cannot be wished away by dreaming up a new acronym.

Not that New Zealand’s foreign affairs and defence “establishment” (FADE) will understand AUKUS in such terms. To the contrary, it is already mounting a full-court press to convince New Zealanders that their country has been slighted and snubbed, and its long-term national security imperilled, because their government has not sung along lustily enough in the new “Indo-Pacific” chorus-line. Over the next few weeks and months FADE will attempt to apply maximum pressure on Jacinda Ardern’s government by wheeling out every academic expert, former military officer, US-aligned politician and journalist at its disposal.

The first of what promises to be a great many of these AUKUS promoters appeared on the Q+A current affairs programme just yesterday morning (19/9/21). Former New Zealand Deputy-Prime Minister and Foreign Minister, Winston Peters, with the sparkling waters of the Bay of Islands as his backdrop, was interviewed with uncharacteristic deference by the programme’s presenter, Jack Tame. Absent entirely from this encounter was the hectoring tone usually reserved for the NZ First leader by mainstream journalists. What viewers saw was a senior New Zealand statesman invited to shed light on New Zealand’s disturbing exclusion from this new and important security agreement.

Peters, naturally, did not disappoint. Indeed his performance was excellent – full of gravitas and more-in-sorrow-than-in-anger exasperation at the failings of his former Labour colleagues. He didn’t quite say Si vis pacem, para bellum (he who desires peace, should prepare for war) but that was clearly the message delivered by this antipodean Cincinnatus. Peters also made it plain that words have consequences: a not-so-subtle reminder that while his speeches as Foreign Minister only strengthened this country’s relationship with the United States, the speeches of Nanaia Mahuta have produced the opposite effect.

With the National Party locked in what Matthew Hooton calls a “death spiral”, and Act out of contention as a coalition partner for Labour, NZ First presents the Americans with a tempting prize. Subject to proper nurturing, and the right kind of advice, Peters’ party could once again find itself in a position to dangle the keys to the kingdom in front of a desperate Labour caucus. As the price of opening the castle gates, Peters could demand – and would, almost certainly, be given – both the Foreign Affairs and Defence portfolios. The chances are high that, very soon thereafter, the doors to AUKUS would also swing open.

The next New Zealand General Election is, however, still two years away, and much can change in two years. Beijing has just handed Wellington an extraordinary opportunity to place itself at the head of those Indo-Pacific nations that would much rather expand the opportunities for economic co-operation and trade, than join in ratchetting-up the tensions of a new Cold War. Imagine the diplomatic awkwardness for Canberra if Washington made it clear to “the fella down-under” that he was expected to blackball China from membership in the CPTPP. A China seeking to increase economic opportunities across the Indo-Pacific region would have been frozen-out by an Australian government more interested in the prospects of war than the benefits of peace. The contrast between the policies of Wellington and Canberra could not be rendered more starkly: to New Zealand’s Pacific neighbours, her trading partners, and, not least, to Beijing.

It is also quite possible that, by 2023, the United States will be embroiled in domestic strife bordering on civil-war. By fair means or foul the Republican Party appears poised to seize back control of both the House of Representatives and the Senate in next year’s mid-term elections. With both the Congress and the Supreme Court under their effective control, the possibility exists that the Republicans will attempt to depose President Biden and replace him with Donald Trump. The Trump-dominated Republican Party is certainly crazy enough to try. The real question, then, will be: who, in a constitutionally compromised United States, possesses both the means – and the will – to stop them? Is the American military prepared to destroy the American republic in order to save it? If it is, then AUKUS will be the last thing on its mind!

As for those nuclear-powered submarines the Americans have promised their Australian “mates”. To employ a popular Australianism: “Tell ‘em they’re dreaming!” The six diesel-powered Collins-class subs the Aussies already possess have been one long pain in the Australian Navy’s arse. Plagued by repeated breakdowns and difficulties in accessing spare parts, the Australian submarine fleet is almost never fully functional.

When it is ready for action, however, the Collins-class submarine is considerably nimbler and harder to detect than its larger, nuclear-powered, counterparts. Having only just learned how to get the best out of their current fleet, the idea that their incredibly hard to recruit submariners will have to master an infinitely more complex boat must be seriously depressing Australia’s naval commanders.

And that’s not even factoring-in the white-hot fury of the French – who have just been stiffed out of $93 billion!

All of which suggests that, upon hearing the news about AUKUS, New Zealand’s Jacinda Ardern and Canada’s Justin Trudeau would have both breathed huge sighs of relief. There is something ever-so-slightly bonkers about this supposedly “new” security arrangement. For a start, what, exactly, is new about cobbling together military alliances against surging nation-states threatening to up-end the status quo? Isn’t that the sort of carry-on that led to World War I?

More to the point, how is anyone supposed to take Boris Johnson and his brand new aircraft carrier, HMS Queen Elizabeth II, seriously? A man so enamoured with the life and times of Winston Churchill surely cannot have forgotten the fate of the HMS Prince of Wales and HMS Repulse – sunk, almost casually, by Japanese bombers in December 1941? Surely, someone has told him about China’s hypersonic, carrier-killing missiles?

And what are the Chinese supposed to make of British warships in the South China Sea? Johnson may have forgotten all about the Opium Wars of the mid-nineteenth century, but Xi Jinping has not.

Surely, it is time for New Zealand to break free of the imperial project in which it has been enmeshed for the past 181 years? Surely, as an independent nation, it is in our long-term interests to recognise Australia, the United Kingdom and the United States for what they are? The three countries which, in March 2003, and in blatant contravention of international law and the United Nations Charter, attacked and invaded the sovereign nation of Iraq. In planning and unleashing aggressive war upon a country which had not attacked them, the leaders of the US, the UK and Australia were guilty of the same war crimes for which the leaders of Nazi Germany were tried and convicted at Nuremburg in 1946. To join this “Coalition of the Waning”: this pact composed of the three military aggressors of the Iraq War; would not only be folly – it would be criminal folly.

The shimmering vision of Imperial Hegemony Regained: the mirage which leads Joe Biden, Boris Johnson and Scott Morrison deeper and deeper into a waterless diplomatic desert; will be the ruin of them all.

This essay was originally posted on the Interest.co.nz website of Monday, 20 September 2021.

Adrian Orr – The Reserve Bank’s Revolutionary Governor?

New Zealand's Underarm Banker: It bears recalling that the “independence” of the Reserve Bank Governor was for decades held up by neoliberal capitalists as the most compelling justification for passing the Reserve Bank Act. Interesting, is it not, how the ruling class’s support for the Bank’s independence lasted no longer than its Governor’s first attempt to regulate (albeit modesty) the behaviour of Australasian capital?

I’M BEGINNING to suspect that Reserve Bank Governor, Adrian Orr, is, at heart, a revolutionary. The decision of the Reserve Bank of New Zealand to nearly double the “Big Four” Australian banks capital requirements – from 10.5 to 18 percent – has deeply shocked financial communities on both sides of the Tasman. What Orr has triggered in the minds of the Australian bankers is a truly fateful question: “At what point does our involvement in the New Zealand finance sector become unprofitable?” It’s a question fraught with potentially revolutionary implications for New Zealand’s economic sovereignty.

The reaction from the Right confirms the boldness of Orr’s move. The consensus among those opposed to the Reserve Banks’s decision is that it will make it harder for the Australians to perform to their shareholders’ expectations. In other words, Orr stands accused of reducing the Australian banks’ profitability. New Zealanders are being warned that they will have to endure higher interest rates on their borrowing, and lower rates for their savings, as a consequence of Orr’s actions. National’s Finance Spokesperson, Paul Goldsmith, is predicting a substantial hit to the country’s growth prospects:

“The two primary effects of today’s decision will be higher borrowing costs than would otherwise have been the case and businesses and farmers will find it harder to access the funds they need to grow.”

The NZ Initiative (the successor organisation to the dark knights of Business Roundtable) echoes Goldsmith’s fear:

“The RBNZ’s decision to increase the capital banks are required to hold will have adverse effects for borrowers and the wider economy. The effects are likely to be felt most acutely by high loan-to-value borrowers, the rural sector and small-to-medium-sized enterprises.”

Exposed in these statements, however, is a reality which both authors would undoubtedly prefer to keep hidden from New Zealanders. Namely, the degree to which we have become slaves to the financial power of Australia. Not only that, but how little – if anything – our ruling class is prepared to do to defend (let alone rebuild) New Zealand’s economic sovereignty.

A party calling itself “National” might have been expected to applaud the Reserve Bank Governor’s decision to protect New Zealand depositors from the worst effects of a catastrophic financial collapse. Instead, we have its finance spokesperson chiding the Bank for daring to twist the Kangaroo’s tail. Meanwhile, the front organisation for the country’s biggest capitalists mutters darkly about the need to curb the Reserve Bank’s powers.

It bears recalling that the “independence” of the Reserve Bank Governor was for decades held up by these same neoliberal capitalists as the most compelling justification for passing the Reserve Bank Act. Interesting, is it not, how the ruling class’s support for the Bank’s independence lasted no longer than its Governor’s first attempt to regulate (albeit modesty) the behaviour of Australasian capital?

For those few adherents of “democratic socialism” (still the official ideology of the NZ Labour Party BTW) who continue to soldier-on, the reaction of big capital is extremely instructive. It points the way to how the Australian banks might one day be “persuaded” to relinquish their dominant position in New Zealand.

Way back in the early-1990s, when Jim Anderton’s Alliance was considerably more popular than the Labour Party, I remember being contacted by one of the Alliance’s policy activists with an intriguing question. He wanted to know, in practical terms, how one might go about re-nationalising privatised public enterprises without the legally required compensation payments bankrupting the nation.

Whew! That was a poser! Where to begin? Why not with a country that had already confronted and solved the problem? How did the largest surviving communist state – the People’s Republic of China – deal with/to the private sector? The answer proved to be both remarkably shrewd and surprisingly simple.

What the new communist government of China did, in the early 1950s, was to pass a law requiring all existing capitalist businesses above a certain size to make the Chinese state a 25 percent shareholder in the enterprise. Naturally, such a large shareholding would also entitle the state to be represented on the enterprise’s board of directors. As the years passed and the new regime consolidated itself, the legislation was amended constantly. Year by year, the state’s shareholding in the enterprise was increased – along with the number of its directors.

Unsurprisingly, the value of these enterprises’ shares plummeted. Seeing which way the wind was blowing, all those Chinese capitalists with a lick of sense offered-up their business’s remaining shares to the state. The latter generously agreed to take these off their hands – albeit for a handful of cents on the dollar. In this way, China’s largest capitalist enterprises were legally, peacefully – and cheaply – acquired by the state. As an added bonus, most of the by-now-former capitalists took what was left of their money and ran – to Taiwan, Singapore and the United States.

So, that was how you did it. By deploying the state’s legislative and administrative powers against the entrenched economic power of private enterprise. Far from sending in the revolutionary guards to seize, in the name of the people - and without compensation – the banks, insurance companies, department stores and factories, a democratic-socialist government would send in … its lawyer.

Like the ruthless, clear-eyed hero of the television series McMafia, the state’s representative will patiently explain to the people who used to be in charge, the new rules of the game:

“From now on” he’ll quietly inform the Chairman and his CEO, “your bank will be obliged to meet a capital requirement of 18 percent. In two years’ time that will rise to 25 percent. Three years after that the Reserve Bank’s CR will be 33 percent.”

“But that will ruin us!”, the Chairman and the CEO of the Aussie bank will wail. “We will have nothing to offer our shareholders.”

“With respect to that”, the young, clear-eyed lawyer will respond, with just the flicker of a smile, “the Minister of Finance has authorised me to make you the following offer …”

This essay was originally posted on The Daily Blog of Friday, 6 December 2019.

A Rainy Afternoon In September.

“I must say it is refreshing to find a person of your years displaying an interest in this part of the world. After all, as Henry Kissinger so crudely put it: ‘Only a handful of people live there Mr President. Nobody cares what happens to them.’”

GEORGE LIFTED HIS HAND in greeting as Martyn entered the bar. At two o’clock on a rainy afternoon in early September the place was virtually empty.

“I took the liberty of ordering you a bottle of cider, dear boy”, said the retired civil servant as Martyn hung his coat over the back of his chair. “Is that right?”

“Is that in my file, George? ‘Drinks cider’?”

Among other things. Although, I have to confess it’s been a while since I actually laid eyes on it. For all I know you may have abandoned your old tipple and embraced the fad for craft beer.”

“No, no. it’s still cider – so, thanks, and your very good health.”

“Don’t mention it, dear boy. It’s the least I can do for the man who winkled me out of my retirement shell on this inclement afternoon. I have to acknowledge that I was more than a little impressed that you had my number.”

“You’re not the only person with informants, George, or files for that matter.”

“Indeed.” George took a thoughtful sip of his single malt and waited for the younger man to speak.

“I’m told that you were, for many years, ‘Our Man in the Pacific’. And that there’s very little you don’t know about New Zealand’s back-yard – and what has gone on there since the Americans drove the Japanese back into a more manageable set of boundaries.”

“A trifle exaggerated, but essentially correct. I did, indeed, hold the South Pacific Desk for a number of years. I must say it is refreshing to find a person of your years displaying an interest in this part of the world. After all, as Henry Kissinger so crudely put it: ‘Only a handful of people live there Mr President. Nobody cares what happens to them.’ Why do you care, Martyn?”

“I care because the Chinese care. I thought you might have some insights as to why.”

George’s face broke into an avuncular grin. “Ah, yes! Our very, very, very good friends the Chinese. Their mission is not so much to show the peoples of the South Pacific how much they care, as it is to find out how much the United States, Australia and New Zealand care about the Pacific’s ‘handful of people’. That’s the way Chinese diplomacy works: they test; judge the target’s response; then test again. If they encounter strong resistance, the Chinese retreat. If they are met with indifference, they advance. If they are welcomed with open arms, they advance very fast.”

“How far would you say China has advanced in the last decade?”

“Quite a long way, dear boy, quite a long way. Of course her task was made easier by the fact that the West had got itself into such a horrible mess in the Middle East. While the fat American cat has been away, the oriental mice have been playing hard for the hearts and minds of our Pasifika brothers and sisters – and even harder for the wallets of their infinitely corruptible leaders. They have yet to discover that the trick with Pacific politicians is not just to buy them, but to persuade them to stay bought. We have slightly more experience in these matters, but the Chinese are nothing if not fast learners.”

“You don’t sound all that enamoured of the South Pacific political class. What ever happened to the ‘Pacific Way’?”

George took another sip of his whiskey and absently pattered his impressive head of silver hair into place.

“‘The Pacific Way’. Ah yes, that was a durable and extremely useful fiction. We turned a blind eye to the small and large scale corruption that dogged every one of the South Pacific’s post-colonial regimes, and, in return, they kept their people safe from the anti-imperialist virus that laid low so many Third World countries in the 1960s and 70s. Their non-viable economies were kept afloat by US, Australian and New Zealand aid, and by the money remitted from the thousands of Pasifika who had taken jobs in the Palangi’s factories and offices. It was the Cold War, Martyn, and we worked on the principle that although practically all of the Pacific leaders were a corrupt pack of bastards, they were, when all was said and done, our corrupt pack of bastards – and not the Chinese’ of the Soviets’ corrupt pack of bastards.”

Martyn stared at the old man, eyebrows raised, and slowly shook his head.

“But the Cold War is over, George.”

“Indeed it is, Martyn, indeed it is. For a few years, relieved of the need to keep the Russian’s out, we told the Pacific leaders that they would have to adapt to George Bush Senior’s ‘New World Order’ of globalisation, free markets and the sudden recovery of blind eyes. Needless to say, all hell broke loose politically in the South Pacific. The days of corrupt-but-stable governments were replaced by the days of corrupt-but-bloody-mad-and-unstable governments. What every leader was looking for was a diplomatic sugar-daddy – and, of course, as China’s economic strength grew by leaps and bounds, Beijing was only too happy to oblige.”

“Or, in the case of Nauru, the Australians.”

George set his glass down on the glass table-top with a loud crack.

“Don’t talk to me about Nauru and the bloody Aussies! That god-forsaken quarry was a condominium in which the Brits, the Aussies and the Kiwis were supposed to have an equal say. Fat chance! Even before their bloody awful ‘Pacific Solution’ came into play, Canberra had decided that Nauru was theirs to do with as they pleased. Something to stash away for a rainy day. Do you know, Martyn, I remember advising Clark, back at the time we signed the FTA with China, to convince our new-found friends that New Zealand could act as the cut-out for a Chinese takeover of Nauruan politics. Remember what I said about Pacific leaders being notorious for not staying bought? We could have left the Aussies high and dry!”

“Imagine the songs they’d be willing to sing for Jacinda if Nauru was a New Zealand-Chinese condominium – instead of an Australian concentration camp!”

“Imagine!”

George rose from his chair and reached out his hand to Martyn.

“That’s enough for one rainy afternoon, dear boy. Plenty to be going on with there.”

“Thanks, George. We must do this again.”

George was already at the door. Wobbling his hand in a farewell salute.

“You’ve got my number.”

This short story was originally posted on The Daily Blog of Friday, 7 September 2018.

Poisoning Nauru: How Australia Is Destroying A Pacific Neighbour’s Democracy, While New Zealand’s Government Looks On.

Silencing All Opposition: Matthew Batsiua, one of five opposition MPs expelled from the Nauruan Parliament for challenging the increasingly dictatorial regime of President Baron Waqa, is arrested for leading a protest demonstration against its latest crackdown on free speech and the Internet. While Australia, in the name of its brutal "Pacific Solution", is poisoning Nauru's democratic institutions, New Zealand looks on in silence.

 

CORRUPTION IS LIKE POISON. Once inside your system it immediately starts attacking your defences. Eventually, if nothing is done to counteract its effects, it kills you. The tiny Pacific island nation of Nauru, situated approximately 4,000 kilometres north of Auckland, has been corrupted by Australia. Slowly but surely, its democratic institutions are being poisoned.

 

Some would argue that it all began a hundred years ago when the Australians turfed out the Germans at the beginning of the First World War. At the war’s end, Nauru was declared a League of Nations “mandate” under the joint control of the British, Australian and New Zealand governments. In reality, however, Nauru has always been an Aussie-run operation.

 

No one would have cared (other than the Nauruans, who weren’t consulted) had it not been for the fact that this tiny dot (just 21 square kilometres!) on the equator had, over thousands of years, accumulated hundreds-of-thousands of tons of top-quality bird shit.

 

Nauru’s phosphate deposits were among the purest in the world, a fact which conferred upon the hapless island territory the dangerous status of “strategic possession”. Ruthlessly extracted for use as fertiliser, Nauru’s phosphate deposits would, between 1920 and 1980, transform New Zealand’s farms into some of the most productive agricultural units on earth.

 

The Nauruans were not permitted to get their hands on this crucial resource until the late 1960s. For a few fat years the newly independent republic of Nauru waxed affluent on its rapidly dwindling guano deposits. Briefly, its citizens enjoyed one of the highest per capita incomes on earth. And then, suddenly, it was gone. Leaving Nauru as little more than, in David Lange’s memorable phrase: “a clapped-out quarry”.

 

What was Nauru to do? In 1991 it had $1.5 billion in its Nauru Phosphate Royalties Trust – a not insignificant capital base for 10,000 citizens looking for a fresh start. Tragically, by 2001, corruption and mismanagement had reduced the Trust’s resources to barely $100 million. With its levels of expenditure now well in excess of its income, Nauru was broke.

 

And then along came the Tampa and its hundreds of rescued asylum seekers. Little Johnny Howard responded by unconscionably exploiting Australia’s most visceral racist impulses. That created an urgent political need to get the whole festering problem off Australian soil. What Howard and his Liberal Party were looking for was a nation state that was not only willing to “accommodate” Australia’s unwanted asylum-seekers, but to also put a dampener on the enthusiasm of interfering human-rights lawyers, UN rapporteurs, and investigative journalists. Thus was born the “Pacific Solution”.

 

The detention of the Tampa refugees was arranged with indecent haste, but the transformation of Nauru into an hermetically-sealed island of unaccountable state power was bound to take a little longer. Nauru had a perfectly serviceable democratic constitution. It belonged to the Commonwealth and was a member of the Pacific Forum. It had a respectable and responsible judiciary made up of (mostly) Australian judges. Its small, Australian-trained, police force was reasonably competent and honest. On the debit side, the country was broke, and just about everybody lucky enough to have a job worked for the Nauruan government. Politics and public administration was the country’s Achilles’ Heel. To corrupt Nauru, all Howard (or any other Australian prime minister) needed was a fistful of aid dollars – and 10 of its 19 MPs.

 

It has taken 14 years, off and on, but the poison is clearly working. Nauru’s decision to host Australia’s concentration camps for asylum seekers has eroded every constitutional check and balance essential to the survival of democratic institutions.

 

The first casualty was the Nauruan judiciary. In January 2014 the Chief Justice of Nauru, Geoffrey Eames, was expelled from the country, along with the Australian magistrate, Peter Law. With them went the rule of law in the tiny republic. The administration of justice is now in the hands of persons answerable only to the politicians. Opponents of the Government can no longer rely on the courts for protection.

 

The police force, too, has fallen under political control. Its inevitable involvement in the oppression of the asylum seekers has fatally compromised its personnel as impartial enforcers of the law. The Nauruan Police have abandoned their role as the the citizens’ protectors to become the Government’s enforcers. In collusion with the private security personnel responsible for keeping “order” at the refugee detention centres, police officers are increasingly regarded as people to be feared; thugs who can break the law with impunity.

 

The reason so little news of these derelictions filters out of Nauru is due to the ruthless censorship applied by the state-owned and operated television and radio stations. Attempting to report such matters would instantly cost any local journalist his or her job. It’s no easier for foreign journalists. President Baron Waqa and his Cabinet have imposed a mandatory, non-refundable $8,000 “bond” on every journalist attempting to enter the country. If that doesn’t dampen their enthusiasm, the Nauruan immigration authorities can always arrange for them to be put on the next plane to Sydney or Auckland. Oh, and just in case young Nauruans might feel tempted to organise and communicate through social media, the Government has shut down Facebook.

 

Not surprisingly, with the Judiciary subverted, the Police corrupted and the news media gagged, Baron Waqa and his allies decided in June of last year that it was time to put the finishing touches to their 21 square kilometre dictatorship. This involved the suspension of all those members of the Nauruan parliament who refused to go along with Waqa’s increasingly lawless regime.

 

Last week, several hundred Nauruans, led by one of the suspended MPs, Matthew Batsiua, attempted to protest the Waqa Government’s ever more draconian attempts to shut down free speech and the Internet. As they approached Parliament House, the Nauruan Police (aided by security officers from the camps) waded into the crowd and a number of protesters were hurt. Batsiua, along with the opposition MPs Sprent Dabwido (a former President of Nauru) and Squire Jeremiah were later arrested and remain in custody. Another opposition MP, Roland Kun, was physically hauled off a plane due to depart for Wellington and has had his passport cancelled. The Waqa regime is apparently concerned that he will inform the outside world about what is happening in Nauru.

 

The silence of the Australian Government in the face of this “Lord of the Flies” descent into lawlessness and brutality is readily understood. Prime Minister Tony Abbott needs the Pacific Solution and he is fully aware that it cannot be made to work in a democratic country where the rule of law holds sway.

 

More difficult to understand, and harder to forgive, is the silence of our own government. The Nauruans and their phosphate may have made New Zealand rich, but that does not appear to have inspired a reciprocal determination on our part to keep them free.

 

This essay was originally posted on The Daily Blog of Thursday, 25 June 2015.