Monday, October 23, 2017


The Commonwealth of Australia and the United States enjoy a very close alliance relationship. Australia shares many cultural traditions and values with the United States and has been a treaty ally since the signing of the Australia-New Zealand-United States (ANZUS) Treaty in 1951. Australia made major contributions to the allied cause in the First and Second World Wars, and the conflicts in Korea, Vietnam, Iraq, and Afghanistan. Australia is also a close intelligence partner through the “Five Eyes” group of nations. U.S. Marines are conducting rotational deployments in northern Australia. This initiative and others demonstrate the closeness of the relationship. A traditional cornerstone of Australia’s strategic outlook is the view that the United States is Australia’s most important strategic partner and is a key source of stability in the Asia-Pacific region. Australian decision-makers have also believed that Australia does not have to choose between the United States and China. Some former Australian political leaders and former government officials, as well as media reports, have expressed concern about where Australia’s relationship with the United States may be headed under the Trump Administration.

While Australia has a complex array of international relations, its geopolitical context is to a large extent defined by its economic relationship with China and its strategic relationship with the United States. Australia’s political leadership believes it can have constructive trade relations with China while maintaining its close strategic alliance relationship with the United States. However, shifts in the geostrategic dynamics of Asia are leading regional states such as Australia to hedge, increasingly with other Asian states, against the relative decline of U.S. engagement in the region. This is one interpretation of what is behind the recent strengthening of ties between Australia and Japan and between Australia and other regional powers in Asia. Australia also plays a key role in promoting regional stability in Southeast Asia and the Southwest Pacific, and has led peacekeeping efforts in the Asia-Pacific, including in Timor-Leste and the Solomon Islands.

Under the former Liberal Party government of John Howard, Australia invoked the ANZUS treaty to offer assistance to the United States after the attacks of September 11, 2001, in which 22 Australians were among those killed. Australia was one of the first countries to commit troops to U.S. military operations in Afghanistan and Iraq. Terrorist attacks on Australians in Indonesia in the 2000s also led Australia to share many of the United States’ concerns in the struggle against Islamist militancy in Southeast Asia and beyond. Australia is part of the global coalition to defeat the Islamic State (IS). There are continuing concerns in Australia about domestic Islamist terrorist threats, including from “lone wolf” attacks. Dozens of Australian citizens are believed to have gone to fight for the Islamic State.

Australia’s trade relationship with China has been a key source of economic growth. However, there is an ongoing debate in Australia on where the Australian economy is headed as the “China boom” subsides. While profits from iron ore and other mineral exports to China may slow, other emerging exports, including exports of Australian liquefied natural gas (LNG) potentially to a more diversified set of export partners may provide a continuing source of growth. Australia, which has signed free trade agreements with the United States, South Korea, Japan, and China, is a signatory of the 12-nation Trans Pacific Partnership (TPP) agreement.

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Malaysia, an ethnically diverse majority Muslim nation in Southeast Asia, has long been a partner in U.S. security and economic initiatives in the region, although political sensitivities in Malaysia have constrained both sides from forging deeper ties. Bilateral relations have improved over the past decade. Prime Minister Najib Razak, who came to power in 2009, made relations with the United States a priority early in his administration. More recently he has moved to deepen trade and economic ties with China. Congress has shown interest in a variety of issues in U.S.-Malaysia relations over the years, especially regarding trade, counterterror and security cooperation, human rights, the environment, and Malaysia’s external relations.

Malaysia is considered a middle-income country that is relatively prosperous when compared to other Southeast Asian countries. The United States and Malaysia are major trade and investment partners. In 2016, Malaysia was the 24th-largest market for U.S. exports and the 14th-largest supplier of U.S. imports. The two countries negotiated and signed the Trans-Pacific Partnership (TPP) free trade agreement (FTA), which would have removed tariff and non-tariff barriers to trade between the United States, Malaysia, and the other 10 participants. President Trump withdrew from the pact in January, stating an intent to negotiate future FTAs bilaterally, potentially with TPP partners. To date, there appears to have been little discussion of resuming bilateral U.S.-Malaysia FTA negotiations, but there may be interest in Malaysia in some type of economic dialogue with the United States such as a Trade and Investment Framework Agreement (TIFA). Malaysia is also seeking to develop deeper regional trade ties through the Regional Comprehensive Economic Partnership (RCEP), which does not include the United States.

Malaysia has enjoyed considerable political stability since it gained independence in 1957 despite potential cleavages within its multiethnic and multireligious social fabric. Political coalitions led by the United Malays National Organization (UMNO), the country’s dominant political party, have ruled Malaysia without interruption since independence. UMNO is a staunch proponent of economic and social preferences for ethnic Malays and other indigenous groups, collectively known as bumiputra. It has supported a wide-ranging economic program known as the New Economic Policy (NEP), which attempts to address socio-economic disparities by privileging bumiputra in government contracts, education, and government hiring. Malaysia has also enjoyed broad success in achieving higher income levels for its citizens since independence.

The United States occasionally has criticized the Malaysian government for its weak human rights protections, its record on combatting human trafficking, constraints on press freedom, and prosecution of opposition political leaders like Anwar Ibrahim. Many Members of Congress questioned the improved ranking and asserted that the State Department had overlooked serious human trafficking problems in order to facilitate approval of the TPP.

Malaysia is actively engaged in diplomacy on numerous regional and global issues. Efforts to promote moderate Islam and marginalize religious extremism have been a major part of Malaysian diplomacy, including acting as a mediator in conflicts between Muslim separatist groups and the central government in both the Philippines and Thailand. Malaysia maintains good relations with its neighbors and has promoted cooperation among the 10 countries in the Association of Southeast Asian Nations (ASEAN). Malaysia is one of several Southeast Asian countries with maritime and territorial claims in the South China Sea, although it has assumed a relatively low profile in those disputes. U.S.-Malaysia security cooperation includes counter-terrorism activities, numerous military exercises, ship visits, and military education exchanges.

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Terrorism in Southeast Asia

Southeast Asia is home to more than 625 million people and around 15% of the world’s Muslim population. The region has faced the threat of terrorism for decades, but threats in Southeast Asia have never been considered as great as threats in some other regions. However, the rise of the Islamic State poses new, heightened challenges for Southeast Asian governments and for U.S. policy towards the region.

Southeast Asia has numerous dynamic economies and three Muslim-majority states, including the world’s largest Muslim-majority nation, Indonesia. Although the mainstream of Islamic practice across the region is comparatively tolerant of other religions, Southeast Asia is also home to several longstanding and sometimes violent separatist movements and pockets of Islamist radicalism, which have led to instances of violence over the past 30 years. These were particularly acute during the 2000s, when several attacks in Indonesia killed hundreds of Indonesians and dozens of Westerners. The threat seemingly eased in the late 2000s-early 2010s, with the success of some Southeast Asian governments’ efforts to combat violent militancy and degrade some of the region’s foremost terrorist groups.

Several Southeast Asian governments, including Indonesia, Malaysia, and Singapore, have intensified counterterror efforts since 2014, outlawing calls for support of the Islamic State and strengthening policing and border-control efforts. Yet the challenges that governments in the region face were exemplified in January 2016 by a violent attack in Jakarta, Indonesia, that killed eight people, including four civilians.

There are several factors that characterize the terrorism threat in Southeast Asia. The region’s largest Muslim-majority nations, Indonesia and Malaysia, have long been known for moderate forms of Islam and the protection of religious diversity; policies that have widespread popular support but which raise resentments among small numbers of conservative actors. In other Southeast Asian countries with substantial Muslim populations, including the Philippines and Thailand, simmering resentments in Muslim-majority regions have been fed by perceived cultural and economic repression, leading to separatist movements that have posed threats to domestic groups and, in the case of the Philippines, to Western targets.

Threats are evolving with the rise of the Islamic State, which has conducted extensive recruitment in Indonesia’s national language and in the Malay language widely spoken in the region. Though the number of Southeast Asians who have traveled to the Middle East to fight with the Islamic State is considerably lower than numbers from other regions, observers estimate that hundreds of Southeast Asians have joined the fight, raising concerns that battle-trained individuals may return to the region and conduct attacks. Southeast Asia’s borders are comparatively porous, raising concerns about trans-border threats that may lead to attacks in third-party states, such as Singapore. This raises the issue of border controls, an important factor for addressing terrorism. Governments in the region have sought better coordination and intelligence sharing. These efforts have been supported by the United States.

The Trump Administration has indicated that combatting terrorism broadly, and IS specifically, is among its highest foreign-policy priorities. This has implications for numerous other U.S. interests, as U.S. policy towards the Asia-Pacific region balances a wide range of security and economic goals. The United States has offered counterterrorism assistance to several Southeast Asian nations. These include helping Indonesia create a centralized antiterrorism unit and providing U.S. troops on the Southern Philippine island of Basilan to help the Armed Forces of the Philippines combat violent groups in the country’s deep South.

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Tuesday, May 30, 2017

Conventional Arms Transfers to Developing Nations, 2008-2015

The newest available Congressional Research Service report providing quantitative data on conventional arms transfers to developing countries by the United States and other nations over the preceding eight year period.

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Saudi Arabia

The kingdom of Saudi Arabia, ruled by the Al Saud family since its founding in 1932, wields significant global influence through its administration of the birthplace of the Islamic faith and by virtue of its large oil reserves. Close U.S.-Saudi official relations have survived a series of challenges since the 1940s. In recent years, shared concerns over Sunni Islamist extremist terrorism and Iranian government policies have provided some renewed logic for continued strategic cooperation.
Political upheaval and conflict in the Middle East and North Africa appear to have strained bilateral ties, but the Trump Administration has stated its intent to strengthen ties to the kingdom. Successive U.S. Administrations have referred to the Saudi government as an important partner, and U.S. arms sales and related security cooperation programs have continued with congressional oversight and amid some congressional opposition.
Since 2009, the executive branch has notified Congress of proposed sales to Saudi Arabia of major defense articles and services with a potential aggregate value of more than $119 billion. The United States and Saudi Arabia concluded formal arms sale agreements worth more than $58 billion, from FY2009 through FY2015. Since March 2015, the U.S.-trained Saudi military has used U.S.-origin weaponry, U.S. logistical assistance, and shared intelligence in support of military operations in Yemen. Some Members of Congress have expressed concern about Saudi use of U.S.-origin weaponry, skepticism about Saudi commitment to combating extremism, and doubts about the extent to which the Saudi government shares U.S. priorities. Nevertheless, U.S.-Saudi counterterrorism ties reportedly remain close, and Saudi leaders have taken action against the Islamic State at home and abroad.
In parallel to close security ties, official U.S. concerns about human rights and religious freedom in the kingdom have in part reflected deeper concerns for the kingdom’s stability. Saudi activists advance limited economic and political reform demands, continuing trends that have seen Saudi liberals, moderates, and conservatives press for domestic change for decades. While some limited protests have occurred since unrest swept the wider region in 2011, clashes involving Saudi security forces have not spread beyond certain predominantly Shia areas of the oil-rich Eastern Province. The Obama Administration endorsed Saudi citizens’ rights to free assembly and free expression. Saudi leaders reject foreign interference in the country’s internal affairs.
The death of King Abdullah bin Abd al Aziz in January 2015 brought to a close his long chapter of national leadership. His half-brother King Salman bin Abd al Aziz assumed the throne and has moved to assert his authority at home and pursue Saudi prerogatives abroad. Succession arrangements have attracted particular attention in recent years, as senior leaders in the royal family have passed away or faced reported health issues. A series of appointments and reassignments since 2015 has altered the responsibilities and relative power of leading members of the next generation of the Al Saud family, the grandsons of the kingdom’s founder.
U.S. policy makers have sought to coordinate with Saudi leaders on regional issues and help them respond to domestic economic and security challenges. Saudi authorities are attempting to reorient and revitalize the nation’s economy, while streamlining public expenditure. Shared security challenges have long defined U.S.-Saudi relations, and questions about Saudi domestic and foreign policy may become more pertinent as leadership changes occur in the kingdom and conflicts and competition continue in the Middle East region. Saudi leaders’ assertiveness in confronting perceived threats and the effects of their sharpening tensions with Iran could affect U.S. security interests, including with regard to Yemen, Egypt, Bahrain, Syria, Lebanon, and Iraq.

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Navy Force Structure and Shipbuilding Plans

On December 15, 2016, the Navy released a new force-structure goal that calls for achieving and maintaining a fleet of 355 ships of certain types and numbers. CBO estimates that the earliest the Navy could achieve the 355-ship fleet would be 2035. Procuring the additional ships needed to achieve and maintain the Navy’s 355-ship fleet would require several billion dollars per year in additional shipbuilding funds.
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21st Century U.S. Energy Sources

Since the start of the 21st century, the U.S. energy system has seen tremendous changes. Technological advances in energy production have driven changes in energy consumption, and the United States has moved from being a growing net importer of most forms of energy to a declining importer, and possibly a net exporter in the near future. The United States remains the second largest consumer of energy in the world, behind China.
The U.S. oil and natural gas industry has gone through a renaissance of production. Technological improvements in hydraulic fracturing and horizontal drilling have unlocked enormous oil and natural gas resources from tight formations, such as shale. Oil has reached a level of production not seen in decades, and is projected to surpass the previous peaks of the early 1970s. Natural gas has set new production records almost every year since 2000.
In conjunction with the rise in oil and natural gas production, U.S. production of natural gas liquids has also increased. The rise in production of these fuel sources has also corresponded with increased consumption and exports of each. The rise in U.S. oil and natural gas production has taken place mostly onshore and on nonfederal lands. Nonfederal crude oil production nearly doubled over the past decade. While production on federal land has increased, it has not grown as fast as nonfederal oil production, causing the federal share of total U.S. crude oil production to fall from its peak of nearly 36% in 2009 to about 22% in 2015 (the latest data available).
U.S natural gas production shifted even more dramatically, with total U.S. production nearly doubling since 2006, while production on federal lands declined by almost 26% over the same time period. The federal share decreased from 28% in 2006 to 15% in 2015.
The electric power industry is in the process of transformation, especially with natural gas becoming the main electric generation fuel in 2016 and the growth in renewable forms of energy. The electricity infrastructure of the United States is aging. Uncertainty exists about how to modernize the grid and what technologies and fuels will be used to produce electricity in the future. Unresolved questions about transmission and reliability of the grid are arising due to potential cybersecurity threats and continuing interest in renewable energy and other low carbon sources of electricity.
Concerns about reliability and electricity prices are complicated by environmental regulations and the rising availability of natural gas for electric power production. While renewable energy is currently a relatively small portion of the total U.S. energy sector, renewables production and consumption have increased since the turn of this century. As a source of total primary energy, renewable energy increased 97% between 2001 and 2016.
Unlike some other energy commodities (e.g., crude oil), renewable energy is available in a variety of distinct forms that use different conversion technologies to produce usable energy products (e.g., electricity, heat, and liquid fuels). Therefore, it is important to distinguish between renewable fuel sources and uses. The United States has the largest coal resources in the world. Coal is used primarily for electricity generation. Although its prices have stayed low, coal has faced increasing competition from natural gas and renewables. U.S. consumption peaked in 2007 and has since declined by 35%. Meanwhile, nuclear output has stayed flat during the time period, but has faced significant stress as a future source of electric power generation.

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