India and the Russia-Ukraine War: The Paradox of Military Dependence, Traditional Loyalty and Strategic Autonomy

[from India in Transition, published by the Center for the Advanced Study of India (CASI) of the University of Pennsylvania, by Arndt Michael]

India, long-established as the world’s most populous democracy, has been quite instrumental over the years in assisting various countries dealing with democratic struggles. This support has included a blend of bilateral and multilateral initiatives, and especially economic development projects. Yet, India’s recent attitude toward the Russian attack on Ukraine and its concomitant behavior in the United Nations Security Council (as a non-permanent member) seems to contradict its support of democracy. By abstaining, rather than explicitly voting in favor of UN resolutions condemning Russian aggression at the beginning of the war, India angered several UN member-countries.

In order to substantiate its abstention from voting, India felt compelled to issue a so-called “Explanation of Vote” (EoV). In it, India asked for a “return to the path of diplomacy” and an immediate cessation of “violence and hostilities.” Crucially, India stated in the EoV that “the contemporary global order has been built on the UN Charter, international law, and respect for the sovereignty and territorial integrity of states…all member states need to honor these principles in finding a constructive way forward. Dialogue is the only answer to settling differences and disputes, however daunting that may appear at this moment.” 

While these statements and the call for dialogue are in accordance with India’s professed stance toward the relevance and objectives enshrined in the UN Charter, the discrepancy between rhetoric and practice is still conspicuous. At first glance, a “good” relationship with Russia seems to be more significant than the expectations of the world-community as represented in the United Nations. And, more importantly, by abstaining, India seemingly violated one of its central foreign and strategic policies: to always strive for strategic autonomy.

However, from a strategic perspective, India is precisely replicating what it did when the Soviet Union invaded Afghanistan. For India, its own national security is at stake, as well as its current and future geostrategic influence in Asia and the world. The military dependence that currently exists between India and Russia is nothing short of gigantic and has created a dangerous conundrum. Since the “Indo–Soviet Treaty of Peace, Friendship and Cooperation” was signed in 1971, defense agreements and long-term supply contracts have been in place. And while India and Russia have shared a strategic relationship since October 2000, this was upgraded in December 2020 to a “Special and Privileged Strategic Partnership.” 

Although there was a marked reduction of Russian imports in past years, official data from the Stockholm International Peace Research Institute (SIPRI) reveal that between 1996-2015, the Russian proportion of Indian military imports was almost 70 percent, and between 2016-20 it still hovered around 49 percent. In fact, 70 percent of all Indian military equipment currently in use has been directly produced in Russia, was manufactured with the majority of parts coming from Russia, or licensed by Russia. In 2020, this included the majority of Indian tanks, the only aircraft carrier (the INS Vikramaditya, a heavily modified Kiev-class aircraft carrier) with all of its combat aircraft MiG-29s, six frigates, four destroyers and the only nuclear-powered submarine. Additionally, eight out of fourteen Indian Navy submarines belong to the Russian Kilo-class. The Indian Air Force flies Sukhoi Su-30MKIs and Mil Mi-17s, which, respectively, constitute the largest share of the combat aircraft and utility helicopters, in addition to Russian tanker planes. India also just recently purchased the S-400 missile system.

Even though India has begun to reorient itself militarily toward other countries—the U.S., Israel, France and Italy—and has substituted foreign imports by slowly developing its own capabilities, a large number of new Indo-Russian projects are in the conceptual or implementation stages. In December 2021, in the frame of the so-called “2+2 Dialogue” (foreign and defense ministers), India and Russia began a new phase in their militarytechnological cooperation. Incidentally, India has used this very format for furthering cooperation in strategic, security and intelligence issues with four of its key strategic partners: Australia, the U.S., Japan and the newly added Russia. Russia and India agreed upon a further deepening of mutual military relations for ten years (until 2031). What is new is that next to the traditional purchase of Russian weapons systems, many common research projects and the development of new weapons systems—with their production taking place equally in both countries—have been agreed upon. This production includes new frigates, helicopters, submarines, cruise missiles and even Kalashnikovs

The depth of this mutual engagement, and especially India’s dependence, highlights a huge dilemma that might not only have drastic strategic consequences, but also long-lasting regional repercussions. The worldwide sanctions issued against Russia aim at the Russian economy and military. When it comes to the procurement of such crucial components as microchips or airline parts, Russia is soon expected to face shortages, essentially crippling its capacity to repair, construct, or have spare parts available (let alone construct new equipment). Unless other countries, such as China, circumvent international sanctions and step-in, the expected Russian inability to take care of its own military will have a spill-over effect. Russia is unlikely to be able to fulfill its contractual obligations toward India, and the lack of spare parts also has the potential to cripple India’s own military with regards to the Russian weapons equipment. The procurement agreements and common projects are, hence, all in jeopardy and India, now more than ever, depends on Russian goodwill. 

Next to military dependence, there are other concomitant effects in the economic and political sphere that influence Indian voting behavior. The worldwide sanctions have already led to dramatic increases in oil and gas prices, with India relying on imports of up to 80 percent. India will, therefore, have to pay much more for such crucial imports. Military imports from other countries aimed at substituting Russian equipment will also be much more expensive. All of this deals the Indian economy another blow—an economy that has been especially hit hard by the COVID-19 pandemic. And politically, Indian hegemony in South Asia has been markedly under pressure, in no small part because of the ChinaPakistan axis. In the eyes of India, this axis poses a serious threat to an already highly volatile IndoPakistan relationship. In addition, the IndoChina relationship reached a new low in May 2020 when Chinese infrastructure projects along the Himalayan borderlands led to fighting and the killing of soldiers. In addition, the Chinese claims to the South China Sea are categorically disputed by India. Chinese overtures toward Sri Lanka, the Maldives, and especially Pakistan in the frame of the Road Initiative are also regarded with growing discontent, as India claims that China is following a policy of encircling India.

In its 75th year of independence, India is following a classic realpolitik in trying not to alienate Russia while pledging rhetorical support for Ukraine. The contradictory consequence is that Russia has now offered more discounted oil, gas, and investments, while at the same time, the UK has suggested its military relationship with India could be upgraded—and has offered weapons made in the UK. For the Indian political establishment, India cannot forgo Russian support, militarily or as a producer of cheap oil and gas. Going forward, India’s military will need to protect its national security and project Indian influence and power well beyond its borders.

Arndt Michael is a Lecturer in the Department of Political Science, University of Freiburg (Germany), author of the multi-award-winning book India’s Foreign Policy and Regional Multilateralism (Palgrave Macmillan, 2013), and co-editor of Indien Verstehen (Understanding India, Springer, 2016). His articles have been published in Asian Security, Cambridge Review of International Affairs, Harvard Asia Quarterly, India Quarterly and India Review.

Penn Wharton: U.S. Budget Model

The U.S. Fiscal Imbalance: June 2022

[from Penn Wharton, University of Pennsylvania]

We estimate that the U.S. federal government faces a permanent fiscal imbalance equal to over 10 percent of all future GDP under current law where future federal spending outpaces tax and related receipts. Federal government debt will climb to 236 percent of GDP by 2050 and to over 800 percent of GDP by year 2095 (within 75 years).

Read the full analysis [archived PDF].

View the data [archived XLSX].

Brief based on work by Agustin Diaz, Jagadeesh Gokhale and Kent Smetters. Prepared by Mariko Paulson.

New Ultrathin Capacitor Could Enable Energy-Efficient Microchips

Scientists turn century-old material into a thin film for next-gen memory and logic devices

[from Berkeley Lab, by Rachel Berkowitz]

Electron microscope images show the precise atom-by-atom structure of a barium titanate (BaTiO3) thin film sandwiched between layers of strontium ruthenate (SrRuO3) metal to make a tiny capacitor. (Credit: Lane Martin/Berkeley Lab)

The silicon-based computer chips that power our modern devices require vast amounts of energy to operate. Despite ever-improving computing efficiency, information technology is projected to consume around 25% of all primary energy produced by 2030. Researchers in the microelectronics and materials sciences communities are seeking ways to sustainably manage the global need for computing power.

The holy grail for reducing this digital demand is to develop microelectronics that operate at much lower voltages, which would require less energy and is a primary goal of efforts to move beyond today’s state-of-the-art CMOS (complementary metaloxide semiconductor) devices.

Non-silicon materials with enticing properties for memory and logic devices exist; but their common bulk form still requires large voltages to manipulate, making them incompatible with modern electronics. Designing thin-film alternatives that not only perform well at low operating voltages but can also be packed into microelectronic devices remains a challenge.

Now, a team of researchers at Lawrence Berkeley National Laboratory (Berkeley Lab) and UC Berkeley have identified one energy-efficient route—by synthesizing a thin-layer version of a well-known material whose properties are exactly what’s needed for next-generation devices.

First discovered more than 80 years ago, barium titanate (BaTiO3) found use in various capacitors for electronic circuits, ultrasonic generators, transducers, and even sonar.

Crystals of the material respond quickly to a small electric field, flip-flopping the orientation of the charged atoms that make up the material in a reversible but permanent manner even if the applied field is removed. This provides a way to switch between the proverbial “0” and “1” states in logic and memory storage devices—but still requires voltages larger than 1,000 millivolts (mV) for doing so.

Seeking to harness these properties for use in microchips, the Berkeley Lab-led team developed a pathway for creating films of BaTiO3 just 25 nanometers thin—less than a thousandth of a human hair’s width—whose orientation of charged atoms, or polarization, switches as quickly and efficiently as in the bulk version.

“We’ve known about BaTiO3 for the better part of a century and we’ve known how to make thin films of this material for over 40 years. But until now, nobody could make a film that could get close to the structure or performance that could be achieved in bulk,” said Lane Martin, a faculty scientist in the Materials Sciences Division (MSD) at Berkeley Lab and professor of materials science and engineering at UC Berkeley who led the work.

Historically, synthesis attempts have resulted in films that contain higher concentrations of “defects”—points where the structure differs from an idealized version of the material—as compared to bulk versions. Such a high concentration of defects negatively impacts the performance of thin films. Martin and colleagues developed an approach to growing the films that limits those defects. The findings were published in the journal Nature Materials.

To understand what it takes to produce the best, low-defect BaTiO3 thin films, the researchers turned to a process called pulsed-laser deposition. Firing a powerful beam of an ultraviolet laser light onto a ceramic target of BaTiO3 causes the material to transform into a plasma, which then transmits atoms from the target onto a surface to grow the film. “It’s a versatile tool where we can tweak a lot of knobs in the film’s growth and see which are most important for controlling the properties,” said Martin.

Martin and his colleagues showed that their method could achieve precise control over the deposited film’s structure, chemistry, thickness, and interfaces with metal electrodes. By chopping each deposited sample in half and looking at its structure atom by atom using tools at the National Center for Electron Microscopy at Berkeley Lab’s Molecular Foundry, the researchers revealed a version that precisely mimicked an extremely thin slice of the bulk.

“It’s fun to think that we can take these classic materials that we thought we knew everything about, and flip them on their head with new approaches to making and characterizing them,” said Martin.

Finally, by placing a film of BaTiO3 in between two metal layers, Martin and his team created tiny capacitors—the electronic components that rapidly store and release energy in a circuit. Applying voltages of 100 mV or less and measuring the current that emerges showed that the film’s polarization switched within two billionths of a second and could potentially be faster—competitive with what it takes for today’s computers to access memory or perform calculations.

The work follows the bigger goal of creating materials with small switching voltages, and examining how interfaces with the metal components necessary for devices impact such materials. “This is a good early victory in our pursuit of low-power electronics that go beyond what is possible with silicon-based electronics today,” said Martin.

“Unlike our new devices, the capacitors used in chips today don’t hold their data unless you keep applying a voltage,” said Martin. And current technologies generally work at 500 to 600 mV, while a thin film version could work at 50 to 100 mV or less. Together, these measurements demonstrate a successful optimization of voltage and polarization robustness—which tend to be a trade-off, especially in thin materials.

Next, the team plans to shrink the material down even thinner to make it compatible with real devices in computers and study how it behaves at those tiny dimensions. At the same time, they will work with collaborators at companies such as Intel Corp. to test the feasibility in first-generation electronic devices. “If you could make each logic operation in a computer a million times more efficient, think how much energy you save. That’s why we’re doing this,” said Martin.

This research was supported by the U.S. Department of Energy (DOE) Office of Science. The Molecular Foundry is a DOE Office of Science user facility at Berkeley Lab.

World-Watching: China Globalization Conference

[from the Center for China and Globalization]

The Center for China and Globalization is proud to announce the full program of their upcoming 8th edition of CCG annual China and Globalization Forum 2022 to be held in online-offline hybrid format in Beijing. Everyone is cordially invited to join the events open to public virtually. All sessions open to public will be broadcast live. You will be able to access the sessions on Zoom:

Tuesday, June 21st

09:00-10:00—Forum Special Online Program I: Advancing the 2030 Agenda in Uncertain Times: Sustainability and the Quest for ChinaU.S. Cooperation – Fireside Chat with Sec. Henry M. Paulson, Jr. and Mr. WANG Shi (王石)

10:30-12:30—Ambassadors’ Roundtable: Global Recovery in Post-Pandemic Times: Trends, Challenges, and Responses

14:00-16:00ChinaEurope Roundtable: ChinaEurope Economic Cooperation: Moving Forward with the Global Quest for Sustainability

17:30-18:30—Forum Special Online Program II: History at a Turning Point: Pandemic, Ukraine, and the Changing Relations between China, Europe, and the United States–Dialogue with Historian Niall Ferguson

20:00-21:30—Forum Special Online Program III: Realigning the U.S.China Trade and Economic Relationship: Inflation, Tariffs, and the Way Forward – ChinaU.S. Think Tank Dialogue

Zoom:
Webinar ID: 894 5641 9097
Passcode: 566991

Once you’re admitted into the Zoom meeting, your camera and audio will remain off. Simultaneous interpretation of both English and Chinese languages will be available by selecting the language pane.

Agenda

Monday, June 20th

09:00-10:00—Forum Special Online Program I: Advancing the 2030 Agenda in Uncertain Times: Sustainability and the Quest for ChinaU.S. Cooperation – Fireside Chat with Sec. Henry M. Paulson, Jr. and Mr. WANG Shi (王石)

Host

WANG Huiyao (王辉耀), CCG President, Vice Chairman of China Association for International Economic Cooperation (CAFIEC)

Speakers

Henry M. Paulson, Jr., former U.S. Treasury Secretary, Founder and Chairman of the Paulson Institute
WANG Shi (王石), CCG Senior Vice President, Founder and Honorary Chairman of China Vanke Co., Ltd., Founder of C-Team

This program will also be livestreamed on the web via the Baidu links and social media platforms below:

English language
Chinese language

Social Media
Youtube
Twitter
Facebook

10:30-12:30—Ambassadors’ Roundtable: Global Recovery in Post-Pandemic Times: Trends, Challenges, and Responses

Chair

WANG Huiyao (王辉耀), CCG President, Vice Chairman of China Association for International Economic Cooperation (CAFIEC)

Opening remarks

LONG YongtuCCG Chairman; former Vice Minister of Commerce
LIN Songtian, President of the Chinese People’s Association for Friendship with Foreign Countries, former Chinese Ambassador to South Africa
Siddharth Chatterjee, UN Resident Coordinator, United Nations in China

Participants

(in alphabetic order by country): 
Rahamtalla M. Osman
, Permanent Representative of African Union to China
Graham Fletcher, Ambassador of Australia to China 
Paulo Estivallet de Mesquita, Ambassador of Brazil to China 
Nicolas Chapuis, Ambassador of European Union to China 
Laurent Bili, Ambassador of France to China 
Djauhari Oratmangun, Ambassador of Indonesia to China 
Luca Ferrari, Ambassador of Italy to China 
Raja Dato Nushirwan Zainal Abidin, Ambassador of Malaysia to China 
Clare Fearnley, Ambassador of New Zealand to China 
Signe Brudeset, Ambassador of Norway to China 
Moin ul Haque, Ambassador of Pakistan to China 
Luis Quesada, Ambassador of Peru to China 
José Augusto Duarte, Ambassador of Portugal to China 
James Kimonyo, Ambassador of Rwanda to China 
Alenka Suhadolnik, Ambassador of Slovenia to China 
Siyabonga Cwele, Ambassador of South Africa to China 
Bernardino Regazzoni, Ambassador of Switzerland to China 
Arthayudh Srisamoot, Ambassador of Thailand to China 
Ali Obaid Al Dhaheri, Ambassador of UAE to China

14:00-16:00ChinaEurope Roundtable: ChinaEurope Economic Cooperation: Moving Forward with the Global Quest for Sustainability

Chair

Andy MokCCG Senior Fellow

Participants

(in alphabetic order)
Joseph Cash
, Policy Analyst, China–Britain Business Council (CBBC)
CUI Hongjian, CCG Non-Resident Senior Fellow and Director of the Department of European Studies at the China Institute of International Studies (CIIS)
Vivian Ding, CCG Senior Council Member, Founder and CEO of WeBrand Global
FENG Zhongping, Director of Institute of European Studies, Chinese Academy of Social Sciences (CASS)
Allan Gabor, President of Merck China
Archil Kalandia, Ambassador of Georgia to China
LENG Yan, CCG Senior Council Member; Executive Vice President of Daimler Greater China
LIU Chang, Vice President of Knorr-Bremse Asia Pacific
Steven Lynch, Managing Director, BritCham China
Dario Mihelin, Ambassador of Croatia to China
Leena-Kaisa Mikkola, Ambassador of Finland to China
MIN Hao, CCG Senior Council Member; Founder, Chairman, and CEO of the Nanjing Easthouse Electric Ltd.
SUN Yongfu, CCG Senior Fellow; former Director-General of MOFCOM Department of European Affairs
Joerg Wuttke, President of the EU Chamber of Commerce in China
ZHOU YanliCCG Advisor; Former Vice Chairman of China Insurance Regulatory Commission
Helen Zhu, CCG Senior Council Member; Vice President of Sanofi China

This program will also be livestreamed on the web via the Baidu links and social media platforms below:

English language
Chinese language

Social Media
Youtube
Twitter
Facebook

17:30-18:30—Forum Special Online Program II: History at a Turning Point: Pandemic, Ukraine, and the Changing Relations between China, Europe, and the United States–Dialogue with Historian Niall Ferguson

Speakers

Niall Ferguson, Milbank Family Senior Fellow at the Hoover Institution, Stanford University
WANG Huiyao (王辉耀), CCG President, Vice Chairman of China Association for International Economic Cooperation (CAFIEC)

20:00-21:30—Forum Special Online Program III: Realigning the U.S.China Trade and Economic Relationship: Inflation, Tariffs, and the Way Forward – ChinaU.S. Think Tank Dialogue

Moderator

WANG Huiyao (王辉耀), CCG President, Vice Chairman of China Association for International Economic Cooperation (CAFIEC)

Speakers

(in alphabetic order)
Craig Allen
, President, US-China Business Council (USCBC)
Wendy Cutler, Vice President, Asia Society Policy Institute; former Acting Deputy U.S. Trade Representative
JIN Xu, President, China Association of International Trade (CAIT)
Adam Posen, President, Peterson Institute for International Economics (PIIE)
Jeremie Waterman, President of China Center and Vice President, U.S. Chamber of Commerce
YI Xiaozhun, former Deputy Director-General of World Trade Organization, former Vice Commerce Minister

Tuesday, June 21st

09:30-12:30China Globalization 30 Roundtable Experts Roundtable: China and Globalization in the 21st Century (Chinese language livestream, not available on Zoom)

Chair

Mabel MiaoCCG Secretary-General

Discussants

(in alphabetic order)
CHEN Zhiwu, Director of Asia Global Institute, Professor of Business School, Hong Kong University
DA Wei, Professor and Director of Center for International Security and Strategy, Tsinghua University
DONG Guanpeng, Vice President of China Public Relations Association, Dean of School of Government and Public Affairs, Communication University of China
GE Jianxiong, Director of Institute of Chinese Historical Geography, Fudan University
GU Xuewu, Director of Center for Globalization, University of Bonn
HU Biliang, Executive Director of the Belt and Road Institute and the Institute of Emerging Markets, Beijing Normal University
LI Xiangyang, Director of Institute of Asia-Pacific and Global Strategy, Chinese Academy of Social Sciences (CASS)
LIU Guoen, Dean of Institute for Global Health and Development, BOYA Distinguished Professor, Peking University
LIU Junhong, Director of Globalization Center, China Institutes of Contemporary International Relations (CICIR)
SU Hao, Director of Center for Strategy and Peace Studies, China Foreign Affairs University
XIE Tao, Dean of School of International Relations and Diplomacy, Beijing Foreign Studies University
XUE Lan, Dean of Schwarzman College, Tsinghua University
WANG Huiyao (王辉耀), President of Center for China and Globalization; Dean of Development Research Institute, Southwest University of Finance and Economics
WANG Ning, Zhiyuan Chair Professor, Shanghai Jiao Tong University, Foreign Member of the European Academy of Sciences
WANG Yiwei, Professor of School of International Relations, Renmin University of China
WANG Yong, Director of Center for International Political and Economic Studies, Peking University
WU Xinbo, Dean of Institute of International Studies, Director of Center for American Studies, Fudan University
WU Zhicheng, Vice President of the Institute of International Strategic Studies, Party School of the Central Committee of CPC (National Academy of Administration)
YANG Xuedong, Senior Professor of Political Science, Tsinghua University
ZHANG Shuhua, Director of Institute of Political Science, Chinese Academy of Social Sciences (CASS)
ZHANG Xudong, Professor of Comparative Literature & East Asian Studies, NYU
ZHANG Yunling, Member of Presidium of Academic Divisions of Chinese Academy of Social Sciences (CASS)

This session will also be livestreamed on the web accessible via this Baidu link (Chinese language only, no simultaneous interpretation).

World-Watching: Bank of England—Bank Rate Increased to 1.25%

[from Bank of England]

The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 15 June 2022, the MPC voted by a majority of 6-3 to increase Bank Rate by 0.25 percentage points, to 1.25%. Those members in the minority preferred to increase Bank Rate by 0.5 percentage points, to 1.5%.

Read the Monetary Policy Summary and Minutes [Archived PDF]

COVID-19 and “Naïve Probabilism”

[from the London Mathematical Laboratory]

In the early weeks of the 2020 U.S. COVID-19 outbreak, guidance from the scientific establishment and government agencies included a number of dubious claims—masks don’t work, there’s no evidence of human-to-human transmission, and the risk to the public is low. These statements were backed by health authorities, as well as public intellectuals, but were later disavowed or disproven, and the initial under-reaction was followed by an equal overreaction and imposition of draconian restrictions on human social activities.

In a recent paper, LML Fellow Harry Crane examines how these early mis-steps ultimately contributed to higher death tolls, prolonged lockdowns, and diminished trust in science and government leadership. Even so, the organizations and individuals most responsible for misleading the public suffered little or no consequences, or even benefited from their mistakes. As he discusses, this perverse outcome can be seen as the result of authorities applying a formulaic procedure of “naïve probabilism” in facing highly uncertain and complex problems, and largely assuming that decision-making under uncertainty boils down to probability calculations and statistical analysis.

This attitude, he suggests, might be captured in a few simple “axioms of naïve probabilism”:

Axiom 1: more complex the problem, the more complicated the solution.

This idea is a hallmark of naïve decision making. The COVID-19 outbreak was highly complex, being a novel virus of uncertain origins, and spreading through the interconnected global society. But the potential usefulness of masks was not one of these complexities. The mask mistake was consequential not because masks were the antidote to COVID-19, but because they were a low cost measure the effect of which would be neutral at worst; wearing a mask can’t hurt in reducing the spread of a virus.

Yet the experts neglected common sense in favor of a more “scientific response” based on rigorous peer review and sufficient data. Two months after the initial U.S. outbreak, a study confirmed the obvious, and masks went from being strongly discouraged to being mandated by law. Precious time had been wasted, many lives lost, and the economy stalled.

Crane also considers another rule of naïve probabilism:

Axiom 2: Until proven otherwise, assume that the future will resemble the past.

In the COVID-19 pandemic, of course, there was at first no data that masks work, no data that travel restrictions work, no data of human-to-human transmission. How could there be? Yet some naïve experts took this as a reason to maintain the status quo. Indeed, many universities refused to do anything in preparation until a few cases had been detected on campus—at which point they had some data, as well as hundreds or thousands of other as yet undetected infections.

Crane touches on some of the more extreme examples of his kind of thinking, which assumes that whatever can’t be explained in terms of something that happened in the past is speculative, non-scientific and unjustifiable:

“This argument was put forward by John Ioannidis in mid-March 2020, as the pandemic outbreak was already spiralling out of control. Ioannidis wrote that COVID-19 wasn’t a ‘once-in-a-century pandemic,’ as many were saying, but rather a ‘once-in-a-century data-fiasco’. Ioannidis’s main argument was that we knew very little about the disease, its fatality rate, and the overall risks it poses to public health; and that in face of this uncertainty, we should seek data-driven policy decisions. Until the data was available, we should assume COVID-19 acts as a typical strain of the flu (a different disease entirely).”

Unfortunately, waiting for the data also means waiting too long, if it turns out that the virus turns out to be more serious. This is like waiting to hit the tree before accepting that the available data indeed supports wearing a seatbelt. Moreover, in the pandemic example, this “lack of evidence” argument ignores other evidence from before the virus entered the United States. China had locked down a city of 10 million; Italy had locked down its entire northern region, with the entire country soon to follow. There was worldwide consensus that the virus was novel, the virus was spreading fast and medical communities had no idea how to treat it. That’s data, and plenty of information to act on.

Crane goes on to consider a 3rd axiom of naïve probabilism, which aims to turn ignorance into a strength. Overall, he argues, these axioms, despite being widely used by many prominent authorities and academic experts, actually capture a set of dangerous fallacies for action in the real world.

In reality, complex problems call for simple, actionable solutions; the past doesn’t repeat indefinitely (i.e., COVID-19 was never the flu); and ignorance is not a form of wisdom. The Naïve Probabilist’s primary objective is to be accurate with high probability rather than to protect against high-consequence, low-probability outcomes. This goes against common sense principles of decision making in uncertain environments with potentially very severe consequences.

Importantly, Crane emphasizes, the hallmark of Naïve Probabilism is naïveté, not ignorance, stupidity, crudeness or other such base qualities. The typical Naïve Probabilist lacks not knowledge or refinement, but the experience and good judgment that comes from making real decisions with real consequences in the real world. The most prominent naïve probabilists are recognized (academic) experts in mathematical probability, or relatedly statistics, physics, psychology, economics, epistemology, medicine or so-called decision sciences. Moreover, and worryingly, the best known naïve probabilists are quite sophisticated, skilled in the art of influencing public policy decisions without suffering from the risks those policies impose on the rest of society.

Read the paper. [Archived PDF]

World-Watching: Global Energy Tracker

[from the Council on Foreign Relations]

by Benn Steil and Benjamin Della Rocca

The Global Energy Tracker allows you to gauge trends in energy use across the globe through time.

The charts on the tracker page compile data on energy-consumption trends in seventy-nine countries going back to 1990. Each chart shows how much energy a given country consumes from nine different sources.

The charts display each country’s consumption data for each energy source by the amount of exajoules consumed, by exajoules consumed per capita, and as a share of that country’s total energy consumption. (Exajoules are a measure of energy; one exajoule is roughly equivalent to California’s annual electricity use.)

As the legend indicates, five energy sources covered by the trackercoal, oil, natural gas, biofuels, and other (unclassified)—emit high levels of carbon dioxide. Four others—solar, wind, nuclear, and hydroelectric—are low-carbon emitters.

Together, the charts reveal significant trends in global energy usage. They show, for example, that high-carbon energy sources—especially oil—are the world’s dominant source of power. On average, 83 percent of tracker countries’ energy comes from high-carbon sources, and 37 percent specifically from oil.

Low-carbon sources, however, are on the rise, particularly in developed countries. Since 2010, the United States’ low-carbon consumption share climbed from 12 to 16 percent, the United Kingdom’s from 10 to 19 percent, and Germany’s from 14 to 19 percent. China, the world’s largest energy consumer, saw its low-carbon share rise from 9 to 15 percent. Rapid cost declines for low-carbon sources such as wind and solar, beneficiaries of technological innovation, explain much of the change. Still, low-carbon power’s share has actually declined in some rich countries, such as Japan—where it has fallen from 18 to 11 percent.

Some tracker countries rely highly on low-carbon energy. Twenty-five percent of Canada’s energy and 29 percent of Brazil’s, for example, comes from hydroelectric—compared with 9 percent for tracker countries on average. France derives over a third of its energy from nuclear. Other countries remain heavy users of higher-carbon sources. China derives 56 percent of its power from coal—although that figure is down from 70 percent a decade ago.

View the Global Energy Tracker.

WANG Huiyao: To Save Global Trade, Start Small

[from the Center for China and Globalization]

by WANG Huiyao (王辉耀), Founder of the Center for China and Globalization

The global economy is being rocked by war, sanctions and spiraling commodity prices—not to mention the ongoing strain of the pandemic, geopolitical tensions and climate change. These compounding risks present a serious challenge to the system of open trade that the World Trade Organization was designed to uphold. But it also offers a chance for the beleaguered organization, which is holding its first ministerial conference since 2017, to prove its continuing relevance.

The WTO has traditionally focused on combating protectionism—measures designed to insulate producers from international competition. Now, though, the biggest threats to free trade come from policies meant to safeguard national security and protect citizens from risks, such as those related to health, the environment or digital spaces.

Former WTO Director-General Pascal Lamy has called this growing use of export controls, cybersecurity laws, investment blacklists, reshoring incentives and the like “precautionism.” It’s been on the rise since the start of the pandemic, when many countries moved to restrict exports of medical supplies and other essentials. COVID-19 has also raised concerns about the vulnerability of supply chains, particularly those dependent on geopolitical rivals.

The world’s two biggest trading nations, the United States and China, have both engaged in precautionism. The U.S. is actively pursuing a policy of “friend-shoring”—shifting trade flows from potentially hostile countries to friendlier ones. China’s “dual circulation” strategy aims in part to reduce dependence on foreign imports, especially technology, while its government has long imposed limits on data flows in and out of the country.

With Russia’s invasion of Ukraine, the momentum toward friend-shoring has grown. Meanwhile, food shortages and surging prices have triggered another round of precautionary measures: Since the war began, 63 countries have imposed a more than 100 export restrictions on fertilizer and foodstuffs.

While the impulse driving such policies is understandable, the trend could cause great harm if allowed to run unchecked. It will increase inflation and depress global growth, especially if it involves costly redeployment of supply chains away from efficient producers such as China. A recent WTO study estimated that decoupling the global economy into “Western” and “Eastern” blocs would wipe out nearly 5% in output, the equivalent of $4 trillion.

As a recent study by the International Monetary Fund points out, the way to make global value chains more resilient is to diversify, not dismantle them. Turning away from open trade will only make states more vulnerable to economic shocks such as war, disease or crop failures.

The WTO is an obvious vehicle to rally collective action on these issues. However, like other global institutions, it has been weakened by years of deadlock. At this week’s meeting, countries should start to build positive momentum with some small but symbolically significant breakthroughs to show the WTO can still mobilize joint action.

Given current threats to food security, at the very least members should agree not to restrict exports of foodstuffs purchased for the World Food Programme. A step further would be a joint statement calling on members to keep trade in food and agricultural products open and avoid imposing unjustified export restrictions. There should also be closer coordination to smooth supply chains and clogged logistics channels.

Another low-hanging fruit is finally securing a  waiver covering intellectual property rights for COVID-19-related products. This proposal has languished for over 18 months but has now been redrafted to address concerns from the U.S. and European Union. Signing it would go some way to expanding global access to vaccines, which are still sorely needed in many parts of the world.

Beyond this week, the WTO secretariat and members need to develop a work program to reform the organization. This should include developing a framework to ensure that if states do take precautionary measures, they do so in a transparent, rules-based manner that does not slide into more harmful forms of protectionism.

Reviving the WTO’s defunct dispute settlement mechanism is a clear priority. Twenty-five members have agreed to an interim arrangement that would function in a similar way. More members should join this agreement, ideally including the U.S., and start negotiating the full restoration of a binding mechanism. They should also set clear criteria for carveouts for legitimate precautionary measures related to national security, healthcare and environmental issues.

No one should expect big breakthroughs in Geneva. But practical agreements on immediate priorities such food security and vaccines would at least help to reassert the WTO’s relevance and show that the world’s trading partners are not simply going to give up on multilateralism. At this dangerous moment, even small victories are welcome.

Shipping and the World

[from Seatrade Maritime News]

Asyad Dry Dock Expanding Capacity As Demand Grows

Oman shipyard Asyad Dry Dock is expanding its capacity by 20% with a new floating dock as its current facilities are fully utilized.

by Marcus Hand

The shipyard, formerly Oman Drydock Company, is now part of the Asyad Group, the logistics arm of the Oman government. Management of the yard has been combined with shipowner Oman Shipping Company, and overseen by Dr. Irbahim Al Nadhairi, Chief Executive Officer, Shipping & Drydock.

“We have integrated the shipping and drydocking as the shipping service. The companies are still two legal separate entities but then we share the same executive team to be more efficient,” Dr. Ibrahim told Seatrade Maritime News in an interview at Posidonia 2022.

On the shipping side of the business the group owns a fleet of 65 ships with plans to increase the fleet to over 100 vessels over the next five years. He explains that with such a size of fleet the shipowner needed a quality shipyard so it made sense to work together.

Asyad maintains most, if not all its fleet at the shipyard in Oman, accounting for around 15% of its business. While part of the same group Dr. Ibrahim says it does not send its ships to the yard “by default,” and they have to make sure it is competitive as it needs to be for their third-party customers.

Business has been growing for the shipyard and it experienced a spike in the first half of this year as Chinese capacity has been taken out of the market by COVID restrictions pushing work to yards in other parts of the world. “So, we could see there was a big hike in the number of ships, not only for Asyad Dry Dock, but the entire region as well,” Dr. Ibrahim said.

“The next 12 months I believe the ship repair industry will still continue to flourish on our side.”

The shipyard’s two 600,000 DWT drydocks are already operating at full capacity and this year sees it adding a floating dock with the capacity to handle vessels up to Panamax size.

“We’ve recently acquired a floating dock which is of Panamax size and we reckon that about 40% of the business in ship repair is within that Panamax size. The floating dock gives us around 20% extra capacity,” he said. It will increase the number of ships the yard can repair from 200 to around 240.

The floating dock is expected to arrive in Oman in the next six weeks, and following some dredging works be operational by the start of Q4 this year.

Greek owners are major clients of the shipyard and account for around 40% of business, and Dr. Ibrahim said they added two more Greek clients last week. “It seems we have a good reputation in the Greek market and between now and end of Q3 we have 27 ships in orderbook from the Greek market.”

Globally its customer base includes MSC, AP Møller-Mærsk, CMA CGM S.A., Hapag-Lloyd, and Mitsui OSK Lines (株式会社商船三井). Maersk currently has currently two vessels in the yard.

Being able to deliver services efficiently and on time is of critical importance in the financially booming container sector.

“Today when you talk about bringing a container ship into a shipyard time really is money,” Dr. Ibrahim said. If a container ship owner says a ship will be in the yard for 15 days the owner will expect work to be completed in 12 days.

‘Further Action Is Needed’ As MEPC 78 Gets Underway

IMO Secretary General Kitack Lim hailed the 78th session of the Marine Environment Protection Committee as an opportunity to be brave and lead by example on decarbonization.

by Gary Howard

MEPC 78 has a packed agenda with the opportunity to consider and progress IMO’s work on cutting greenhouse gas emissions from ships.

At the last MEPC meeting, a revision process was agreed to strengthen the IMO’s initial GHG strategy which was adopted in 2018. A strengthened version of that initial strategy is due in mid-2023 at MEPC 80.

Speaking to Seatrade Maritime News in May, Stamatis Fradelos, Vice President, Regulatory Affairs at ABS said that important influencers in the IMO like the United States, EU, Canada, Japan, Australia and New Zealand are calling for net zero emissions from shipping by 2050 and introducing a level of ambition for 2040.

“Whilst progress has been made on many of the measures set out in the Initial Strategy, I am sure that we can all agree that further action is needed. Your discussions this week will chart the way forward for the decarbonization of international shipping,” said Lim.

“It is therefore of utmost importance that IMO continues to deliver concrete progress in transitioning international shipping from fossil fuels to low and zero-carbon alternatives.”

Member states at MEPC 78 will also consider adoption of guidelines to support short-term measures on GHG emissions, including correction factors for carbon intensity, EEXI calculation methodology and revised SEEMP.

Calculations on the GHG impact of fuels will be discussed, as ISWG-GHG 11 reports progress on developing lifecycle GHG assessment guidelines. Well-to-wake and tank-to-wake calculations are in scope, with the aim of giving fuel users a full picture of the impact of the production and use of the fuels they choose.

“Your constructive discussions on these topics will enhance the Committee’s evidence-based decision making when further considering proposals for mid-term GHG reduction measures,” Lim told Member States.

“I would like to take this opportunity to express my deepest appreciation to all Member States, and observer delegations, and especially the Chair of the Working Group on reduction of GHG emissions from ships, Mr. Oftedal of Norway, for the extraordinary effort and dedication in ensuring the successful outcome of both intersessional meetings.”

Houston Begins $1.1Bn Ship Channel Widening

The Port of Houston kicked off its the long-awaited billion dollar dredging scheme, the Houston Ship Channel Widening and Improvement Project 11 last week.

by Michele Labrut

The $1.1bn expansion of the Houston Ship Channel, which has been in planning for more than a decade is finally underway.

After more than a decade of planning, Project 11 will allow the ship channel to accommodate an additional 1,400 vessels per year and could generate up to $134bn more annually in economic impact once completed. The channel currently accommodates about 8,200 vessels and 215,000 barges each year, hauling more than 247m tons of cargo.

“This project will enable Port of Houston to continue to grow and respond effectively to whatever the future demand in the supply chain has to offer,” Port of Houston Executive Director Roger Guenther said in a statement.

Port of Houston is a 40-2 km-long complex of nearly 200 private and public industrial terminals along the 583.6 km-long manmade Houston Ship Channel, which connects the port to the Gulf of Mexico.

Project 11 will widen the Houston Ship Channel by 51.8 m along its 41.8 km Galveston Bay reach, to 213.3 m wide. It will also deepen upstream segments from a current depth of 13.7 m to a depth of 14.7 m. Dredging began last week. The Houston Ship Channel winds from the Gulf of Mexico through shallow Galveston Bay and up through the port.

“This project is important on many levels, including improving the efficiency of our nation’s supply chains, promoting navigational safety, and creating environmental benefits through the innovative use of dredged material,” Michael Conner, Assistant Secretary of the Army (Civil Works), said in a statement.

Port of Houston and the Army Corps of Engineers signed an agreement in August giving the port permits to start dredging the federal waterway. Great Lakes Dredge and Dock Co. was awarded a $95m contract in October, which also includes oyster mitigation and construction of a bird island. The channel widening and deepening project is scheduled to be completed in 2025.

EU Transport Commissioner Focuses on ‘Solidarity Lanes’ and Sanctions

As the global food crisis deepens and millions of tons of Ukraine’s grain remain blocked in the Black Sea, EU Transport Commissioner Adina-Ioana Vălean has declared that all transport modes will be considered in setting up new Solidarity Lanes that bypass the Black Sea.

by Paul Bartlett

Her comments come as disrupted grain movements risk a global food crisis.

Speaking to journalists immediately prior to yesterday’s opening ceremony at Posidonia, she said that trucks, tracks, trains, transshipment and storage facilities will all contribute to new supply chains to ensure that exports from one of the world’s largest grain exporters can resume, at least in part, as soon as possible.

She said that the setting up of Solidarity Lanes would have important commercial implications for shipping and could even lead to changes in the sector’s business models

Vălean also rejected criticism from prominent Greek shipowners who had claimed earlier in the day that sanctions imposed on Russia in the wake of its invasion on Ukraine won’t work. At a Maritime Leaders Summit staged by Capital Link on Monday, George Prokopiou and Evangelos Marinakis had both said that sanctions against Iran and Venezuela had been shown not to work and similar moves against Russia would not be effective either.

However, other sources pointed to the scale of the sanctions package that has severely impacted the Russian economy by disrupting key revenue generating sectors. Energy exports are the most obvious example and although Russian oil is still easily sold in India and China, for example, it is at deep discounts to global prices.

Meanwhile, LNG exports have also been hit and development of Arctic LNG supply chains have also been severely affected. Within the next few months, Vălean said that Russian oil exports would be further disrupted by the withdrawal of insurance cover on shipping and transport arrangements.

U.S. Bureau of Economic Analysis: Marine Economy, 2020

[from the U.S. Bureau of Economic Analysis]

The marine economy accounted for 1.7 percent, or $361.4 billion, of current-dollar U.S. gross domestic product (GDP) in 2020 and 1.7 percent, or $610.3 billion, of current-dollar gross output. Real (inflation-adjusted) GDP for the marine economy decreased 5.8 percent from 2019 to 2020, compared with a 3.4 percent decrease for the overall U.S. economy. Real gross output for the marine economy decreased 8.5 percent, while marine economy compensation decreased 1.2 percent, and employment decreased 10.8 percent.

Read the current release [Archived PDF]