Pandora's Sandbox

China's Island-Building Strategy in the South China Sea

By Andrew Erickson and Austin Strange
J UL Y 1 3, 2 0 1 4

Vietnamese motorboats anchor at a partially submerged island in the Spratlys, April 18,
2010. (Courtesy Reuters)
Ongoing international disputes over territory in the South China Sea have led many to
invoke an old adage: When the facts are on your side, pound the facts. When the law
is on your side, pound the law. When neither is on your side, pound the table. Beijing
is using all these approaches simultaneously, but with an ambitious twist -- as it tells
other claimants to pound sand, China is pouring it.
A prominent case in point is a major reclamation project on the disputed 7.2-square
kilometer (4.5-square mile) Johnson South Reef in the Spratly Islands archipelago.
Photos taken since March 2012 document Chinas creation of a 30-hectare (74-acre)
island atop the previously submerged reef by dredging seabed material and then
dumping it using pipelines and barges. In addition to a communications platform built
after China wrestled the atoll from Vietnam in 1988 (killing 64 Vietnamese sailors in
the process), over the last two years China appears to have set up additional radars,
satellite communication equipment, anti-aircraft and naval guns, a helipad, a dock,
and even a wind turbine. IHS Janes and other observers have pegged the reef as the
potential home of Chinas first airstrip in the Spratlys.
Chinas beach building is not limited to Johnson South Reef, which may, in fact, just
be a warm-up act. Satellite images have confirmed similar dredging activities, albeit at
a smaller scale, at three other structures in the Spratly archipelago: Cuateron Reef (the
southernmost of Chinas reclamation projects), Gaven Reef, and Johnson North Reef.
But Chinese efforts center on Fiery Cross Reef. Beijings 1987 announcement that it
would establish an ocean observation station there on behalf of UNESCO helped
trigger the 1988 skirmish on nearby Johnson South Reef. It reportedly serves as a base
for Chinas reclamation efforts and already boasts an eight-square kilometer (five-
square mile) artificial structure with a wharf, helipad, coastal artillery, and garrisoned
marines. China, currently rumored to be in the process of adding an airstrip and
enlarging the harbor, may eventually transform Fiery Cross into a military base twice
the size of Diego Garcia, a key U.S. military base in the Indian Ocean. It could
become a command-and-control center for the Chinese navy and might anchor a
Chinese air defense identification zone (ADIZ)similar to the one it announced over the
East China Sea in 2013. Prominent Chinese strategist Jin Canrong suggests that Fiery
Cross Reef construction is a complex oceanic engineering project, the ultimate scale
of which depends on how Johnson South turns out. Such an initiative would clearly
require central government resources, and he notes that the plan has been forwarded to
the Chinese state council for approval.
Yet, despite media claims, including statements by Chinese experts, Beijings precise
plan for fortifying the Spratly Islands remains speculative. Beijing has declined to
provide authoritative, detailed information that might dispel myths and clarify the
intent and scope of Chinas operations. When questioned by a reporter about island
reclamation, Hua Chunying, a spokesperson for Chinas foreign ministry replied,
China has indisputable sovereignty over [the Spratly] Islands including [Johnson
South] Reef and the contiguous waters. Whatever construction China carries out in
[Johnson South] Reef is completely within Chinas sovereignty. In reality, however,
by creating new facts of ground, Beijing is expanding the territory it controls and
literally changing the security landscape in the South China Sea.
FACTS OF GROUND
China lays claim to the entire Spratly Islands and their 820,000 square kilometer (510
square mile) area. The archipelago contains more than 550 islands, sandbanks, reefs,
and shoals, many of which are also partially or fully claimed by Brunei, Malaysia,
Philippines, Taiwan, and Vietnam. With the exception of Taiwan, even the
northernmost atolls are far closer to the shores of rival claimants than to mainland
China.

(Library of Congress)
Although it has exercised caution in making official statements about land reclamation
in the Spratlys, it is no secret that Beijing has long worked to enhance and occupy the
bits of rock it claims in the South China Sea. It has already established manned
garrisons on seven of the hundreds of Spratly features. And existing garrisons on Fiery
Cross and Subi Reef, each with various radar surveillance capabilities, already house
about 100200 troops. Several years ago, there was even a photo exhibit at
the Shanghai Navy Museum showing small-scale earthmoving and compaction
equipment on one of the Spratly Islands.
Of course, it is unfair to single out recent Chinese reclamation activities without
considering the actions of other claimants. A brief historical refresher suggests that
even though Chinas current behavior is troubling, China did not necessarily open
Pandoras sandbox. For example, Vietnam captured Southwest Cay from the
Philippines in 1975, and it has since built a harbor and other land features there. In
total, it has occupied 29 islands and reefs in the Spratlys. Meanwhile, Malaysias
Naval Station Lima on Swallow Reef is the result of substantial reclamation efforts
after Kuala Lumpurs occupation of the atoll in 1983. In 2008, Taiwan completed an
airstrip on Taiping Island, the largest in the Spratly group, which Taipei occupied in
1955 and on which it already had an extensive navy garrison and radar station. In
addition, the Philippines occupies ten Spratly structures and is planning to build an
airport and pier on Thitu Island. China is apparently the only major claimant to
territory in the Spratlys without an airstrip there, although not for long.
Still, whether Beijing is a leader or follower in land reclamation in the Spratlys, it is
undoubtedly the only claimant whose economic prowess can support projects that,
without violence, significantly alter the status quo there. Admittedly, it is difficult to
find credible data on whether other contenders have dredged or pursued similar island-
building tactics. Nonetheless, given their considerably lower capabilities for such
work, it is unlikely that any other county has, or will engage in, sand pouring on par
with Chinas current construction efforts. For example, China may invest over $5
billion over ten years on reclamation in Johnson South Reef; the Philippines 2014
military budget is less than $2 billion. Chinas German-builtTianjing Hao dredger, the
largest of its type in Asia and Chinas primary weapon in island-building, cost
approximately $130 million to build -- nearly three-fourths of the per-unit cost that
Vietnam paid for some of its Russian-built Gepard-class frigates, its most advanced
warship.
SO WHAT?
So what are the implications of Chinas large-scale island building? Some
international observers believe that, beyond asserting de facto sovereignty, Chinas
efforts to amass sand on the reef and rock formations are aimed at strengthening its
claim to the 322-kilometer (200-mile) exclusive economic zone (EEZ) abutting its
coastline and all of its islands under the aegis of the United Nations Convention on the
Law of the Sea (UNCLOS). This seems unlikely. Article 60 of UNCLOS explicitly
states that artificial structures are not equal to islands and that their existence has no
bearing on the demarcation of territorial seas, EEZs, or continental shelves. Although
China could theoretically argue that it is building on pre-existing natural island
structures, other countries would surely dispute that claim -- and they could furnish
pictures to prove it. China itself has lambasted similar behavior by Japan on
the Okinotorishima atoll in the Philippine Sea.
That doesnt mean that pouring sand is pointless. Unlike Beijings recent temporary
deployment of the Haiyang Shiyou (HYSY)-981 oil rig to regions disputed by China
and Vietnam, as well as the placement of four additional rigs in the South China Sea
in late June, island building will eventually support permanent civilian and military
infrastructure. This will enable China to diversify its strategy for asserting territorial
claims in the Spratlys. Some of the structures in question lie within the EEZ claimed
by the Philippines, and are situated just 300400 kilometers (186249 miles) from the
Philippines and Vietnam.
Arguably more discomfiting for other states, a mature network of military facilities in
the Spratlys, including an expanded Fiery Cross presence, would effectively extend
Chinas ability to project power by over 800 kilometers (500 miles), particularly
through Chinese Coast Guard patrols in contested areas and potentially even air
operations. Similar to its relative economic supremacy, Chinas relative advantages in
military size, modernization, and professionalism suggest that it is the only South
China Sea claimant that is potentially capable of establishing de facto air and sea
denial over tiny islet networks in a maritime setting as vast as the Spratly archipelago
Another concern is that the creation of facts of ground might spur Chinas
announcement of one or more ADIZ in the South China Sea. However, if that is
Chinas goal, there are plenty of reasons for it to exercise restraint. First, antagonizing
multiple neighbors and members of the Association of Southeast Asian Nations
(ASEAN) simultaneously is a far greater price to pay than further inflaming already-
poor relations with Chinas bte noire, Japan, as it did when it declared its first ADIZ
over the East China Sea last November. Second, declaring an ADIZ over the full
extent of its claims in the South China Sea would presumably require Beijing to
define, for the first time, the precise geographical coordinates of the 9-dash line it
draws on maps to claim the vast majority of the South China Sea, or at least provide
more clarification than it has to date.
Such transparency, together with Chinas declaring a second ADIZ in general, would
increase pressure on Beijing to specify the basis for its claims in the area -- something
it has declined to do, presumably because there is no consistent legal basis for all of
them. In addition, declaring an ADIZ over the full extent of Chinas claims in the
South China Sea might expose Beijings still-limited ability to monitor and patrol the
southernmost part of its claim, which is far from Chinese land-based radars and major
airfields. Although bulking up islands could help Beijing enhance its surveillance
capacity, it will take time to develop the ability to patrol the entire South China Sea, a
prerequisite for being able to establish an enforceable ADIZ in the future.
Finally, and arguably most disconcerting, although China might not have initially
opened Pandoras sandbox, its large-scale digging could lead to an arms race of
augmentation in an already-sensitive sea. Other regional states probably cannot come
close to matching the raw scale of Beijings ambitious construction, yet they --
particularly the Philippines or Vietnam -- will surely find ways to protect their claims
more creatively. None of this suggests a forecast of calm seas around the Spratly
archipelago.
ISLAND DISPUTE
With the future looking turbulent, the international community should undertake a
technologically-informed study of island feature augmentation to better understand
which parties, particularly in the East China Sea and South China Sea, are capable of
such construction; which have done so, or are doing so; how difficult and expensive
such buildup is; and how durable the artificial islands are likely to be in this typhoon-
prone region. Addressing these questions will help concerned countries in the region
and abroad gain a better understanding of the short- and medium-term implications of
Chinas sandbox in the Spratlys, as well as how the neighborhood is likely to react.
The international community will also have to consider the implications of Chinas
island building on international maritime law. If Beijings strategy even partially
enhances its presence and the momentum of its claims, it could trigger an arms race as
rival claimants fortify features under their respective control with sand, structures, and
ships. That could undermine the otherwise potentially moderating influence of
existing norms and international agreements such as UNCLOS.
To be sure, China, like other states in the region, still faces inevitable constraints on its
ability to contest maritime territorial claims despite its ability to easily out-dredge and
out-drill smaller neighbors. Beijings entrepreneurial sand pouring, which comes on
the back of an upsurge of oil extraction near the disputed Paracel Islands, still faces
legal and political barriers that prevent more decisive actions.
As such, it is too early to list artificial island augmentation in the same category as the
Great Wall and the Grand Canal, which are regarded as Chinese engineering triumphs
over inconvenient geographic conditions. Even so, ongoing island building is a
demonstration of Beijings use of creative thinking to address its security concerns.
For now, expect new facts on the ground -- and of ground -- to emerge from the roiled
South China Sea.
The Global Contest for the Future of Government
By John Micklethwait and Adrian Wooldridge
F ROM OUR J ULY/ AUGUS T 2 0 1 4 I S SUE

(Kevin Lamarque / Courtesy Reuters)
The state is the most precious of human possessions, the economist Alfred Marshall
remarked in 1919, toward the end of his life, and no care can be too great to be spent
on enabling it to do its work in the best way. For Marshall, one of the founders of
modern economics and a mentor to John Maynard Keynes, this truth was self-evident.
Marshall believed that the best way to solve the central paradox of capitalism -- the
existence of poverty among plenty -- was to improve the quality of the state. And the
best way to improve the quality of the state was to produce the best ideas. That is why
Marshall read political theorists as well as economists, John Locke as well as Adam
Smith, confident that studying politics might lead not only to a fuller understanding of
the state but also to practical steps to improve governance.
In todays established and emerging democracies, few people seem to share
Marshalls sentiment and regard government as precious. Fewer still care about the
theory behind it. Many instead see government as the root of many of the problems
that plague their societies and express their contempt in protest movements and
elections that sometimes seem more antigovernment than pro-reform. In Brazil and
Turkey in recent years, huge numbers of protesters have marched in the streets against
the corruption and incompetence of their rulers. In Italy, since 2011, three prime
ministers have found themselves defenestrated, and in last years national elections,
voters awarded the largest share of votes to a party led by a former comedian. In
Mays elections for the European Parliament, millions of British, Dutch, and French
voters, frustrated with their countries political elites, chose to support right-wing
nationalist parties -- just as legions of Indian voters turned to Narendra Modi during
elections this past spring. In November, Americans will trudge to the polls more full
of anger than hope.
Much of this dissatisfaction is rooted in a despairing belief that when it comes to
government, nothing is going to change. This cynicism has become commonplace --
and yet it is actually rather odd. It assumes that the public sector will remain immune
from the technological advances and forces of globalization that have ripped apart the
private sector. It also ignores the lessons of history: government -- and particularly
Western government -- has changed dramatically over the past few centuries, usually
because committed people possessed by big ideas have worked hard to change it.
Its not only ordinary citizens in the democratic world who have lost sight of the fact
that government can, in fact, change: their leaders have, as well. Somewhat ironically,
these days its Chinas authoritarian rulers, and not their Western counterparts, who
are more likely to understand Marshalls insights into the preciousness and
malleability of the state. Chinese leaders study the great Western political theorists --
Alexis de Tocqueville is a particular favorite -- and their bureaucrats scour the world
for the best ideas about governance. The Chinese, it seems, realize that government is
the reason why the West has been so successful. Until the sixteenth century, China
represented the most advanced civilization in the world; after that, the West pulled
ahead, thanks in part to three (and a half) revolutions in government that leveraged the
power of technology and the force of ideas. Now, a fourth revolution has begun, but it
isnt yet clear which countries will shape it and whether they will draw mostly from
the ascendant tradition of Western liberal democracy or from newer forms of
authoritarian rule that have emerged in recent decades.
The Chinese, it seems, realize that government is the reason why the West has been so
successful.
YOU'RE GONNA NEED A BIGGER STATE
Providing a comprehensive account of the political development of Europe and North
America would be a monumental undertaking: the historian Samuel Finer died before
finishing his attempt, and the book he left behind, The History of Government From
the Earliest Times, still runs to 1,701 pages. That said, one can briefly sketch out the
three major developments that give the story its basic shape: the appearance of nation-
states in the sixteenth and seventeenth centuries, which brought internal order and
external competition to Europe; the liberal revolution of the late eighteenth and
nineteenth centuries, which replaced patronage systems with meritocratic and often
much smaller government; and the Fabian revolution in the early twentieth century,
which created the modern welfare state. The return of market-oriented governance,
embodied by British Prime Minister Margaret Thatcher and U.S. President Ronald
Reagan, represents a smaller but equally significant shift -- something like a half
revolution. Each one of these revolutions tried to answer a basic question: What is the
state for? And the best way to understand each revolution is to examine the answers to
that question formulated by four thinkers: Thomas Hobbes, John Stuart Mill, Beatrice
Webb, and Milton Friedman.
Hobbes, the founder of modern political theory and the author of Leviathan, was born
in England in 1588. At the time, Europe was a blood-drenched backwater. The
worlds most powerful and advanced countries were all in Asia. Imperial China was
then about the same size as Europe but was unified by a vast system of canals that
connected its great rivers to various population centers. Its government was similarly
constructed: a country that was at least as geographically diverse as Europe was ruled
by a single person, the emperor. At a time when only three European cities -- London,
Paris, and Naples -- could boast 300,000 inhabitants, Beijings imperial quarter alone
housed that many people, including many of the mandarins who helped the emperor
rule his vast kingdom. These civil servants represented the best that China could
produce, and they were regularly selected through open examinations.
For Hobbes, as for most Europeans, life was far less orderly. Hobbes was born
prematurely, supposedly because his mother was terrified by the combination of a
violent storm and a rumor that the Spanish Armada had landed on English shores.
(Fear and I were born twins together, he wrote in his autobiography.) Hobbes grew
up in a time of religious conflict, rebellions, and political plots. The dominant event of
his life, the civil war between Charles I and his Puritan foes in Parliament (164251),
claimed the lives of a larger proportion of the British population than would World
War I.
In Leviathan, published in 1651, Hobbes deconstructed society into its component
parts in much the same way that a mechanic might deconstruct a car in order to
discover how it works. He did this by asking what life would be like in the state of
nature. The answer was not encouraging: men, he argued, were constantly trying to
get the better of one another, trapped in a war of every man against every man. The
only way to escape from perpetual conflict and the prospect of a nasty, brutish, and
short life was for one to give up his natural rights to do as he pleased and construct
an artificial sovereign: namely, a state. The states function was to wield power: its
legitimacy lay in its effectiveness, its opinions defined the truth, and its orders
represented justice.
It is not hard to see why Europes monarchs welcomed that idea. But Leviathan also
featured a subversive dash of liberalism. Hobbes was the first political theorist to base
his argument on the principle of a social contract. He had no time for the divine right
of kings or dynastic succession: his Leviathan could take the form of a parliament, and
its essence lay in the nation-state rather than in family-owned territories. The central
actors in Hobbes world were rational individuals trying to balance their desire for
self-promotion and their fear of self-destruction. They gave up some rights in order to
secure the more important goal of self-preservation. The state was ultimately made for
(and of) the subjects, rather than the subjects for the state: the original frontispiece
of Leviathan shows a mighty king constructed out of thousands of tiny men.
This mixture of firm control with a touch of liberalism helps explain why Europes
nation-states surged ahead. Beginning in the sixteenth century, across the continent,
monarchs established monopolies of power within their own borders, progressively
subordinating rival centers of authority, including the princes of the church. Kings
promoted powerful bureaucrats, such as Cardinal Richelieu in France and the Count-
Duke of Olivares in Spain, who expanded the reach of the central government and
built efficient tax-gathering machines. This shift allowed Europe to escape from the
problem that had doomed Indian civilization to impotence: a state that was so weak
that society constantly dissolved into petty principalities that inevitably fell prey to
more powerful invaders. Yet Europe also avoided the problem that had plagued the
Chinese state: too much centralized control over too vast a region. Even Europes
most imposing monarchs were far less powerful than the Chinese emperor, whose
enormous bureaucracy faced no opposition from Chinas landed aristocracy or its
urban middle classes and thus fell prey to self-satisfied decadence.
The birth of the modern state was reinforced in Europe by technological and economic
advances. The Industrial Revolution gathered people into massive cities and
accelerated the speed of communication. The emergence of railroads transformed not
only transportation but also governance: in earlier eras, it had made sense for royal
authorities to delegate power over the countryside to the nobility and the gentry. But
now that any place was just a short ride away, it made more sense to concentrate
power in the hands of an efficient central bureaucracy.
THE NIGHT-WATCHMAN STATE
The centralization of the modern state paved the way for the liberal revolution of the
late eighteenth and nineteenth centuries. The transformation began with the American
and French revolutions in the late eighteenth century and eventually spread across
Europe, as reformers replaced regal patronage systems with more meritocratic and
accountable governments. But the political shift that seems most pertinent today
occurred more peacefully, in the United Kingdom during the nineteenth century.
British liberals took a decrepit old system and reformed it, establishing a professional
civil service, attacking cronyism, opening up markets, and restricting the states right
to subvert liberty. The British state shrunk in size even as it dealt with the problems of
a fast-industrializing society and a rapidly expanding global empire. Gross income
from all forms of taxation fell from just under 80 million pounds in 1816 to well under
60 million pounds in 1846, despite a nearly 50 percent increase in the size of the
population. The vast network of patronage appointees who made up the unreformed
state was rolled up and replaced by a much smaller cadre of carefully selected civil
servants. The British Empire built a night-watchman state, as it was termed by the
German socialist Ferdinand Lasalle, which was both smaller and more competent than
its rivals across the English Channel.
By the 1970s, the U.S. government seemed to be spoiling everything it touched.
The thinker who best articulated these changes was John Stuart Mill, who strove to
place freedom, rather than security, at the heart of governance. He belonged to a very
different England than the one Hobbes inhabited, one shaped more by reform and
optimism than by dysfunction and fear. Mill had no experience of civil war, and the
only revolution he witnessed was the peaceful transfer of power from a narrow landed
aristocracy to a much broader educated elite. Thus, Mills central political concern
was not how to create order out of chaos but how to ensure that the beneficiaries of
order could achieve self-fulfillment. For Mill, the test of a states virtue was the
degree to which it allowed each person to fully develop his or her abilities. And the
surest mechanism for doing this was for government to get out of the way. In On
Liberty, published in 1859, he argued that the only justification for state interference
was to prevent people from doing harm to others. For Mill, freedom marched hand in
hand with efficiency: the more open trade was, the more prosperous a country would
become, and the less money the state would need to confiscate from private citizens.
He also believed in the open competition of ideas, trusting that the unfettered clash of
opinions would reduce error, persuade people to take a more active role in society, and
provide citizens with moral training.
For most of the nineteenth century, the British state did a remarkably good job of
embodying Mills principles. A succession of British governments dismantled old
systems of privilege and patronage and replaced them with a capitalist state.
Government, the Victorians believed, should solve problems rather than simply collect
rents. They built railways, paved roads, and furnished cities with sewage systems and
policemen, known as bobbies, after their inventor, Sir Robert Peel.
Throughout the nineteenth century, this kind of lean-government liberalism spread
throughout Europe and across the Atlantic to the United States. Yet its moment did
not last long. Mill himself typified the change. The older he grew, the more troubled
he became by some profound questions, mainly to do with the persistence of poverty
among plenty. How could a society judge each individual on his or her own merits
when rich dunces enjoyed the best educations and poor geniuses left school as
children to work as chimney sweeps? How could individuals achieve their full
potential unless society played a role in providing them with a fair start? The state, he
came to feel, had to do more. By its third edition, Mills Principles of Political
Economy, the bible of British liberalism, had begun to look ever more collectivist.
Mill was not alone: the late Victorians (and their imitators around the world)
increasingly questioned the laissez-faire certainties of their predecessors, on two
grounds. First, the night-watchman state stigmatized the poor: they were deprived of
the vote and consigned to workhouses in order to discourage idleness and provide
incentives to work and save. In his 1854 novel, Hard Times, Charles Dickens turned
utilitarianism, the term most commonly attached to Mills thought, into a byword
for heartless calculation. Second, British critics of liberalism argued that the only way
to outcompete other nations, especially Prussia, was to expand the state. Confronted
with Prussias world-class public educational system and effective tariffs, the British
elite fretted about the naivety of free trade and the quality of their countrys breeding
stock. In 1917, Prime Minister David Lloyd George worried aloud that the United
Kingdom could not run an A1 empire with a C3 population.
During the first decades of the twentieth century, as the cities and factories of the
West expanded, collectivism, compassion, and nationalism fused together into a call
for a more potent Leviathan. If Henry Ford could invent a huge mechanistic assembly
line for business, surely it was possible to do the same for government: to apply
scientific management to the business of running the state and training its citizens.
The collectivist dream of a new society also became a technocratic dream of a new
state bent on national efficiency and global competition.
TANGLED WEBB
This dream was most dramatically manifested in the totalitarian nightmares of
communism and fascism. But neither of those ideologies survived the twentieth
century, and it is, instead, a different concept that drove the third great transformation
in modern governance. That concept is the welfare state: the idea that the government
should be a companion throughout the lives of citizens, providing them with
education, a helping hand if they lose their jobs, health care if they fall sick, and
pensions when they get old. This is the notion around which todays sprawling
Western states were built.
One of the most important champions of that idea was the British sociologist and
economist Beatrice Webb. Webbs life typified the sea change from Victorian high
liberalism to collectivism. She was born Beatrice Potter in 1858; her father was a
wealthy tycoon, her mother a disciple of laissez-faire economics. But Webb went in a
very different direction. She swapped London society for social work in the East End
and shocked her social circle by marrying Sidney Webb, a prominent socialist activist,
in 1892.
Webb was not a political theorist in the model of Hobbes and Mill: she spent her life
worrying about administrative details rather than grappling with abstract concepts. But
her work -- including a ten-volume study of local government published periodically
between 1906 and 1929 -- was suffused with a philosophical vision of the state as an
embodiment of universal reason. In Webbs view, the state should stand for planning
(as opposed to chaos), meritocracy (as opposed to inherited privilege), and science (as
opposed to blind prejudice).
Webb also reflected the dark side of big government and collectivism. She hailed the
Soviet leader Joseph Stalin as the architect of a new civilization, for example, and
supported the idea of eugenic planning: given that people were the building blocks of
the mighty state, it was the height of foolishness for the state not to step in to manage
their breeding habits.
The Wests greatest strengthrepresentative democracyis losing its luster.
But those extreme ideas had little bearing on Webbs contributions to policy, which
instead had the effect of gradually pushing the United Kingdom toward socialism.
Together, she and her husband played a significant role in the Fabian Society, which
advocated for socialist policies and an enlarged British welfare state. (The Webbs also
established the London School of Economics, founded the New Statesman, and wrote
the constitution of the British Labour Party.) In the United Kingdom, it did not take all
that long for the state to adopt their basic principles. The British government
introduced free school meals for needy children in 1906, old-age pensions in 1908,
funds to fight poverty in 1909, and national health insurance for the sick and
unemployed in 1911.
By the beginning of the interwar period, most British citizens found it perfectly
reasonable for their government to tax the entire population to provide benefits for the
unfortunate -- a dramatic turnaround from just two decades earlier. This belief was not
limited to governments led by the Labour Party: Tories continued to expand the state
in the face of the Great Depression, and Winston Churchills coalition government
introduced free education to the age of 15 in 1944. Clement Attlees Labour
government then established national life insurance (1946) and free health care via the
publicly funded National Health Service (1948). Homes, health, education, and social
security -- these are your birthright, announced Attlees minister of health, Aneurin
Bevan, in 1945.
In the postwar years, social democracy found even more enthusiastic champions on
the European continent. Between 1950 and 1973, government spending rose from 28
percent to 39 percent of GDP in France, from 30 percent to 42 percent in West
Germany, and from 27 percent to 45 percent in the Netherlands. Governments built
high-rise housing projects, established new universities, and made it easier to become
eligible for welfare payments. On the other side of the Atlantic, a far less extensive
social welfare state evolved at a much slower pace. The United States was too
individualistic, too decentralized, and too business obsessed to embrace European-
style social democracy. Still, during the mid-twentieth century, even the United States
laid the foundations of a welfare state: Social Security, Medicare, and Medicaid.
For the most part, big government seemed to work on both sides of the Atlantic. Rapid
economic growth more than made up for a bit of social engineering. For the United
States, the postwar era was one of unrivaled supremacy. For the British, it was an era
when ordinary people had never had it so good, as Prime Minister Harold
Macmillan put it in 1957. The French had les trente glorieuses, the glorious thirty
years of prosperity, from 1945 to 1975, and the West Germans basked in
theWirtschaftswunder, the economic miracle that began during the period of
postwar reconstruction.
But Leviathan overreached. By the 1970s, the U.S. government seemed to be spoiling
everything it touched: a grinding war in Vietnam, an economy hobbled by stagflation,
cities wracked by drugs and crime. Around the world, the decade brought labor strikes
and energy crises. Those on the political left found themselves mugged by reality, in
the words of the neoconservative critic Irving Kristol -- as did those in the West who
still considered the Soviet Union a kind of noble experiment in collectivism. As the
whole Soviet Union came to seem like one giant Potemkin village, it became painfully
clear that there was nothing noble about Russian communism.
CAPTURING THE FRIEDMAN
Surveying the wreckage of the era, the economist Milton Friedman must have
sometimes thought to himself, I told you so. Born in Brooklyn in 1912 to poor
Jewish immigrants from Hungary, Friedman had an intellectual journey that was the
reverse of Webbs. He arrived at the University of Chicago in 1932 as a supporter of
Norman Thomas, the perennial socialist candidate for U.S. president. After earning a
masters degree, Friedman worked first as a U.S. government economist. Among his
major contributions was helping devise one of the most powerful (and least loved)
tools of big government, the payroll withholding tax. But during the Great Depression
and World War II, Friedmans views changed dramatically, and when he returned to
teach at the University of Chicago in 1946, he began to forge a very different course.
The state, Friedman had come to believe, consistently failed to provide services as
efficiently as the private sector. He adopted the pro-market, libertarian ideas of the so-
called Austrian school of economists, notably Friedrich Hayek, and welded them to
American populism to contrive a novel form of small-government conservatism.
During the 1960s and 1970s, Friedman became an intellectual celebrity, touring the
United States to denounce everything that the American left, and, indeed, most of the
center, held dear: government-provided health care, public housing, student grants,
foreign aid. All of these, Friedman argued, were at best a waste of money and at worst
an abuse of power on the part of an out-of-control, incompetent government. If you
put the federal government in charge of the Saharan desert, he once said, in five
years thered be a shortage of sand.
In the 1980s, Reagan and Thatcher tried to put Friedmans philosophy into practice.
Reagan cut taxes and eliminated regulations. Thatcher faced down the United
Kingdoms labor unions and privatized three-quarters of its state-owned companies,
including such behemoths as British Airways and British Telecom. The Reagan-
Thatcher model soon spread around the world, just as the social-democratic model had
done earlier. From 1985 to 2000, western European governments sold off some $100
billion worth of state assets, including such well-known state-owned companies as
Lufthansa, Volkswagen, and Renault. After the fall of the Soviet Union,
postcommunist countries embraced the so-called Washington consensus with gusto:
by 1996, Russia had privatized some 18,000 industrial enterprises. Leszek
Balcerowicz, Polands first postcommunist finance minister, regarded Thatcher as his
hero. In the 1990s, U.S. President Bill Clinton proclaimed an end to the era of big
government, and British Prime Minister Tony Blair argued that the presumption
should be that economic activity is best left to the private sector.
So Reagan and Thatcher -- and, by extension, Friedman -- won their battle: today,
almost nobody speaks up for big government. But they did not win the war. Leviathan
hardly withered away. In her 11 momentous years in office, from 1979 to 1990,
Thatcher succeeded in reducing public expenditure only from 22.9 percent of GDP to
22.2 percent. Reagan failed to persuade the Democratic-controlled U.S. Congress to
enact the spending cuts that were supposed to accompany his tax cuts and as a result
ended up triggering an explosion in the U.S. deficit. For all the talk of the rise of
neoliberalism and the shredding of the safety net, the state remained far bigger
under Reagan and Thatcher than anything that Webb could have imagined, and it has
only continued to grow in the decades since they left office.
Thus, Friedmans revolution counts as only a half turn. Today, the dominant version
of government in the developed world remains the welfare state that Webb helped
devise. Meanwhile, two other questions now hang over global politics: whether a
genuine fourth revolution might occur, and whether it will originate in the West.
INNOVATION SHIFTS EAST
China is the obvious focus of the debate over the future of governance. The Chinese
have produced a new model of government that directly challenges the Western belief
in free markets and democracy. China has pioneered a form of state capitalism by
selling off thousands of smaller companies but keeping equity stakes in more than a
hundred big companies. The country has also revived its ancient principle of
meritocracy by recruiting Chinese Communist Party members from top universities
and promoting party functionaries based on their ability to hit various targets, such as
eradicating poverty and promoting economic growth. China has also racked up some
astonishing achievements in government reform. In the past decade, it has built a
world-class university system. In the past five years, it has extended a government
pension program to 240 million rural citizens -- far more than the total number of
people covered by Social Security in the United States.
But other countries are even further ahead when it comes to innovations in
government, most notably Singapore, which has created what is arguably the worlds
most effective administrative machine. The government recruits the best prospects to
work in public service, and those who reach the top of the bureaucracy are richly
rewarded with pay packages of as much as $2 million a year and with guaranteed jobs
in the private sector after they leave government. Singaporeans pay 20 percent of their
salaries into the government-run Central Provident Fund, with employers contributing
another 15.5 percent. This compulsory savings account serves as a retirement pension
and also allows Singaporeans to pay for housing, health care, and higher education.
But unlike many welfare state systems in the West, Singapores preserves an incentive
to work hard and contribute: 90 percent of what one gets from the fund is tied to what
one puts in. This reinforces Singapores attempt to combine universal health and
welfare programs with frugality; Lee Kuan Yew, modern Singapores founder and
guiding hand, dismisses the Western welfare state as an all you can eat buffet.
Meanwhile, as Asian countries generate clever ideas for reforming government, the
Wests greatest strength -- representative democracy -- is losing its luster. Democratic
governments increasingly make promises that they cannot deliver on and allow
themselves to be captured by special interests or diverted by short-term
considerations. The U.S. Congress has not passed a proper budget on time since 1997.
The Peterson Institute for International Economics has calculated that since 2010,
uncertainty about U.S. fiscal policy has slowed the United States GDP growth rate by
one percentage point and has prevented the creation of two million jobs. France and a
number of other European countries have not balanced their budgets in decades. And
recent European elections have been exercises in denial -- in the French presidential
election of 2012, neither President Nicolas Sarkozy nor his socialist challenger,
Franois Hollande, proposed cutting the countrys bloated budget or raising its
retirement age. In the recent elections for the European Parliament in Brussels, right-
wing parties made huge gains by blaming the EUs problems on open borders rather
than the overindulgent spending of its members states.
The poor performance of political elites has led to intense cynicism among Western
electorates. Voter turnout is declining, particularly in elections held in EU member
states, and membership in political parties is plummeting: in the United Kingdom,
from 20 percent of the voting-age population in the 1950s to just one percent today. In
2010, Icelands ironically named Best Party won enough votes to co-run Reykjaviks
city council (which is tantamount to co-running the country) by pledging to betray its
promises and be openly corrupt.
Such antipathy toward politics might not matter much if voters wanted little from the
state. But they continue to want a great deal. The result is a toxic mixture: dependency
on government, on the one hand, and disdain for government, on the other. The
dependency forces governments to overexpand and overburden themselves, while the
disdain robs governments of their legitimacy and turns every setback into a crisis.
Democratic dysfunction goes hand in hand with democratic distemper.
THE FOURTH REVOLUTION
This crisis of Western liberal democracy has been brewing for decades, but it has
become acute in the last few years for three reasons. First is the increasingly
unsustainable debt burden that Western states are carrying. The 2008 financial crisis
and the subsequent global recession led to an explosion in public debt: according to
the Economist Intelligence Unit, global public debt reached $50.6 trillion in 2013,
compared with just $22 trillion in 2003. Much of that growth was driven by Western
governments borrowing huge sums in response to the economic slowdown. In Europe,
the working-age population peaked in 2012, at 308 million, and is set to decline to 265
million by 2060. That smaller group of workers will have to support an unprecedented
number (in absolute and relative terms) of retirees. Between the present time and
2060, Europes dependency ratio -- the number of people over 65 as a proportion of
the number of people between the ages of 20 and 64 -- will rise from 28 percent (the
current level) to 58 percent. And those numbers assume that the EU will let in more
than one million young immigrants a year; if it doesnt, the figures will be even worse.
In the United States, where the baby boomers are now crossing into old age, the
Congressional Budget Office reckons that government spending on medical benefits
alone will rise by 60 percent over the next decade -- and will then begin to rise even
faster.
The second factor that has thrown the deficiencies of contemporary Western
governance into sharp relief is the rapid development of information technology. In
the past two decades, computers and the Internet have revolutionized all forms of
commerce and could revolutionize government as well. Information technology has
already transformed the states two core functions: fighting wars and collecting
information. But so far, Western governments have failed to harness the full potential
of the digital revolution, often stumbling in their attempts to make themselves more
Internet-friendly: witness the clumsy launch of the Obamacare website in the United
States.
The third ongoing test of Western-style liberal democracy is the impressive track
records in recent years of other models, particularly the modernizing authoritarianism
pursued by Asian countries such as China and Singapore. For the first time since the
middle of the twentieth century, a global race is on to devise the best kind of state and
the best system of government. Compared to during that earlier era, the differences
between the models competing today are far smaller -- but the stakes are just as high.
Whoever wins this contest to lead the fourth revolution in modern governance will
stand a good chance of dominating the global economy.
Westerners have long assumed that the ideals of freedom and democracy would
ultimately take root everywhere and that all countries that wanted to modernize would
have to adopt such values. But the rise of authoritarian modernization in Asia puts this
in jeopardy. To remain stable and prosperous and to maintain their positions as global
leaders, European countries and the United States will have to embrace the goal of
smaller, more efficient government.
At the moment, Western governments do too many things badly: it would be better if
they did fewer things and did them well. The Western democratic state is ripe for the
sort of spring-cleaning that the Victorians gave it, one that would build on some of the
achievements of the half revolution of the 1980s and 1990s. Reagan and Thatcher
stopped the state from doing many things that it had no business doing in the first
place, such as running energy companies and telecommunications firms. A fourth
revolution should go even further, getting government out of the business of picking
winners in the private sector through market-distorting subsidies and regulations.
Western governments also need to make sure that public largess helps the poor and
not the already well-off. The United States, for example, redistributes huge sums to
relatively prosperous people in the form of tax relief for mortgage holders, financial
assistance in paying for health insurance, and subsidies for the agriculture and energy
sectors. The total value of all the exemptions offered by the U.S. tax code is around
$1.3 trillion, an amount that could be significantly trimmed without damaging the
economy.
Western governments should follow Chinas example and take good ideas wherever
they can find them. Close to home, they should pay attention to Swedens successful
experiments with school vouchers. Farther afield, they should consider Indias
progress in reducing hospital costs and Brazils welfare program based on conditional
cash transfers, which requires recipients to meet certain goals, such as making sure
their children attend school and receive vaccinations.
The twenty-first century is sure to be shaped by ever-fiercer competition between
states to figure out which innovations in governing yield the best results. The liberal
democracies of the Western world still enjoy a significant leg up in terms of wealth
and political stability. But its not yet clear whether the West will be able to summon
the sort of intellectual and political energy that, for the past four centuries, has kept it
ahead in the global race to reinvent the state.
Part I: Who Rules?

Who holds power in Pakistan today? What is the relationship among the
government, the army, and the intelligence services?
March 31, 2009
Sumit Ganguly: Is there any doubt about that? The army, for all practical
purposes, has been and remains in charge. It has steadily increased its power since
the first military coup in 1958. The military has a veto over most critical decisions
affecting both foreign and security policies, and during the Zia era, it expanded its
reach into some areas of domestic politics as well, fomenting, and then containing,
ethnic discord in the Sindh and pandering to religious zealots in social policy.
Civilian governments in Pakistan are of transient significance. The military, the
higher echelons of the civil service, and the intelligence services are the permanent
features of the state. There is little or no evidence that the civilian government has
any meaningful autonomy.

Shaun Gregory: I agree with Sumit on this. The civilian government is very weak.
The Pakistani army retains de facto control of foreign policy, defense policy,
internal security, and nuclear policy, and will defend its expanded economic
interests -- which mushroomed under Pervez Musharraf. On the relationship
between the army and the ISI [Inter-Services Intelligence]: in 2006, Musharraf told
the London Times that the ISI "is a disciplined force . . . doing what the [military]
government has been telling them." I think we should accept his word. I don't buy
the idea that the ISI is a "state within a state," or that it is always "rogue" elements
doing various nefarious things. Broadly speaking, the ISI is under the control of the
Pakistan military and serves as its instrument.

Ashley Tellis: Sumit has it dead-on. The army rules on all the critical issues
important to it: the nuclear program, the budget, security policy, relations with key
foreign partners. Although civilian governments have room to play in other areas,
their choices are crowded out by prior military preferences. I think the view that
the ISI implements military preferences is by and large correct. ISI can conduct
activities that the GHQ [General Headquarters] may not be aware of, but I don't
believe that any such autonomous actions can ever be sustained if they are seen to
be against military interests.

Aqil Shah: The military has withdrawn from exercising direct government power
by passing the baton to elected civilians, as it has done several times in the past,
but it would be naive to expect it to loosen its control over what it sees as its
legitimate "structural" missions, including Afghanistan, India, and the nuclear
weapons program. The intelligence services work directly under the command and
control of the army chief of staff, even though the ISI is formally answerable to the
prime minister. It is hard to determine the presence or extent of factionalization
within the military-intelligence complex, but there is little credible evidence to
suggest that the military does not operate as a coherent organization. Once the
army chief signs off on a policy, the costs of disobedience can be prohibitively
high.

Stephen Cohen: The ISI is part of the government, and especially the army, but it
is not certain that either exercises sovereign control over all of Pakistan. The
weakening of central authority would not be of much concern to outsiders,
however, if some groups did not operate beyond Pakistani borders or threaten the
fabric of Pakistan itself. In the long term, the weakening of the Pakistani state itself
will be a problem, not just its loss of territory or control over radical elements. The
army cannot govern Pakistan but won't let anyone else govern it either. It's a
chicken-egg situation, worsened by the total collapse of the economy and the
withering away of state institutions. Right after Musharraf took over (in a coup that
I thought was necessary), I suggested to him that the best course for the military
would be to reset the system, allowing the Pakistani people to decide who governs
them. He obviously rejected this and other advice.

Aqil Shah: I disagree with Steve that the 1999 coup -- or any past coup, for that
matter -- was "necessary." There are two assumptions underlying this observation.
One, that the military has the competence and the capacity to "reset" the system,
and two, that military intervention is the default option when civilian governance
falters. In fact, the military has neither such competence nor such capability, and
coups are more often made by armed men who think they have the duty to "sort
civilians out" whenever they deem it appropriate.

Sumit Ganguly: The military in Pakistan is bloated beyond all reason. Curbing its
influence and inducing it to become a professional army focused on legitimate
threats should not in any way compromise its viability. It is time that the United
States use its still considerable leverage within Pakistan to trim the extraordinary
privileges of the army, induce it to shed its extracurricular activities, and end its
support to jihadis of every stripe.
Christine Fair: I am dubious about this posited U.S. leverage so long as
Washington depends on Pakistan for help with the war in Afghanistan. Russia's
willingness to permit passage of nonlethal goods is a welcome development, but
Russia doesn't share a border with Afghanistan, and there are also lethal goods that
need to be shipped into the theater. These supplies can be airlifted, but it's costly.
The bottom line is that the United States needs new regional partnerships to make
its demands to Pakistan more persuasive. It also needs a new assistance paradigm
that envisions the kind of Pakistan that is desired to emerge over the next 20 years
and works to make that a reality. The United States and the international
community need to invest in civilian capabilities in Pakistan. Domestic
insurgencies are defeated by police forces with armies in support -- not by armies
themselves. Yet the U.S. approach has been to support the army while spending
little on civilian institutions, which only perpetuates and exacerbates the
problem.

Stephen Cohen: Christine raises a critical issue, that Pakistan controls two vital
choke points: access to Afghanistan from the south and east, and intelligence
cooperation regarding jihadis who commute between Pakistan and other places
(notably Europe). Past administrations in Washington were unwilling to forego
Pakistani cooperation on security issues, something that gave Islamabad powerful
cards. Will the Obama administration be able to develop alternative routes to
Afghanistan that make it less dependent on Pakistani cooperation? Not anytime
soon.

Ashley Tellis: The cruel fact is that there are only two efficient supply routes into
Afghanistan, through Pakistan and Iran. The northern routes are too long and
convoluted and run through too many independent states.

Sumit Ganguly: I think the argument that Washington needs Pakistan to supply
Afghanistan is wearing a little thin, even if it is technically true. Let's face it: the
Pakistani state is in hock. It cannot afford to give up the substantial rents that it
earns from the supply routes. What would replace them? With global oil prices
down, the Gulf states are hurting badly, so Saudi Arabia will not bail out Pakistan
with any substantial infusion of cash. Nor is China likely to dole out huge sums of
money.
Part II: The Military's Worldview

What do the Pakistani security services want? How does supporting political
violence and extremism fit into their agenda?
Shaun Gregory: The extent to which the army and ISI support terrorism is
contentious. That they have done so in the past is beyond dispute. That they still
support certain groups that serve their internal or regional interests is highly likely.
That they support groups that threaten Pakistan's territorial integrity is most
unlikely. However, there is more than one actor stirring the terrorist/extremist pot
here. Pakistan, having been through 1971, views territorial integrity with the
utmost seriousness and is acutely sensitive to those countries -- such as Iran and
Afghanistan -- that support subnational groups within Pakistan threatening
secession. Anyone seeking greater stability in the region, or seeking to wean
Pakistan off support for extremists and terrorists, has to address Pakistan's
legitimate security needs. This means working with neighboring countries to draw
the sting of issues such as Kashmir and Baluchistan. Pakistan, for its part, must
move to a fairer federal dispensation and take the opportunity for bilateral progress
with India that the present context offers.

Sumit Ganguly: The security services and the military basically wish to preserve
their prerogatives at the cost of the rest of Pakistan's society. They have steadily
aggrandized power and privilege and have come to construe their principal role as
the guardians of the Pakistani state. They see the jihadi groups as their
handmaidens and believe that the risks in using them are both controllable and
calculable.

Aqil Shah: Any desire to deal firmly with cross-border militancy is trumped by the
military's perceived need to retain its ties to this or that militant group in order to
counter Indian influence in Afghanistan. The army continues to fear that the United
States could simply lose interest in Afghanistan once it captures the senior
leadership of al Qaeda (as Washington did after the Soviet withdrawal from
Afghanistan), leaving Pakistan exposed to Indian (and Russian) "encirclement" --
evidence of which it sees in New Delhi's alleged support for the insurgency in
Pakistan's resource-rich Baluchistan province and Indian funding for a 135-mile
road connecting Afghanistan's Nimroz province with the Iranian port of Chabahar.
Intelligence officials privately concede their mentoring of militant groups in the
past, but say they have now escaped the military's orbit -- an assertion not fully
consistent with the facts. There appears to be a pervasive belief in the army, among
both mid-level and senior officers, that the United States and India are
destabilizing FATA [Federally Administered Tribal Areas] and the rest of the
country as a prelude to depriving Pakistan of its nuclear weapons. Officers who
have served in FATA have told me that they face a U.S.-Indian combined
offensive and that the local Taliban receive their funds from across the border. The
army might inculcate such beliefs in order to motivate its soldiers, but they also
connect to the military's larger worldview. For the generals, the U.S.-Indian
nuclear deal is proof of an evolving Indo-U.S., or even Indo-U.S.-Israeli, strategic
alliance -- not to mention American duplicity.

Stephen Cohen: Aqil has captured the essence of the Pakistani security
establishment's paranoia, but even paranoids have enemies, and no Pakistani
soldier (or intelligence functionary) will soon forget that their country was cut in
half by India. Most of them see things through an India-tinted lens, and have
always feared that the United States might choose India over Pakistan -- a fear
confirmed by the US-Indian nuclear deal. Other Pakistanis have a more nuanced
view of the world.

Sumit Ganguly: Aqil's views on the Pakistani army's paranoia about Indian
involvement with the CIA in the FATA are fascinating. That said, it would be a
marvel if the Indians were that competent with covert operations. Their flat-
footedness in these matters simply does not convince me that they constitute a
viable threat in the FATA, even if they would want to be one. I disagree with
Steve, however, about the Pakistani army's "memories" of the dismemberment of
their country in 1971. Surely they have a glimmer of understanding about their
own role in precipitating that crisis. India certainly played a major role in bringing
about the genesis of Bangladesh. But the Pakistani army resists coming to terms
with the flight of close to ten million individuals following the military crackdown
there. The 1971 crisis is exploited to good effect for public-relations purposes and
India-bashing, but we need not buy into this obfuscatory propaganda.

Aqil Shah: It would be reasonable to speculate that [India's] RAW [Research and
Analysis Wing] is settling scores with the ISI in Afghanistan and perhaps
Baluchistan. But so far, the Pakistani military establishment has produced little
evidence of the "Indian hand," and logically it doesn't make sense for India to back
groups that could instantly turn their guns on New Delhi, as many of the Pakistani
Taliban promised to do in the wake of the recent Mumbai attacks. The trouble with
Pakistan is that the specter of the unremitting "enemy" serves the parochial
interests of the military. That is why the question of civil-military relations is
critical to Pakistan's external policies and behavior. When the entrenched
organizational beliefs, biases, routines, and interests of the military become the
primary drivers of a state's decision-making for war and peace, it has trouble
written all over it. Sumit is on the mark with the argument that the military
believes it can still calibrate and control the "good" jihadis (those who fight in
Indian-administered Kashmir or lend a helping hand in Afghanistan) from the
"bad" ones (those who have turned on the Pakistani army, ostensibly with Indian
prodding). In fact, the generals continue to see the "good" ones as the frontline in
the military's strategy of asymmetric warfare against a conventionally superior
India. Senior military officials reportedly told a group of journalists in Islamabad
after the Mumbai attacks that the militant commanders were "patriotic" Pakistanis,
and that they had "no big issues with the militants in FATA," "only some
misunderstandings" that "could be removed through dialogue."

Sumit Ganguly: The Pakistani military may well have legitimate concerns and
indeed misgivings about India's weapons purchases. That said, two issues
immediately stand out. First, Pakistan has to decide on its own -- or better, in
conjunction with India -- what constitutes an adequate level of weaponization to
address its security needs. Second, we need to acknowledge that India has other
threats that it faces, namely, from China. If we in the United States hedge against
Russia, then we should concede that the Indians have every right to hedge against
an uncertain future with China. But they also need to reassure the Pakistanis that
they will not use their growing capabilities to intimidate or coerce Pakistan.

Shaun Gregory: It is increasingly clear to everyone except Pakistanis that
Pakistan is no longer a regional equal of India, and nobody behaves any longer as
though it is. Sumit is right: if Pakistan wants sensitivity to its legitimate interests,
then it must acknowledge those of others, and that means recognizing India's
emergence as a great power and its legitimate concerns about China. Pakistan's
insistence on a bilateral calculus vis--vis India makes no sense anymore and is a
patent obstacle to progress.

Christine Fair: I think it would be a mistake to completely disregard Pakistan's
regional perceptions due to doubts about Indian competence in executing covert
operations. That misses the point entirely. And I think it is unfair to dismiss the
notion that Pakistan's apprehensions about Afghanistan stem in part from its
security competition with India. Having visited the Indian mission in Zahedan,
Iran, I can assure you they are not issuing visas as the main activity! Moreover,
India has run operations from its mission in Mazar (through which it supported the
Northern Alliance) and is likely doing so from the other consulates it has reopened
in Jalalabad and Qandahar along the border. Indian officials have told me privately
that they are pumping money into Baluchistan. Kabul has encouraged India to
engage in provocative activities such as using the Border Roads Organization to
build sensitive parts of the Ring Road and use the Indo-Tibetan police force for
security. It is also building schools on a sensitive part of the border in Kunar--
across from Bajaur. Kabul's motivations for encouraging these activities are as
obvious as India's interest in engaging in them. Even if by some act of miraculous
diplomacy the territorial issues were to be resolved, Pakistan would remain an
insecure state. Given the realities of the subcontinent (e.g., India's rise and its more
effective foreign relations with all of Pakistan's near and far neighbors), these fears
are bound to grow, not lessen. This suggests that without some means of
compelling Pakistan to abandon its reliance upon militancy, it will become ever
more interested in using it -- and the militants will likely continue to proliferate
beyond Pakistan's control.

Aqil Shah: Christine's observations provide damning evidence of the games states
play. The Indians seem to be saying, "The Pakistanis did it to us in Kashmir, so we
will pay them back in Baluchistan and elsewhere." So it should not be surprising
that the Pakistani military continues to patronize groups it sees as useful in the
regional race for influence, even if the costs to Pakistan's political stability
outweigh the benefits.

Sumit Ganguly: I never suggested that the Indians have purely humanitarian
objectives in Afghanistan. That said, their vigorous attempts to limit Pakistan's
reach and influence there stem largely from being systematically bled in Kashmir.
Their role in Afghanistan is a pincer movement designed to relieve pressure in
Kashmir. Whether it will work remains an open question. Meanwhile, I know that
the Indians have mucked around in Sind in retaliation for Pakistani involvement in
the Punjab crisis. But as much as the Indians may boast about their putative
pumping of funds into Baluchistan, why is the evidence for that so thin?

Ashley Tellis: What do key Pakistani actors want, especially the military?
Obviously, they want security for Pakistan, along with the ability to protect their
own interests inside it. Both objectives become problematic, unfortunately, when
pursued in certain ways. The army is pursuing security for Pakistan in the east by
combating India through a war of a thousand cuts and a rapidly expanding nuclear
program, and in the west by a little imperial project in Afghanistan. There is a
temptation to see the latter entirely through the lens of India-Pakistan competition.
But Pakistan has interests in Afghanistan that transcend its problems with India. In
fact, one of the crucial problems in both theaters is the exaggerated Pakistani fears
of what it believes the Indians are up to. Aqil captures that paranoia quite well. I
am not sure I buy Christine's analysis of Indian activities in Pakistan's west: this is
a subject I followed very closely when I was in government, and suffice it to say,
there is less there than meets the eye. That was certainly true for Afghanistan.
Convincing Pakistanis of this, however, is a different story. I think Sumit and
Shaun get the bottom line exactly right: Pakistan has to recognize that it simply
cannot match India through whatever stratagem it chooses -- it is bound to fail. The
sensible thing, then, is for Pakistan to reach the best possible accommodation with
India now, while it still can, and shift gears toward a grand strategy centered on
economic integration in South Asia -- one that would help Pakistan climb out of its
morass and allow the army to maintain some modicum of privileges, at least for a
while. The alternative is to preside over an increasingly hollow state.

Christine Fair: I am not trying to blow Indian activities in the region out of
proportion, rather stressing the need to not dismiss the importance of Pakistani
perceptions of those activities simply because one thinks they are exaggerated.
These activities matter to some in the Pakistani elite and to a broader public that is
fed a steady stream of information about them. Countless surveys demonstrate the
Pakistani public's peculiar view of the region and their country's activities in it.
Public opinion matters to the army, and it will not cooperate with the West's
desires unless such cooperation enjoys support among Pakistanis at large. Coercive
measures against the army -- which I tend to support to some extent -- are at odds
with attempts to persuade Pakistanis of the real nature of the threats their
government has brought upon them and the need for immediate action in response.
Regarding the formation of perceptions, Pakistan's educational system is, of
course, the font of these problems. Alas, Washington has focused entirely too
many (wasted) resources on the so-called madrassah problem while failing to
acknowledge the much larger problem of Pakistan's public schools, which educate
some 70 percent of the student population. (Private schools of varying quality
educate another 30 percent of full-time students, with madrassah enrollments
largely a rounding error.) Attitudinal surveys of older children in religious, private,
and public schools show very different views on militancy, violence, minority
rights, and the conflict with India. Private-school students have the most reassuring
worldviews, suggesting that those schools, the vast majority of which are not elite,
are doing something right. Surely, market incentives could be bolstered to
encourage private-school expansion and utilization.
Part III: U.S. Interests

What are the most important U.S. interests in Pakistan, and how should
Washington advance them?
Ashley Tellis: As far as the West is concerned, its principal objective is simply
getting the Pakistanis to make good on their commitment to confront terrorism
comprehensively. It is easy to understand why Pakistan won't. It is harder to
understand why Pakistan, even now, cannot appreciate the risks to itself in its
chosen course. Three problems account for this in my opinion: first, simple inertia
(what has been done for fifty years becomes the default course of action); second, a
tendency to maximize short-term gains at the expense of long-term interests; and
third, the vexed civil-military relationship in Islamabad. Unfortunately for
Pakistan, the West is losing patience with its shortcomings -- and while Pakistan
may be slowly changing, the threats emerging from that country toward the rest of
the world are increasing fast.

Christine Fair: As Ashley notes, the perplexing question is why Pakistan's
security elites do not recognize the problems their policies pose to Pakistan's own
security. They argue that militants are increasingly turning on them, not as
"blowback" from their own past and current policies, but because of Pakistan's
alliance with the United States. Many have told me that once that alliance is shaken
off, the Pakistani state will be able to restore good relations with the militants, who
will continue to serve the security elites' interests. And to date, the use of these
militant groups has been almost cost-free, has it not?

Sumit Ganguly: Without some explicit benchmarks, further aid to the Pakistani
army will be money down a rat hole. We have done this before, and not just with
Musharraf. I distinctly recall that after several years of support to the Pakistani
military during the Soviet invasion of Afghanistan we discovered to our great
horror that the bulk of our assistance had gone to those who had done the least
fighting, such as Gulbuddin Hekmatyar and his thugs. It is time we make it clear to
the Pakistani army that it will not be business as usual.

Stephen Cohen: I strongly favor conditionality when it comes to a matter that is in
Pakistan's own vital interest, such as counterinsurgency. I don't see why we should
sell arms for other purposes. But the problem, of course, is that we want more
things from Pakistan than they can probably deliver. We want them to be a
democracy, clean up the madrassas, get along with India, be forthcoming on A. Q.
Khan and their past nuclear program, have a world-class nuclear command and
control system, be with us against al Qaeda, the Afghan Taliban, and the Pakistani
Taliban (including its Punjabi ideological soul mates). If you think that a threat to
cut off military sales can make them do all of these things, I have a bridge I'd like
to sell you. We must decide what is most important.

Sumit Ganguly: Steve, we don't need to ask the Pakistanis to do all those things
simultaneously. That said, I see no reason why we cannot approach such a list
sequentially. This will entail a serious discussion in Washington about near- and
medium-term priorities. At a bare minimum, we can ask Pakistan to end its ties
with jihadi organizations. This is in the American interest, in the interests of India
and Afghanistan, and ultimately in the interest of Pakistan itself. Cutting the
umbilical cord between certain entities of the Pakistani state and these
organizations will not be easy or simple, but unless concrete, tangible steps are
taken toward that end, we may as well stop talking fatuously about how Pakistan is
"a valuable ally in the war on terror." The menace that was spawned on and
unleashed from Pakistani soil threatens us all, and we need to be forthright about it.

Stephen Cohen: What if they stop their ties to jihadi organizations that affect us
but not to those that are pointed at India? Is this our problem or India's? And is al
Qaeda a jihadi organization?

Sumit Ganguly: There cannot be neat distinctions between "good" and "bad"
jihadis. The Pakistani army cannot guarantee that even ostensibly "anti-Indian"
jihadi organizations will not turn their guns on us when it suits them. And yes, al
Qaeda is a jihadi organization!

Christine Fair: I'd like to push police training. The [National Highways and]
Motorway Police and the Lahore traffic police demonstrate that a good salary and
absolute accountability can produce effective policing in Pakistan: police can be
professional when the proper incentives are in place. U.S. assistance has not
focused the resources it should have on civilian capacity building. While
"Operation Clean-up" -- in Karachi against the MQM [Muttahida Quami
Movement] -- had some pretty nasty and draconian elements, it did demonstrate
the capacity of police and the rangers to put down serious insurrection when there
is will to do so.

Shaun Gregory: For me, the top priority is Pakistan's ongoing support for the
Afghan Taliban. Any hope the Obama administration has of progress in
Afghanistan is going to turn in large measure on persuading Pakistan to act on its
side of the border. I'd argue that the nuclear issue can wait, that even al Qaeda can
wait; it's the tribal instability in the FATA/NWFP [North-West Frontier Province]
and Pakistan's impact in Afghanistan that have to be front and center. The question
of why the Pakistani army does not see its embrace of terrorists as ultimately self-
destructive is important. Is it arrogance that makes it believe it can somehow
weather the storm, achieve its objectives in Afghanistan, Kashmir, and elsewhere,
and still control anti-state terrorism within its own borders? Or is there any merit in
seeing this as driven by a pernicious mix of cultural and religious factors -- the
labyrinthine working through of shame-honor/power-challenge codes, Islamic
fatalism, the notion of jihad within the army? Is Pakistan so cornered that it feels it
has no other options, or does the army prefer to pull the house down on everyone's
heads, including their own, rather than accept a dispensation of regional weakness?

Aqil Shah: The United States has to pay more attention to the Kashmir conflict
and be seen to be doing so. Kashmir shapes the Pakistani state's worldview to a
significant degree. It also plays a crucial role in legitimating the military's virtually
open-ended security mission and limits the prospects of reversing military power in
domestic politics. Meanwhile, if Washington is backing civilian rule in Pakistan, as
it says it does, U.S. officials should resist holding secret meetings with the
Pakistani army leadership. These interactions undermine the authority of the
civilian government and reinforce the generals' exaggerated sense of importance.
The military feels it can get away with murder in good measure because it believes
that it is indispensable to Washington. As for the possibility that "religious
fatalism" is part of the problem, I don't think cultural or religious essentialism can
help us understand the Pakistani military's intransigence in the face of changing
circumstances. Organizational beliefs and norms, which define the values and
goals that are important to the group and are imparted to all new members in a
highly structured environment, deeply influence military behavior. One deeply
internalized assumption is that India is evil and anyone who abets or aids it in any
way, or is seen as doing so, must also have evil designs on Pakistan. On FATA, as
urgent as dealing with militancy is, there is a serious and long overdue need to
reform the barbaric colonial-era rules and regulations under which Pakistan
(mis)governs the area. The government, for example, is currently allowed to use
fines, arrests, property seizures, and economic blockades to punish an entire tribe
for crimes committed anywhere in its territory. Official decisions are not subject to
appeal in a court of law. The people of FATA are deprived of basic political rights,
and political parties are still banned from operating in the area (which is one reason
the madrassah-based JUI-F dominates local politics). External actors need to lean
on Pakistan to get serious about governance and economic reforms in FATA. The
Pakistani state has washed its hands of its basic responsibility to govern FATA by
blaming it on Pashtun traditions and culture. But FATA is misgoverned
deliberately, not because of tribal resistance.

Stephen Cohen: I know and admire Aqil's views, which have influenced me
greatly. But achieving "Aqil's Pakistan" requires a long-term strategy, and some
agencies in Washington have pressing short-term goals. They would be willing,
like previous U.S. administrations, to trade off dealing effectively with al Qaeda
and the Afghan Taliban now at the expense of helping Pakistanis construct a stable
and, hopefully, democratic state over the long term. But the prospect of a truly
rogue Pakistan several years down the road is frightening. As far as policy is
concerned, the approach set out in the Biden-Lugar legislation changes the
fundamental ground rules of our relationship with Islamabad and the Pakistani
people. I support it wholly. I don't think that the GOP understands this; Richard
Holbrooke will have to make it clear to them that the old rules have changed, while
convincing the rest of the Obama administration that a short-term policy must be
accompanied by long-term policies as well. Finally, there must be active
diplomacy with our friends and others so they can, if they choose, coordinate their
diplomacy and aid packages with ours. Other relevant states also need to be
engaged -- not just India but also China, Europe, and Saudi Arabia, all of which
want a stable Pakistan. All this will require leadership. There's no guarantee that it
will work, but looking at the fundamental trend lines in Pakistan, it is hard to be
optimistic if things continue the way they are now.
Part IV: What Now?

Given all of the above, what are the implications of recent developments such
as the Swat Valley deal and the SharifZardari confrontation?
Sumit Ganguly: For me, recent events have only underscored the fragility of the
Pakistani state and its institutions. They also reveal that the court system is firmly
ensconced in the politics of the moment. It does not bode well for the country.
Allowing sharia in Swat, regardless of its particular manifestations, constitutes an
abnegation of state authority. This is deeply worrisome and cannot be sanitized.
Even during the darkest days of the Punjab insurgency, the Indian state never
ceded this sort of ground to the Khalistanis.

Shaun Gregory: What is depressing about the latest events in Pakistan is that they
were completely predictable. It is like watching the unfolding of a bad tragedy one
has seen a hundred times before. In my view, the issue of Sharia in Swat is less
important than the nature of the people to whom the Pakistani authorities have
ceded authority there. As for Asif Zardari and Nawaz Sharif, this is a wholly
unnecessary fight that diverts huge amounts of political energy from real priorities.
They remind me of Holmes and Moriarty, so intent on the destruction of each other
that they missed the point that they were standing on the edge of an abyss.

Aqil Shah: Recent events in Swat show only that the military-dominated Pakistani
state is either unwilling or unable to perform its basic function: enforcing the
legitimate monopoly over the means of coercion and administration in its own
territory. Even if we concede that striking a cease-fire agreement with the Taliban
was the only feasible option in the face of abject military failure and the rising
human costs of the military campaign, how is the government going to make sure
that the Taliban have made a credible commitment? What is to stop the Taliban
from reneging on their promises? Press reports suggest that they have already
violated the terms of the cease-fire agreement by attacking and kidnapping security
personnel, just as they did in all of the previous "peace deals" in the FATA. The
cease-fire agreement basically gives the Taliban a pass on their crimes against the
state. They have terrorized the population, burnt down hundreds of girls' schools in
Swat, and murdered civilians and military personnel. As Shaun says, it's dj vu all
over again.

Shaun Gregory: For U.S. and NATO policy, meanwhile, the fundamental
challenges remain. Washington and NATO should partner with all those who can
take Pakistan forward, wherever they are -- in moderate political parties, civil
society, the private sector, even Islamist parties that eschew violence. Efforts
should shift from military aid to civilian aid and strive for economic, social, and
political progress. Any and all military aid that continues should be strictly
accounted for and subject to conditionality. Western dependence on Pakistan -- in
terms of logistics, intelligence, and so forth -- should be reduced so Western
leverage over the army and ISI can increase. Washington should explore
containment strategies for the FATA that end the airstrikes, re-task the Pakistan
military, suppress arms trafficking, limit the reach of the extremist message, and
seek some accommodations with tribal groups. Meanwhile, the West needs to
recognize that Pakistan has legitimate interests and concerns in Afghanistan, and in
the region more broadly, and allow those interests to be addressed, or else the
paranoia of the army and the intelligence services will continue to be fed. A
regional diplomatic process, with Pakistan and Afghanistan at the center, can
provide a political framework for progress. The combination of Obama, [Hillary]
Clinton, Holbrooke, and [David] Petraeus provides the best shot at such a process
we're likely to see for a generation.

Aqil Shah: The transition to democracy has done little to change the dynamics of
political power. The politicians appear too busy protecting their flanks to realize
the gravity of the situation. Opinion polls show a sharp downslide in public
confidence in the government's performance. The Sharif-Zardari showdown may
not have been unexpected, but it has certainly disappointed Pakistanis who
perceived the 2008 elections and their results as a first step toward extricating
Pakistan from its authoritarian trap. The political, economic, and security problems
faced by the elected government are largely legacies of Musharraf's military rule.
But the PPP [Pakistan People's Party] government cannot hide behind that excuse
to mask its own incompetence. Power in Pakistan, as in any other aspiring
democracy, needs to be restrained by the rule of law. This, in turn, requires the
supremacy of the constitution, enforced by an autonomous judiciary. But the PPP-
led government has used paltry subterfuges to subvert judicial independence and
has held over other anti-democratic measures from the Musharraf era, such as the
presidential power to arbitrarily sack elected governments. The PPP and other
parties may find it inconvenient to be restrained by constitutional checks and
balances, but without them democracy is likely to remain feeble and vulnerable to
authoritarian backsliding. If that happens, civilian politicians will have to share a
good part of the blame for squandering the democratic gains of the last few years.

Sumit Ganguly: Sadly, I agree. Going back to a question we touched on earlier,
do any of you think Pakistan's political elites fully grasp the dimensions of the
crises that confront the state? Or do they feel that they will somehow find a way to
muddle through yet again? I think that the country faces unprecedented challenges
to its political stability, public order, and economic growth, and that its past ability
to cope with similar threats may not be a useful guide to what lies ahead.

Ashley Tellis: I think Pakistani elites understand the nature of their challenge but
are victims of short-term necessities, just like our own politicians. The Sharif-
Zardari fissure is a great example. Both ought to be strengthening the civilian
regime vis--vis the army, but normal politics comes in the way, as it always does.
Shaun's recommendations for Western policy are very useful, but I'm pessimistic
we can succeed. Washington will engage the civilians -- as it does already -- but is
it realistic to imagine that it will "disempower" the Pakistani military so long as it
is fighting al Qaeda and the Taliban? And Washington may shift the focus of aid to
civilian ends, but civilian assistance may well be unfocused and wasted. There is
strong pressure on the Obama administration to introduce conditionality on
military aid to Pakistan, but I would be very surprised if it goes this route. Trying
to offset the dependence on Pakistan through the northern routes makes sense, but I
don't think there is much prospect of good news there -- for the foreseeable future,
it's the Khyber Pass. (And to be fair, the Pakistani record in transporting stuff is not
at all bad, a few dramatic events notwithstanding.) The idea of a containment
strategy is interesting, but can a Pakistan with multiple sovereignties survive? I
don't know. As for airstrikes and collateral damage, this has been more of an issue
in Afghanistan than Pakistan, where the U.S. record on targeting bad guys has been
remarkable. On Pakistan's legitimate concerns, finally, the real issue here is not
Islamabad but Kabul. How do you protect Pakistan's interests when Afghanistan
has a different conception of what those should entail? It is the security dilemma
between Afghanistan and Pakistan that lies at the core of all else. I am personally
skeptical about a regional approach as it is being defined now. I wish Holbrooke
and his colleagues well, but you can't fix deep-rooted security dilemmas
instantaneously or through marginal policy changes. Sorry to be a wet blanket, but
I am not optimistic. I think the best we can do is try to manage Afghanistan
without Pakistan's cooperation while slowly working with Islamabad to bring it
around over the longer term.

Aqil Shah: This is a classic moral hazard problem. Military and civilian elites in
Pakistan believe that they can pursue their notion of the national interest without
serious repercussions because of the country's strategic importance. And so far, the
United States and others have done little to puncture that belief. Consider U.S.
silence on Musharraf's demolition of the higher judiciary, an issue that triggered
civil-society mobilization against his regime and helped loosen his grip on power.
The not unfounded perception of this in Pakistan was that U.S. acquiescence was a
response to the Supreme Court's efforts to apply Pakistani laws to illegally
incarcerated terror suspects. To many Pakistanis, this was just another case of
Washington's expedient alliances with Pakistani military dictators. The attack on
the Sri Lankan cricket team in Lahore demonstrates all too well the audacity and
growing reach of Islamist militants into the "settled" areas of Pakistan. Much of
Pakistan's internal insecurity is linked to its perceived security dilemma, which is
typically used by the establishment to pursue unaccountable security policies and
to justify domestic repression. If the stabilization of Afghanistan and Pakistan is
not addressed with all the diplomatic, economic, and political tools available, then
the region is likely to go to hell in a handcart, with horrendous consequences.

Shaun Gregory: I've just been re-reading Tariq Ali's (admittedly leftist) analysis
of the U.S.-Pakistan relationship, The Duel. The basic thesis is that since 1958 the
major Western powers have put their own short-term interests first, propping up
one military dictatorship after another and paying only lip service to support for
democracy. If such a course had achieved U.S. and Western objectives, it could
perhaps be countenanced. But it hasn't. For decades, Washington and others have
put the interests of the Pakistan army and the country's tiny kleptocratic elite first
while neglecting the Pakistani people. This is a basic error that cannot be repeated
if Pakistan is to be turned around. I can't help thinking that if the same resources
and intellectual energy that have been put into the Pakistani military had been put
into genuine support for democracy, social progress, and development, we'd be in a
very different place today. Over the past ten years, Washington has spent almost
six billion dollars on the FATA, 96 percent of them on military activity and just 1
percent on development. This is a sterile, failed policy, and there surely have to be
other ideas worth trying. The Obama administration says it wants to change course.
We'll see if it does.