Learning by Failing

The Norwegian Government Pension Fund, or more commonly the Norwegian Petroleum Fund, established in 1990, is the world’s largest sovereign wealth fund. The fund is commonly regarded as a successful product of economic foresight in a country with strong traditions of long-term planning. As the fund was established in a period during which leading social scientists strongly doubted the ability of Norwegian political and administrative institutions to handle the large oil riches, the article examines the background of the fund in detail. Government archives reveal that senior advisors in the central administration opposed and delayed the establishment of a petroleum fund. The argument in the article is that the advisors’ previous experience with fund structures, combined with the institutional logic in which the most important advisors were situated, explains both the long-lasting opposition against the fund and how and why the fund acquired its main characteristics.     

Killing the goose that laid the golden egg? Australia's resource policy regime in comparative perspective

A common criticism of the minerals resource rent tax (MRRT) was that it would ‘kill the goose that laid the golden egg’ for the Australian economy. Mining companies, their industry associations, and the Liberal–National Coalition all argued the MRRT would reduce Australia's attractiveness for mining investment, and lead to ‘capital flight’ as resource firms shifted towards lower-taxing competitors. To evaluate this claim, it is necessary to compare Australia's resource policy regime – including, but not limited to, its taxation elements – against those of its principal competitors. This article undertakes such an evaluation by comparing Australian resource policies with those of nine of its major mineral and energy competitor countries. This survey reveals that Australia's comparatively high mining tax rates are partially offset by its ‘non-interventionist’ approach to resource policy, and that it has retained good rankings on international political risk surveys. There is some evidence of short-term market response to the mining tax, but there is little evidence of sustained capital flight occurring due to the MRRT. These data collectively suggest that the MRRT did not significantly undermine Australia's attractiveness for international mining investment, despite widespread perceptions to the contrary.     

The Geopolitics of the ‘Future Return’: Britain's Century-Long Challenges to Norway's Control over the Spitsbergen Archipelago

Within the context of Arctic geopolitics, the article focuses on British policies toward Spitsbergen or Svalbard over the past century. The 1920 Spitsbergen Treaty accorded Norway sovereignty over the archipelago, but it gave other signatories, including Britain, non-discriminatory access to its natural resources. It is argued that while geopolitical interests have played a role in Britain's policy-making, its main rationale has been a determination to use international law to protect pre-existing mining rights and potential future oil rights in the Svalbard area. Apart from Russia, Britain has been most active in challenging Norway's interpretation of its sovereign rights, especially the view about the treaty's non-applicability to Exclusive Economic Zones and continental shelves. It is shown that the Britain's economic focus was tempered during the Cold War by the need for Western solidarity and for supporting Norway's resistance to Soviet Spitsbergen claims. But having been instrumental in watering down Norway's sovereignty provisions in the negotiations on the Spitsbergen Treaty, Britain has never been prepared to abandon its interpretation of the treaty's stipulations on natural resources and equal access to the archipelago's maritime areas.     

Regional development in a resource production system: long distance commuting,population growth,and wealth redistribution in the Western Australia Goldfields

Resource towns often exist on a knife‐edge, largely depending upon global demand for their resource/s and, at the same time, playing a critical role in the development of a nation. The transition from single resource towns to diversified economies has been modelled on several occasions, but their application to other resource locales is difficult given the unique interplay of geographic, political, social, and economic factors. Nonetheless, Innis' Canadian staples theory may explain the political motivations of resource extraction and exportation, not least in relation to the Western Australia Goldfields. This paper seeks to explore the theory's potential in this context by examining the implications of high labour mobility. It employs a two‐step process using, first, a social network analysis to map the entire Australian labour commuting network and, second, a regression analysis of commuting, regional wealth, and population size against population change. While the Goldfields historically grew in line with processes described by Innis' theory, contemporary high labour mobility has created a variegated landscape of different development dynamics and trajectories. This finding carries implications for network patterns of residence and work. Labour acts to extend the distribution of wealth by sending incomes to the metropolitan core and to amenity‐rich regional towns across the State and nation. In such light, regional development scholars must view the resource town in its broader urban system of distinct but interlocked, and sometimes overlapping, activity nodes.     

Determinisme et liberte: Approche d'une histoire du conditionnement: La peur de souffrir

The article takes issue with W. G. Runciman's contention, in Great Books, Bad Arguments, that modern political development has moved beyond both theory and practice of governance by a sovereign power over subjects as expounded in Hobbes's Leviathan. Runciman's allegations that Hobbes overrates education, that he fails to recognise the potential for dissent and revolt in a polity under a sovereign, and that he ignores society's pre-political scope and its post-absolutist, eventually democratic prospects, are checked against the text and argument of Leviathan. Runciman's contention that government without subjection has been achieved in modern constitutions is confronted with Hobbes's resistance.     

The unintended consequences of emergency food aid: neutrality,sovereignty and politics in the Syrian civil war, 2012–15

This article dissects the role of emergency food aid during the current Syrian conflict. Drawing on Séverine Autesserre's concept of frames and Giorgio Agamben's theory of sovereignty, we argue that the neutrality frame, which undergirds the majority of humanitarian relief efforts in Syria, obfuscates the impact of emergency food aid, both on sovereign power relations and local political dynamics. While neutrality appears benign, it has had a tangible impact on the Syrian civil war. Through close scrutiny of various case‐studies, the article traces how humanitarian efforts reinforce the bases of sovereign politics while contributing to a host of what Mariella Pandolfi (1998) terms ‘mobile sovereignties’. In the process, humanitarian organizations reaffirm sovereign power while also engaging in similar activities. We then analyse how and why ostensibly neutral emergency food aid has unintentionally assisted the Assad regime by facilitating its control over food, which it uses to buttress support and foster compliance. By bringing external resources into life‐or‐death situations characterized by scarcity, aid agencies have become implicated in the conflict's inner workings. The article concludes by examining the political and military impact of emergency food assistance during the Syrian conflict, before discussing possible implications for the humanitarian enterprise more broadly.     

The new resource politics: can Australia and South Africa accommodate China?

The material transformation of the Chinese economy is forcing a concomitant process of political adjustment—and not just in China. Other states are being forced to accommodate the ‘rise of China’. In this context, this article first presents a comparative analysis of China's impact on two countries, Australia and South Africa, which have little in common other than a wealth of natural resources and a possible status as middle powers; this is a particularly useful exercise because these states are geographically distant and have very different political structures and general developmental histories. Second, the authors consider how China's bilateral ties look from a Chinese perspective in these two very different relationships. Such an analysis serves as a reminder that resource dependency is a two‐way street. The article argues that underlying material realities are constraining and to some extent determining the domestic and foreign policies of three very different states that otherwise have little in common.     

Resource nationalism or resource liberalism? Explaining Australia's approach to Chinese investment in its minerals sector

Since 2005, a burgeoning wave of Chinese investments has set off a new ‘minerals boom’ in the Australian iron ore and coal mining sectors. While normally a welcome development, the state-owned and strategic nature of the investors has raised concerns in Australia about how these should be regulated. As a result, in February 2008 the Australian government declared an intention to more closely screen foreign direct investment (FDI) from state-owned sources, which both supporters and detractors alike have claimed is evidence of ‘resource nationalism’ in Australia's approach towards its trade and investment relationships with China. This article challenges this understanding through an examination of the characteristics of Chinese mining FDI, the dilemmas these present to the Australian government, and the relatively restrained nature of its response. Through this, Australia's FDI policy is explained as a defensive move against the potential for strategic behaviour by Chinese investors resulting from their state ownership, rather than any national program to subject minerals trade and investment to political control. On this basis, the article argues that Australian government policy instead evidences a ‘resource liberalism’ approach, which intends to ensure that the governance of Australia's minerals trade and investment with China remain market-based processes.     

Exile at home: A matter of being out of place

This article employs Hannah Arendt's theorizing about assimilation to consider how sovereign citizens of a nation state might nevertheless experience a sense of exile. It builds on Aziza Khazzoom's notion of a ‘chain of Orientalism’ to suggest that the assimilation of Europe's Jews to Enlightenment ideals has had ongoing repercussions among Jews in the modern state of Israel. The article focuses on what it means to be Jewish in terms of religious observance, and who feels at home in the Jewish state. Employing vignettes from recent ethnographic fieldwork, it raises questions about the modern nation state's capacity to create conditions in which its own ‘people’ can flourish. In this case, Israel has claimed to make it possible for the Jews to flourish, in Arendt's terms, ‘as Jews’, but it is far from clear what ‘as Jews’ would, could or should mean. This leads the author to suggest that Israel has a Jewish problem.     

Sovereign wealth funds: dangers and opportunities

Soaring oil prices since the early 2000s have led to a historic transformation of wealth from consuming regions to major oil exporters. In recent years many of these exporters have set up oil funds to utilize their massive and growing oil revenues. These funds are divided into two categories—stabilizing and saving. Their large investments in western markets have raised concerns that they might be driven by political and strategic interests rather than commercial ones. This article examines oil funds in the Persian Gulf, Norway and Russia. It discusses US and European proposals to regulate oil funds' investments. The article examines the International Monetary Fund's efforts to forge a consensus on a ‘code of conduct’ that would guide the relationship between oil funds and the recipient markets. The analysis argues against excessive regulation.     

The Curious History of the Minerva Reefs: Tracing the Origin of Tongan and Fijian Claims Over the Minerva Reefs

ABSTRACT

This article explores the historical events relating to the competing claims over the Minerva Reefs by Tonga and Fiji. Tonga’s sovereign claim over the Minerva Reefs was prompted by a private group’s laying claim to a 'Republic of Minerva' in 1972. At that time, Fiji, as well as the South Pacific Forum, recognized Tonga as the only possible owner of the Minerva Reefs, but did not explicitly recognize Tonga's claimed sovereign title. Such a position reflected the legal uncertainty in relation to Tonga's claim in 1972. The establishment of the 200?nm Exclusive Economic Zone legal regime in the late 1970s gave rise to Fiji's claim to the Minerva Reefs, whereas subsequent developments in international law have significantly reduced the legal uncertainty in relation to Tonga's claim.     

The responsibility to protect and Australian foreign policy

It is widely recognised that the Responsibility to Protect (RtoP), adopted by heads of state and government in 2005, is an important new international principle. Australia has been one of the principle's most significant contributors, with prominent Australians and governments from both sides of politics contributing to its development, emergence, and implementation. This article traces and explains Australia's contribution to RtoP and asks what more it might do to assist in its implementation. It argues that Australia's commitment to RtoP is informed by a synergy of values and interests and has been strengthened by the Rudd government's reengagement with multilateralism. It concludes by calling for the development of a whole-of-government strategy for implementation and by suggesting some policy avenues that might be considered.     

Unearthing global natures: Outer space and scalar politics

During the 1960s, the United Nations Committee on the Peaceful Uses of Outer Space (COPUOS) worked to develop laws that would regulate activity in outer space. In the treaty that followed, outer space, a resource that encompassed Earth, was to remain outside of existing political borders, free from sovereign claims, and open to use by all states. Because of these stipulations, many have labeled outer space a “global commons” or “global resource.” In most academic analyses of global commons, these laws rejecting sovereign claims are treated as the de facto way that a resource that materially spanned all states would be governed. As debates in and outside of COPUOS indicate, however, the status of outer space as beyond states’ sovereign territorial jurisdiction was not given. Rather, as I demonstrate in this paper, the status of outer space and orbits as beyond sovereign territories is a result of political contestation over the understanding of physical properties of outer space and Earth. I trace the debate in the late 1960s and 1970s over the border between sovereign air space and “global” outer space. This was a debate over how outer space would be incorporated into political–economic relations. By using a production of nature approach that recognizes the importance of physical materialities and scalar politics, I demonstrate the constructedness of outer space as a “global” resource and how its construction as such furthered uneven political–economic processes. Such analysis illuminates how such socionatures beyond and across borders are produced to achieve particular political–economic outcomes.     

Functions of sovereign violence: Contesting and establishing order in Darjeeling,India

This paper explores the relationship between de facto sovereign violence and order in spaces of contested authority. Here, so-called “informal sovereigns” imbued with the power to kill and punish with impunity can act either as rebels against, or as chosen mediators for, a weak government. This paper takes this ambivalent relationship between informal sovereigns and the state as a starting point to explore the different functions of sovereign violence drawing on a case study from Darjeeling, India. Here, informal sovereigns appear in the form of regional leaders of an autonomy movement that has, at times, violently challenged the government's authority over the region. Drawing on Walter Benjamin's distinction between law-making and law-preserving violence, the paper argues that sovereign violence performed by such informal sovereigns has different functions. It can either stabilize or challenge existing power relations and legal orders. To differentiate these functions and to account for the ambivalent relations between informal sovereigns and the state, the category of informal sovereigns needs to be disentangled. To do so, this paper establishes a distinction between ‘petty sovereigns‘, whose sovereignty is outsourced from the state, and ‘autonomous sovereigns’, whose authority is mainly grounded in actors' capacity to perform excessive violent acts. While petty sovereigns' violence is law-preserving and strengthens existing power relations, autonomous sovereigns engage in law-making activities and aspire to affect changed orders and to benefit from that change. The case study concludes that a sovereign's efficacy in effecting order is not only grounded in violence. Rather, its authority emerges from the grey zone of the negotiated boundaries between itself and the state, and its recognition by its respective constituents.     

What If Piketty Is Right? Real Economic Costs of Rising Income Inequality

Thomas Piketty's analysis of income and wealth distribution, Capital in the Twenty-First Century, argues that wealth has become increasingly concentrated in the hands of the most affluent, while lower and middle class real incomes have stagnated; he warns that this trend could have “potentially terrifying” results, possibly even violent revolution. This article presents evidence that growing inequality weakens the entire economy by eroding the purchasing power of the vast majority of the population and the education of the labor force, while increasing its vulnerability to future collapses of the financial markets. It agrees with Piketty's concern that the capitalist market system, driven by Adam Smith's classic reliance on the pursuit of individual self-interest, lacks mechanisms to correct these distortions, which must be addressed by new policy initiatives.     

Who's afraid of sovereign wealth funds?

A spectre is stalking the world: the spectre of a rich Chinese state buying strategic resources, hollowing out companies, gobbling up financial institutions and threatening the sovereignty of the countries in whose resources and companies it invests. The China Investment Corporation (CIC) – a sovereign wealth fund company (SWF) – is the stalking horse of the Chinese state. Using the CIC as an example, this article argues that the warning about SWFs has little to do with their size, the speed of their growth or what SWFs have or have not done. It is about a shifting power relationship in the global economy. This broader realignment may have been occurring slowly, but it is happening. Neither side – those who have been writing the rules of the game for international political economy and those who are historically rule-takers – is fully willing to acknowledge the shift and take responsibility to build a new architecture of an international financial system that can accommodate interests of old and new players.     

Australia's Antarctic agenda

Australia has had a long connection with, and significant national interests in, the Southern Ocean and Antarctica. The Australian Antarctic Territory comprises 42 per cent of Antarctica's landmass. Australia is not only a claimant state and original signatory to the Antarctic Treaty but has played a significant role in the development of what is termed the Antarctic Treaty System (ATS). This article aims to provide an overview of Australia's key policy interests and government policy goals towards Antarctica, including its commitment to the ATS. In examining key policy objectives we note that despite continuity and development of these objectives, significant changes and challenges have arisen in the period 1984–2006. It is these challenges that will help frame Australia's Antarctic agenda over the next 20 years and beyond.     

In pursuit of independence: the political economy of Catalonia's secessionist movement

This article examines the fiscal dimensions of recent support for Catalan secession. Since the region is a cultural community distinct from the rest of Spain, much research has spotlighted national identity features in the calculus of Catalan political aspirations. This study supplements this work by contextualising support for Catalan independence in terms of the state's fiscal arrangements with the use of public opinion survey data. Even after controlling for self‐reported cultural identity and other relevant factors, it argues that support for independence is a function of grievances rooted in the desire for Catalonia to assume responsibility for taxation and spending policy. Meanwhile, it validates some observations about Catalonia's separatist movement, while bringing others into question, and offers support for the theoretical framework linking political economy to secessionism. The results suggest that Spain might be able to stave off Catalonia's separatist bid through some form of political and taxation policy reconfiguration, with the caveats that cultural identity factors and the existence of other separatist movements across the country complicate this strategy.     

‘An ally for all the years to come’: why Australia is not a conflicted US ally

In 2011, Australia communicated a clear choice about its strategic future. It would continue to cleave tightly to the US alliance, expand its military links and work to advance the USA's conception of regional order. Given its economic interests, why has Australia bound itself to the US alliance? What lies behind this strong commitment and what would it take for Australia to change its relationship with the USA? This article presents an analysis of the current state of the US–Australia alliance and argues that Canberra's pursuit of close relations with the USA reflects the interaction of a rational calculation of the costs and benefits of the alliance with a set of resolutely political factors that have produced the current policy setting. The article first assesses the security cost and benefit behind the alliance. It then argues that the move also derives from the strong domestic support for the US alliance, a sharpened sense that China's rise was generating regional instability that only the US primacy could manage and the realisation that the economic fallout of such a move would be minimal. It concludes with a brief reflection on what it might take to change the current policy settings.     

Australia and the 1947 United Nations Consular Commission to Indonesia

ABSTRACT

The Netherlands’ colonial empire was a source of wealth, pride and prestige, being seen by some as an essential element of Dutch identity and the key to the Netherlands’ status as a European power. The most prized of the empire’s components was Indonesia. When nationalists declared the independence of the Republic of Indonesia on 17 August 1945, Dutch colonialists refused to take it seriously, but they soon discovered that the Indonesians were willing to fight for their newly-declared freedom. They also found that international opinion, especially as expressed in the new United Nations (UN), defended the Republic’s right to exist. Australia has been acknowledged as an important contributor to international recognition of Indonesian independence through its actions in the UN Security Council and its membership of the UN Committee of Good Offices (CGO). This article, however, focuses on a lesser-known part of the story: Australia’s role in the UN Consular Commission, established at the same time as the CGO. Although the Commission was active for only a short period in late 1947, it deserves recognition on a number of counts: for its pioneering work in UN peacekeeping; as an early example of Australian diplomacy in its region; and for how an examination of its activities, and the responses of the Dutch, the Indonesians and others, can be useful for understanding the course of the Indonesian independence struggle in the years that followed.