His family's declaration that they will continue Somare's struggle to reclaim the prime ministership will also offend the population. PNG is a vibrant democracy with no tradition of dynastic leadership transfers in parliament. PNG's leadership may well have been dominated since 2002 by Michael Somare, who was also the founding prime minister, but the people will not sympathise with his family's desperation to stay in power.

For Peter O'Neill's Government (whose record since the constitutional crisis has not been blameless, with the controversial deportation of a New Zealand businessman and a diplomatic spat with Indonesia), the resolution of the mutiny is good news. It strengthens its legitimacy as a new generation government committed to stability.

One positive conclusion to draw from all the instability of the past couple of months is that PNG has not followed the path of many African states which have endured similar challenges. No civil unrest or even mass public protest followed either the constitutional crisis in December or the dramatic events of yesterday. No state of emergency was declared. Diplomatic missions have not had to evacuate staff. Business has proceeded largely as normal. The population has effectively looked on as politicians have engaged in battle for the spoils of office.

With elections due in June, there is, however, no certainty that the nation's politicians will turn their focus to the good of the nation rather than pursuing their personal ambitions.

Photo by Flickr user ComSec.

Thirlwell outlines two models: the 'fixed stock' and the 'opportunity cost' paradigms. Yet both potentially overlook a significant aspect of World3's 'overshoot and collapse' scenario. However much Forrester and the Meadows experimented with its parameters, World3's 'overshoot and collapse' scenario always occurred during the time-period of 2030-2100. Changing the model's assumptions simply altered when the scenario would occur.

The 1980 bet between Ehrlich and Simon is a great media sound-bite. However, the reality also was that commodities traders including Michael Marcus and Bruce Kovner of Caxton Corporation and Paul Tudor Jones made fortunes on the market volatility during this period — which Sebastian Mallaby details in the opening chapters of his book More Money Than God: Hedge Funds and the Making of a New Elite.

LtG has many legacies. It foreshadowed the contemporary interest in resource wars, environmental and energy security, and catastrophic risk. LtG's early simulation modelling led directly to Stella's iThink and other system dynamics programs like Vensim. The second episode of the Adam Curtis documentary series All Watched Over By Machines of Loving Grace (2011) credits LtG with galvanising environmental activists and non-government organisations to debate elite policy-makers. The third episode notes that the logistics and supply chain for consumer electronics like Sony's PlayStation 3 and Apple's iPhone is closely connected to current resource wars and near-failed states in Africa.

The search for solutions to LtG's limits has led to other innovation initiatives, such as those in the book Massive Change, whose authors Bruce Mau with Jennifer Leonard and the Institute Without Boundaries were influenced by designer R Buckminster Fuller. The drafters of future Australian Government white papers could learn something from LtG's impacts.

But there's a great virtue in parsimony, and given that the simplest measure of wealth we have is GDP, I'm going to claim that comparing GDP and GDP per capita over time should do a pretty good job of capturing much of what's going on in the relative economic positions of the two economies. After all, most of the other potential variables we might consider can be thought of as inputs or contributors to GDP. And as I've noted before, although GDP has a lot of well-known shortcomings, a general dearth of alternatives tends to mean that we end up using it anyway.

That still leaves us with the problem of how best to measure it. Long-standing Interpreter readers will be familiar with the ongoing debate over whether PPP or US dollar GDP is the best choice. Arvind Subramanian discusses this issue in his recent book on China's rise, and goes for the interesting option of weighting the GDP variable in his 'index of economic dominance' half on a PPP basis and half on a US dollar one. 

Below, I try to side-step this issue by charting both the US dollar and the PPP series for GDP and GDP per capita, expressed as a ratio of the Chinese to the US value (all data taken from the latest IMF WEO database, including the latest Fund forecasts out to 2016):

Looking at these two charts, even on the measure that's least favourable to China – GDP per capita measured on a US dollar basis – it's pretty hard to argue that China has gone backwards relative to the US since 1991. On a PPP basis, the degree of catch-up is actually rather impressive. Moreover, it's possible that this still understates China's progress.

Finally, having just made the case for GDP as the appropriate metric for economic comparisons, I'm going to back away from that claim a bit. One recent  approach to measuring national wealth has been pursued by the World Bank, where analysts have constructed an alternative estimate comprising the sum of produced capital (machinery, structures and equipment), natural capital (agricultural land, forests, minerals, energy) and intangible capital (calculated as a residual, but intended to capture human, social and institutional capital including hard-to-measure factors like the rule of law and the quality of governance). 

The idea of this measure is that, unlike GDP, which only captures the value of production, it takes into account both environmental factors and intangibles. The Bank has produced estimates for national wealth for three years (1995, 2000 and 2005), and again I've plotted the ratio of Chinese to US wealth on both a total and a per capita basis.

I'll finish with two points based on this last comparison.

First, both the overall and the per capita wealth ratios are much lower than the comparable ratios for GDP. While this reflects significant gaps across all three measures of wealth — according to the Bank's estimates, natural wealth per capita in China in 2005 was about 30% of US levels, produced capital was about 6% of US levels, and intangible capital less than 1.5% of US levels – the last of these is the standout item for me. This brings us nicely back to my opening point: that there are significant differences between developed and developing/emerging economies. One of those differences is the relative size and quality of the kind of things that make up intangible capital.

Second, even on these measures, China has still made some modest progress in terms of catch-up. This slower progress also suggests (not surprisingly) that closing the gap in human, social and institutional capital is likely to be tougher for emerging markets than closing the gap in machines and factories.

Photo by Flickr user kk+.

For the moment, dams on the Mekong's mainstream have been held at bay, but the new environmental battleground is going to be what happens on the Mekong's tributaries. The most contentious proposed dam is not one with Chinese involvement; this is the proposed dam on the Se San River in Stung Treng province, with proposed funding coming from Electricite du Vietnam and the Cambodian conglomerate, the Royal Group.

Arguments for and against each of these projects boil down to whether the generation of hydroelectricity is more important than preserving wild rivers for the fish found in them. So far as the proposed Se Sam dam is concerned, Hun Sen has made his judgment, stating that 'the Se San and Sre Pok Rivers are not the source for fish breeding for fisheries across Cambodia'.

Although China has a 'flavour of the decade' character, there is no doubt the Cambodian Government has hopes for greater American involvement in its economy too.

My travel through Cambodia was in the company of a group of senior American businessmen for whom the Cambodian Government pulled out every stop: a reception in the new Peace Palace in Phnom Penh, the presence of Deputy Prime Minister Sok An at a formal dinner, and to top it all, dinner under the stars by a flood-lit Bayon temple in the Angkor Archeological Park. This was a welcome that went beyond mere courtesy.

Photo by Flickr user chrissusieking.

Before we get to that, however, it seems worth spending a bit more time on the premise. If we think our economic ties to country X are too small, precisely what is it that they are too small relative to? What's our point of comparison – other than a gut feel, or perhaps the fact that we currently trade or invest more with countries Y and Z? What we need is some kind of benchmark, but how do we find one?

One option would be to take some off-the-shelf estimates from gravity models of trade and finance in order to construct a simple estimate of what we think Australia's trade and financial relationships should look like in equilibrium, and then compare these to the actual outcomes in order to highlight outliers, or alternatively to note where actually, we are probably already trading or investing pretty much as we would expect to be. 

Yes, I'm realistic enough to accept that any such benchmark is going to be pretty rough and ready, and subject to all sorts of limitations. But at least it would provide a start on examining our assertions before we rush to fix a problem that may not exist.*

3. How do we balance diversification and specialisation?

We all know that there are potentially big gains from specialisation. Likewise, we also know that there important gains to be had from diversification. Constructing a good portfolio involves balancing one against the other. So an interesting question is, how far (if at all) should we apply that analogy to Australia's portfolio of economic relationships? 

Suppose, for example, that some compelling version of the benchmarking exercise suggested above indicated that, even though almost 70% of our merchandise exports currently go to East Asia, in equilibrium we should be exporting even more goods to the region. And suppose we believed that a given policy intervention (for the sake of argument, say spending more on Asian language education) could help drive that number towards this target. Should we seek to balance the implied extra benefits that would presumably come from greater specialisation in our trade portfolio against the risks that might be implied by increased concentration? If so, how?

Actually, this raises a further question: in our increasingly integrated world economy, would a greater spread of country trading and investment partners really deliver anything other than illusory diversification anyway? The mapping exercises I proposed above might at least go some way to helping answer that one.

*It's possible someone has done this kind of exercise already and I've missed it. If so, mea culpa, and I'd be grateful to any Interpreter readers who could point me in the right direction.

Photo by Flickr user atomicShed.

In short, whether and how the SCAF and the Brotherhood reconcile their differences over constitutional and other issues will determine the course of Egypt's political transformation, at least in the short term. And here the immediate battle is less likely to be over whether Egypt should be an Islamic state or a secular one than whether power should shift to the parliament (which the Brotherhood prefers) or stay with the president (and until a president is elected, the SCAF).

As these negotiations play out, the main risk is that the SCAF and the Brotherhood's hitherto workable, if at times uneasy, relationship will break down. If this happens it could be very bloody, given the number of people both sides could put on the streets. But there are almost as many dangers for Egypt's democratic evolution in a relationship between the SCAF and the Brotherhood that is too cosy and that sees the interests of the broader community — including copts, women, secularists, and the young — sacrificed to serve their narrower interests.

2. Will Egypt avoid an economic crisis?

The need for the SCAF, the Brotherhood and indeed all political actors to show greater political leadership and responsibility is underlined by Egypt's economic circumstances. According to Egypt's Central Bank, foreign investment declined 93% in the first nine months of 2011. Tourism has crashed, economic growth has sunk, inflation is rising and foreign reserves have declined to dangerously low levels. 

Add to this high popular expectations for economic improvement and Europe's economic woes (which will see fewer German, Spanish and Italian tourists in Egyptian beaches even if the country stabilises) and you have an enormous political and policy challenge.

It is little wonder the SCAF has suddenly become more interested in an IMF loan they summarily rejected late last year. But while an injection of funds will undoubtedly help, more important will be how it is spent. Unfortunately, as a friend and an astute observer of the region told me after a recent trip to Egypt, for the moment at least everyone seems to want political power while avoiding responsibility for getting Egypt out of its economic mess.

Will the revolutionary youth return to the streets, or to the cafes, or what?

There has been a tendency of late both inside Egypt and outside to question the continuing relevance of the young revolutionaries that were at the forefront of the uprising. 

Critics point to their unwillingness or failure to organise politically after the overthrow of Mubarak, reflected in their poor showing in the parliamentary elections. The critics argue that street protests, clashes with security forces and demands for 'revolution 2.0' have become ends in themselves, at odds with the desire of most Egyptians for security, stability and economic improvement.

It is easy to be critical of the motley collection of Tahrir youth. For all the courage, idealism and high principles they have shown in the last year, they have also been naive, willful, egotistical and at times even thuggish. But I have sympathy for them on the question of their supposed political failure.

They were able to confound and outmaneuver the Mubarak regime precisely because they were not like the traditional opposition movements that the regime had by-and-large tamed. So it is no surprise that, after the revolution, many were reluctant to become conventional politicians. Indeed, those that that did often fared badly in the elections, for a combination of reasons, but not least because they were up against movements like the Muslim Brotherhood with a long history and experience of political mobilisation and electoral contests.

But this does not mean that the young guard should just 'keep on keeping on'. Even if a drift into conventional politics would have been (or in some cases, was) a mistake, an indefinite occupation of Tahrir Square, both literally and figuratively, is not the answer either. To do so risks them becoming cannon fodder for, or even marionettes of, the SCAF, the Brotherhood, or both. Or it could see many of their numbers drift away, disillusioned with politics altogether. 

More importantly, it risks widening the gulf between the young guard and the broader population. Here the young should learn from the Brotherhood, which has been successful not just because it is well organised, as is so often said, but because its community networks allow it to better understand what people want. 

To remain relevant, the revolutionary youth need to develop similar political antennae while coming up with new forms of activism that enable them to more effectively and constructively articulate their interests and demands. In effect, they need to become more like politicians while, at the same time, remaining less like them.

Public opinion in general though is increasingly important. When something happens, and public opinion spreads across the whole of society, then it can create real pressure. This kind of pressure means that the Government has to take public opinion into account. We can even find some examples of the Government changing its opinion, even in the wrong direction, but following public opinion. For example, lawyers might look at a case in a very professional way, but public opinion can be extremely emotional and the final decision of a judge might be influenced by this kind of emotion. In these kinds of cases, it's hard to say whether it's good or not.

Weh Yeoh: With the rise of the power of the netizen in China, do you see the increased resistance and criticism of the Government on the web as being able to translate into real action and change in the way China is governed?

That's a good question because websites have become so powerful in China. People may say the internet, especially micro-blogs, have become the first influential social force in China. I would say as long as there is a high social voice on the internet, there must be an influence on public policy or decision-making process, but the Government has also learned to deal with such opinions and has tried to 'guide' them.

In some other cases, if people use the internet with the strong intention of doing something specific, it can be effective. For example, the Xiamen PX project. This was one of the first cases where people came together and went to demonstrate. They were connected by the internet. It's hard to identify the leader because there was no leader. People just delivered their messages online. People went to the same place at the same time and demonstrated, even though we don't call them demonstrations because demonstrations are not legal in China. We just call it 'taking a walk together'. This has also happened in Shanghai and other cities. In these kinds of cases, public opinion can be most efficient because people have a very strong interest in doing something.

Enrico Fardella: Can we imagine a future where the internet takes the place of the parliament as a filter between the masses and the leadership?

I think I wouldn't say the internet could play the role of a parliament because parliament is organised and has formal power in the decision-making process. The internet is much more loosely organised and it doesn't have formal power. It doesn't have voting procedures; it cannot make decisions. People can just show their opinions.

The internet plays a role more like a 'public space'. People can learn to express themselves. This is a very important ability, where people have very little experience or ability in China. We don't have this training in school or university, but the internet is a good way for people to learn to express themselves, and then to listen to others, to discuss with others and be tolerant of others' opinions.

Peter and Nathan: Do you think the internet in China is tolerant?

Not so tolerant, but the internet itself has some characteristics of tolerance. Unless you are the forum manager, you can't delete others' posts. You have to see other people's opinions there and you need to learn that there are many voices in the world, not just one voice like you're told in school. In school, you're told there's one answer, the right answer. On the internet, people can learn that there is sometimes no right answer, just noise, and you try to persuade others of your opinion even if you can't be successful.

History will surely be more respectful to the Indian leader than his present-day critics. The good doctor is hardly to blame for the dysfunctionality of Delhi politics, an endemic problem. Nor the failure of Congress to command a parliamentary majority of its own, since the once-dominant party has been in decline for decades – even Uttar Pradesh, the country's most populous state and the Gandhi's political fiefdom, has not had a Congress state government for 23 years. Personally unimpeachable, Singh is also one of the most honest and incorruptible of Indian politicians; the grubby deals, alleged to include chest fulls of cash, are left to party hacks.

This trustworthiness explains much of his success on the world stage, where he is seen as a global elder and sage. When Singh speaks at G-20 summits, says an admiring Barack Obama, his fellow leaders listen. Had the Indian Prime Minister not been such a faithful negotiating partner, the Bush Administration might not have pressed so strongly for the landmark US-India civil nuclear agreement in 2005. Certainly, his involvement and personal assurances offered a thin coating of sugar for opponents of the deal on Capitol Hill.

His calm influence, if not always appreciated at home, has also made South Asia less volatile. In the aftermath of the Mumbai attacks in 2008, Singh resisted the clamour for retaliation against Pakistan, thus avoiding the kind of nuclear brinkmanship that grew out of a smaller-scale assault by ISI-backed militants on the Indian parliament in December 2001. His presence lends weight to the argument that Pakistani generals and intelligence chiefs should end their India fixation.

On the economic front, Dr Singh has also pressed ahead with much-needed infrastructure spending – $1 trillion as part of the next five-year plan to finance roads, ports, and upgrades to the rail network and broadband. Nor should it be forgotten that already he can boast a legacy. When he served as the country's Finance Minister in the early 1990s, he arguably did more than any other Indian in putting down the foundations for its global rise.

Politically, he has also proved himself, if nothing else, a survivor, having become the first Prime Minister since Nehru to win re-election after serving a full five-year term. In a dynastic and caste-based system, where 37% of Congress parliamentarians are hereditary MPs, the Oxbridge graduate is also a reminder that merit is rewarded occasionally.

Still more important, he is also the first Sikh to become prime minister, thus helping to preserve India's secular ideal at a moment, seven years ago, when it was serious under threat from the Hindu nationalist BJP. 

So as the tanks rumble past his review stand on Thursday, and the strains of the fife and drum fill the Delhi air, it is worth remembering that Dr Singh still has an appreciative audience, even if much of it is found beyond the borders of India's sprawling republic.

Photo by Flickr user US Embassy New Delhi.

Within self-imposed limits, the reform process appears to be real. Close observers with direct access to key players, including Thein Sein himself, are convinced that the President is genuine in his wish to introduce a wide range of new and more enlightened policies and to bring greater peace and prosperity to Burma. Significantly, this view is shared by Aung San Suu Kyi, who perhaps more than anyone else has reason to be cautious about accepting the Government's statements at face value.

The changes seen in Burma during 2011 are largely the result of internal developments — notably Senior General Than Shwe's retirement, the advent of the Thein Sein Government and Aung San Suu Kyi's willingness to work with the new President. Despite the rather unseemly scramble by some foreign governments, activist groups and individuals to claim credit for aspects of the reform program, forces outside Burma have contributed only marginally to this outcome. 

The task facing Thein Sein is daunting. After more than 50 years of brutal, inept and ideologically distorted military rule, there is hardly a single sector of Burma's government, economy and civil society that is not begging for reform and desperate for financial, technical and other kinds of assistance. Some steps can be taken quickly and relatively painlessly, but the depth and complexity of the challenges faced by Burma are such that fundamental reform will take considerable time, effort and resources.

The most intractable problem confronting Thein Sein is the gulf between Naypyidaw and the ethnic minorities. Generations of war, human rights abuse, economic exploitation and broken promises have left the minorities deeply distrustful of the Burman-dominated central government. For their part, the Government and armed forces remain determined not to compromise — as they see it — Burma's unity, stability and independence. Some progress has been made but a durable solution seems a distant prospect.

Another important question is whether Naypyidaw can manage popular expectations. After decades of hardship and disappointment, few Burmese are taking anything for granted, but according to recent visitors to Burma, the population is increasingly hopeful of real reforms and an improvement in their standard of living. Having Aung San Suu Kyi on side should help Thein Sein keep these hopes within realistic limits but already there have been demands for faster and more far-reaching changes.

Given Burma's recent history and current problems, Naypyidaw's critics will be able to point to issues of concern for some time yet. In parts of the country, military operations are continuing. Officials used to wielding unbridled authority will not change their behaviour overnight. Corruption, discrimination and the abuse of power have become deeply embedded in Burmese society. And in some ways Naypyidaw is being held to a standard higher than that applied to other regional governments. Even if he had a firmer power base and greater resources, Thein Sein would not be able to satisfy everyone.

The reform program has considerable momentum, and even if it falters it will be difficult to turn the clock back to 2010. But the President needs to balance competing political pressures while taking account of Burma's limited ability to implement and absorb rapid change. His aim — in the short term, at least — seems to be something along Chinese lines, namely a prosperous and independent country with a measure of individual freedom, exercised within the framework of a restrictive constitution.

For her part, Aung San Suu Kyi is facing the challenge posed to all popular leaders, of making the transition from political icon to effective politician. For the time being, she seems prepared to work with Thein Sein in achieving national reconciliation and incremental reform. This is a pragmatic strategy but it carries risks. It has already upset some of her supporters. It will also be difficult to sustain. For there will come a time when pressure will build for Burma's 'disciplined democracy' to give way to a genuinely representative system of government. That may prove the real test of the President's reform program.

No doubt there are some elements in Asia who would prefer America wasn't around. But to judge from moves to strengthen links with the US not just by Australia but by many of China's other close trading partners – Japan, South Korea, Singapore, India, Indonesia, the Philippines, Malaysia, Vietnam, and now even  Burma – that must be a pretty small club. North Korea and China seem to be the only states in Asia that aren't looking for a stronger US profile.

Nor was it my objective to defend American policy in Asia (which Rawdon Dalrymple has done rather well), least of all the US Treasury's ill-judged response to the 1997 Asian financial crisis. Indeed, as Stephen knows from his own close involvement, at that time the Australian Government lobbied hard, and ultimately with success, to overturn a misguided US position that was jeopardising Indonesia's stability and Australia's interests.

Rather, my purpose was to draw attention to the reality that the US remains a resident power in Asia and, despite growing intra-Asian economic links, an integral political, economic and security player in the region. I also sought to highlight, based on new research by Michael Beckley, that widely-held assumptions about US decline relative to China may prove wrong and that the US is likely to continue to play a central role in the region well into the future, one which the White Paper should take into account.

My concern is that the White Paper risks being framed too narrowly from the outset. Unfortunately, whoever drafted the terms of reference seems to have heeded the advice that what is happening in America or its relations with Asia does not matter to Australia. Among the terms of reference are 'the future course of economic, political and strategic change in Asia' and 'the political and strategic implications of the Asian Century for Australia'. Yet the US – still the region's major political, economic and military player and likely to remain so, if Beckley is right – is not mentioned once. That doesn't make sense.

Nor does the title. Just three years ago the Rudd Government titled its Defence White Paper 'Defending Australia in the Asia Pacific Century'. Now suddenly the nomenclature has changed. Why? Presumably the Gillard Government's choice of 'Asian Century' rather than 'Asia Pacific' or 'Indo-Pacific' century was deliberate. Either way, it was a mistake; signals matter.

Photo by Flickr user iz4aks.

One spur for this new technology is, of course, the shift in costs and prices produced by the first effect. So in model two, the cost of a given resource is determined by a race between the cost-increasing effects of resource depletion and the cost-reducing effects of technological change. It follows that resource scarcity will produce rising real price over time. 

Model two is richer than model one, and there is no doubt that, in terms of past predictive ability, it has vastly out-performed model one, since for most of the 20th century, for most commodities, the second effect has dominated, and the real price of most commodities tended either to decline or at best remain relatively flat.

This is captured in another favourite cautionary tale — the notorious 1980 bet between the biologist Paul Ehrlich and the economist Julian Simon as to the likely price trajectories of five resources over the following decade. Ehrlich chose five minerals (tungsten, nickel, copper, chrome and tin) and calculated how much of each could be bought with US$200 in 1980. The bet was that, come 1990, Simon and Ehrlich would calculate the price of the same quantities of the minerals; if the total price was higher than the US$1000 (after adjusting for inflation) Ehrlich paid back in 1980, Simon would pay Ehrlich the difference. If it was lower, Ehrlich would pay Simon. Of course, Simon won the bet hands down: the quantity of minerals that had cost US$1000 in 1980 was worth less than US$424 by 1990.

The good news is that I reckon model two will continue to out-perform model one as a way of thinking about the prospects for non-renewables. The not-so-good news is that this is not the same as saying we have nothing to worry about when it comes to assessing potential limits to growth, for at least two reasons.

First, resource price signals as received over the past decade appear to be sending quite a different message from the earlier, generally reassuring one sent by the steady falls in real prices experienced by most commodities over much of the previous century. Something important might be changing in the race between resource depletion and technological change.

Second, the focus on what comprises the critical limits to growth has changed. Current fears are not so much about running out of non-renewable resources, but instead about bumping into environmental constraints including the damage to renewable resources and breaching so-called planetary boundaries. These are concerns that at least some economists now take very seriously. Indeed, as the New Scientist piece points out, it is striking that one area where the otherwise über-pessimistic Limits to Growth has actually turned out to be too optimistic is with regard to pollution and climate change.

Photo by Flickr user Roger's Wife.

Indeed, as he mentions, important elements of that engagement have even diminished in recent times. Of course the relationship with China has burgeoned with the resources boom, Chinese investment here and efforts by both sides to seek fuller and more sympathetic understanding. But the relationship with Japan has probably slipped back a little and our capabilities in relation to the whole region from north to south (two billion-plus people and perhaps more than half the global economy) has not increased.

Why are Asian languages, history etc less studied here now than twenty years ago? Why is there still so little Australian export business from Australia to those countries not requiring our iron ore, coal etc? And so little Australian investment? Grenville asks these questions and others, like the relative paucity of Asian coverage in our media.

At one level, the answer is easy: for 90% of Australians these countries, their languages, cultures and histories are much more foreign than those of Europe and the Americas. Despite geography, they are less accessible.

Why have the necessary steps not been taken to overcome these obstacles? It has not been for lack of trying by major institutions such as the Australian National University and relevant parts of other universities, some elements of the federal government and of state governments. We have had some prime ministers and foreign ministers who appeared genuinely interested and what is now DFAT has been on the job for a long time now (its present Secretary was Head of the Political Section in the Australian Embassy in Jakarta in the early 1980s). But DFAT's resources have been cut back further and further and the information and cultural capacities slashed. Only the consular services (which attract public attention and where ministers want at all costs to avoid vulnerability) are fairly adequately funded.

In times of stringency, governments are unlikely to make expensive efforts in the face of public apathy. Nor can government in Australia do much to alleviate the often rather squalid image of Australia generated by some of our tourism to places like Bali and Phuket. What we need is a major national soul-search on the relationship with Asia. Good luck to you, Dr Henry!

Photo by Flickr user mikaku.

This is no surprise. By regional standards, the Iranian navy represents an atypically strong coastal force with a coherent force structure designed not to defeat a superior naval power so much as impose prohibitive costs on intervening in Iran's southern air and maritime approaches. Built for sea denial, it comprises submarines, mines and fast-attack craft armed with anti-ship cruise missiles. Each of these capabilities is cheap relative to the platforms against which they're being fielded, and each places a disproportionate burden on the side seeking to defend against them. Submarines are hard to find; mines take a long time to clear; and fast-attack craft, especially when used in numbers and in dispersed formations, are difficult to prevent closing to a range at which their missiles become a serious risk to even well protected ships.

The effects of this force are magnified by congenial naval geography. By contrast to the Western Pacific, with its oceanic expanses and concentric archipelagic chains, the Persian Gulf is a narrow body of water, making it conducive to offensive denial operations. It has one constricted entry point. This creates a funneling effect that allows Iranian forces to concentrate their firepower.

Short distances make operations less surveillance intensive, and therefore less technologically demanding. They also compresses the warning time available to an enemy defending against missile strikes, while long stretches of noisy coastal water create an ideal acoustic environment for lurking Iranian submarines.

All of this makes Iran is a tough competitor on its coastline, undoubtedly capable of raising the threshold for US intervention in the Gulf. But it is not, ultimately, insurmountable. Iran's naval potency diminishes sharply with distance and duration. Iran could mine the Straits, restrict commercial traffic and delay entry to US forces while imposing moderate levels of risk in the meantime. However, its sclerotic command and control systems and lack of survivable land-based air-power betray an enduring inability to enforce a close or continuous blockade of the Straits, much less defeat the US Navy in an open, protracted naval war.

No military balance is static, however, and the current extent of Iran's naval inferiority is not necessarily immutable. Over the longer term, two shifts in the geopolitical landscape bode well for continued improvements to Iran's prospects at sea.

First, the emergence of a weak and divided Iraq in the place of a former existential rival is a geostrategic windfall. Historically, the greater salience of defending land borders has been a principal constraint on the development of naval power in countries with both coastlines and contestable continental frontiers – think China or France or Germany. For Iran, that may no longer be the case. With its western continental approaches now largely secure (and with the situation to its east improving as the US backs out of Afghanistan), Tehran can channel a progressively greater proportion of is defence expenditure into its navy.

Second, for China, cultivating Iran's sea-denial capabilities is emerging as the most cost-effective means of diluting US primacy in the Gulf. This matters to Beijing because it is profoundly dependent on the sea-lines traversing the Gulf, yet it is unable to reach or secure them with its own navy and therefore vulnerable to a distant US blockade. There's a reason, after all, why a good number of Iran's anti-ship missiles are already stamped 'Made in China'.

Photo by Flickr user yeowatzup.

The European Central Bank has often played an unhelpful role, resisting a Greek debt restructure and being too ready to claim that its mandate prevents it from helping more. As the US Fed showed in 2008, central banks have to stretch their mandates and put their balance sheets on the line when the stakes are this high. 

But it will be hard for the Fund to push the responsibility for the euro mess back where it belongs. The Europeans recently contributed an additional $200 billion to the IMF (which would be counted as their contribution towards the $500 billion), no doubt with some unspoken understanding that these funds, and more, would flow back to them as needed.

Part of the Fund's argument for additional resources is that if the euro founders, the collateral damage to all of us will be very substantial. Certainly it looks like a number of eastern European countries which have received very large capital inflows over the past decade will be in trouble, with Hungary as an example. But again there is a case for pushing the problem back where it belongs – in this case, to the Austrian banks which lent too much.

The Fund is hoping to tap Asian countries for this support fund, with the First Deputy Managing Director David Lipton going as far as acknowledging that 'the potential for collaboration is clouded by memories of the Asian financial crisis of 1997–98'.

In rejecting this IMF call for more funds, the US, Japan and Canada made it clear that they expected the Europeans to do most of the heavy lifting to save the euro. Australia might do well to join this side of the argument.

Photo by Flickr user Arnoooo.

I'd like to see serious consideration of nuclear propulsion and suspect community attitudes on nuclear-powered submarines might no longer be based on 30-year-old nuclear politics. The nuclear leasing option advocated for Australia by Ross Babbage seems to be good enough for India, which will this year lease a nuclear submarine from Russia. A similar model might work for Australia.

There is also an argument that we shouldn't build submarines in Australia for the same reason we don't build passenger jets or cruise liners (and perhaps shortly, passenger cars). Recent problems with the construction of Air Warfare Destroyers and the conclusions of a recent parliamentary report into defence capital projects lend some weight to scepticism about the arguments for home-grown submarines.

I'm not swayed by the arguments of Paul Dibb and Richard Brabin Smith that the chosen future submarine force must be entirely self-reliant. Our present fleet of submarines wouldn't put to sea without US support, and as yesterday's Kokoda Report makes clear, a future submarine would be inconceivable without US Navy propeller expertise and hydrodynamic research facilities.

In short, I'm not yet convinced by any of the options on how to proceed with the future submarine, but I am concerned that by conducting such an important national policy debate behind closed doors we might be missing valuable contributions by Australians who don't have vested interests in either defence industry or strategic policy positions.

Photo courtesy of the Department of Defence.

The anguish Fiji generates owes much to the strong emotions the military regime generates. Hitting the keyboard is one of the few political acts currently acceptable in Fiji. Yet Fiji has always been notable for the way its politics is played in a manner that is passionate and deeply personal. It's ironic that the nation which defined the Pacific Way in the conduct of regional affairs is so non-pacific in its internal affairs. 

The easiest way to explain this has always been the politics of race. As an Indian pol said to me in Suva a couple of decades ago: 'The trouble with Fiji is that we have too many Chiefs and too many Indians!' 

The humour in the line also had sting because of the bitter truth it expressed. But the politics of race is shifting in line with Fiji's demography. At the time of the Rabuka coups in 1987, the population was divided almost exactly 50-50 between Fijians and Indo-Fijians. Today, the trend line is heading towards two-thirds Fijians and one-third Indo-Fijians. Demography makes it easier to move towards democracy. The Supremo says he is going to do away with the politics of race and introduce one-man-one-vote. The weight of Fijian numbers should make that a less threatening prospect, even for the Fijian hardliners, strengthening Bainimarama's hand in moving to his promised election in 2014.

The Supremo has trained the region not to place too much reliance on his promises. But he has been making the 2014 promise for so long that even he would find it hard to chutzpah his way out of that pledge. Certainly, there are a lot of moves yet to be confronted, much less made. What sort of constitution? What sort of government? What sort of election?

The latest bit of showmanship from Suva suggests Bainimarama is finally starting to shift from being Mr NO! towards the day when he must propose rather than dispose. For the region, that means that over the next three years, the Supremo will move from being a greater to a lesser evil. Thus, Australia and the rest of the South Pacific can start to consider ways of dealing with Fiji that reach beyond the helpless Let it Bleed position.

Some previous thoughts on the course of Bainimarama's New Order are here and here, and the implications of the military as Fiji's strongest tribe.

Were US politics based on merit alone rather than primogeniture, we might already be speaking of a President Jeb Bush in the past tense. After all, in 1999 the then Governor of Florida was widely viewed as a far more substantial figure than the then Governor of Texas. Now however, one of the most famous names in US politics has moved from being a respected brand to a damaged brand. One day it might be ripe for rehabilitation, but the widely-held view is that America is not yet ready for a Bush restoration.

There are entries to make on the positive side of the ledger. George W Bush tried to overhaul immigration law so that millions of illegal aliens could achieve legal status – a move that would have boosted the Republicans amongst America's fastest growing demographic. But GOP hardliners thwarted him in Congress and Obama ended up winning 67% of the Hispanic vote partly as a result.

The other important point to make is that, despite these handicaps, the GOP could still take the presidency in November, given the high rate of unemployment and Obama's 49% approval rating. Four presidents have started re-election year with under a 50% approval rating. Only one, Richard Nixon, survived.

At the GOP convention four years ago, George W Bush was a no-show (much to the relief of John McCain) because he wanted to monitor a hurricane churning towards New Orleans. Nor has he been a visible presence in this race. Watching the Republican debates, I have yet to hear his name mentioned admiringly by any of the candidates.

Curiously, this will be the first presidential election cycle since 1976 that a Bush has not held statewide or national office, or sought it. But even in the family's absence, the Bush effect is still being felt.

Photo courtesy of Wikipedia.