Cross Border Journal

China's Proceeds Apace with Central Asia Strategy: What is America's to Match?

Via the New York Times: China Quietly Extends Its Footprints Deep Into Central Asia

Relative to China, the modern foreign policy of the U.S. in regards to Central Asia is fairly new. I believe this modern foreign policy began its life from September 11th, 2001, where from that moment since our armed forces and political leadership has sought to permanently eliminate Afghanistan as a safe haven for the planning and management of international terrorism. For those who follow the conflict closely, it is not news that the countries neighboring Afghanistan are able to, at varying degrees, make this effort easier or more difficult. Some countries provide the needed logistical support and increased trade links required to provide a sense of economic and social stability within Afghanistan. At the same time, other countries continue to remain as safe havens to those forces dedicated only to further destabilizing Afghanistan and prolonging the effort of U.S. and allied armed forces until they withdraw entirely. Unfortunately, when the U.S. government refers to Afghanistan, the focus remains on those efforts directly related to the military mission, including supporting activities managed by civilian administrators. The question remains as to what is being done by the U.S. and its allies on the periphery of Afghanistan to ensure it can continue on a self-supported, sustainable path after our armed forces are removed from the country?

This article by the New York Times reveals that, while China moves forward in executing a clear strategy of its own for increasing regional stability on its own borders, the U.S. is largely in reactive mode. The Chinese approach the region on multiple fronts:

"Chinese officials see Central Asia as a critical frontier for their nation’s energy security, trade expansion, ethnic stability and military defense. State enterprises have reached deep into the region with energy pipelines, railroads and highways, while the government has recently opened Confucius Institutes to teach Mandarin in capitals across Central Asia."

That America does not have a clear strategy for the region is highlighted in the Chinese weariness of American activities in Central Asia:

"Chinese officials are wary of what they view as American efforts to surround China, seeing American troops and military alliances in Central Asia, India and Afghanistan as the western arc of a containment strategy that also relies on cooperation with nations in East and Southeast Asia.

"China is flexing its own military muscle in the area, conducting sophisticated war games in Kazakhstan in September as part of annual exercises that traditionally include several Central Asian nations. According to a State Department cable released by WikiLeaks, American officials suspected China of offering Kyrgyzstan $3 billion to shut down the American air base there."

The article highlights a quote from anonymous American official that does not offer any insight into the American strategy for Central Asia and further paints the Americans as a spectator to developments outside of Afghanistan:

""The growing economic footprint in Central Asia is pretty significant," said an American official who spoke on the condition of anonymity because he was not authorized to speak publicly about Chinese policy in the region. "In many ways, the investments are welcomed, not only by those countries, but also by the U.S. But there’s a lack of transparency in terms of China’s investments and relations with those countries.""

One official bluntly exposes the U.S. lack of strategy:

""China’s energy cooperation with Central Asian countries began in the 1990s, but in recent years, with the rapid growth of China’s national strength, China took advantage of the lack of initiative in the region by the United States and Russia," General Liu wrote in an essay published last summer in the news magazine Phoenix Weekly. "China has begun stimulating feverish consumerism in the area.""

There are obviously Americans and American enterprises working in Central Asia on projects that aim to help regional development, but it is past time that the U.S. government put forth a strategic context to these activities and help ensure our ongoing efforts in Afghanistan are not put to waste.

Obama's 2010 Progress on a Grand Strategy for the Asia-Pacific

Earlier in 2009, I wrote several posts speculating on how the Obama Administration would develop their grand strategy for the Asia-Pacific. Last year, I followed this up with a review of 2009 accomplishments. For convenience, I have provided links to the key posts below:

Speculation on Obama's Grand Strategy for the Asia-Pacific Part I, II, III, IV, V, VI, 2010 Follow-Up

Essentially, I suggested that Obama would rely on and lean on the "three legs" of SoS Clinton, SoT Geithner and SoD Gates in crafting strategy directed at the Asia-Pacific. Quickly reviewing each member's performance in 2010:

• SoS Clinton has continued to maintain her stature, but the recent Wikileaks scandal has exposed the Administration. It will be important in 2011 for State to better manage the Administration's message overseas and those communications shared with allies and partners. In the Asia-Pacific, Clinton recently made a round of visits to various countries, including Australia, and this provided needed visibility in the region to round off 2010 initiatives.
• SoD Gates continues to do a solid job of maintaining existing relationships from a defense and security perspective with Asia-Pacific countries. In 2010, the issues relating to U.S. military installations in Okinawa were resolved. But, at the same time, the situation on the Korean peninsula has had a slight eruption with North Korea's recent attacks on a South Korean ship and most recently an island near the disputed dividing line between the countries. In addition to ongoing missions in Central Asia, tensions with North Korea are likely to require greater attention and management across the region and highlight the importance of managing relations with China, Japan and South Korea (and Russia to some degree) from a unified, strategic perspective.
• SoT Geithner continued to have a rough time in 2010, since, as I speculated last year, he had done little to prepare himself for a better year by the end of 2009. He continues to fail on fiscal policy and Geithner's actions have yet to address the soaring debt and lack of fiscal restraint. Both Obama and Geithner were roundly refuted in this policy at the recent G20 summit while also losing face in the eyes of the American public as reflected in the Democratic Party's resounding electoral defeats. This continues to make him weak in speaking with countries in the Asia-Pacific, especially China, and particularly when telling other countries how they should be managing their fiscal policy. With Obama reversing on the expiration of the Bush tax cuts at the end of last year, and new Republican leadership in the House and across much of the U.S., it will be interesting to observer Geithner's moves in 2011. 

For most of 2010, Clinton and Gates again carried more than their fair share of the weight for Obama in the Asia-Pacific, but this time falling short in making up for Geithner's continued poor performance. The G20 refutation of American fiscal policy, while conducting the meetings in the Asia-Pacific no less, by the majority of countries was the low point for the year. I feel Obama and Geithner lost additional edge by going to the G20 meeting with such chutzpah as to coax other countries to adopt their losing policies, while poking China again on the yuan revaluation issue. This after Obama had lost additional luster from the election due to massive Democratic Party defeats across the U.S.

I will repeat what I wrote last year: China, whether you agree with their policies or not, is a deliberately long-term thinking nation at the top in regards to domestic policy and thus a negotiator working with them to make changes to this domestic policy must factor this into their strategy. This policy will not change based only on the short-term policy fancies of SoT Geithner and President Obama.

Let's review briefly how the Obama Administration made progress on my initial recommendations for 2010. This is intended to be a thought exercise at a very high-level from which more detailed discussions on individual topics can be had: 

• Shoring up fiscal policy at home: continued to fail on this point, but a reversal on keeping all of the Bush tax cuts at the end of the year offered a glimmer of hope for 2011
• Reaching important milestones in efforts to restore stability to Afghanistan (which borders China): with General Petraeus now leading the effort in Afghanistan, the potential for success has increased but the situation still remains precarious due to Obama's previous withdrawal deadline commitments for 2011 and the continuing lack of regional strategy
• Stepping back from the hollow science of CO2 reductions, and outlining a partnership program for tackling climate adaptation through practical technologies and solutions: the Administration is still clinging to U.N. politics on this point, which is bad for the U.S. and the world
• Strengthening trade relationships with traditional Asia-Pacific partners and opening doors and dialogue with others in parallel to the ongoing trade deals within the Asia-Pacifc: some positive developments were made on this front towards the end of the year with Obama's movement on the South Korean FTA and now Japan is making some movements in a similar direction
• Find a few strategic activities led by the U.S. through which both India and China can be engaged together: nothing particularly to take note of on this point; low-hanging fruit would be Afghanistan and the strengthening of cross-border linkages in Northeast India, Southwest China.
• Working behind the scenes on contingency plans with China and South Korea in regards to a possible collapse of North Korea: with the recent tensions, this continues to rise in importance and the leaked diplomatic cables combined with the announcements from China shortly after hostilities took place help illustrate that no cooperative, strategic solution to a collapse or suddent escalation of hostilities is truly in place between neighboring countries
• Leveraging Japan as a technology partner for solutions to the impact of aging societies across the Asia-Pacific (health care, mobility, workplace assistance, knowledge transfers, etc.): no progress on this as a strategy, but perhaps could be part of a future free trade agreement between the U.S. and Japan
• Encouraging the investing in the infrastructure of and linkages to the Asia-Pacific logistics corridor: this happens continually in the private sector, and between Asia-Pacific governmental committees, but no formal strategy in U.S. foreign policy explicitly mentions the importance of this; but it is important to consider as the U.S. Navy helps maintain security along the primary corridors throughout the Asia-Pacific

I would add this year that a review of the long chains of national energy and natural resource supply and demand in light of ongoing demand in the Asia-Pacific be conducted and then incorporated into regional, strategic initiatives.

As I mentioned last year, from the perspective of a supply chain professional working in the Asia-Pacific, it is important that the U.S. maintain respect and positive involvement in dealing with the region and that it provides a solid strategic context within which U.S. businesses and organizations--public and private--will thrive and succeed. I look forward to the vigorous debates of the above issues across the web and will be watching to see what progress, if any, the Obama Administration makes in regards to the Asia-Pacific in the new year.

The Fascinating Fall of Kevin Rudd

When I heard in 2007 that a Mandarin-speaking politician well-versed in Asia relations was elected as Prime Minister of Australia, I was living in Japan and understood almost nothing in regards to the Australian political scene beyond the fact that John Howard was previous Prime Minister. As a result, I was initially impressed and thought that this new PM would help strengthen Australia's integration with the rest of the Asia-Pacific.

Since moving to Australia at the end of 2008, I have gradually increased my knowledge of Australia, its people and by extension its politics. Particularly, once I bought a car here and started tuning in to the morning and evening news radio broadcasts, I have listened to many political events evolve in their daily detail and minutae. This includes an occasional listen to live parliamentary Q&A sessions between the political opposition--the Coalition--and the party currently in power-Labor. Although sometimes entertaining, these sessions seem to end up in adolescent-like, back-and-forth bickering that made me think these politicians deserved the title "The Kids in Canberra."

Up until recently, the two key political playground rivals were PM Kevin Rudd and current Coalition leader Tony Abbott. Unlike my initial impression that Mr. Rudd would be someone that worked above the fray in the manner of a diplomat with international clout, I ended up finding him to be more like a nerdy, condescending student council president that sought out every opportunity to look "cool" when he obviously wasn't. In opposition, Tony Abbott is the bombastic, sports jock that will often speak ahead of what he thinks, but seems preferable to his predecessor, Malcom Turnbull.

Recently, as has been prominent in the news, Mr. Rudd lost his position as PM and was decisively replaced by the calm and collected Julia Gillard. The story of Rudd's downfall is quite fascinating as momentum built for his removal--either by a newly called election or by an internal Labor coup. What is clear over the last year is that Mr. Rudd was never a true leader for Labor and had never truly solidified his support in the party. The Australian Financial Review published a cover story yesterday on how Rudd's downfall evolved and wrote this of his predicament:

"If there was a single theme to Rudd's political death, it was this: Rudd had foes everywhere. Once his support collapsed in the polls, there was nowhere to run. He had centered all government decision-making in his own office. Nothing could be delegated, no issue was too small for prime ministerial oversight.

"Rudd's ministers often became simple messengers and his oft-cited preoccupation with process and planning masked a chaotic government. All of these elements had frustrated his colleagues.

"Moreover, in his bid to eradicate factional control over ministries, Rudd had accorded to himself untrammelled power, which sat badly with his personal propensity for micro-management. He had a potty-mouth when angered and, according to some ministers, there were implied threats against those who failed to toe the line. Many ministers, fearful of losing favour and position, held their tongues. In the manner of both great tragedy and schoolyard brawls, Rudd had simply made too many enemies."

It is equally interesting how quickly Mr. Rudd has dropped from view and it seems few Australians could care less that he is out of view and now retreated back to his represented home of Queensland. In many ways, Mr. Rudd's problems the past year parallel the many problems faced by President Obama in the U.S. So I had to laugh when I heard the following quotes from the two meeting earlier this year in April at Fiji, via the Australian Broadcasting Corporation:

"O'Brien says during his 20-minute interview with Mr Obama, the US president shed some light on his relationship with Australia's Prime Minister. "It was interesting. Diplomats and politicians say nice things about each other when they're having international chats," O'Brien said.

"But O'Brien says Mr Obama spoke candidly about their relationship - which has in the past been described as a "meeting of minds". "He was quite expansive and quite genuine on what he saw as the commonality and connections between [he and Mr Rudd]. One of which was humility," O'Brien said."

President Obama calling former PM Rudd and himself humble is pure comedy and I am sure Obama said it with a straight face. In the end, everybody loved Kevin Rudd until everybody hated him. Now, this morning, new PM Gillard has called a general election for August 21st. The next few weeks are sure to be interesting for fellow news junkies here in Australia.

Karzai's Speech Reflects the Absence of a U.S. Grand Strategy for Central Asia

Upon reading the early reports of Afghan President Karzai's recent speech criticizing foreign interference, and thus indirectly including U.S. interference, it would be natural to feel resentment given the material and human sacrifice the U.S. has made over the past +8 years in attempting to both destroy terrorist networks in Afghanistan and reestablish the national and economic foundation of the country. However, I believe the U.S. shouldn't be surprised at this speech for two key reasons:

1. The leaders of Central Asian countries have resorted to such speeches frequently since the collapse of Soviet hegemony in the region in 1991. It is typical of being an extremely weak state amongst a number of other volatile and weak states, a situation which has been leveraged over the years by multiple foreign powers to project power in Central Asia and, particularly, to gain advantage or control over Afghanistan's affairs.
2. The U.S., and its Western allies, lack a larger, encompassing strategy for the Central Asia region. If there existed a larger, guiding strategy for Central Asia, there would be multiple, inter-related pieces and activities in play in parallel with our efforts within Afghanistan to bolster the foundational state of its security, economy and political structure. The lack of this increasingly ensures that success of our efforts within Afghanistan are too closely hinged to the actions, including mistakes, of our own political, diplomatic and military leadership.

Although the U.S. remains the world's primary superpower, the recent trip by President Obama to Afghanistan showed an eagerness to appear tough with President Karzai in relation to his crackdown on government corruption. But, in my opinion, we have no reason to appear tough with President Karzai if we are confident in our ability to project influence with his administration behind-the-scenes. Thus, I believe public pronouncements by the Obama Administration in regards to criticisms of Karzai's lack of progress in tackling corruption is more for U.S. political theater than for the benefit of Afghanistan and by extension the Central Asia region.

I am by no means attempting to diminish the importance of rooting out and eliminating corruption in the Afghan government, but we must remember that this will be an ongoing process that can be improved over time and, given the horrid and decrepit state from which the country is being reborn, we must keep things in perspective. Our pressure on this front must occur at the national level in Afghanistan, but even more so at the local level where the political constitution of Afghani society is still most critical to address due to the country's disintegration in the early 1990s.

As long as we continue to lean towards a "policy-by-country" approach to the Central Asia region, Afghanistan will be in danger of falling back from the sometimes small and sometimes dramatic improvements it has made since 2001. This is because, during moments of political, economic and security distress, Afghanistan currently only has the U.S. to fall back on rather than a regional movement with momentum towards peaceful economic and diplomatic connectedness. It is this type of regional movement with which a grand strategy for Central Asia should be centered on and only part of which includes our current military, economic and diplomatic initiatives in Afghanistan.

For a sampling of mainstream commentary on Karzai's speech, please see below:

Washington Post: Publicly criticizing the Afghan president hurts the U.S., by Michael O'Hanlon and Hassina Sherjan

Reuters Afghan Journal: Why Karzai decided to attack the West

MSNBC: Karzai's speech befuddles Afghan officials, by John Yang

Afghanistan's Endless War: Chapter 6 Review

The discussions here of Afghanistan's Endless War have not only extended across boundaries, but also across time. This is because of my belief that the importance of Afghanistan cannot be understood unless the observer acquires a solid footing in the country's historical context as well as regional context. This of course holds true for many subjects of modern interest, but in the formulation and execution of strategy driven by governmental policies, we are constantly reminded of how easy it is to  become beholden to any number or accumulation of short-sighted, narrow-minded tactical maneuvers aimed at winning the day rather than empowering our future.

Mr. Goodson writes with the foresight and wisdom of someone aimed at cultivating the empowerment of our future, including the future of Afghanistan, towards something worth creating for generations to come. This is why I cannot recommend this book enough as it relates to the current affairs of Afghanistan, and Chapter 6, simply titled "The Future of Afghanistan," does not disappoint in rounding off the previous chapters. Here, Mr. Goodson discusses the bedrock upon which a new Afghanistan must be laid, the required constitution of that bedrock, and how it must be cultivated and strengthened over time. He also steps back to clarify the lesson Afghanistan provides to the rest of the world in regards to failed states.

Laying the Bedrock of a New Afghanistan

Mr. Goodson explains in this chapter that Afghanistan's descent into state failure up through 2001 resulted in "the rise of society over the state" and that meant "the rise once again of the local community, or qawm." He follows that there are three key changes that must take place for "reintegration of the society and reconstruction of a functioning state to begin:"

1. Widespread ethnic-based fighting must cease,
2. A reasonably legitimate government must be established, and
3. Normality must return to Afghanistan.

We can see from articles in the news reporting from Afghanistan starting just over a month ago that the effort and aim of U.S. forces and allies is first focused appropriately on #1, while paving the way for a parallel effort enabling #2 to take hold in cities like Marjah and more recently the larger population center of Kandahar:

• Feb 9: New Battles Test U.S. Strategy in Afghanistan
• Feb 9: U.S. Starts Afghan Surge
• Feb 13: Marjah's Long Game: Months of Patrols
• Feb 27: In Afghanistan, U.S. plans major push into Kandahar 
• March 9: Afghanistan Coalition Looks Past Marjah

The goal of course is to ensure that efforts at succeeding with #1 and #2 result in #3--returning Afghanistan to normalcy. Mr. Goodson rightly points out not just the dangers facing this effort within Afghanistan but also the historically negative influence by neighboring countries that fueled conflict through 2001 and that continues today. He writes correctly that:

"No Afghan government will have any policy success or be able to rebuild the nation's shattered economy without outside support, so the role for outside actors of all sorts, but especially the United States, is crucial to the reintegration of Afghanistan."

Thus the importance of a clear, well executed regional strategy, as I have pointed out in discussions of previous chapters. It is not enough to simply create pockets of stability within Pakistan and retreat from the country and region--we must ensure that Afghanistan is left integrated with the global economy via those outside actors exporting the people, resources and knowledge aimed at building positive outcomes. This thinking is reinforced in a recent series of related blog posts by Dr. Tom Barnett:

• March 13: Can't get Afghanistan regionalized
• March 13: Bad developments for India in Afghanistan
• March 19: India and Russia growing nervous over Obama's Afghanistan strategy
• March 20: Obama's hurry to leave Afghanistan precludes strategic imagination

Failure to rebuild Afghanistan via the establishment of strong, sustainable links to the global economy may, as Mr. Goodson writes, "delay development in these regions for years to come and will certainly mean decades of continued neglect for Afghanistan."

An Example for All Failed States, For Better or For Worse

Where Mr. Goodson dives into discussion on failed states and their role in the 21st Century, he outlines the illustrates his prescience in understanding the key patterns developing in the world up through the summer of 2001, and what would take place since then through today. In essence, what he writes is what Dr. Barnett later mapped visually below in "The Pentagon's New Map":

 

Mr. Goodson starts his discussion making two key points: 1) that "state failure is not only a political phenomenon, a mere exercise in changing borders on maps. Subtler and harder-to-measure forms of social, cultural, and economic failure and dysfunction can occur within or aside from the existing political framework," and 2) "Third World state failure is a threat to security--perhaps the most important security issue facing the world early in the twenty-first century...While wars between major powers with large conventional forces are becoming less common, new security threats are emerging. If liberal democracy is indeed the ideology and form of government of Fukuyama's Last Man, and if pacific relationships among democracies are the norm, then the transitional countries from Second and Third Worlds will provide the security threats of the next century."

He goes on to summarize that states will either be constrained by integration or fragmentation (Barnett's connectivity and disconnectedness respectively), and that, lastly, the degree to which a state is in or near failure can be measured against the following four variables:

1. Strength of the state--the stronger are less likely to fail
2. Stability of the population--the more stable are less likely to fail
3. Economic well-being of society--the stronger the economy, the less likelihood of failure
4. Geostrategic position of the state--the greater the geostrategic importance, the less likelihood of failure

Prior to 9/11, Afghanistan had reached the point where its state was weak, population degraded, economy in shambles and geostrategic position on the back burner for the major powers. Once 9/11 struck the U.S., we saw its geostrategic position suddenly thrust back in the spotlight and now a tremendous amount of resources--some positive, some nefarious depending on their origin--flowing into the country in attempts to shape Afghanistan's future. For the sake of Afghanistan and the future of the world, our leaders must recognize and understand both the patterns of history and those patterns shaping the events of today, just as Mr. Goodson did in writing and publishing Afghanistan's Endless War.

Afghanistan's Endless War: Chapter 4 Review

In my review of Chapter 3, I summarized the series of stages in Afghanistan's experience with modern war as described by author Larry Goodson. Chapter 4, titled "Impact of the War on Afghan State and Society," focuses on the impact of this experience on the entire architecture of the Afghan nation. So to frame and organize the thoughts of Mr. Goodson in this chapter, I would like to use the supply chain architectures I have discussed in relation to Afghanistan previously. These architectures can be viewed as comprising a pyramid within which the base architectures are most critical and without which the entire pyramid would crumble:

Throughout the stages of modern war experienced by Afghanistan, the base architectures that been built over time with the help of foreign nations, such as the Soviet Union, were systematically destroyed and / or degraded to a point of deep distress.

Impact on Human Architecture

The toll the war has taken on human life across a broad spectrum of the Afghan population cannot be underestimated when taking assessment of Afghanistan's conditions. At the time of Mr. Goodson's book in 2001, he writes that "recent reports suggest that from 1.5 million to more than 2 million war deaths" had occured in Afghanistan "since 1978." This was approximately 10% of the population at that time. Furthermore, 500 thousand to 1 million Afghans had been wounded and injured. Another 6.2 million refugees existed outside of Afghanistan at the peak in 1990, in addition to which 2 million were internally displaced. Throughout 1996 and 1997, a stable 2.7 million refugees lived beyond the borders of their homelands.

Impact on Physical Architecture

As Mr. Goodson states, "at one point or another since 1978, virtually everything in Afghanistan has been a target. Cities, towns, villages, houses, mosques and minarets, schools, hospitals, industrial structures, other buildings, roads, bridges, orchards, and fields have all been damaged or destroyed during combat." Mr. Goodson continues that "as of early 2001, Afghanistan was a country reduced by the technology of modern war to a premodern level of existence."

Impact on Financial Architecture

Due to the destruction and degradation of the above architectures upon which the Afghan nation state was built, "its formal economy had essentially collapsed. Virtually no industry functioned, and the most vibrant economic activities were transit trade, opium growing, heroin manufacturing and smuggling, and other small-scale agriculture." The mechanisms, tools, and vehicles that existed to support and enable the Afghan people to deploy their goods and services to market no longer existed. In the ensuing chaos, the rise of the Taliban from out of Western Pakistan eventually led to the "Kalishnikovization" of the nation, facilitated by the illicit weapons and drug trade that extended beyond Afghanistan's borders.

The Rise and Role of the Taliban

As is detailed by Mr. Goodson, the Taliban was born solely out of the madrassas located in Pakistan's western provinces in the mid-1990s, and encouraged by Pakistan covertly, and later more overtly, as an effort to fill the vacuum left by the Soviet Union. In entering Afghanistan, the Taliban leveraged Pakistan-based support to maintain military prowess, channels of financing and overall logistical strength while taking advantage of the Pushtun population in Afghanistan to build a foundation of support from which to attack and degrade the positions of non-Pushtun minorities.

The source of Taliban strength is illustrated above. In essence, movement into Afghanistan is supported by a combination of leadership and students from the madrassas and logistical, financial and military support based in and / or routed through Pakistan. The extremely large Afghani refugee population in Pakistan has also contributed resources, human and otherwise, to the Taliban movement.

To complete the loop, Taliban hardened by the experience of fighting and living in Afghanistan return to Pakistan for rest and to train the next round of fresh recruits brought into the Pakistan madrassas and Pakistan-based Taliban militia. Up until 2001, this regular and for so long unimpeded movement allowed the Taliban to put down deep roots across the Pakistan-Afghanistan border. However, up until 2001, the Taliban mostly reinforced the current state of Afghanistan's base architectures more than they had acted to rebuild them towards reconstructing the nation state.

This was evident in how they tightened the vice on both men and women, massacred and forcefully migrated minorities, and further degrading all of the elements of culture and society upon which communities, and in aggregate a nation, would be re-founded.

The majority of the struggle in Afghanistan faced today is the difficulty in "unwinding" this deeply rooted Taliban entrenchment and cross-border intertwinement with Pakistan, including all the negative elements of criminal trade, while at the same time trying to establish the foundation for the legitimate and pro-development trade that is desired between Pakistan and Afghanistan for the benefit of progress in Central Asia.In review of Chapter 5: The Changing Regional Environment I will discuss Mr. Goodson's take on the actions and interests of the various external actors that have had an impact on Afghanistan's state of affairs up until 2001.

Business Schools and Ethics: Which Way Forward for the MBA?

With all of the publicity in surrounding failed and corrupt business executives flooding the news since even the early stages of the financial crisis, the "business man" in the form of the "Wall Street executive" has taken a pounding in the eyes of the public. This anger has in turn been channeled by politicians and other opportunists looking to leverage it to their advantage in aggregating influence and power. Given this phenomenon, it is no wonder that business schools and their product, MBA's, have begun taken a beating themselves, leading to prominent discussions amongst business school deans and pundits in the press around ethics, honor codes, and the general culpability of business schools in the global financial crisis. Below are a few articles from 2009 to this effect:

• How Business Can Stand Tall Agan, May 4th, 2009
• Thunderbird MBAs Take the Oath, May 15th, 2009
• MBAs: Public Enemy No. 1?, May 20th
• A Promise to be Ethical in an Era of Immorality, May 29th, 2009
• Blame the B-Schools, June 16th, 2009

In reviewing the role of MBA's in crises past and present, we cannot forget two things: a) the overwhelming role of government policy and related political corruption and incompetence, and b) that many business managers and executives making critical decisions do not even have an MBA (Bernie Madoff was a law school dropout). One thing is certain: MBA's have had influence in far more positive business stories than negative ones, and they can play a key role in influencing business practices for the better into the future.

The question is: how do MBA programs identify the bad eggs prior to entering a program, during a program, and after a program amongst the many alumni that left business schools at different times under different environments (Raj Rajaratman got his Wharton MBA in 1983)? This is a very difficult task, as MBA graduates could spend 20 years as a positive role model in the business world and due to various circumstances work their way into nefarious activities, intentionally and unintentionally.

I believe business schools should focus on developing the appropriate models around decision-making skills, models that could be applied to any given situation and that would provide MBA graduates with a tool, or set of tools, to evaluate the major actions they are asked to execute or make decisions on during the course of a career. These models should be founded on a clear set of values.

Even putting this in place, however, doesn't solve any problems by itself, and we shouldn't overestimate the influence of an MBA by overestimating its culpability in the global financial crisis. A solid and readily applicable framework will allow MBA's to influence for the better or steer clear of a negative situation in their work environment, but it is often the case that most co-workers and managers will not have been part of an MBA program with these tools. Thus, it is simultaneously important that organizations (including government) develop their own programs that build the right decision-making qualities in all employees, top-to-bottom. This is made even more difficult due to the fact business operations extend across borders and cultures with differing business values.

MBA's will have an important role in restoring credibility to the business world as we work our way out of this global financial crisis. My only hope is that the U.S. government's recent intervention in the management of financial and automotive sector companies will provide it with some additional experience on what is required to run a successful business and positively influence future policy decisions. Given its track record, I am extremely cynical.

Afghanistan's Endless War: Chapter 3 Review

This chapter chronicles modern war in Afghanistan as it was up until the time of the book's publication in mid-2001. Mr. Goodson's analysis led him to categorize specific periods of Afghanistan's modern history from the late 1970's through mid-2001 into eight stages, summarized by myself below in simple terms:

• Stage 1: From Coup de'Etat to Soviet Invasion (1978-1979)--In this phase, the Soviet Union assisted a coup de'etat of the existing Afghan leadership, and when this proved too unstable and uncontrollable from afar, the Soviets used the infighting that arose in rejection of the new, Soviet-backed leaders to launch their invasion, composing of approximately 85,000 soldiers at the start.
• Stage 2: National Resistance and Soviet Entrenchment (1980-1983)--Mr. Goodson writes, "The second stage of the war was characterized more by patterns and trends that developed than by discrete events of importance...First, the war itself quickly widened and intensified...Second, a tactical pattern emerged that would characterize the next two stages of the war. The mujahideen mounted attacks from the mounts; the Soviets responded with combined arms offensives up the valleys to relieve pressure on the cities and major roads," where they had entrenched themselves.
• Stage 3: Air War, Interdiction, and Destabilization (1983-1986)--At this point, "the Soviets made a significant change in military strategy. During the first years of occupation, Soviet priorities were to control the cities, protect the norther pipelines, keep the major roads open, and broaden the government's base of support." As further success in these efforts proved limited gains, "the Soviets stepped up their counterinsurgency campaign." In addition, "the next step for the Soviets was to intensify and widen the war and further weaken the support structure of the mujahideen. To that end, they shifted to an air war...bombing villages and depopulating rural areas that provided vital support to the mujahideen." Although this stage saw "that the mujahideen finally began to jell into an effective fighting force," in the end "the ruthless use of (Soviet) airpower was critical during this period because it increased the intensity of the war, caused widespread destruction, and provided a long-term advantage against the insurgency."
• Stage 4: Resistance Gains and Soviet Withdrawals (1986-1989)--By this time, "the lengthy conflict...was taking a toll on Soviet morale and political will to continue" despite the fact that "the Soviet combination of refocusing strategic aims and refining new tactics (in particular the increased reliance on overwhelming air power) was effectively driving the mujahideen off the battlefield." The general population supported the resistance and created continuing instability in the Soviet-backed Afghan government. During this period, "the most notable expansion of the war was the increased violation of Pakistani and Iranian territory by Soviet forces." Lastly, new weapons, such as the CIA supplied "Stinger" reduced the effectiveness and execution of Soviet air war strategy and aided in the development of military improvements within the mujahideen groups. 
• Stage 5: High-Intensity Civil War (1989-1992)--After the Soviet withdrawal, Mr. Goodson writes, "Several important developments characterized this stage: continued covert Soviet involvement in the conflict and support for the Kabul regime, the resilience of the Najibullah (Soviet-backed) government, continued disunity among the resistance, and erosion of U.S. support for the mujahideen." The coup attempt in Russia against Gorbachev in August 1991 and a following agreement with the U.S. to rachet down support for respective Afghan factions ended the lifeline for the Afghan government and paved the way for victory by the resistance forces.
• Stage 6: From Victory to Fragmentation (1992-1994)--Mr. Goodson writes that "Stage six was characterized by fragmentation and warlordism, although much of the fighting centered on Kabul and several other strategic towns (i.e. the rural areas were relatively peaceful during this stage)." This stage, Mr. Goodson continues, ended as "Pakistani and Saudi Arabian fundamentalists began to support a new movement known as the Taliban (religious students) in the summer of 1994. The Taliban were Afghan refugees and war veterans based in rural Pakistani and Afghan madrasahs, or Islamic religious schools." 
• Stage 7: Taliban Ascendance (1994-1998)--In this stage, the Taliban consolidated their power throughout most of Afghanistan, enabled by support primarily coming from Pakistan and Saudi Arabia. The minority warlords, such as Ahmed Shah Massoud of the Northern Alliance, received varied support from countries opposed to the Pakistani and Saudi influence, such as India, Iran, Russia, Tajikistan, and Uzbekistan. The U.S. exhibited little influence in the region and distanced itself further after the missile attacks executed in 1998 against alleged Al Qaeda training grounds near Khost. 
• Stage 8: Endgame? (1998-?)--Once the Taliban had a hold on most of Afghanistan, its support from Pakistan become more public and overt, with increased migration from western Pakistan of fighting men from the madrasahs and military resources provided by agents of the Pakistani military and intelligence forces. The Northern Alliance had weakened further and hope for reconciliation of differences between the Taliban and minorities diminished as the ideology and barbaric atrocities of the Taliban spread throughout the country.

At this point, Mr. Goodson offers some speculation of the future and where Stage 8 would possibly end:

"The ethnic minorities of the center and north of Afghanistan continue to reject Taliban control over their areas, and it can be expected that resistance to Taliban hegemony will continue in these regions during the new century. Largely because outside powers continue to supply all the warring parties, both the Taliban and their opponents continue to seek a military solution to the question of who should control Afghanistan and what manner of government the country should have. Thus the foundation for continued conflict is in place...

"Transition from the current conflict to peace can occur only if the United States and interested regional powers exercise sufficient leverage on their Afghan clients to put in place and maintain a broad-based government. For this to happen, the outside actors would have to agree to curtail their support for their Afghan proxy forces, and a mechanism for power sharing between the intransigent groups would have to be devised--both daunting prospects."

We all understand now that Stage 8 ended with 9/11, giving start to a new stage in Afghanistan's struggle. What is clear is that Afghanistan has experienced a devastating series of destruction and degradation in all the aspects of society that would normally provide the foundation for a healthy, national government.  It is upon this shaky foundation that Afghanistan sunk again into conflict after 9/11 and that a national government was reconvened under the leadership of Hamid Karzai.

Understanding this history, it is without much surprise that the Karzai government and other operations in Afghanistan have faltered since 9/11. The greatest investments in the country during this new stage have most often come from actors far outside the region, such as the U.S., Canada and Europe, where political will and commitments are volatile and fleeting. Little is heard of any positive efforts and commitment by actors in the immediate region around Afghanistan in coordination with the above mentioned Western powers. From Pakistan's failure to come to a lasting solution in its Northwestern Frontier region to the indecisive and less-than-strategic commitments by NATO and the U.S., current efforts have been more of a patchwork of bandaids than a holistic and 100% effort by all interested actors to restore Afghanistan's national health.

Examining a recent spate of articles out of the Wall Street Journal illustrate the difficulties and tendency to let failure in managing the details determine overall success. On December 15th, the Journal published the article, "For U.S. Troops in Afghanistan, Supplies Are Another Battle." Below are some key excerpts to focus on:

"At this phase, Afghanistan is a logistics war as much as any other kind of war," said Mr. Carter, whose formal title is under secretary of defense for acquisition, technology and logistics, in a recent interview.

Unlike Iraq, Afghanistan has no modern infrastructure. Critical supplies such as fuel must be imported. The country is landlocked and has just three major overland routes. Enormous distances separate bases and outposts. High mountains and valleys, as well as extreme weather, make air travel difficult.

This latter is the obvious reason logistics has been made a targeted focus, and the base of a solid logistics organization begins with people, equipment and infrastructure, and financing. Because of these requirements, it is easy, as is inferred below, for those in command to get caught up in details. Without a clear, regional strategy, it will be easy for anyone to nitpick and find ways to bring down an existing operation:

"Mr. Carter says he stays in close contact with the top U.S. commander in Afghanistan, Gen. Stanley McChrystal, about urgent issues such as finding ways to protect troops against improvised explosive devices.

"That is partly a reflection of Pentagon officials' top concerns: the risk that public support for the war is fading, and the rise of roadside bomb attacks on U.S. troops by Taliban and al Qaeda-affiliated forces. Any major hiccups bringing in troops and armored vehicles -- let alone staples such as ammunition and fuel -- could derail the escalation of a military mission that is becoming the defining wartime test of the Obama administration.

"Another pressure: Senior Democratic and Republican lawmakers are chafing at the high cost of operations in Afghanistan.

""As you transition operations to Afghanistan, you find that the cost of doing business is two to three times as expensive as Iraq," said Dakota Wood, a senior fellow at the Center for Strategic and Budgetary Assessments in Washington. According to the think tank, the annual cost of a U.S. soldier is about $1 million in Afghanistan, with fuel costs associated with supporting that soldier accounting for between $200,000 to $350,000 of the total."

When you pump goods and resources, no matter how good or how many, into a supply chain with deficiencies in either people, equipment and infrastructure, or financing, speed, quality and cost are going to all be affected in the negative. If we are to succeed in Afghanistan, these need to be constantly improving and making progress and must include involvement from regional actors. For example, if the cost of supporting each additional U.S. soldier is that much more than elsewhere, then the activities of our leadership should be focused on reducing the total overhead cost over time, rather than focused on simply reducing head count. That leads us to the next article. 

On December 17th, the Journal published "Surge Focus Is Roads, Police." In the title itself, infrastructure and people are mentioned as cornerstones to the "surge," with police being just one division of labor in the supply chain as a component of an overall security program. Essentially, the below is discussing the goal of building a critical mass of secure supply chain infrastructures between key locations:

"The troop surge in Afghanistan will focus on expanding and connecting safe areas of the country, and on revamping the troubled Afghan police, the U.S.-led coalition's day-to-day commander said in an interview.

"U.S. Lt. Gen. David M. Rodriguez outlined Tuesday how the surge would unfold, in the most specific terms since President Barack Obama authorized early this month the dispatch of 30,000 extra American troops to Afghanistan. Asked how he would measure success a year from now, he said the crucial marker would be opening up insurgent-infested roads between Afghanistan's agricultural heartland in Helmand province and the Pakistan border."

""There are pockets of security -- but they are not connected," Gen. Rodriguez, who heads the newly established International Security Assistance Force Joint Command, said during a visit to Herat. "Afghan people need, in addition to being secure, to be able to move to places that are important to them, such as to sell farm produce. We've got to be able to expand the secure areas for the people, and improve their freedom of movement.""

The existing reality of the people available in Afghanistan to support a security program to run parallel in any infrastructure improvements is mentioned later in the article. Having an improved police force will ideally reduce that total overhead cost mentioned earlier without any significant, negative impact on quality:

"The second major U.S. unit deploying in coming months will be a 4,000-strong brigade combat team of the U.S. Army's 10th Mountain Division, Gen. Rodriguez said. The brigade's artillery battalion will focus on running a police-training school, while much of the remaining three battalions will be scattered throughout the country at joint outposts where platoon-size American forces would live and operate together with Afghan police units.

"Turning the Afghan National Police -- seen as corrupt and lagging behind Afghanistan's army in performance -- into an effective law-enforcement and counterinsurgency force is key to rolling back the Taliban and restoring government authority, U.S. officials say.

""We've got to improve the police significantly," Gen. Rodriguez said. "We've built the army basically from scratch and sent it out. The police was already there, and we've been trying to train it on the job, which is significantly harder. We're a couple of years behind.""

Because the role of people in rebuilding the underlying infrastructure of Afghanistan can not be underestimated, I want to also mention an article from the Journal on December 18th titled, "Training for the Civilian Surge." Designed to run in parallel with the security programs mentioned above, these civilians are being trained to act as hands-on professional advisors to Afghan communities aiming to re-establish the required infrastructure for a health local, and by extension, national economy:

"American military personnel have complained in the past that State Department staff stationed in Iraq or Afghanistan were ill-equipped to operate in areas outside of Baghdad or Kabul. U.S. diplomats, meanwhile, have argued that the Pentagon in recent years has developed a disproportionate influence over U.S. foreign policy.

"To bulk up the capacities of civilian personnel, the program gives trainees a taste of "what they experience in the field," said Jim McKellar, an administrator of the Muscatatuck course. Trainees should arrive in Afghanistan feeling "very, very comfortable," he said."

Because the systems in the U.S. are antiquated or just plain non-existant to support such an effort, it needs to be innovative and look beyond the standard stock of existing government employees:

"The State Department and U.S. development agencies are short of employees conversant in Dari, Pashto and other languages spoken in Afghanistan. Civilian agencies in Washington also have less flexibility than the Pentagon to mobilize staff -- such as diplomats and farming experts -- for duty in war zones. More seasoned U.S. bureaucrats also are wary to part from their families for prolonged overseas missions, said U.S. officials.

"As a result, the civilians taking part in security and cultural exercises at the Muscatatuck Urban Training Center are often private contractors with extensive experience working overseas."

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Overall, the state of modern war in Afghanistan has shifted from a focus on simply defeating the enemy to one of ensuring that a positive foundation fills the vacuum left when the enemy has dissipated, surrendered, or been destroyed, a foundation upon which the national health of Afghanistan can be restored. The U.S. cannot do it alone and will fail if at least a majority of Central Asian countries on Afghanistan's border have not bought in to the strategy and programs being deployed. Over the next year, we will observe first hand, month-by-month how this plays out.

Afghanistan's Endless War: Chapter 1 Review

When I was in 7th grade (about 1987), I remember an assignment that required us to do a report on a country of our choosing outside the United States. For a reason I cannot quite remember, I had chosen Afghanistan and put together a small booklet containing illustration and text that I still have today. It mentions the mountainous geography, the ancient Buddhist relics and salt mines amongst other things. Quite absent is Afghanistan's long history of war and conflict between peoples local and from all around the world, something a junior high encyclopedia was unlikely to document for a 7th grade audience. Little did I know at that time just how prominent of a story Afghanistan would become in our lives and on the world stage today. As a result, I find myself seeking out a deeper understanding of the land and rough boundaries of Afghanistan.

While in a local, second hand bookshop, I was fortunate to come upon the book, "Afghanistan's Endless War." Published in 2001, but before September 11th, the book reads today with an understanding of the country and surrounding region that remains extremely relevant to the critical choices continuing to be made by our political and military leaders.

What I like about the Preface and Chapter 1: Afghanistan in the Post-Cold War World is the regional perspective the author, Larry Goodson, brings to the table. In introducing his book, he writes:

"To date, no single work has analyzed both the comprehensive impact of the war on those factors that have historically been most influential in Afghanistan (ethnicity, state-vs.-society struggles, Islamic ideology, economy) and the way in which Afghanistan today influences a dramatically changed region (geopolitics)...it is my contention that Afghanistan has a singular importance in the regions it touches and that it must also be understood in terms of how it influences its neighbors and other international actors. In this latter sense, Afghanistan provides a useful point of departure for understanding how failed and failing states, through the very ills that are brought about or exacerbated by their weakness, can have such disproportionate influence in regional and international politics in the new milennium."

Wrapping up the Preface and moving into Chapter 1, Mr. Goodson explains that the focus of his thesis is that:

"...Afghanistan's situation is illustrative of a significant problem facing the post-Cold War world. It is useful to understand what is happening in Afghanistan not just because its continued turmoil has such great influence on the region but also because of what it reveals about the transforming nature of the international system today."

This statement begins to provide a clear rationale of why we should be focused on not just Afghanistan's success, but also the success of the surrounding region. But the difficulties of Afghanistan have many roots, and Mr. Goodson begins to paint a picture on page 17 of how ethnic boundaries transcend geographic boundaries:

 "...all of Afghanistan's major ethnic groups except for the Hazara overlap the international borders into neighboring countries, especially:

• Pashtuns (NW Pakistan)
• Tajiks (Tajikistan)
• Uzbeks (Uzbekistan)
• Turkomens (Turkmenistan and Uzbekistan)

Moreover, the Hazara, Aimaq, and Farsiwan are thought to be ethnic cousins of the Eastern Iranian Berberi. Because all of Afghanistan's major ethnic groups either straddle the border with neighboring countries, all of those countries have built-in incentives for meddling in Afghanistan's internal affairs."

To conclude Chapter 1, Mr. Goodson steps back again and sets the stage for further chapters:

"With the end of the Cold War and the collapse of the Soviet Union, Afghanistan finds its geo-strategic position still important, but for different reasons. No longer merely a buffer state, Afghanistan is now a crossroads between states that want and need trade, as both Iran and Pakistan engage in a struggle for access to Central Asia's mineral wealth and markets."

If the U.S. and NATO fail to help Afghanistan succeed in getting through the current turbulence of difficulties it now faces, it will be because, as Dr. Thomas Barnett continually refers to, our leadership has failed to design and execute a Central Asia strategy as comprehensive and thorough as that being currently conceived for action within Afghanistan's porous borders.

In a couple weeks, I will review Chapter 2: Historical Factors Shaping Modern Afghanistan.

Two Tales of Chinese Investment Overseas

As Chinese businesses become increasingly assertive in evaluating and executing investments overseas, they are learning lessons critical to managing supply chains across borders. These lessons highlight not only the existing weaknesses of Chinese supply chains but also their growing strengths, and serve to illustrate the very real need for China's supply chain managers to understand how global trade, security, regulation, and development intersect in their areas of operations.

Two recent articles in the Wall Street Journal and New York Times provide excellent examples of this dynamic, both focused on aspects of China's intense effort to invest in and develop commodity resources overseas. The first, by the WSJ's Alex Wilson, is titled "As Commodity Prices Rebound, Australia Limits Foreign Investors" and reports on Australia's effort to slow the pace of Chinese investment in Australian companies in the mining industry.

Chinese businesses focused on the import and development of the various commodities that feed into its high-growth, manufacturing engine have taken advantage of the Global Financial Crisis to execute deals with overseas suppliers in multiple countries. They have done so by making wholesale acquisitions or by injecting significant amounts of cash in companies that were short of revenue and hungry for sources of capital to simply remain in business, or continue with the capital-intensive investments so common in the mining industry. This has been a boon for Australia's mining-rich economy, sitting in China's immediate backyard.

As the WSJ article mentions, Australia's quick rebound in the resources sector has resulted in a greater confidence within the mining industry and government alike that they can take a stronger stance on China's increasing appetite for investment with reduced risk to the economy:

"A strong rebound in commodity prices and thawing debt markets this year have led to a recovery in the Australian resources sector, with fewer distressed miners seeking foreign cash to shore up their balance sheets or to fund projects.

"This has emboldened Australian regulators to take a tougher stance against foreign investment that has been entering the country.

"Australia's resources industry needs foreign investment to develop new projects, however, and the government is keen not to shun interest. The government has been able to firmly enforce its preference for foreign investors to take minority stakes rather than opt for a takeover."

The article goes on to show how Chinese investors have initially reacted to the increased scrutiny by the Australia government on various deals:

"Market participants say this has been the government message behind the scenes for some time, and Chinese investors now seem to have acknowledged it by tailoring deals over the past year to meet the government's preference for stakes in Australian miners to under 50%.

"But recently China pitched a number of deals above the 50% mark, and one investment banker said FIRB's comments may be Australia's attempt to send a message to China that it won't approve any more of these deals.

""They have been saying it privately to the Chinese and the Chinese keep bringing [deals that require more than a 50% stake], so maybe they have decided now to make it public to try to convince them not to do it," said the banker.

"For Chinese investors, the FIRB's comments provide some clarity on a foreign-investment-review process that has been criticized by some for its uncertainty and lack of transparency."

I believe the above hints at the sophistication Chinese business investors are developing in making overseas investments, probing markets for the best deal until regulation becomes additionally restrictive, and then looking for the best deals within the new legal framework. The absence of rash decisions or a highly reactive backlash provides a sense of how integrated and sensitive Chinese supply chains have become in the globalized economy. This will only serve to drive further progress in supply chain relations and innovation. 

The second article, by Timothy Williams, is titled "China Oil Deal is New Source of Strife Among Iraqis" and reports on China's struggle in moving forward with its Iraqi oil field development while maintaining peace with local Iraqi communities:

"When China’s biggest oil company signed the first post-invasion oil field development contract in Iraq last year, the deal was seen as a test of Iraq’s willingness to open an industry that had previously prohibited foreign investment.

"One year later, the China National Petroleum Corporation has struck oil at the Ahdab field in Wasit Province, southeast of Baghdad. And while the relationship between the company and the Iraqi government has gone smoothly, the presence of a foreign company with vast resources drilling for oil in this poor, rural corner of Iraq has awakened a wave of discontent here.

""We get nothing directly from the Chinese company, and we are suffering," said Mahmoud Abdul Ridha, head of the Wasit provincial council, whose budget has been cut in half by Baghdad in the past year because of lower international oil prices. "There is an unemployment crisis. We need roads, schools, water treatment plants. We need everything.""

This experience for China is not new; it has been facing similar reaction in Africa, as often highlighted by Dr. Tom Barnett, and who's comments brought me to this article. Whereas China is operating in a mature market with well established rules in Australia, Iraq's market is in the very early stages of developing rules at a national and local level that help it deal with foreign direct investment by countries and businesses with varying degrees of experience. China may be able to keep much to itself in totalitarian regimes such as Iran and Sudan, but it as an Iraqi puts it below, investing in a young democracy has its implications:

"The result has been a local-rights movement — extraordinary in a country where political dissent has historically carried the risk of death — that in the past few months has begun demanding that at least $1 of each barrel of oil produced at the Ahdab field be used to improve access to clean water, health services, schools, paved roads and other needs in the province, which is among Iraq’s poorest.

""No one would have dared to ask for such a thing during Saddam’s regime; if he did, he would definitely be executed," said Ghassan Ali, a 43-year-old farmer who lives near the oil field. "But now we are a democratic country, so we have the right to ask for our rights like any other province in Iraq.""

"The basis of the complaints here is that, aside from the hiring of a few hundred residents as laborers and security guards at salaries of less than $600 a month, the Ahdab field — a roughly $3 billion development project — has provided no local benefit."

The response by the Chinese is representative of how its understanding of global supply chain management remains immature across industries and markets, suffering a lack of holistic thinking and ability to see the direct links between investment success and the success of surrounding communities:

"China National Petroleum says it needs relatively few workers because it is still in the exploration phase of its 23-year project at the Ahdab field. Oil production is not scheduled to begin for two and a half years.

"Now, the field’s 100 or so Chinese workers rarely leave their spartan compound for fear of being kidnapped, the company said, even though the Iraqi government recently deployed extra security to the area.

"More trouble could be on the way next spring when 1,000 Chinese workers arrive to build a central processing plant.

"Mr. Han said hiring Iraqis to do the job was out of the question. “We don’t have enough time to train local people to do that work," he said."

With this perspective, the Chinese make their work at the nexus of cross border trade unnecessarily difficult in the short-term and with increasingly negative effects downstream in the long-term as local tension is brushed aside and ignored.

Over time, Chinese businesses will internalize lessons learned from one market, deploy them where applicable in another, and develop the skills and talent required to tailor their investment decisions and execution for a wide range of operational environments. Cross border professionals need to ensure that the natural flow of globalization and corresponding rule sets will gradually work to hold the Chinese and other nations accountable for their actions across borders and in communities like those of the miners in Australia and farmers in Iraq.