Foreign affairs 2016 09-10

Building on Success the health of women and children across Africa. And through our Global Health Security Agenda, a partnership between the United States and some 50 other countries that our administration launched in 2014, we are strengthening the capacity of vulnerable countries in Africa and around the world to combat future outbreaks. Improving health security represents just one facet of our growing relationship with Africa. Through such forums as the U.S.-Africa Leaders Summit and the Young African Leaders Initiative, we have engaged with African leaders on all levels, from heads of state to civil society, expanding and deepening partnerships that contribute to the continent’s increasingly bright future. American leadership has also proved decisive in addressing climate change. Our administration’s landmark investments at home have tripled the amount of electricity we harness from the wind and increased our solar power 20-fold since 2008. We’ve put in place rules that will double the fuel efficiency of our cars by 2025, and we’ve set forth an unprecedented plan to reduce the amount of carbon dioxide that our power plants emit. These are the most significant steps the United States has ever taken domestically to combat climate change, and because our actions proved that we take this threat seriously, we were able to rally other countries to make concrete commitments of their own—starting with China, the world’s leading emitter. That’s how we achieved last year’s historic Paris agreement to combat climate change. At the same time, we’re working to increase the resilience of com­ munities that are already being affected by rising temperatures and extreme weather, at home and around the world. We’re implementing strategies to address the increased risk of flooding in coastal communities and improving our national resilience in the face of long- term droughts. We’re also building climate considerations into all our efforts to promote sustainable development around the world, including aid programs such as Feed the Future, which supports climate-smart agriculture. Our $3 billion pledge to the un’s Green Climate Fund will help the poorest and most vulnerable nations become more resilient to climate change. And through a bold initiative called Power Africa, we’ve set a goal of doubling access to electricity on the continent through clean and sustainable methods. Through all these efforts, we’ve laid the groundwork to protect our planet. But the resulting opportunities can be seized only if the next president follows the science, recognizes the dangers of doing nothing, and musters the political will to address the threat. September/October 2016 53

Joseph R. Biden, Jr. Other transnational threats are only a keystroke away, whether it be state actors pilfering commercial or government data or North Korean, Iranian, or anonymous criminal hackers perpetrating cyberattacks against American companies. That is why we’ve fortified our cyber­ defenses, expanded partnerships with the private sector and with other governments, authorized theTreasury Department to impose sanctions against malicious hackers, enhanced our technical and attributional capabilities, and worked to improve our ability to respond to and recover from cyberattacks. Meanwhile, we have secured a number of important commitments from China on its actions online, including an agreement not to conduct cyber-enabled economic espionage for commercial gain, and a number of other states are following our lead and securing similar commitments of their own. We continue to support an open, trans­ parent, and interoperable Internet as an engine of economic growth and civil society. Finally, we are building a growing coalition of like- minded states around a set of voluntary norms of responsible state behavior in peacetime, an important effort to enhance stability in cyberspace, which has been endorsed by leaders from a number of the most capable countries, including those of the G-7 and the G-20. The next administration should pick up this baton and run with it, further refining principles to guide the digital revolution as part of a broader effort to shape new rules of the road for space, the sea, and the other critical domains that will define commerce and competition in the decades ahead. DEFEATING VIOLENT EXTREMISM Terrorism and violent extremism provide perhaps the most vexing example of a virulent transnational danger that demands sustained U.S. leadership. Al Qaeda, isis, and their offshoots represent real threats, and the attacks in Paris, San Bernardino, Brussels, Orlando, Istanbul, and elsewhere have reminded us over and over again that terrorism can happen anywhere. At the same time, even amid a climate of fear and uncertainty, we must remember that terrorists cannot destroy the United States or our civilization. They are significant, but not existential, threats—and we should never underestimate the strength and resilience of the American people. Terrorism must—and will—be defeated. But more than a decade of war in Afghanistan and Iraq has taught us some hard lessons about 54 foreign affairs

Building on Success when and how to deploy military power to address this danger. Even as we have removed more than 165,000 U.S. troops from combat in Afghanistan and Iraq, President Obama has never hesitated to use force to defend the American people when necessary. Just ask Osama bin Laden and al Qaeda’s top operatives in Afghanistan and Pakistan, the leaders of al Qaeda’s affiliates in Somalia and Yemen, and more than 120 of isis’ top leaders and commanders. Our administration If the next administration has not been hamstrung by an ideology chooses to turn inward, it of restraint, as our most vocal critics allege. Rather, we carefully consider could very well squander the use of force because we understand the tremendous human costs and unfore­ the hard-earned progress seen consequences of war. We must we’ve made. ensure that when we do use force, it is effective. Accordingly, we have taken precise and proportional military actions, guided by a clear mission that advances U.S. interests. When­ ever possible, we have acted alongside allies and partners so that they will share the burden and become invested in the mission’s success. And perhaps most important, we have used force in a manner that is sustainable. We’ve learned in no uncertain terms that success on the battlefield will not endure if U.S. military involvement outpaces political developments on the ground or the ability of local partners to control their own territory. Lasting victory against al Qaeda and isis will therefore require viable indigenous forces to hold liberated areas, rebuild shattered communities, and govern effectively. That’s why we’ve worked with more than three dozen nations to train Afghan forces to hunt down al Qaeda and other terrorist groups. And that’s why we’ve invested so much in building a partnership with the Government of National Accord in Libya and with other African governments—from Nigeria to Somalia to Tunisia—to go after al Qaeda and isis affiliates. In Iraq and Syria, we’ve built a 66-member coalition to train local forces, and we’ve provided afflicted communities with critical humani­ tarian and stabilization assistance. We’ve deployed special operations forces, and as of July 2016, our coalition has carried out more than 13,000 air strikes in support of local ground forces. With enhanced intelligence sharing and law enforcement cooperation, we have worked with our partners to improve their border security, reduce the flow of foreign fighters into Iraq and Syria by 50 percent, and strangle isis’ September/October 2016 55

Joseph R. Biden, Jr. finances. The result: isis is losing. Over the past two years, the group has been under siege from western Iraq to northern Syria, losing approx­ imately 50 percent of the populated territory it once held in Iraq and more than 20 percent in Syria. We’ve taken thousands of isis’ frontline fighters off the battlefield, and the group has lost a quarter of its overall manpower. Its morale is plummeting, and its hold over local populations is loosening. Meanwhile, we’re working with the international community to provide billions of dollars in humanitarian aid to displaced people in Iraq and Syria and refugees across the region and billions more to stabilize and rebuild communities liberated from isis. To address the grievances that give such groups oxygen, we are engaged at the highest levels in Iraq to encourage greater political inclusivity and reconciliation across that country’s ethnosectarian divide. And we are aggressively pursuing a diplomatic settlement to produce a political transition in Syria— because not only is there no military solution to the conflict; there is also no way to end it so long as Bashar al-Assad remains in power. It is worth recalling that what initially set isis apart in 2014 was the group’s attempt to carve out both a state and a self-described caliphate in the heart of the Arab world. This risked creating a territorial platform for attacks on the West.This is the threat we are systematically dismantling in Iraq and Syria, and the one we are making progress in undoing in Libya. But even when isis’ would-be caliphate is destroyed, the jihadist challenge will continue. Other violent jihadist movements with localized agendas—some that are distinct from isis and others that have appro­ priated its brand—will likely continue to exploit ungoverned spaces and threaten stability in key countries. Boko Haram was a threat to Nigeria long before it renamed itself the Islamic State’s West African Province, for example, and it will still have to be addressed even if isis’ core is destroyed. More broadly, the Salafi jihadist ideology that underpins such groups does not require territory to radicalize lone wolves to carry out attacks like those in San Bernardino, Orlando, and Nice. And foreign fighters returning home from the front may con­ tinue to attempt attacks like those in Paris and Brussels. The next administration will have to continue to address this challenge in a smart, sustainable, and holistic manner. This will require the disciplined application of military force, alongside the best efforts of our intelligence and law enforcement communities, diplomats, and 56 foreign affairs

Building on Success development professionals. It will require working with local partners and the international community to improve governance in fragile and failing states. And it will involve countering toxic ideologies online. But this comprehensive campaign against violent extremism will succeed only if it is carried out in a manner that is consistent with our values and keeps the world’s 1.5 billion Muslims—the vast majority of whom reject Salafi jihadist views—on our side. We know that al Qaeda, isis, and their ilk want to manufacture a clash of civilizations in which Americans think of Muslims in us-versus-them terms. Last year, isis’ top leader, Abu Bakr al-Baghdadi, revealed the goal of his group’s at­ tacks: “Compel the crusaders to actively destroy the gray zone them­ selves. Muslims in the West will quickly find themselves between one of two choices: either apostatize or emigrate to the Islamic State and thereby escape persecution.” We should never let these groups win by giving in to the religious war they want. This only raises the premium on adhering to our values and spurning the tactics of our enemies: torture, indiscriminate violence, and religious intolerance. Doing otherwise not only violates our values but also deeply damages our security. AN ENDURING AGENDA The next administration will have a lot on its plate: uniting the Western Hemisphere, deepening our alliances and partnerships in Asia, managing complex relationships with regional powers, and addressing severe transnational challenges such as climate change and terrorism. But because of the actions we’ve taken and the boundless energy and resilience of the American people, I’ve never been more optimistic about our capacity to guide the international community to a more peaceful and prosperous future. It bears under­ scoring, however, that U.S. leadership has never sprung from some inherent American magic. Instead, we have earned it over and over again through hard work, discipline, and sacrifice. There is simply too much at stake for the United States to draw back from our responsibilities now. The choices we make today will steer the future of our planet. In the face of enormous challenges and unprecedented opportunities, the world needs steady American leadership more than ever.∂ September/October 2016 57

Return to Table of Contents From Political Islam to Muslim Democracy The Ennahda Party and the Future of Tunisia Rached Ghannouchi Ennahda, one of the most influential political parties in the Arab world and a major force in Tunisia’s emergence as a democracy, recently announced a historic transition. Ennahda has moved beyond its origins as an Islamist party and has fully embraced a new identity as a party of Muslim democrats. The organization, which I co-founded in the 1980s, is no longer both a political party and a social movement. It has ended all of its cultural and religious activities and now focuses only on politics. Ennahda’s evolution mirrors Tunisia’s broader social and political trajectory. The party first emerged as an Islamist movement in response to repression at the hands of a secularist, authoritarian regime that denied citizens religious freedom and the rights of free expression and association. For decades, Tunisian dictators shut down all political dis­ course in the country, forcing movements with political aims to operate exclusively as social and cultural organizations. But the revolution of 2010–11 brought an end to authoritarian rule and opened up space for open, free, and fair political competition. Tunisia’s new constitution, which Ennahda members of parliament helped draft and which was ratified in 2014, enshrines democracy and protects political and religious freedoms. Under the new constitution, the rights of Tunisians to worship freely, express their convictions and beliefs, and embrace an Arab Muslim identity are guaranteed, and so Ennahda no longer needs to focus its energies on fighting for such protections. RACHED GHANNOUCHI is a co-founder of the Ennahda Party. 58 foreign affairs

ZOUBEIR SOUISSI / REUTERS From Political Islam to Muslim Democracy Ghannouchi in Tunis, January 2011 Therefore, the party no longer accepts the label of “Islamism”—a concept that has been disfigured in recent years by radical extremists—as a description of its approach. In this new democratic stage of Tunisian history, the question is no longer one of secularism versus religion: the state no longer imposes secularism through repression, and so there is no longer a need for Ennahda or any other actor to defend or protect religion as a core part of its political activity. Of course, as Muslims, the values of Islam still guide our actions. However, we no longer consider the old ideological debates about the Islamization or secularization of society to be necessary or even relevant. Today, Tunisians are less concerned about the role of religion than about building a governance system that is democratic and inclusive and that meets their aspirations for a better life. As the junior partner in Tunisia’s coalition government, Ennahda aims to find solutions to matters of concern to all of the country’s citizens and residents. Ennahda’s evolution is a result of 35 years of constant self-evaluation and more than two years of intense introspection and discussion at the grass-roots level. At an Ennahda Party congress held in May, more than 80 percent of the delegates voted in favor of this formal shift, which represents not so much a sea change as a ratification of long- held beliefs. Our values were already aligned with democratic ideals, and our core convictions have not changed. What has changed, rather, September/October 2016 59

Rached Ghannouchi is the environment in which we operate. Tunisia is finally a democracy rather than a dictatorship; that means that Ennahda can finally be a political party focusing on its practical agenda and economic vision rather than a social movement fighting against repression and dictator­ ship. As the entire Middle East grapples with instability and violence— often complicated by conflicts over the proper relationship between religion and politics—Ennahda’s evolution should serve as evidence that Islam is indeed compatible with democracy and that Islamic movem­ ents can play a vital, constructive role in fostering successful democratic transitions. RESISTANCE AND RENAISSANCE Abdelfattah Mourou and I established the Islamic Tendency Move­ ment (mti), which later became Ennahda, in the 1970s. We were both graduates of Ez-Zitouna, the first Islamic university in the world, which was founded in 737 and has long fostered a vision of Islam as dynamic and responsive to the changing needs of society. Our approach was shaped by our contact with a variety of reformist Islamic thinkers. Early on, we were influenced by thinkers in Egypt and Syria linked to the Muslim Brotherhood, such as the movement’s Egyptian founder, Hasan al-Banna, and Mustafa al-Sibai, the leader of its Syrian branch. But as the mti developed, we increasingly drew inspiration from thinkers in the Maghreb region, such as the Algerian philosopher Malek Bennabi and Ez-Zitouna University’s own Mohamed Tahar Ben Achour, one of the fathers of the rationalistic approach to Koranic exegesis, which emphasizes the importance of maqasid al-sharia: the objectives, or ends, of Islamic law. At the time, Tunisia was experiencing increasing social and political unrest due to widespread dissatisfaction with the authoritarian regime of President Habib Bourguiba and its crackdown on civil and political liberties, as well as with the slow pace of economic growth, the spread of corruption, and the persistence of social inequality. Discontent boiled over in a series of strikes between 1976 and 1978 that culminated in a general strike on January 26, 1978—a day that came to be known inTunisia as BlackThursday, when the regime killed dozens of protesters, wounded hundreds more, and arrested more than 1,000 people on charges of sedition. In light of a growing consensus about the need for democratic reforms, the mti brought together Tunisians who opposed the Bourguiba regime 60 foreign affairs

From Political Islam to Muslim Democracy and felt excluded from the political system, especially owing to the state’s repression of any expression of religiosity, whether in public or private. Mti members set up discussion groups, published journals, and organized students on university campuses. In April 1981, the Bourguiba regime consented to the registration of other political parties. The mti submitted a request to form a party committed to democracy, political pluralism, the peaceful sharing and alternation of power, free and fair elections as the sole source of political legitimacy, the protection of moderate religious scholar­ ship, and the prom­ otion of a form of modern­ization that would be in harmony withTunisia’s values and cultural heritage. But the application was ignored by authorities. Faced with rising calls for reform, the regime instead expanded its crackdown, arresting around 500 mti members, myself included. Between 1981 and 1984, I was imprisoned along with many of my colleagues. Shortly after our release, many of us were rearrested, accused of inciting violence and “seeking to change the nature of the state.” Many Ennahda members were sentenced to life in prison after sham trials, as the regime deepened its descent into repression and despotism. The rise to power of Zine el-Abidine Ben Ali, who deposed Bourguiba in a 1987 coup d’état, seemed to signal a potential political opening. The following year, Ben Ali granted an amnesty to all political prisoners and announced the beginning of a new era of multiparty democracy. The mti Ennahda’s evolution proves again applied for recognition as a poli­ that Islamist movements can tical party, changing its name to Hizb Ennahda (the Renaissance Party). How­ play a vital role in successful ever, the application was again ignored, and the hoped-for opening soon proved democratic transitions. to be a mirage, as the Ben Ali regime reverted to the repressive tactics of the Bourguiba era. After the 1989 national elections, in which independent candidates linked to Ennahda won 13 percent of the overall vote and, according to some sources, as much as 30 percent in some major urban areas, the regime moved to crush the party. Tens of thousands of members were arrested, imprisoned, tortured, blacklisted from employment and educational opportunities, and subjected to police harassment. Many others, including me, were forced into exile. September/October 2016 61

Rached Ghannouchi For the next two decades, Tunisia languished under repression, and Ennahda struggled to survive as a banned underground movement. A turning point finally came in December 2010, when a young Tunisian street vendor named Mohamed Bouazizi set himself on fire in front of a local government office to protest the The Ennahda-led harassment he had suffered at the hands government did something of officials. Bouazizi’s action captured never before seen in the the public imagination, and in less than a month, massive protests around the region: it willingly stepped country had forced Ben Ali to flee and down. had sparked a series of revolts across the Arab world. Ennahda members participated in the protests alongside other Tunisians, but not under the party banner, partly to avoid giving the regime an excuse to paint the demonstrations as the work of an opposition group seeking to take power. In the country’s first free and fair elections, in October 2011, Ennahda’s grass-roots networks and track record of opposing the dicta­ torship helped it win the largest share of the vote, by a wide margin. Seeking a national unity government, Ennahda entered into a pio­ neering coalitionwith two secular parties, setting an important precedent in contemporary Arab politics. In Tunisia’s postrevolutionary era, when tensions have threatened to overwhelm the country’s fragile democratic structures, Ennahda has pushed for compromise and reconciliation rather than exclusion or revenge. During negotiations over a new constitution, Ennahda’s parliamentarians made a series of crucial concessions, consenting to a mixed presidential-parliamentary system (Ennahda had originally called for an exclusively parliamentary system) and agreeing that the constitution would not cite sharia as one of the sources of legislation. As a result of Ennahda’s willingness to compromise and work within the system, the new constitution enshrines democratic mechanisms, the rule of law, and a full range of religious, civil, political, social, economic, cultural, and environmental rights. In 2013, violent Salafi extremists carried out a series of attacks and political assassinations, setting off a period of instability and protest. Seeking to tar Ennahda by falsely associating the party with these crimes, a number of parliamentarians suspended their participation in the drafting of the constitution. In response, Ennahda and its coalition 62 foreign affairs



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From Political Islam to Muslim Democracy partners sought to forge a compromise rather than force the document through in the midst of turmoil. To preserve the legitimacy of the process, the Ennahda-led government did something never before seen in the region: it willingly stepped down and handed over power to a neutral, technocratic government. Our priority was not to remain in control but to ensure that the National Constituent Assembly, the supreme representative body, could complete the work of drafting a constitution that would establish the political foundations of a democratic Tunisia. Following elections in 2014, Ennahda gracefully conceded its loss—even before the official results were announced—to Nidaa Tounes, a center-right party founded in 2012. Ever since, Ennahda has worked with Nidaa Tounes as the junior partner in a coalition government. Although the two parties do not see eye to eye on every issue, the coalition has held steady, and the combination of a well- constructed constitution and political cooperation has produced the right conditions for Ennahda to take the next step in its journey toward Muslim democracy. THE SEPARATION OF MOSQUE AND STATE At its tenth party congress, in May, Ennahda announced a series of changes that formalized its decision to focus exclusively on politics and to leave behind social, educational, cultural, and religious activities. In recent years, the party has gradually abandoned those pursuits, recognizing that they should be the purview of independent civil society organizations and not of the party or any entity related to it. The motion to enact this change stipulated, among other things, that the party’s cadres can no longer preach in mosques and cannot take leadership positions in civil society groups, such as religious or charitable associations. Our objective is to separate the political and religious fields. We believe that no political party can or should claim to represent reli­ gion and that the religious sphere should be managed by independent and neutral institutions. Put simply, religion should be nonpartisan. We want the mosque to be a space for people to come together, not a site of division. Imams should not hold positions in any political party and should be trained as specialists in their field in order to gain the skills and credibility required of religious leaders; currently, only seven percent of Tunisian imams have undergone such training. September/October 2016 63

Rached Ghannouchi The party congress also approved a comprehensive strategy to overcome the major challenges Tunisia faces, focusing on consolidating constitutional procedures, pursuing transitional justice, reforming state institutions, enacting economic reforms to spur growth, creating a multidimensional approach to the fight against terrorism, and pro­ moting good governance in religious institutions. Ennahda is now best understood not as an Islamist movement but as a party of Muslim democrats. We seek to create solutions to the day-to-day problems that Tunisians face rather than preach about the hereafter. To be clear, the principles of Islam have always inspired Ennahda, and our values will continue to guide us. But it is no longer necessary for Ennahda (or any other party) to struggle for religious freedoms: under the new constitution, all Tunisians enjoy the same rights, whether they are believers, agnostics, or atheists. The separation of religion and politics will prevent officials from using faith-based appeals to manipulate the public. It will also restore the independence of religious institutions: religion will no longer be hostage to politics, as it was before the revolution, when the state interfered in and repressed religious activities. This separation will also help better equip Tunisia to combat extremism. When religion was repressed and religious institutions forcefully closed and restricted for decades, Tunisian youth were left with no reference point for mainstream, moderate Islamic thought; many succumbed to distorted interpretations of Islam that they encountered on the Internet. Confronting violent extremism requires an understanding of the true teachings of Islam, which reject black- and-white views and allow for interpretations that accommodate the needs of modern life. The genuine separation of mosque and state and the effective governance of religious institutions will facilitate better religious education and reintroduce moderate Islamic thinking to Tunisia. A REBUKE TO TYRANTS AND EXTREMISTS Tunisia has made significant political progress over the last five years. To consolidate these gains, the government must prioritize social and economic development. It must go beyond democratic institution building and carry out economic reforms that will meet the urgent need for jobs and growth. To this end, Ennahda has called for a com­ prehensive national economic dialogue and a participatory approach 64 foreign affairs

From Political Islam to Muslim Democracy to reforms based on a vision of “compassionate capitalism”—an approach that balances the freedom of enterprise with the ideals of social justice and equal opportunity. To boost growth, the government needs to pave the way for the resumption of production in several strategic sectors, such as the phosphate industry, which has slowed down since the revolution due to disagreements between labor unions and producers over pay and working conditions. Ennahda also strongly supports reforms to the banking sector that will make it easier for firms and individuals to get Tunisia’s democratic access to financing. These reforms will development depends on bring much of the informal economy into the mainstream. The party has removing the obstacles that also successfully pushed for increases in government assistance to small busi­ women face in all fields. nesses and farmers. In addition, the government must diversify Tunisia’s trading relations and increase Tunisia’s exports to neighboring countries by opening up new opportunities in Africa, Asia, and Latin America and advancing the ongoing negotiations over a free-trade agreement with the eu. Creating a culture of entrepreneurship is particularly critical for Tunisia’s success. Tunisians have grown accustomed to thinking of the state as the country’s main employer, and corruption under the former regime placed many barriers in the way of would-be entrepreneurs. Ennahda wants to encourage a shift away from this dependence, which has historically allowed the state to monopolize resources and distribute them in an opaque and clientelistic manner. Ennahda supports the government’s ongoing efforts to encourage entrepreneurship among the younger generations; the minister of vocational training and employ­ ment, the Ennahda member Zied Ladhari, has introduced ambitious and much-needed reforms, launching a new program to train more than 600,000 unemployed Tunisians, renovating job-training centers, and creating a national authority for career guidance. Ennahda also backs reforms that will make it easier to establish public-private partnerships and to start new businesses. The Ennahda- led government of 2011–14 introduced a new law governing such partn­ erships, which has recently been adopted. And a new program proposed by Ladhari would promote new businesses by creating mentoring programs for start-ups and by supporting entrepreneurs September/October 2016 65

Rached Ghannouchi through training, flexible funding systems, and a one-stop shop for administrative procedures, to reduce bureaucracy. Economic development cannot progress, however,without significant changes in the educational system, which has become divorced from the realities of the labor market in Tunisia, where the overall unem­ ployment rate currently hovers around 15 percent. Education must be a path to work, not a bridge to joblessness. Ennahda is pushing for reforms that will help educational institutions meet the needs of the market, including by focusing more on soft skills, providing a larger range of technical training schemes, and connecting students to opportunities and internships in the public and private sectors. Consolidating Tunisia’s dramatic political transformation and making progress on economic development will also require social change, especially when it comes to the role of women in government and business. The participation and leadership of Tunisian women— in politics, the judiciary, and civil society—were crucial to the country’s democratic transition. Today, 60 percent of all Tunisian university graduates are female, yet women still face higher unemployment than men (21.5 percent compared with 12.7 percent in 2014). The country’s democratic development depends on removing the obstacles that women face in all fields, promoting equal participation, and protecting women’s rights. To that end, Ennahda supports mandating equal gender representation on all party lists in the local elections that will be held in March 2017. Ennahda members of parliament have also proposed stronger maternity-leave rights to protect women against discrimination and to give them greater career flexibility. Overshadowing all these issues, of course, is the question of security. The challenge of keeping Tunisians safe in an unstable region is testing the resilience of the country’s new democratic system. The state must protect citizens while ensuring respect for individual rights and the rule of law. Ennahda has successfully pushed for amendments to counterterrorism laws that ensure suspects’ access to legal advice. We have also called for a compre­ hensive national security strategy that addresses the complex causes of extremism. Smart counterterrorism avoids counterproductive reactions and will require a cultural shift on the part of Tunisia’s security institutions, toward respecting the supremacy of the law and protecting the freedoms of individuals, civil society groups, and the media. Newly enacted provisions to protect the rights of 66 foreign affairs

From Political Islam to Muslim Democracy detainees, as well as the establishment of the National Anti-Torture Commission, represent a step in the right direction. The only way to conclusively defeat extremist groups such as the self-proclaimed Islamic State (also known as isis) is to offer a hopeful alternative to millions of young Muslims around the world. In the Arab world, people have faced increasing social exclusion, fewer opportunities, and repression at the hands of autocrats. Their frustration has been exploited by extremist groups such as isis, which aim to sow chaos and disorder and impose their own form of tyranny on the region. By showing that Muslim democracy can respect individual rights, promote social and economic opportunities, and protect Arab Islamic values and identities, the successful con­ solidation of democracy in Tunisia will serve as a rebuke to secular tyrants and violent extremists alike. Ennahda’s recent transition will make that kind of success more likely. We hope it will also inspire more debate in the Muslim world about the compatibility of Islam and democracy, what it means to be an inclusive political party, and how to build democratic systems that promote pluralism and respect the right to difference. Of course, Tunisia’s political environment is different from that in the rest of the region. Other Arab countries, such as Egypt, Iraq, and Syria, are still suffering under dictatorship and military rule or remain mired in ethnic and sectarian conflicts. The more complicated a country’s internal situation, the higher the price of change will be and the longer it will take. But change is coming, whether as a result of civil war, peaceful revolution, or gradual reform. And when it comes, Tunisia—and Ennahda—will hopefully serve as a valuable model.∂ September/October 2016 67

Return to Table of Contents China’s Infrastructure Play Why Washington Should Accept the New Silk Road Gal Luft Over the past three millennia, China has made three attempts to project its economic power westward. The first began in the second century bc, during the Han dynasty, when China’s imperial rulers developed the ancient Silk Road to trade with the far-off residents of Central Asia and the Mediterranean basin; the fall of the Mongol empire and the rise of European maritime trading eventually rendered that route obsolete. In the fifteenth century ad, the maritime expeditions of Admiral Zheng He connected Ming-dynasty China to the littoral states of the Indian Ocean. But China’s rulers recalled Zheng’s fleet less than three decades after it set out, and for the rest of imperial history, they devoted most of their attention to China’s neighbors to the east and south. Today, China is undertaking a third turn to the west—its most ambitious one yet. In 2013, Beijing unveiled a plan to connect dozens of economies across Eurasia and East Africa through a series of infra­ structure investments known as the Belt and Road Initiative. The goal of the B&R, Chinese officials say, is to bring prosperity to the many developing Asian countries that lack the capacity to undertake major infrastructure projects on their own by connecting them through a web of airports, deep-water ports, fiber-optic networks, highways, railways, and oil and gas pipelines. The B&R’s unstated goal is equally ambitious: to save China from the economic decline that its slowing growth rate and high debt levels seem to portend. The infrastructure initiative, China’s leaders believe, could create new mar­ kets for Chinese companies and at the same time provide a shot in the arm to the struggling banks and state-owned enterprises whose GAL LUFT is Co-Director of the Institute for the Analysis of Global Security and a Senior Adviser to the United States Energy Security Council. 68 foreign affairs

China’s Infrastructure Play disgruntled bosses might otherwise trouble the current leadership of the Chinese Communist Party. Also called One Belt, One Road, the B&R is a massive undertaking that will shape Eurasia’s future. It will extend from the Pacific to the heart of Europe, stimulate some $4 trillion in investment over the next three decades, and draw in countries that account for 70 percent of the world’s energy reserves. So far, however, the United States has either fruitlessly attempted to undermine the initiative or avoided engaging with it altogether. That is the wrong course. Washington should in­ stead cautiously back the many aspects of the B&R that advance U.S. interests and oppose those that don’t. The United States does not have to choose between securing its global position and supporting economic growth in Asia: selectively backing the B&R would help achieve both goals. SILK ROAD TRIP The B&R comprises two main parts: a series of land-based economic corridors that China refers to collectively as the Silk Road Economic Belt, and the Twenty-First-Century Maritime Silk Road, which will traverse the South China Sea, the Indian Ocean, and the Mediterranean Sea. The first of the Silk Road Economic Belt’s corridors will connect northeastern China to energy-rich Mongolia and Siberia by means of a modernized rail network. The second, the China-Pakistan Economic Corridor, will link China’s western region of Xinjiang to the Pakistani deep-water port of Gwadar, on the Arabian Sea. Beijing will open up China’s southwestern provinces to the Indian Ocean by investing in rail, highways, ports, pipelines, and canals in India, Bangladesh, and Myanmar (also called Burma). To the south, China is developing what it has termed the China–Indochina Peninsula Economic Corridor, connecting Southeast Asia’s 600 million inhabitants to China’s economy through investments in ports and high-speed rail. Beijing also aims to complete two major rail projects: one will likely link Henan Province, Sichuan Province, and the Xinjiang region to hubs in Poland, Germany, and the Netherlands by way of Central Asia, Iran, and Turkey; the other, the New Eurasian Land Bridge, will connect China to Europe by way of Russia. Finally, Beijing is developing a corridor that will connect ports in Djibouti (where China is building a naval base), Kenya, Tanzania, and Mozambique to the Red Sea, the eastern Mediterranean, and central and southeastern Europe. (Although Beijing has not September/October 2016 69

Gal Luft publicly identified that corridor as part of the B&R, it has taken steps— such as purchasing a controlling stake in the Greek port of Piraeus and announcing a plan to back a high-speed railway connecting it to Serbia, Hungary, and Germany—that make its intentions fairly clear.) So far, state-owned Chinese construction and engineering firms have taken on most of the projects generated by the B&R. Backed by the deep pockets and political clout of the Chinese government, these corporate giants are hard to outbid; that will remain the case for the foreseeable future. As for financing, China has developed dedicated institutions to back the projects. The Asian Infrastructure Investment Bank, which opened for business in January, is perhaps the best known of these. Together with the Silk Road Fund, a B&R-focused Chinese government fund, and the New Development Bank, a multilateral development organization formerly known as the brics Development Bank, the aiib will lend nearly $200 billion to infrastructure projects over the coming decade. Most important, China has retooled its foreign policy in service of the Belt and Road Initiative. To encourage their support for the B&R, Beijing welcomed India and Pakistan into the Shanghai Cooperation Organization, a regional bloc; it is likely pushing for Iran to join, too. In Europe, China has upgraded its relations with the Czech Republic, turning Prague into the hub of its ventures on the continent. During a state visit in March, Chinese President Xi Jinping finalized business and investment deals worth some $4 billion with the Czechs. Driven by the belief that the B&R’s success depends on stability in the Middle East, meanwhile, China has recently taken an activist approach in the region that contrasts starkly with its historical reluctance to get involved there. In January, Xi became the first foreign leader to visit Iran after the lifting of international sanctions on that country; on the same trip, he met with the leaders of Egypt and Saudi Arabia. China has also attempted to mediate between the rival factions in Syria’s civil war; has supported Saudi Arabia’s efforts to defeat the Houthi rebels in Yemen; and, in December 2015, passed a law that will allow the People’s Liberation Army to participate in counter­terrorism missions abroad. WASHINGTON’S SNUB The B&R will guide China’s economic and foreign policy for the fore­ seeable future. Yet many China watchers in the United States have downplayed the initiative’s importance, suggesting that it is a pub­lic­ 70 foreign affairs

BOBBY YIP / REUTERS China’s Infrastructure Play Roadwork: a map of the Belt and Road Initiative in Hong Kong, January 2016 ity stunt meant to portray China as a benevolent power, a vanity proj- ect intended to secure Xi’s legacy, or an unwieldy boondoggle that China, which has struggled with some development initiatives in the past, will fail to execute. Nowhere is this underappreciation more apparent than in Wash- ington. Congress has not held a single hearing dedicated to the B&R; neither has the U.S.-China Economic and Security Review Commis- sion, a body that Congress created in 2000 to monitor bilateral trade and security issues. At both the 2015 and the 2016 meetings of the U.S.-China Strategic and Economic Dialogue, the highest-level annual summit held between the two countries, U.S. and Chinese officials detailed more than 100 areas of potential cooperation without mention­ ing the B&R once, and in their public statements, U.S. officials tend to refer to the initiative in vague terms. Washington has not only refused to acknowledge the importance of the B&R; in some cases, the Americans have attempted to undermine it, as when the United States futilely opposed the creation of the aiib. This passive-aggressive approach is misguided: it allows China to shape Eurasia’s economic and political future without U.S. input; it denies American investors opportunities to profit from major infra­ structure projects; and, insofar as it seeks to weaken the initiative, it could stifle a source of much-needed growth for Asia’s developing econ- September/October 2016 71

Gal Luft omies and Europe’s stagnating ones. As the failed U.S. attempt to pre­ vent its allies from joining the aiib shows, resisting China’s regional economic initiatives puts Washington in an uncomfortable position with some of its closest partners, many of which see the B&R as a useful tool for pulling the global economy out of the doldrums. U.S. officials should also be mindful of history: transnational infrastructure projects have often bred hostility among great powers when not managed collaboratively, as the grandiose rail projects of France, Germany, and the United Kingdom did in the years leading up to World War I. The United States’ failure to properly respond to the B&R is espe­ cially striking given that Washington inadvertently helped precipitate Beijing’s interest in the project. The “rebalance,” or “pivot,” to Asia that U.S. President Barack Obama initiated in 2011 has proved hollow, but it has nevertheless reinforced China’s sense of encirclement by the United States and its allies, as has the Obama administration’s de facto exclusion of China from the Trans-Pacific Partnership. Those actions killed many of China’s ambitions in the Pacific, leading Beijing to seek strategic opportunities to its west. In addition, by opposing China’s calls for a larger voting share at the International Monetary Fund in the first decade of this century, the United States pushed Beijing to establish a multilateral lender of its own. And by backing restrictions on projects that violated American environmental standards at the World Bank—where, in 2013, the United States supported a ban on funding for most new coal-fired power plants—the United States made room for Beijing to develop alternative institutions with the knowledge that it could find customers among its less scrupulous neighbors. Even the United States’ unsustainable federal debt played a role in the creation of the B&R: as it ballooned in the years after the 2008 financial crisis, the yield on U.S. Treasury bonds plummeted, pushing China, the world’s largest foreign holder of U.S. debt, to di­ rect more of its massive savings to infrastructure instead. BACKING THE BIG DIG Over the course of the next four years, Asian countries will need around $800 billion annually to build the transport, energy, and communica­ tions networks that they require to achieve their development goals. The investment provided by today’s development banks meets less than ten percent of that need—and even if the aiib and China’s other funding outfits live up to their promise, the money will still fall short. 72 foreign affairs

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China’s Infrastructure Play The United States should not allow its concerns about great-power rivalry to distract it from the challenges this deficit poses to global prosperity. Above all, Washington should not attempt to leverage its relationships with the Asian countries where China plans to back infrastructure projects to stymie the initiative’s progress. Such a course would grant countries such as Kazakhstan, Myanmar, and Sri Lanka inordinate power, creating new flash points between Beijing and Washington. Instead, Washington should approach the B&R with an open mind. U.S. officials should publicly acknowledge China’s initiative and the potential benefits it offers, provided that Beijing leads the effort trans­ parently and ensures that it works largely in the service of inter­national development rather than China’s own gain. The two countries should then The B&R could become find a bilateral forum—the Strategic and Economic Dialogue is just one op­ either a source of great- tion—in which to discuss a joint eco­ power competition or a nomic development agenda and come force for stability. up with a role for the United States that plays to its strengths. American defense contractors, for example, could provide physical security and cybersecurity services to B&R proj­ ects, and the U.S. military could help secure some of the more volatile regions where Washington already has military assets, such as the Horn of Africa.That would spare China the need to increase its overseas military presence and bolster the legitimacy of the U.S. forces working in those areas. The United States should reassure some of its allies, particularly those in Southeast Asia, where anxiety about China’s ascendance runs deep, that the B&R is largely a force for economic development rather than Chinese expansionism. And U.S. officials should seek a role for Washington in the aiib, either as a member of the bank or as an observer. Such a course would have a number of benefits. By cautiously em­ bracing the B&R, the United States could ensure that American firms and investors are not excluded from the opportunities offered by what might become the biggest economic development project in history. Washington’s engagement could also encourage some of the Euro­ pean, Japanese, and South Korean investors who have been reluctant to fund Chinese-led infrastructure projects to change their tune— which would have a broadly positive impact on global growth and, by extension, on the U.S. economy. And by becoming a more active par­ September/October 2016 73

Gal Luft ticipant in the B&R’s various related institutions, the United States would be better positioned to ensure that China’s projects adhere to international labor and environmental standards. Together, China and the United States are responsible for half of the world’s economic growth. At a time when the world economy is facing a potentially prolonged stagnation, Beijing and Washington would be better off harmonizing their development agendas than stepping on each other’s toes. DON’T SELL THE ROPE The United States, however, should not give the B&R its blanket sup­ port, since doing so would pose serious risks. First, it would feed Russia’s fears of U.S.-Chinese collusion, triggering paranoia in the Kremlin, where there is already concern about China’s push into former Soviet states, and Moscow could lash out in response. India poses a similar challenge. It recognizes the B&R’s economic promise, but like Russia, it is wary of China’s motives; specifically, New Delhi is troubled by the commitments Beijing has made to Pakistan and by China’s growing pres­ ence in the Indian Ocean and the neighboring countries of Bangladesh, the Maldives, and Sri Lanka. Any perception that China and the United States are attempting to change the status quo in the region might feed New Delhi’s anxiety and accelerate an arms race between China and India. In both cases, Washington should tread carefully, doing every­ thing it can to avoid creating the appearance of unwanted collaboration between China and the United States. As for the Middle East, the Gulf states will chafe at the prominent role the B&R could give Iran as a land bridge between Central Asia and Europe. So Washington should make clear that its support for China’s infrastructure push will depend on Bei­ jing’s commitment to preserving the delicate balance of power in the Persian Gulf, and it should try to ensure that projects that provide eco­ nomic boons for Iran are balanced by investments of similar benefit to the Gulf states. And to ensure that it is seen as a leader on global infra­ structure itself, Washington should launch and promote its own infra­ structure projects, such as the New Silk Road initiative proposed in 2011 by then Secretary of State Hillary Clinton to connect Turkmenistan, Afghanistan, Pakistan, and India with roads and pipelines. The greatest risk that the United States would face by supporting the B&R wholesale is that China could use American goodwill to advance its own ascendance to the United States’ detriment—above all, by attempt­ 74 f o r e i g n a f fa i r s

China’s Infrastructure Play ing to change the delicate status quo in Southeast Asia and the South China Sea. If China is indeed pursuing a long-term strategy to supplant the United States as the world’s dominant power, as some China watchers contend, then giving it the chance to take such a course would be a grave mistake. In response to the recent rejection of China’s historical claims to most of the South China Sea by an international tribunal, for example, Beijing might try to build dual-use infrastructure that would further mil­ itarize the region and intimidate its rivals there. That is something the United States should not tolerate, as no degree of economic integration can justify compromising the United States’ Pacific alliances. Chinese officials would likely recognize that U.S. involvement in the B&R would place some limits on Beijing’s ability to redraw the lines of the Eurasian economy. But for reasons of self-interest, they should still welcome American cooperation. Infrastructure projects tend to carry a high risk and produce only modest returns on investment; the B&R is too vast and expensive to rest on one country’s shoulders. American en­ gagement would clear the way for co-investments by U.S.-, European-, and Japanese-led institutions, such as the World Bank, the Asian Developm­ ent Bank, and the European Bank for Reconstruction and Development; it would attract private capital to China’s projects, as well. The Belt and Road Initiative could become either a source of great- power competition or a force for stability and collaboration. Beijing and Washington can ensure that the latter possibility wins out. In general, the best course for the United States will be one of selective buy-in: it should participate in projects that advance its interests, such as infrastructure investments aimed at improving intraregional trade in Southeast Asia, while avoiding or resisting those that undermine them. For its part, Bei­ jing should prioritize projects that benefit both China and the United States, and it should put vanity projects on the back burner. It will take a great deal of magnanimity for the United States to resist the urge to oppose such a grand strategic initiative as the B&R, espe­ cially since China’s westward push comes at a time when Washington is increasingly confused about its own role in the world. But the United States must remember that its response to the project will help deter­ mine the future of U.S.-Chinese relations and of the international or­ der. And as the global economy slows down and hundreds of millions of Asians languish with few hopes of escaping poverty, the United States must recognize that its fate is linked to that of the developing world— and that it should give its blessing to initiatives that will lift all boats.∂ September/October 2016 75

Return to Table of Contents Parting the South China Sea How to Uphold the Rule of Law Mira Rapp-Hooper July 12, 2016, marked a turning point in the long-standing disputes over the South China Sea. After more than three years of proceed­ ings at the Permanent Court of Arbitration, an international body in The Hague, a tribunal constituted under the un Convention on the Law of the Sea (unclos) issued a widely anticipated decision in a case the Philippines brought in 2013 to challenge China’s maritime claims to most of the contested waterway. Many observers had expected the tribunal to rule in Manila’s favor. They’d also expected China to reject the tribunal’s decision, since Beijing, a signatory to the convention, has long opposed the pro­ ceedings and had warned that it would not abide by the judgment. But few anticipated a ruling as definitive as the one ultimately handed down. The tribunal ruled in favor of the Philippines on almost every count, declaring nearly all of China’s maritime claims in the region invalid under international law. In so doing, the tribunal has brought a substantial amount of new clarity to a number of contentious legal issues and has set precedents that will affect the law of the sea for years to come. But it has also created an immediate problem: China’s defeat was so crushing that it has left Beijing few ways to save face. Chinese officials may feel that the tribunal has backed them into a corner—and respond by lashing out. That’s especially problematic because international law has no simple enforcement mechanism, so if China decides to defy the tribunal, neither it, nor the Philippines, nor any other interested states will be able to do much to induce China to cooperate. Washington and its MIRA RAPP-HOOPER is a Senior Fellow in the Asia-Pacific Security Program at the Center for a New American Security. Follow her on Twitter @MiraRappHooper. 76 f o r e i g n a f fa i r s

Parting the South China Sea local partners can still avoid a dangerous escalation, but only if they encourage China to abide by the ruling while making clear to Beijing that it has not been trapped by it. ENCLAVED The tribunal’s ruling was striking for several important reasons. First, in a surprising move, the tribunal held that all the territories in the contested Spratly Islands are reefs or rocks, not islands. That distinc­ tion matters, because under unclos, reefs cannot generate a claim to the surrounding waters or airspace, and rocks can serve as the basis for only a small maritime claim of 12 nautical miles. Islands, on the other hand, generate a 200-nautical-mile exclusive economic zone; states can also assert additional rights based on the extent of the continental shelves that underlie them. China insists that it has sovereignty over the Spratly Islands, and the tribunal did not rule on their rightful ownership. But by declaring all of the Spratlys’ features to be reefs or rocks, it significantly limited the claims China can make to the surrounding water and airspace. Under in­ ternational law, China’s outposts in the (now misnamed) Spratly Islands should be considered isolated enclaves floating in a part of the ocean that is in the Philippines’ exclusive economic zone, since they lie within 200 nautical miles of that country’s territory. And Beijing cannot use the Spratlys to justify any claims to the sur­ rounding waters. Next, the tribunal found that China had conducted illegal activities inside the Philippines’ exclusive economic zone. Chinese vessels, the tribunal ruled, had fished where they shouldn’t have, had dangerously approached some Philippine boats, and had prevented others from fishing and extracting petroleum within the zone. Nor was this all: the tribunal also censured China’s construction of artificial islands in the region, which it determined had caused severe environmental damage and heightened geopolitical tensions. Finally, the tribunal completely invalidated China’s claim that it holds historic rights to the South China Sea through its “nine-dash line,” a sweeping cartographic projection that encompasses as much as 90 percent of the waterway. The line was first unveiled by the Republic of China in 1947 and was adopted by China’s Communist rulers after they took power in 1949. Chinese officials have never explained the nine-dash line’s precise legal meaning, but they have repeatedly claimed September/October 2016 77

Mira Rapp-Hooper that it demarcates an area from which China can extract resources. The tribunal found that there was no basis for the rights that Beijing said underpinned the line, and that even if there had been at some point, unclos superseded those rights when China ratified it in 1996. The tribunal’s decrees decimated China’s maritime claims in the South China Sea and handed a great victory to the Philippines in the process. But this victory could prove a Pyrrhic one if China responds with increased belligerence. NO EXIT? As noted, most observers expected the tribunal to issue a ruling that generally favored the Philippines. But most also thought that it would leave China some room to maneuver. One way the tribunal could have done that would have been by implicitly invalidating the nine-dash line without definitively striking down China’s argument that it has historic rights in the region—by, for example, pointing out the line’s ambiguity and indicating that all of Beijing’s maritime claims must comply with unclos. Had the tribunal opted for such a “soft” repudiation, it would have given China a valuable opportunity to save face. In the wake of the ruling, Beijing could have formally defined the nine-dash line for the first time, reframing it as a narrow assertion of its enclaved territories and their maritime entitlements rather than an undifferentiated claim to the entire South China Sea. That would have brought China’s position in line with unclos while allowing Beijing to suggest to its domestic audience that it was not backing down. But since the tribunal rejected China’s claims to historic rights in the waterway entirely, Beijing now must either continue to reject the tribunal’s ruling wholesale or offer the Chinese public a fresh explanation of why its rights still stand—a tough approach, since Chinese leaders have long stuck to exactly the narrative that the tribunal rejected. The tribunal’s ruling that the Spratlys do not constitute islands under unclos closed off another opportunity for Beijing to save face. Before the decision was handed down, it seemed probable that the tribunal was going to forgo issuing any kind of ruling on Itu Aba, a Taiwanese-held feature that seemed more likely than any other part of the Spratlys to be a candidate for the legal status of an island. If the tribunal had indeed avoided this question, it would have given China another off-ramp: since China maintains a claim to Itu Aba through 78 f o r e ig n af fai r s

STRINGER / REUTERS Parting the South China Sea Repo men: Chinese soldiers standing guard in the Spratly Islands, February 2016 its professed sovereignty over Taiwan, Beijing could have argued, at least to the Chinese public, that the reunification of China and Taiwan would eventually entitle it to Itu Aba and therefore to a large swath of the South China Sea. Indeed, the exclusive economic zone that would have extended from Itu Aba under such a scenario would have covered many of the Spratlys’ other contested features. By ruling that Itu Aba, like all the other features in the Spratlys, is not an island, the tribunal eliminated that possibility and destroyed China’s ability to justify its expansive claims to the South China Sea in legal terms. DON’T FLOUT IT China has rejected the legitimacy of the Philippines’ case and the tribunal’s jurisdiction to hear it since Manila first brought its complaint in January 2013. Beijing has decried the tribunal’s decision as illegiti- mate, and it will certainly not abandon its outposts in the Spratlys or return the sand it used to manufacture them to the seabed. In fact, in the wake of the ruling, China landed civilian aircraft on some of those outposts, presumably to demonstrate that possession is nine-tenths of the law. China might now choose to flout the decision more explicitly by deepening its de facto control of the area. It could, for example, declare an air defense identification zone in the South China Sea, as September/October 2016 79

Mira Rapp-Hooper it did in the East China Sea in 2013, unsettling many of its neighbors in Southeast Asia. It could also start to reclaim land at Scarborough Shoal, which it wrested from the Philippines in 2012. (Former U.S. officials have suggested that China might be preparing to do exactly that later this year.) Chinese forces Washington and its could attempt to intercept a U.S. ship partners can still avoid a or plane as it conducts a freedom-of- dangerous escalation. navigation operation, raising tensions between Beijing and Washington. Or China could take actions that are less dramatic but nevertheless destabilizing. It could attempt to apply new domestic laws to the areas it controls. Or it could declare base lines, the formal points from which states measure maritime zones, around the Spratlys, suggesting another effort to administer the surrounding waters. Any of those actions would be deeply worrisome for China’s neigh­ bors and would demonstrate that Beijing is uninterested in playing by the rules of the international order. Even more troubling, however, would be if a defiant and defeated China chose to withdraw from unclos completely. It is possible for a country that is not a party to the convention to observe its provisions—the United States is the prime example. But if China withdrew, it would almost certainly portend Beijing’s rejection of the prevailing maritime order, setting the stage for further escalation of the many disputes regarding the South China Sea. China’s withdrawal from the convention would suggest not only that Beijing intends to ignore the tribunal’s ruling but also that it does not want to be bound by the many other maritime rights and provisions that unclos enshrines and that govern the free use of the global commons. There are good reasons for China not to take such a course. First, although the tribunal dealt a blow to China’s maritime claims—its rights to water and airspace and its authority to conduct certain activities there—it did not rule on China’s claims to sovereignty over territory in the South China Sea, which are beyond the scope of unclos. For that reason, Beijing can rightly argue that its sovereignty over the contested reefs and rocks it occupies has not been affected. It cannot legally continue to declare military zones in the water or airspace around the reefs it occupies, nor can it do so more than 12 nautical miles from the rocks it controls. But if Beijing emphasizes sovereignty claims instead of maritime ones, it could draw public attention away from its legal defeat. 80 foreign affairs

Parting the South China Sea Second, after several years of vigorous island building, Beijing has good reasons to avoid further alienating its neighbors. Many of those states—most notably the members of the Association of Southeast Asian Nations (asean)—have become increasingly wary of Beijing in recent years and have clearly supported resolving the region’s disputes through the mechanisms of international law. Were China to make aggressive new moves, it would deepen their sense of alienation, encouraging them to strengthen their militaries to further balance against Beijing. One other path could mitigate the sting of China’s defeat. The Philippines’ new president, Rodrigo Duterte, has signaled that he is interested in pursuing a more conciliatory approach to Beijing and has held out the possibility of resuming negotiations with China over resource sharing in the South China Sea. If Chinese President Xi Jinping accepts Duterte’s offer, he might be able to reach a deal with Manila that allows China to continue to claim some rights to resources in the far corners of the South China Sea. HOW TO TAKE THE EDGE OFF Satisfying as the tribunal’s decision may be for Manila, all parties now have a strong stake in ensuring that the situation doesn’t escalate. The judgment sets a significant legal precedent: the principles that guided the tribunal’s decision are now part of international law, and countries must embrace and reinforce them if they want others to uphold them in the future. The case concerned just a few of Asia’s many maritime disputes. Other countries, from Japan to Vietnam, are considering cases of their own, and the tribunal’s judgment must produce some positive change if they are to pursue their own arbitrations with confidence. And although the South China Sea disputes have deep historical roots, they have flared up in recent years because China’s growing military capabilities have meaningfully improved Beijing’s ability to press its claims. If China goes further by deliberately flouting the ruling or withdrawing from unclos, it could destroy the maritime order it has already damaged. There are several steps that the United States and its partners can take to reinforce the recent ruling without getting China’s back up. For starters, the United States and like-minded countries around the world should continue to declare their support for the legal process, calling on China and the Philippines to abide by it without taking a position on the underlying sovereignty disputes. The U.S. State September/October 2016 81

Mira Rapp-Hooper Department should work closely but quietly with other claimants that are considering bringing cases of their own to help them ascertain how this ruling might affect their efforts. And the United States should make clear that it will investigate the implications of the decision for its own island claims. The U.S. Department of Defense, for its part, should resume freedom- of-navigation operations that reinforce the decision after a pause of severalweeks to allow tensions to cool. It should conduct those operations without pomp or fanfare: their message should be legal rather than military, and their audience should be Beijing. Finally, U.S. officials should work closely with their Chinese coun­ terparts, encouraging them to negotiate with the South China Sea’s other claimants, particularly the Philippines, and to make progress on a binding code of conduct with asean, a long-sought multilateral agreement that would create a strict set of guidelines for behavior in the South China Sea. A code of conduct would likely also freeze the waterway’s political and territorial status quo, helping China reassure its neighbors that its long-term intentions are not threatening. U.S. officials should remind their counterparts in Beijing that these remaining avenues to negotiation will close if China makes another assertive move, such as beginning construction at Scarborough Shoal, but that if it does not, there will be ample room for cooperation between China and its neighbors and between Beijing and Washington. The United States and China should also press ahead with the confidence-building measures they agreed to at June’s U.S.-China Strategic and Economic Dialogue, to reduce the risk of an accidental clash between them. That would help each demonstrate to the other and to the region that neither wants to see a great-power conflict over the South China Sea or any other maritime issue and that both are committed to acting responsibly. More generally, U.S. officials should make clear that the arbitration decision has brought China to a legal crossroads, but that Beijing still has reasonable options available to it. Resolving the current showdown peacefully and legally would be in everyone’s interests—including, and especially, China’s.∂ 82 foreign affairs

SPONSORED SECTION JORDAN Photo: Andrei Seleznev | shutterstock A Truly Great Investment Destination Known for its peaceful global stance, Jordan is a strong ally of the U.S. and Europe, and an important hub for business at the crossroads of east and west. Enjoying excellent relations with its throughout the country, as the Syrian neighbors and the rest of the world, refugee crisis puts pressure on local Jordan is a modern, open and peaceful housing and services. By appointing a country within the Middle East. thoughtful diplomat and economist, Relations with the U.S. are particularly His Majesty King Abdullah II has strong, as they are offering partnerships endorsed a credible public figure of and donations to help the beautiful and whom great things are expected. proud country’s ongoing development. H.E. Dr. Hani Mulki H.E. Eng. Imad Fakhoury Last May, Jordan passed an In May last year, His Majesty King Prime Minister Minister of Planning investment law which allows foreign Abdullah II launched his Jordan of the Hashemite and International countries to invest in strategic 2025 vision, which includes over Kingdom of Jordan Cooperation projects in Jordan, such as energy and 400 policies and procedures to be infrastructure development. implemented by the government, the private sector, and civil As Minister of Planning and International Cooperation society organizations in the coming decade. Total U.S. aid H.E. Eng. Imad Fakhoury explains: “We are a country that to various Jordan projects in 2015 alone amounted to some continues to demonstrate resilience against the odds. We have $15,833 billion. developed a very clear socioeconomic blueprint thorough the Jordan’s competitive advantages are many. The country has Jordan 2025 national vision and strategy with which we aim an excellent strategic location where Europe, Asia and Africa to show increasing resilience to the issues in the region while converge, state of the art transport links, a dedicated and aggressively expanding prosperity for our citizens.” stable leadership, a firm commitment to private enterprise, Dr. Ziad Fariz, Governor of the Central Bank, commends and access to major markets. In recent years, incentives and the focus on free trade and the private sector over the past exemptions for investors have increased with the growth of five years. free zones and industrial estates, its 9.7 million inhabitants “We have undertaken great institutional, economic and include a young and well-educated population. political reforms that have helped us maintain stability within Jordan’s main industries include tourism, information Jordan, despite the difficulties surrounding the region,” he technology, clothing, fertilizers, potash, phosphate mining, says. pharmaceuticals, petroleum refining, cement, inorganic “Our focus on free trade and the private sector has ensured chemicals, and light manufacturing, and the country also the development of our exports; which has been an engine produces citrus, tomatoes, cucumbers, olives, strawberries, for growth. Education is a major factor in our development stone fruits; sheep, poultry and dairy goods. As a result of our higher education and human resources, we The appointment of H.E. Dr. Hani Mulki as Prime Minister are focused on exporting our services. In fact, the export of in May 2016 has led to renewed optimism for people services contributes to almost two thirds of our GDP.” www.worldfocusgroup.com

JORDAN SPONSORED SECTION The Leading Bank in the Arab World in Financial Inclusion The Housing Bank for Trade and Finance pursues a competitive strategy for expansion of its retail and corporate business. Established in 1973, The Housing Bank for Trade and Finance (HBTF) embarked on a journey of continuous growth and development to become a leading provider of a wide spectrum of banking services covering areas of corporate and investment banking, project finance, asset management, treasury, and commercial Ihab G. Saadi Chief Executive Officer and retail banking. Today, HBTF stands at the helm of the Jordanian banking sector and acts as a major contributor to economic growth, as the key financier of a number of strategic projects implemented by national enterprises and local companies across varied industries, from real estate and hospitality, to gas and electricity. Indeed, over the past several years, HBTF’s leading role in The New Headquarters for Housing Bank. corporate banking activities has been critical in the development of Bahrain, Syria, and Palestine, and through representative offices in UAE, Iraq, and Libya.” the Jordanian economy. The bank’s outstanding performance and leading role in the Meanwhile, as the largest retail bank in the country with an overall Jordanian banking sector has been recognized both in the region and internationally. In 2016, the World Union of Arab Bankers named market share of 15%, and a 38% market share of saving deposit the HBTF The Arab World’s Leading Bank in Financial Inclusion and the bank also won the award for Best Bank in Jordan 2016. In accounts, matched by an extensive network of 129 branches and 215 addition, Forbes Magazine rated the Housing Bank among the top ATM’s, HBTF enjoys the widest geographical reach and the largest “In 2016, The World Union of Arab Bankers named HBTF The Arab World’s customer base in Jordan and is thus able to provide the highest levels Leading Bank in Financial Inclusion.” of services to retail clients, in addition to commercial clients wherever Ihab G. Saadi, the HBTF’s Chief Executive Officer they are located in Jordan. On an international level, HBTF is present three of the top 100 solid companies in the Arab world. In a region prone to conflict, the Housing Bank for Trade and through branches and subsidiaries in the United Kingdom, Algeria, Finance is adapting both to the situation and to being proactive in the Key Facts of the Housing Bank. USD Million market. Ihab Saadi, the HBTF’s Chief Executive Officer, is prudently guiding the bank according to current interest rates while pursuing Item / Year 2014 2015 June 2016 an aggressive strategy for competitive growth and expansion of retail (Unaudited) and corporate business. For him, the bank’s contribution to Jordan’s banking sector rests both on the strategy of risk assessment and on Total Assets 10,712 11,174 10,814 the HBTF’s realization of its Corporate Social Responsibility. Total Deposits 8,552 8,950 8,506 The Housing Bank for Trade and Finance is well positioned as a market leader to offer highly competitive and successful financial Total Credit Facilities 4,201 5,327 5,638 products in the retail sector. The bank’s housing loans currently Total Equity 1,465 1,466 1,423 Profit before Tax 229 250 141 Net NPL 6.1% 4.8% 4% Coverage Ratio 107.1% 111.6% 118.1% Capital Adequacy Ratio 18.2% 17.0% 18% Return on Assets 1.63% 1.58% 1.8% Return on Equity 11.95% 12.01% 13.5% Market Capitalization 3,230 3,360 3,292 Profit before tax for June 2015: USD 122 million www.worldfocusgroup.com

SPONSORED SECTION JORDAN offer the lowest rate of 5.99% in the country. With nearly 40% of the and efficient. With a growing number of market share in savings, the bank can offer financing and transactions branches and ATMs and mobile banking at reasonable costs. To further leverage its edge on private banking, service, the Housing Bank for Trade and the HBTF will increase its number of branches from 129 to 138 by the Finance will remain in first place among end of 2016. Since 2014, customers have also been able to use mobile Jordan’s banks. The bank has also invested in new headquarters in banking services. Amman, the nation’s capital, further boosting to its growth. The prestigious building can accommodate up to 1,200 employees with a These key strengths are underpinned by skilled staff and built up area of 78,000 square meters, while the high-tech design also management, as well as the well-recognized brand name. includes an attractive flagship branch. In addition, the bank is expanding its commercial and corporate In the future, Ihab Saadi will continue to look at all business drivers business as well as project finance. Ihab Saadi points out the bank’s instead of focusing on just one. The bank will realize opportunities in involvement in successful infrastructure projects in the past, including all areas: corporate investment banking as well as retail commercial, corporate and other services. To remain aggressive in financing and “The country has a strong will to competitive in the banking sector, HBTF will offer new financial promote both international and products every year to address the changing needs of the market. For local investments.” HBTF’s Chief Executive Officer, Jordan is a country on the brink of realizing its upside potential and top maturity stage for investors: “If Ihab G. Saadi, the HBTF’s Chief Executive Officer you are thinking of going abroad to the Middle East, Jordan is your best bet. Jordan is a stable country, neutral, safe, and strategically high-profile energy projects: in 2003 and 2004, HBTF led a debt located, ” heFsoareyisg.n A airs Magazine - Final - OTP.pdf 1 6/21/16 3:02:32 PM syndication of $160 million to finance the gas pipeline project for the Housing Bank for Trade and Finance Amman / Abdali, Parliament Street, P.O.Box: 7693 Jordanian Egyptian Fajr Company, one of the largest syndications in Postal Code 11118, Amman, Jordan Tel: +962 6 500-5555 | Website: www.hbtf.com Jordan. In 2014, it led a second $120 million syndicate financing for the same company involving Liquefied Natural Gas (LNG) project in Aqaba. HBTF further supported the project by facilitating the import letters of credit of LNG for the National Electricity Company with well over $400 million a year. Today, HBTF continues work in Aqaba with its financing of the Ayla Oasis project development, one of the largest real-estate projects in Jordan to reshape Aqaba into a modern seaside-destination city. As a leading bank in Jordan, HBTF undertakes its responsibilities to attract even bigger projects strategic to the country that will helCp further in Jordan’s development. M While financial markets in the region’s neighboring countries arYe in turmoil, HBTF’s financing strategy with its careful selection and CM focus on collateral has proven successful: the bank has reduced its percentage of non-performing loans (NPLs) from 6.1% in 2014 MtYo just below 4% in June 2016. CY For foreign investments, Jordan confidently offers a healtChMyY banking sector, a legal framework and a business-friendly K environment. For the Housing Bank for Trade and Finance, the structure and incentives in Jordan are established and the bank is capable of structuring, supporting and financing projects and new businesses for foreign investors in Jordan. The country has a strong intention to promote both international and local investments. With small and medium-sized enterprises making up a big part of the business market in Jordan, there is a definite place for them in the portfolio of the Housing Bank for Trade and Finance. The bank has internally restructured and further developed this department. HBTF closely collaborates with organizations like the Jordan Loan Guarantee Corporation, Overseas Private Investment Corporation (OPIC) and the credit bureau CRIF Jordan, thus ensuring credible credit information and guarantees to make SME lending more viable www.worldfocusgroup.com

JORDAN SPONSORED SECTION ASEZA positioning makes Aqaba as a World-Class Gateway of Jordan for Business, Trade & Leisure A pivotal export center that links Asia Port Community, the Aqaba Marine Park, the Logistic Zone and the Southern Industrial Zone and the Airport Industrial Zone. The with North Africa, ASEZ (Aqaba Special contribution of the Aqaba Special Economic Zone Authority (ASEZA) to Jordan’s GDP grew by 56% between 2000 and 2015. Over the past Economic Zone), is Jordan’s gateway to decade, the department, headed by Chief Commissioner H.E. Nasser Shraideh, has attracted more than $21 billion in tourism projects, $3 global commerce and a premier tourist billion in industrial investments, $250 million in commercial real estate, $2 billon in logistics, and $340 million in health and education. destination, and is strategically located at Aqaba is part of the Golden Triangle of Jordan, along with the the crossroads of four countries and three desert of Wadi Rum and the ancient village of Petra (one of the Seven Wonders of the World). Due to Jordan's regional prominence continents. Aqaba spans approximately as a peaceful and safe destination, ASEZA is promoting several mixed-use developments and investments worth $16 billion. 375 square kilometers and is making H.E. Nasser Shraideh The number of hotel beds will have risen from 500 in 2000 to Chief Commissioner an estimated 8,000 by the end of 2016. ASEZA offers exclusive exciting headlines around the world. incentives to SMEs and global investors and is committed to creating The area’s growth in terms of people and sustainable development. economic worth is nothing short of mind-blowing, and it is shown in the improvement of the citizens' quality of life. The master plan that was established in 2001 from the vision of His Majesty King Abdullah II and ASEZ encompasses real estate, tourism, logistics, industrial parks, education, health and other investment sectors to create more sustainable growth. Specialized areas have already been established, including Aqaba Town (fast becoming Jordan’s second city), the Aqaba Development Corporation (ADC) ADC acts as a development driving force for Aqaba and Jordan. Aqaba Development Corporation (ADC) is run by a Jordanian team and supported by the international private sector and mulitnational companies. A private shareholding company governed by a board of directors, ADC is wholly owned by the Government of Jordan and ASEZA. Each has a 50% stake with a mandate to Eng. Ghassan Ghanem CEO develop ASEZ through building new or expanding existing infrastructure and the required superstructure, creating business enablers for ASEZ, and managing or operating its key facilities. As Eng. Ghassan Ghanem, CEO of ADC, acknowledges: At the crossroads of four countries and three continents. “Jordan’s stability has boosted the confidence of investors in the Southern Industrial Zone have been given the infrastructure needed to receive new industrial and logistic investment. The Aqaba, which aims to become a hub of imports and exports in the Southern Industrial Zone will be the backyard of the new relocated port — The Southern Port — which will have six berths to replace region.” the existing main port, as part of the Marsa Zayed project: Jordan’s largest ever mixed-used development, also based in Aqaba. Plans are afoot for a new group of terminals to be either expanded or constructed, including terminals for liquefied natural gas (LNG) at a cost of $140 million and another for liquefied petroleum gas (LPG) at a cost of $25 million. From one port in 2000, to 10 specialized ports in 2016, and 12 by 2018, the industrial possibilities are massive, as are the incentives for SMEs to establish themselves. The King Hussein International Airport has been developed in line with international standards and has a capacity of two million passengers per year. The industries in www.adc.jo www.aqabazone.com/en/ www.worldfocusgroup.com

SPONSORED SECTION JORDAN Opening up for major investment PBI Aqaba and the Aqaba Container Termanal are playing a major role in making the Aqaba International Industrial Estate (AIIE) an attractive location for investment. With its strategic geographic location, major forward his views: “Jordan has to prepare for seaport, international airport, and developed growing trade; this will happen domestically road network, AIIE is the perfect place for through a growing population, and manufacturing, logistics, storage, renewable regionally when the borders to its neighbors energy and energy efficiency initiatives, and countries, Iraq and Syria, are opened up. This related services. alone could result in trade growth of up to Registered in the U.K., PBI Aqaba 30%,” he says. “Privatization is another way develops and manages AIIE under a Sheldon Fink Jeppe Nymann Jensen of acquiring knowledge and His Majesty’s concession contract, and during the 11 years Chairman & CEO CEO, Aqaba vision calls for multiple opportunities for it has been in operation, it has marketed land PBI Aqaba Container Terminal investors to participate in tenders for public- areas spanning 700,00 square meters. It private partnerships.” boasts undeveloped land of 500,000 square meters and is currently Since APM Terminals won the concession of Aqaba Container in negotiations for a further million. Terminal in 2006, total investments have grown to a worth of $300 PBI Aqaba provides support and assistance to investors before million. The most significant investment is the quay expansion that and after commencement of operations. Investors at AIIE benefit was completed at the end of 2013 and doubled the quay length to from investment incentives which include a wide range of market 1,000 meters.” access (free trade) agreement; 5% fixed income tax on company net The eighth-largest potash producer worldwide by volume of profit; no withholding tax on dividends; duty-free input of all raw production and the only producer of potash in the Arab World, the materials, machinery and equipment and 70% foreign labor permitted automatically. Sheldon Fink, whose experience ranges from industrial and logistics development to power and water projects, and who also has extensive Aqaba International Industrial Estate Your Premium Business Development Partner Middle East management experience, explains the ethos: Aqaba International Industrial Estate (AIIE) is the premium location for “PBI is by far the most financially manufacturing, logistics and related services in the Hashemite Kingdom of Jordan. competitive industrial estate in Jordan and ranks very well internationally.” PBI Aqaba, the developer of AIIE is building a world-class base for small and medium industries in the field of: Sheldon Fink, Chairman and CEO, PBI Aqaba 1- Renewable energy, energy saving and other environmentally-friendly “PBI is by far the most financially competitive [industrial estate] industries. in Jordan and ranks very well internationally. We are competing with companies that are 10 times bigger. More than 65% of our 2- Material and components for infrastructure development. 1,000-strong workforce is Jordanian and once we have completed our growth trajectory we will have brought around $600 million to 3- Security related manufacturing. Jordan. 4- Logistics, storage and service companies benefiting from “PBI is looking to bring investors and companies to Jordan that Aqaba’s special location. produce renewable energy devices. In particular, we have been focusing on companies that produce solar energy and LED lighting. We’ve made PBI Aqaba provides support and assistance to investors before agreements with both U.S. and Chinese manufacturing companies to and after commencement of operation. help them move part of their operations here. I would recommend U.S. companies to take a serious look at Aqaba—we know how things work Investors locating at AIIE benefit from investment incentives, here and it’s easier to conduct business.” which include: At the Aqaba Container Terminal, CEO Jeppe Nymann Jensen puts - Jordan's wide range of market access (Free Trade) Agreements. - 5% fixed income tax on company net profit. - No withholding tax on dividends. - Duty-free input of all raw materials, machinery and equipment. - 70% foreign labor permitted automatically. FDI Magazine (Financial Times) in its Oct/Nov. 2015 issue, recognized AIIE as “Best in Class” in three categories among global Free Zones including Industrial Estates. For more information Tel. +962 3 205 8000 Fax +962 3 205 8003 www.pbiaqaba-jo.com emal: [email protected] www.worldfocusgroup.com

JORDAN SPONSORED SECTION Arab Potash Company (APC) is a firm in a we hit 2.35 million tons,” he says. “We million. are very happy with the work we did last As well as contributing a huge amount year to increase the capacity of the plant to the Jordanian economy, it also has without capital investment. Despite serious one of the best track records among challenges such as high energy costs, we have Jordanian corporations for work safety, managed to remain competitive within the good governance, sustainable community industry. development, and environmental Brent Heimann H.E. Atef Tell, Chairman, “We are financing two dams here in Jordan conservation. CEO King Abdullah II Design that will lower water costs and provide fresh Arab Potash Co. & Development Bureau water to local communities near our plants. A Huge Success Story We also have plans to expand by 250,000 Established in 1956 as a pan-Arab venture, APC operates under a tons a year to reduce our production costs. concession from the Government of Jordan that grants it exclusive “We operate in one of the poorest areas, if not the poorest area in the rights to extract, manufacture and market minerals from the Dead country — Jordan valley — so we feel that, one, it is very important to Sea until 2058. In addition to its potash operations, the company also hire from the local community; and two, it is important to give back. invests in several downstream and complementary industries related We have supported the local hospital and built several schools locally. to Dead Sea salts and minerals, including potassium nitrate, bromine We offer scholarships to any student in the area who scores highly and other derivatives. APC employs more than 2,200 workers in enough to go to medical school: anything we can do to enhance and Amman and Aqaba. help the local community. Our CSR over the past five years has been In recognition of its amazing work, His Majesty King Abdullah II about 10 million JD per year. Last year, it was about 8-9% of our total awarded APC an Order of Independence of the First-Class medal for net income. This is an extremely unusual percentage. supporting the national economy, employing Jordanians and corporate “Our growth prospects are positive because potash is a necessary social responsibility. ingredient for providing balanced fertilization for soil, and demand for CEO Brent Heimann is justifiably proud. “We’ve been producing food crops will continue to rise.” potash since 1982; this is by far our biggest year for production as King Abdullah II Design and Development Bureau (KADDB) An independent government organization that exists within the Jordan Armed Forces, the KADDB was established by Royal Decree in 1999 to be a center of excellence. The company has strengthened its industrial capabilities by partnering with local companies, as well as some of the world’s leading defense and technology firms, and is aiming to be the globally-preferred partner in designing and developing defense and security products and solutions in the region. “Jordan and KADDB have a lot to offer its partners and investors and can help generate very attractive ROIs,” Atef Tell, Chairman of KADDB says. “We also benefit from the Special Operations Forces Exhibition (SOFEX) and Conference Center to emphasize these unique assets in pursuit of our set goals and objectives.” Your gateway to Jordan and beyond Aqaba Container Terminal (ACT) www.act.com.jo www.worldfocusgroup.com

Return to Table of Contents Keeping Europe Safe Counterterrorism for the Continent David Omand Just before 11 pm on Thursday, July 14, a 19-ton truck turned onto a seaside promenade in Nice, France, where crowds had gathered to watch Bastille Day fireworks. The truck sped up, plowing into the people on the promenade. By the time French police shot the driver, the truck had traveled 1.1 miles, killing 84 people and injuring hundreds more. That attack came less than four months after three terrorists killed 32 people in explosions in the departure hall of Brussels Airport and a metro car near Brussels’ Maelbeek subway station. And it came eight months after a group of young men killed 130 people in Paris, in the deadliest attack on France since World War II. The self-proclaimed Islamic State, or isis, claimed responsibility for all three attacks. These attacks have exposed deep flaws in continental Europe’s approach to counterterrorism. European intelligence agencies do not share information with one another fast enough. Europe’s porous borders allow terrorists to cross the continent with ease. Other European governments have lagged behind the United Kingdom in developing capabilities and legal frameworks for digital intelligence gathering and in cultivating effective cooperation between their many agencies. In the aftermath of the attacks, continental Europe now has a unique opportunity to reform its intelligence infrastructure. Its leaders recognize the need for action. After the Paris attacks, French President François Hollande imposed a state of emergency, declaring that “France is at war.” A French parliamentary commission of inquiry into the Paris attack concluded that Europe was not up to the task of fighting terrorism, identifying failures in French intelligence and in DAVID OMAND is a Visiting Professor in the Department of War Studies at King’s College London and at Sciences Po, in Paris. He served as the United Kingdom’s Security and Intelligence Coordinator from 2002 to 2005. September/October 2016 83

David Omand the communication between intelligence and law enforcement bodies. Belgian authorities have accepted that their counterterrorism policies are inadequate: the Belgian interior and justice ministers offered their resignations over the evident failures in Belgian intelligence. European governments must now commit to lasting reforms, ramping up investment and breaking down barriers to information sharing. The United Kingdom’s vote to leave the eu will not make things easier. Yet it also creates an opportunity to create other, stronger networks for international cooperation across the continent and beyond. As they respond to isis’ threat, governments would do well to heed four main lessons from history. Governments must not forget the importance of understanding the enemy, formulating realistic goals that are consistent with democratic values, remaining flexible in the face of a threat that is unlikely to remain static, and, above all, forging partnerships based on earned trust. UNDERSTAND THE ENEMY Episodes from the 1990s and early years of this century illustrate the first key lesson of successful counterterrorism: the importance of understanding the nature of the threat. When intelligence agencies misdiagnose the danger after a plot is uncovered or after an attack, governments are less likely to invest to preempt future threats. Throughout the 1990s, despite several warning signs, British and U.S. intelligence agencies failed to grasp the potential significance of the threat from Islamist terrorist groups. In 2000, the British Security Service uncovered the first cell of Islamist bomb-makers in the United Kingdom. But it treated the discovery as a one-off event, since at the time it did not seem similar to other threats that the intelligence agency had encountered. Later that year, the Security Service arrested a Pakistani microbiologist who was seeking pathogen samples and equipment suspected to be suitable for making biological weapons. Once again, however, the intelligence agency viewed the episode as an isolated incident. In fact, British and U.S. intelligence agencies later discovered that it was part of an al Qaeda plan to develop biological weapons. It would not be until after 9/11 that the British intelligence and security community would grasp the potential scale of the threat from radicalized extremists and would invest enough resources in response. 84 foreign affairs

PHILIPPE WOJAZER / REUTERS Keeping Europe Safe En garde! Near the Eiffel Tower, Paris, March 2016 The U.S. intelligence community was similarly slow to understand the extent of the danger al Qaeda posed. In January 1993, Mir Aimal Kansi, a Pakistani jihadist, shot two cia employees outside the agency’s headquarters, in Langley, Virginia. The cia responded by fortifying its perimeter security, but its assessment of its counterterrorism strategy did not change. Just one month later, an al Qaeda truck bomb exploded under the North Tower of the World Trade Center, killing six but failing to topple the building. Intelligence agencies tend not to examine the causes of a near miss as seriously as they do the causes of an actual disaster. (Airlines, by contrast, routinely scour close calls for lessons.) Thus, after the 1993 attacks, they learned valuable tactical lessons—how to protect a building from attack, for example—but missed the larger message: that al Qaeda was actively plotting to cause mass casualties on U.S. soil. Five years later, al Qaeda blew up the U.S. embassies in Kenya and Tanzania, killing more than 200 people. Within weeks, U.S. President Bill Clinton ordered cruise missile strikes on targets in Afghanistan and Sudan. Osama bin Laden became a high-priority intelligence target. But the U.S. government still massively underestimated the risk of a terrorist attack on the United States itself and did little to strengthen homeland security; the subsequent attacks on 9/11 came as all the more of a shock. September/October 2016 85

David Omand When intelligence agencies understand the threat they face, they’re more likely to adopt prudent reforms. In April 1993, the Provisional Irish Republican Army detonated a massive truck bomb in the City of London, inflicting more than $700 million worth of damage, killing one, and injuring 44. The British authorities, who understood the nature of the threat after decades spent fighting the ira, assessed that the group had the explosives, personnel, and funds to continue to pose a danger. The case for boosting investment in security was clear. Within a few months, the British government had set up the “ring of steel,” a security cordon of checkpoints and surveillance cameras around the City of London that covered every entry point and major building. The police, local government, and private companies worked together to make London’s infrastructure more resilient. France also successfully adapted its counterterrorism strategy after the Armed Islamic Group launched a series of attacks in the 1990s, hoping to deter France from intervening in the group’s struggle to seize power in Algeria.The French authorities understood the group’s motives and the methods it was likely to use and rapidly strengthened France’s security apparatus. The government made it a crime to associate with terrorists, by providing them with a vehicle, for instance, and intro­ duced flexible pretrial procedures led by specialized counterterrorism magistrates and trials in dedicated courts. These moves made it easier to convict terrorists and deprived them of local support. Today, however, many European intelligence agencies have been slow to recognize the threat that isis poses. They have largely failed to combine the work of their domestic and external intelligence services and have failed to integrate the work of the police with that of their security and intelligence agencies. For too long, they have ignored the risks inherent in the Schengen system of open borders, which leaves their security dependent on the effective intelligence of their neighbors. As a result, networks of terrorists, hardened by fighting in Iraq and Syria, in possession of European passports, and hiding among Europe’s many undocumented refugees, now reach across the continent. KEEP CALM The second lesson is the importance of setting a clear and realistic strategic aim, one that European governments can meet while staying true to their democratic values. After 9/11, U.S. President George W. Bush declared that his administration would do whatever it took to 86 f o r e ig n af fai r s

Keeping Europe Safe destroy al Qaeda. He authorized measures unheard of in peacetime, including extraordinary rendition, detention without trial, torture, and the targeted killing of enemy combatants far from any recog­ nized battlefield. Yet much of the United States’ response to 9/11 has proved counter­ productive. The rhetoric of the so-called war on terror expressed resolve, but it led policymakers to overreact in their desperation to secure “wins.” Prevailing in a long war is not the same as winning tactical engagements or even a battle or two, and many of the extra­ ordinary measures the United States implemented, such as the use of torture, helped reinforce extremist narratives and damaged the United Many European States’ standing in the world. The intelligence agencies have invasion and occupation of Iraq helped produce a new generation of terrorists. been slow to recognize the The Bush-era drone program, which President Barack Obama has since threat that ISIS poses. expanded, has killed much of al Qaeda’s senior leadership and disrupted its ability to mount organized attacks. But the organization still represents a significant threat through its links to the al-Nusra Front in Syria, and the inevitable accidental killings of civilians in drone strikes have provided ready material for extremist propaganda. The 9/11 attacks also shocked the British government. (Sixty-seven British citizens died that day, the largest single loss of British life in a terrorist attack.) At first, the United Kingdom responded in a similar fashion to the United States; by October, U.S. and British armed forces were fighting alongside each other in Afghanistan. But their counterterrorism strategies soon diverged. As the United States pressed on with its “war on terror,” the British government adopted a counterterrorism strategy known as contest, which aimed to “reduce the risk to the uk and its interests overseas from terrorism, so that people can go about their lives freely and with confidence.” The government sought to reassure tourists, encourage investment, and stabilize markets. This approach emphasized the continuation and resumption of ordinary life. In contrast, the United States, in adopting extreme measures, preserved an abnormal situation, playing into the terrorists’ narrative. So far, the British approach has worked. Since 9/11, there has been only one major successful attack in the United Kingdom: the bombings September/October 2016 87

David Omand on London’s public transport on July 7, 2005, which killed 52 people. But the threat remains severe. British intelligence has thwarted several major al Qaeda attacks, including a sophisticated attempt to down U.S. airliners over the Atlantic in 2006. In Investing more in February, the British security minister digital intelligence said that at least seven attacks had been stopped in the previous 18 months alone. should be a priority. Through tight cooperation between the Security Service and the police, sup­ ported by the other British intelligence agencies, the government has successfully identified and prosecuted hundreds of terrorists (there were 255 terrorism-related arrests in just one year, between March 2015 and March 2016) without significantly infringing civil liberties. This lesson is an important one for Europe’s current leaders. Since the attacks in Paris and Brussels, governments have ramped up protection at crowded public events. But there are limits to what they can do. A combination of effective intelligence and protective security measures can almost eliminate the risk of attack for a small number of high-value targets, such as a world leader or a nuclear power station. (Isis maywell be considering such targets; last November, investigators found video footage at the apartment of a militant linked to the Paris terrorist attack of a senior official at a Belgian nuclear facility.) Yet there will always be a risk that terrorists will instead focus on softer targets—subway stations, cultural centers, concert venues—as they have recently done in Denmark, Belgium, and France. In response, authorities should do what they can to ensure that people feel safe when they use public transportation or congregate in public spaces, even if the government cannot eliminate the risk. They should deploy more armed police officers to areas of high risk and train rapid-response units to react to the sorts of attacks that have hit Mumbai, Nairobi, Copenhagen, Paris, and Brussels, where small groups of armed men have rampaged across the city. States of emergency, such as the one France imposed, can empower authorities to take sensible immediate steps to protect the public. But they do not represent a long-term answer. If measures such as the widespread deployment of soldiers on the streets persist for too long, authorities risk creating a new normal—one that the public will think terrorists have imposed on them. 88 f o r e ig n af fai r s

The Henry A. Kissinger Chair in Foreign Policy & International Relations at The John W. Kluge Center at the Library of Congress Henry Kissinger with Egyptian President Anwar Sadat Photo by U.S.I.A. LEADING SCHOLARS The World’s Largest Repository of Knowledge The Kissinger Chair is a distinguished senior research position in residence at the Library’s John W. Kluge Center. The chair engages in research on foreign policy and international affairs that will lead to publication, on any aspect of foreign policy or international relations involving the United States. One distinguished scholar is appointed annually. Scholars worldwide are eligible. APPLICATIONS & NOMINATIONS Now being accepted through November 1 loc.gov/kluge/fellowships/kissinger.html The Kissinger Program is made possible by generous donations of the friends and admirers of Dr. Henry A. Kissinger.

David Omand When officials communicate with the public about the risk of ter­rorism, they should temper expectations. It is difficult to stop those who are prepared to use extreme violence in the pursuit of an ideological end, especially if they are willing to die for their cause. Statements that pledge to eliminate the risk of a future attack may promise too much—and they may convince publics to accept weaker protections of their human rights in the pursuit of absolute security. Instead, governments should provide a truthful and convincing narrative to explain the causes of the attacks and lay out a clear road map for what the public can expect next. ADAPT AND EVOLVE A third lesson is that policymakers must remain open to adapting their strategies and methods as the jihadist threat evolves. To become more flexible, intelligence agencies should adopt a joint approach to counterterrorism, just as modern armed forces rely on joint mission planning and command. In 2003, for example, the United Kingdom created the Joint Terrorism Analysis Centre, in which staff from the intelligence agencies, the police, the military, and other government agencies analyze and process infor­mation together. One year later, the U.S. government launched a similar organization, the National Countert­errorism Center. The French parliamentary commission of inquiry set up after the 2015 Paris attack has called for the French government to establish a similar joint organization in Paris to overcome coordination problems between the many French police services and security agencies. The British Security Service provides a case study in how an intelligence agency can become more flexible. After the July 2005 attack in London, the agency set up eight regional counter­ terrorism hubs, based alongside police counterterrorism units, outside the city in the places it considered most vulnerable to radicalization. By decentralizing its investigations and cooper­ ating closely with regional police departments, the Security Service could better understand local communities. Other coun­ tries affected by jihadist radicalization should consider this model. In a promising first step, France has already announced the cre­ ation of a dozen regional “reinsertion and citizenship centers” to help identify potential jihadists and prevent extremists from rad­ icalizing them. 90 foreign affairs

Keeping Europe Safe LEARN TO TRUST The final and most important lesson is that countries must build partnerships based on earned trust. On the national level, policymakers should reexamine the relationships between police and intelligence agencies, between external and internal security and intelligence services, between civilian and military services, and between govern­ ment agencies and the private sector, looking to build trust wherever possible, by arranging more cross-postings, for example. On the international level, European governments need to earn the trust of partners inside and outside the eu to protect sensitive intelligence that can lead to shared leads and joint operations. And they need to establish good relationships with the U.S. technology companies that may hold data vital to stopping future attacks. To do so, they should negotiate bilateral agreements with the United States that provide the necessary legal safeguards for companies to respond to legitimate requests without breaking U.S. law. Eu governments should also consider revising their data-retention laws. An insistence, for privacy reasons, on short data-retention periods has hindered prosecutions in the past. Investing more in digital intelligence should be a priority. Intelligence professionals understand the value of having bulk access to Internet communications (between Syria and Europe, for example), being able to hack the devices used by terrorists and criminals, and using data-mining techniques to identify suspects. In 2010, for example, British authorities foiled the plans of a group of jihadists to bomb the London Stock Exchange by uncovering their electronic communications. But the revelations of U.S. and British government electronic surveillance programs by the former National Security Agency contractor Edward Snowden have diminished public trust in the use of such techniques. It is essential to rebuild confidence across Europe in the use of these methods— under strict legal safeguards and with independent oversight. Leaders should acknowledge the important role that intelligence agencies play and defend their methods as essential to public safety. To get smaller states on board, the larger powers, such as the United Kingdom and France, should reach out to them to offer support and training. The Club de Berne, a non-eu body where the heads of the internal intelligence services of the eu countries, Norway, and Switzerland meet regularly and oversee the Counter September/October 2016 91

David Omand Terrorist Group, which liaises with the eu, would be a good forum for coordinating such efforts. BREXIT BLUES? The United Kingdom’s vote to leave the eu, or Brexit, has introduced great uncertainty for at least the next two years over the United Kingdom’s relationship with Europe.The United Kingdom is Europe’s major intelligence power and has long benefited from its close coordination with the United States on security and intelligence gathering. It remains at the cutting edge of digital intelligence—it has around 5,500 people working in this area, compared with France’s 2,800 and Germany’s 1,000. At the moment, the United Kingdom enjoys excellent bilateral and multilateral relationships with other European intelligence services. That should continue, but politicians will need to show steady nerves to ensure that the security needs of Europe as a whole are placed above the political interests of its individual leaders. Policymakers must be prepared to cooperate internationally through informal networks, rather than waste time dreaming of new eu institutions, such as a European cia or fbi. An effective international network could develop among counterterrorism centers, for example, especially to share threat assessments (preferably based on an agreed set of warning levels). The various European national intelligence coordinators, working with the U.S. director of national intelligence, could form another such network. And the United Kingdom will remain a major player in the Club de Berne. Intelligence and security professionals across Europe sincerely hope that the United Kingdom will remain fully engaged, even as they understandably regret the wider disruption that Brexit will cause. The eu has done much to foster police and judicial cooperation while safeguarding fundamental rights. The common European Arrest Warrant speeds up the extradition of suspects between eu member states, a mechanism the United Kingdom used to return a suspected terrorist to Italy to face trial after the second wave of attempted attacks on London in 2005. Europol provides a valuable avenue through which police can liaise with one another. The Schengen Information System II allows police to share information about suspects, and the Schengen III information-sharing arrangements provide a network for sharing dna, fingerprints, and vehicle registration databases (the 92 f o r e i g n a f fa i r s