Are we losing out to evil?

It would be easy to think that the civilised word is losing out to the terrorists after the events of the past few days.

In Sydney the central business district is brought to a halt for almost 18 hours while a deranged gunman who claims he is connected with Islamic extremism holds hostages in a café. The siege ends in a hail of bullets leaving two innocent people dead.

In Peshawar, northern Pakistan, seven Taliban gunmen target a school and massacre 132 children and nine staff in an act so abominable it almost defies description.

And in the United States, Sony Pictures decides to scrap release of The Interview after hackers, almost certainly acting on behalf of the North Korean regime, threaten death and destruction on a 9/11 scale if  theatres show the movie, a comedy in which North Korean President Kim Jong-un is assassinated.

At first sight it seems ludicrous to put the third incident against the other two where so much blood was spilled, but I believe its long-term consequences for the West could be even more significant.

In the first two cases, the perpetrators paid for their crimes with their lives – little comfort to the victims and their loved ones, but at least they will never kill anyone again.

But with Sony the terrorist hackers (because that’s what they are) achieved their objectives without any danger to themselves. In fact they have probably learnt from their actions and are even more capable of striking again.

The group, which calls itself the Guardians of Peace, had already shown its abilities by hacking into Sony’s computer system and stealing a wad of emails, staff salary details and social security numbers which it published on the internet, as well as proof copies of five yet to be released movies.

The threat to movie cinemas seems less realistic, but it nevertheless had most chain owners running for cover. Before Sony’s decision to withdraw The Interview there had already been a string of cancellations of the scheduled Christmas Day opening in the US.

But what many terrorism experts fear is the extent to which the hackers could bring down crucial systems such as electricity grids, water and sewerage utilities and Government computer operations.

Could they, for instance, hack into a major dam’s network and flood towns and cities? At this point probably not. Government and utility computer defences are likely to be far more secure than that of Sony, which is already being criticised for not taking better care of its secrets.

Our leaders also seek to play down the fears. US President Barak Obama says there is no credibility to the hackers’ 9/11 threat – and he is almost certainly right. However, the extent to which terrorists can disrupt the normal running of society simply by threatening to do something, cannot be discounted.

Years ago, during the Northern Ireland troubles, a prominent British politician suggested to me that if just 10 per cent of a community’s population refused to be governed, the entire community would become ungovernable – in the digital age there is potential for chaos to be spread without a single person being physically present.

We are heading for very interesting times.      

Is Australia becoming too ‘China dependent’?

Treasurer Joe Hockey is known for some interesting quotes, but his recent suggestion that China will have a billion of its people raised into the middle class by 2030 stands out from the rest.

Given that China currently numbers 1.3 billion people and its population growth rate is falling (at just 0.47 per cent it is ranked 159^th in the world) there will not be many more Chinese around in 2030 than there are now. In other words Mr Hockey is suggesting that something more than 80 per cent of the nation’s population will be designated ‘middle class’ in just 16 years.

That would be an outstanding achievement, especially as the current estimation of the middle class in China is around 150 million people, mostly living in the capital and the eastern coastal cities.

Of course there is really no scientific definition of ‘middle class’ and it may be that people living a few percentage points above the poverty line will be counted as ‘middle class’ by the statisticians in Beijing, but leaving aside this argument it is the reasons behind Mr Hockey’s optimistic statement that are most concerning.

Once again the Treasurer is holding China up as Australia’s lifeline to continued prosperity as the century progresses. What is most worrying is that it is increasingly looking like the nation’s only lifeline. As Griffith University academic, Tom Conley pointed out in a recent article Australia is already the most China-dependent economy in the world.

The nation’s exports to China have grown from 8.5 per cent of the total in 2003-04 to 32.5 per cent in 2013-14 and with a free trade agreement in the offing they will grow further.

So, if things go wrong in China – economically or politically – then Australia will be hit harder than any other nation

Dr Conley says Australia is in need of a Plan B and suggests it should be based on a diversification away from the resource industries that that have provided the bulk of our exports to China in recent years.

Given the plunge in world prices, notably for iron ore, this make a great deal of sense, but I would add to it by suggesting the Federal Government should actively encourage exporters to look at other potential destinations to at least stem the growth in China’s market share.

The most obvious example is India – a nation similar in size to China but at the moment taking just one tenth of the goods and services we send to Beijing. Like China, India is becoming more prosperous and under the new Government elected in May is embarking on a program of rapid economic expansion.

Last month Indian Prime Minister Narendra Modi was in Canberra pushing for a free trade agreement. While he got a polite reception the fear is that our exporters, blinded by the Chinese ‘miracle’, will see no urgency in such a deal and put it on the back burner.

As Dr Conley gloomily concludes: “If policymakers simply believe that China will sustain Australia’s prosperity over the next 20 years, then many Australians will think there is no reason to change tack – until it’s too late.”