Author: DaveSharma

Trump’s Jerusalem move could help revive peace prospects

When Donald Trump recognised Jerusalem as Israel’s capital in a speech on Wednesday and announced plans to move the US embassy there from Tel Aviv, he overturned almost seven decades of US foreign policy.

Since Israel’s founding in 1948, successive US administrations — and indeed almost the entire international community, Australia included — have maintained that the status of Jerusalem is disputed.

It was 100 years ago this month that Anzac troops marched into Jerusalem, capturing it for the ­Allies from the Ottoman Empire in December 1917. The subsequent 30-year period as a British mandate territory came to an end with the UN partition plan of 1947, which provided for the creation of two states: one Jewish, one Arab. Jerusalem was to be governed by a special international regime because of its unique status.

The Jewish leadership at the time accepted the partition plan. The Arabs rejected the plan and attacked the newly declared state of Israel. When the fighting ceased, Israel was in control of the western half of Jerusalem while the eastern half, including the Old City, was controlled by Jordan. When Israel again came under attack from neighbouring Arab states during the Six-Day War of 1967, it ended up in possession of all of Jerusalem, which has been under full Israeli control since.

It makes no sense to deny the centuries of history that link the Jewish people to Jerusalem, the capital of the ancient kingdoms of Israel, or the revered place Jerusalem holds for the Jewish faith. UN resolutions that attempt to deny this connection are a disservice to history and a discredit to the multilateral system.

It also makes little sense to pretend the western part of Jerusalem is not sovereign Israeli territory — Israel’s Knesset, ­Supreme Court, the official residences of its prime minister and president, and many other state institutions lie within it.

Foreign dignitaries, including Malcolm Turnbull and Foreign Minister Julie Bishop, base themselves at west Jerusalem’s King David Hotel during official visits. As an ambassador, I would travel from Tel Aviv to Jerusalem several times a week to meet ministers and officials.

Even if Israel were to withdraw to its pre-1967 borders, it would ­remain in possession of west ­Jerusalem.

In this sense, the US President’s announcement recognising Jerusalem as Israel’s capital is, as he described it, “nothing more or less than a recognition of ­reality”.

And moving the US embassy to Jerusalem is an acknowledgment that under any possible future scenario, west Jerusalem will remain part of Israeli territory.

But Trump’s new approach does carry with it significant risks. Jerusalem is a hot-button issue in the Middle East and the merest mention of changes to its status are enough to set off violent upheavals throughout the Islamic world. Opinion in the Arab and ­Islamic worlds will be inflamed by this decision.

Fulfilment of a campaign promise alone cannot justify the risks. If this move is to support efforts towards a peace agreement, as Trump declared, rather than derail the prospects, several steps must accompany it.

First, the US should make clear that Trump’s statement is not an endorsement of Israel’s claim of sovereignty over the entire city of Jerusalem, and that it expects a Palestinian capital in the predominantly Arab neighbourhoods of east Jerusalem will emerge during final-status negotiations.

Jerusalem’s inhabitants include Israelis and Palestinians, and the city is holy to the three main monotheistic faiths. Its ­future status should reflect this character, and the US announcement should not be seen as prejudging this.

Second, the US and Israel must reaffirm, in word and deed, their commitment to maintain the status quo at the holy sites of Jerusalem, including Haram al-Sharif (Temple Mount) and the Western Wall, and ensure close co-ordination with the Jordanian religious body, the Waqf, that administers Haram al-Sharif. This is critical in addressing Muslim concerns about continued freedom of access to Jerusalem’s holy sites.

Finally, the US — having spent a year in preparatory talks and stocktaking, and much time talking about the “ultimate deal” — should launch a new Israeli-­Palestinian peace effort.

This effort should encompass an Israeli-Palestinian track but also extend to a broader peace between Israel and the Arab world. Neither is possible without the other.

With converging interests between Israel and the Arab world over the shared threats of Iranian expansionism and Islamic extremism, and a modernising leadership in Saudi Arabia, the prospects for a peace settlement are more promising than they have been for some time.

Israeli-Palestinian conflict dip­lomacy is characterised by stale thinking and stale approaches. Too often it has sought to treat the conflict as a simple border dispute, when the source of the conflict runs much deeper.

Too often it has ignored the ­realities on the ground, seeking to turn back the clock to a fictional 1948. And too often it has failed to confront the myths both sides use to frustrate progress.

One such myth, disturbingly prevalent, denies the legitimacy of the Jewish people’s connection to Jerusalem and the land of Israel, and patiently awaits the day that the Jewish people are vanquished in the Middle East. Another myth, favoured by a small but vocal minority, believes that the entirety of Jerusalem and the West Bank rightfully belong to Israel, and the Palestinians will eventually be forced to make way.

If accompanied by a serious peace effort and renewed commitment to the creation of a Palestinian state, Trump’s disruptive announcement could help puncture these myths, inject some sorely needed reality into this frozen conflict, and lay the groundwork for genuine progress.

Australia should proceed cautiously. We cannot play a lead role in resolving the conflicts of the Middle East. The most we can be is a supporting actor.

We should encourage the US administration to ensure Trump’s announcement is followed by moves that underpin a renewed peace effort, and we should support such an effort. But we should be gauging developments carefully and be in no rush to replicate US policy or move the Australian embassy to Jerusalem.

Published as an opinion piece in The Australian, 11 December 2017

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Superforecasting and diplomacy

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The day after Donald Trump effectively secured the Republican nomination for President, when Senator Ted Cruz withdrew from the race, back in the mists of time – 4 May 2016 – I conducted a snap poll amongst Australian diplomatic staff in Israel. The question posed: what odds did they now assign to Trump eventually winning the Presidency?

Some gave him odds as high as 60%. Some gave him as low as 2%. The average was 27% – not a bad prediction, all things considered. (Nate Silver, on the eve of the election, gave Trump a 30% chance of winning.)

After this snap poll, I distributed copies of Philip Tetlock and Dan Gardner’s excellent book, Superforecasting: The Art & Science of Prediction to each member of staff, and started reading it myself.

As I did so, an obvious realisation began to dawn. All diplomats are part of the ‘forecasting’ profession, but we do not spend much time at all consciously thinking about how we go about our forecasting, or how we might improve it.

We make (and are paid to make) judgements and assessments all the time about what the future is likely to hold, and its implications for Australia and Australian interests. But are we any good at it? How often do we get things right? Can we improve our performance?

I came away with several lessons and conclusions from my read of Superforecasting.

Firstly, the ‘forecasting’ business is deeply unprofessional, a little like the practice of medicine until the 20th century. There is no measurement, no data, no reviews or post-mortems (except in extreme cases – think Iraq WMD). Professional pundits are rarely assessed against their track record or held accountable for their failures of insight. With no assessment of effectiveness, there is no ability to identify which methods and tools work and which ones don’t, and hence no possibility of improvement.

Secondly, we offer judgements that are very squidgy. We tend to offer judgement and predictions in qualitative terms (“the risks of X are rising”), or as a description of factors at work (“on the one hand … on the other”), and often using indeterminate timeframes (“in the medium term”). The end result means that our prediction, whatever it is, is so hedged in with caveats, and so difficult to tie down, that it can never be proven wrong. As a result, our backs are covered, but the value of such analysis to decision-makers is limited.

Thirdly, we need to be more comfortable with degrees of likelihood, or probability, and less demanding for binary judgements. We often tend to say we think something is either likely to happen, or unlikely to happen, or could go either way (i.e. an even bet). But there is a world of difference (and hence implication) between saying something is 5% likely versus 40% likely. And if we say we think an event is 70% unlikely to happen, and it in fact happens, this does not mean our prediction is wrong – the corollary is that we thought there was a 30% likelihood of the event happening.

Fourthly, crowd-sourced judgements are nearly always better than that of an individual, no matter how talented or well-informed that individual. This is because of the asymmetry with which information is held, and the fact that countervailing biases tend to cancel one another out in large enough groups.

Newly-endowed with the wisdom gained from Superforecasting, the Embassy staff agreed to embark on a forecasting exercise on questions and topics that fell squarely within our work responsibilities.

We posed ourselves 33 questions, from domestic politics (will the composition of Israel’s government change? will a Palestinian unity government be formed?), to the peace-process (will direct, final-status negotiations resume?), to the risks of regional conflict involving Israel. Each of the questions is time-bound, and for each we were required to give an answer on  the basis of a percentage likelihood. We’ve structured the scoring to incentivise more confident answers (so someone who predicts something with a 90% likelihood gets more points than someone who predicts it with only a 60% likelihood, but conversely loses more points if their prediction turns out to be wrong).

One of the questions we asked ourselves, for instance, was the likelihood of a Resolution being adopted by the UN Security Council which condemned Israeli settlement activity before 20 January 2017 (we asked this question back in October). Some people put the odds of this as high as 60%; others as low as 5%; and the average (or crowd-sourced) answer was 33%. It turned out that this in fact happened  – UNSCR 2334 was adopted on 23 December 2016.

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Most of the questions have a timeframe out to 1 May 2017, so we will only be able to assess our effectiveness, and identify any hidden ‘superforecasters’ amongst us, at that point.

But already the exercise has fostered some fresh curiosity, and instilled some extra discipline, in our work.

It has thrown a light on what are the more important and consequential questions we need to answer, and the links between some of them.

We now throw around probabilities when we talk about scenarios (“80% likely”), rather than just reaching for qualitative terms whose ambiguity is high (“probable”).

We adjust our estimates in response to new developments and evidence, recognising that predictions cannot remain static.

Most importantly, it has instilled some humility. We’ve recognised that the future is, by definition, unknowable, and that even low-probability events will happen from time to time. As a result, we should never put too much faith in forecasts, and we should always be prepared for scenarios at odds with conventional wisdom. (And 2016 should have brought that home to all of us involved in some way in international politics.)

As a new Administration takes office in Washington, we have a whole new series of questions and scenarios to ponder, including in the Middle East. The forecasters will be busy.

 

Thomas Piketty’s Capital and the year 2016

Thomas Piketty’s study of income and wealth inequality, Capital in the Twenty-First Century, was a big hit in 2014. I got to it rather late, only in 2016. But as I ploughed through it, it occurred to me that Piketty’s book actually had a lot of insights to offer into the tumultuous political year we have just lived through.

Piketty has a lot of data and theory to offer on the current nature of income and wealth distribution in advanced western economies. (The Economist did a very good precis of his book, which you can find here: http://www.economist.com/blogs/freeexchange/2014/02/book-clubs). But his most insightful observations come with his review of economic history. If I came away with one conclusion, it is that the post-war golden age of steady economic growth, low inequality, shared prosperity, and high social cohesion may be grinding to an end.

Piketty points out that for most of modern human history, say from the year 0 to the year 1700, the world’s population, and the world’s economy, were basically stagnant. Population grew by about 0.1% per year, as did economic output, meaning that – on average – per capita incomes barely budged between the height of the Roman Empire and the dawn of the Industrial Revolution. Intuitively, I think we know this to be true – that the average standard of living of a subject of the Ottoman Empire in the year 1700 was not markedly different to his Roman cousin living during the time of Jesus.

When growth is so slow, both in demographic and economic terms, each generation tends to replicate itself – in terms of wealth, occupation, social class and economic structure. The children of blacksmiths become blacksmiths themselves. The land-owning gentry bequeath their wealth to their children. Domestic staff give birth to domestic staff; farmworkers to farmworkers. In such a society, inherited wealth matters greatly (since the economy grows little), social hierarchies are rigid (and largely reflect inherited wealth), and social mobility – the ability to climb social classes over the course of a generation or generations – is almost non-existent (usually achieved only through marriage). Expectations are low accordingly. People “know their place”. Of course, fortunes are still made and lost, but the macro picture is overwhelmingly static. This is the world which the characters of Jane Austen and Balzac inhabit, and which Piketty evokes.

This world began to change gradually around 1700, with the onset of the industrial revolution, and then in a more accelerated fashion in subsequent centuries. So in the 100 years from the outbreak of the First World War (1913) to 2012, world output grew by 3% per year on average, world population by 1.4% on average, and per capita income by 1.6%.

Though these low single-digit figures do not sound especially dramatic to our modern ears – and indeed are what we have come to expect of a modern and healthy economy – the cumulative effect has been transformative. Per capita output growth of 1.5% on an annual basis means that over the course of a generation (thirty years), the children are 50% wealthier than the parents. This implies major changes in lifestyle and employment. New goods, services and professions are created. New fortunes are made in new industries. Old industries are disrupted out of existence. We only need to look back to 1986, and think about the demise of Kodak and the rise of Apple since, to realise this is true. When coupled with strong demographic growth, the result is an exceptionally dynamic and fluid society, especially by the standards of most of human history.

The two factors together – strong demographic and strong economic growth – play an equalising role. They are a fount of opportunity, and break down the importance of inherited wealth. They generate avenues for the creation of new wealth. Every generation is different and must in some sense construct itself, rather than replicate its predecessor. In such a scenario, social hierarchies are fluid, not fixed; mobility is high; and the vagaries of birth are less important in determining one’s fate and station.

On top of this, the twentieth century was also a period of massive wealth destruction. Two world wars, hyperinflation, the Great Depression, physical devastation, and the wrenching social and policy changes needed to mobilise and wage ‘total war’ cut huge swathes through the fortunes of many, largely destroying the aristocratic and landowning classes of Europe. It was a great social leveller.

We tend to look back on the post-war period – with its high income equality, high social mobility, and high growth – as the norm. In fact, the last 70 years is more accurately viewed as the historical exception. And, as Piketty argues in his book, this golden age may be coming to an end. Inequalities in wealth and income distribution in wealthy western economies have been steadily widening over the past 30 years (the widening in Australia has been less than other western nations, but the trend is the same). Capital-to-income ratios are approaching 1910 levels. Wealthy economies may be shifting to a lower-growth path – one that may be more normal by historical standards, but which seems little short of stagnation on the basis of modern expectations. (Much here will turn on whether the ‘fourth industrial revolution’ – automation, AI and big data – is all it is cracked up to be, or a pale whimper when compared to the telegraph, railway, electricity and steam engine). And in a quasi-stagnant economy, inherited wealth will acquire a disproportionate importance in determining economic structures.

The picture Piketty paints is a sobering one, of an era of immense prosperity, equality, mobility and social harmony coming to an end. It is one where the benefits of economic growth increasingly accrue to the top-end of the income scale; where median incomes have not moved much in the past 30 years; where wealth is increasingly concentrated, and return on wealth is increasingly important as a source of income compared to paid work; and where one of the principal structural economic innovations of the twentieth century (and one which helped stave off the dire predictions of Marxism and class conflict), the emergence of a wealth-owning middle-class, is becoming increasingly squeezed.

As Piketty explains, the social compact which governs our nations today is built on the basis of meritocracy. We believe that inequalities based on individual talent and effort are justified or at the least acceptable; but that inequalities based on other factors (birth, social class, race, religion, inherited wealth) are much less so. In the decades that followed World War Two, work, study and application became the surest way to the top. The path was open to everyone. But if society is becoming less meritocratic, with less social mobility, our tolerance for these inequalities may begin to fray. Societies can certainly exist and function with high structural inequalities, but historically they have done so only with vastly different social compacts (usually some variant of what we would call the ‘class’ system, a set of rigid social hierarchies at odds with today’s norms and values).

It is fiendishly hard to characterise the global political upheavals of 2016 into a single category, or attribute them to a single set of factors. But I think what we are seeing, manifested in many different ways across many Western nations, are the political reverberations of the story which Piketty tells.

Rising insecurity; the sense of being ‘squeezed’; a loss of faith in the political system and institutions (and a belief they have been captured by certain groups); fading belief in meritocracy and social mobility; growing resentment towards ‘elites’; greater attachment to more traditional forms of identity – these are some of its manifestations. It is hard to characterise or diagnose politically, because it draws on the traditional well-springs of both the left and the right of politics. We tend to dismiss it as populism. In its policy prescriptions, it might well be, but the anxieties it reflects are held deeply, and find at least some of their basis in Piketty’s analysis.

Like all good books, Piketty’s Capital forces you to question whole swathes of received wisdom, and imagine alternative scenarios. What if the high productivity growth of the post war era does not return? What if economic inequality continues to grow? What if our political system is unable to adapt? Would we accept a society where meritocracy is no longer the main organizing principle? Piketty might not be right in his diagnosis, but the questions he poses are worth thinking about.

Disrupting the National Day

In three years in Israel, I’ve been to some truly great national day celebrations, and some not-so-great ones. They all follow a standard pattern: speeches, national anthems, flags, toasts, and a general reaffirmation of the importance of the bilateral relationship between country X and Israel.
I’ve got no objection to the formula as such, except that it is rather formulaic.
But I’m convinced – perhaps because I’ve spent too long in and amongst Israel’s start-up scene – that this product is ripe for an overhaul.
So this year, Australia is attempting to disrupt that most dogged of diplomatic institutions, the national day reception.
As a group and as a profession, we diplomats need to find new and better ways of communicating with the public and reaching our target audiences, in a much more crowded and contested media environment.
The old public communication methods – the press release, the speech, the on-the-record interview – are no longer enough. These set-pieces still have a role, but it is a shrinking one. As tools they are generally too slow, too clunky, too dry, and too mono-directional to keep pace with the modern media cycle or grab the public’s attention.
The more savvy diplomats are reaching for social media and other new media tools, and finding new ways to engage the public, create relevance, and have their message heard amongst the din.
The national day reception fits firmly within the old public diplomacy toolkit. It has a limited reach, the guests are always much the same, and it struggles to generate wider public interest or profile beyond the social pages, given its rather stale format.
This year, Australia is trying something different. We’re calling it Ozraeli – a brand that seeks to capture what is best about Australia, Israel, and our friendship and partnership.
Ozraeli is a month-long series of events to celebrate, in deed rather than word, what makes our two nations great.
Last Sunday we assembled a group of young Australian and Israeli volunteers to clean up a section of the shoreline on the Sea of Galilee. Over several hours we picked up and hauled away bags and bags of rubbish. We left behind a cleaner beach but also, we hope, some of the enthusiasm and can-do attitude which inspired the Clean Up Australia campaign.
On Friday we are introducing Australia’s most famous football code to Israel, and staging an Australian-rules football match in Park Hayarkon in Tel Aviv. There will be stands serving Australian football haute-cuisine (meat pies and sausage rolls) and the Australian national beverage, beer. A day at the footy is a quintessentially Australian experience, and we hope our Israeli friends will enjoy it as much as we do.
On 26 September we are holding the Ozraeli Gala event at the Peres Center in Jaffa. We’ll have Australian singers, comedians, musicians and of course food and beverages. Like our two countries, it is meant to be a fun and light-hearted, a celebration of our friendship. We are shaking up the guest list, asking people from all walks of life. My buddies from Hebrew class, the family vet, and my youngest daughter’s Gan teachers will be all be coming. We’re also giving free tickets away to the public, in an effort to get more engagement (tweet your best photo or meme about Australia and Israel to #Ozraeli).
We’ve also got three separate high-tech delegations visiting Israel this month, all looking for ways to partner with Israel’s innovation ecosystem to build new products, disrupt old business models, and improve society along the way.
And on top of this, Australian Foreign Minister visited Israel earlier this month, affirming the strong and enduring friendship between our countries. Though in the ‘old diplomacy’ category, visits remain a traditional but still highly effective means of diplomacy. And Minister Bishop also found time to drop by our Landing Pad in Tel Aviv and talk with Australian entrepreneurs in Israel.
All up, Ozraeli is a month of celebration of the partnership between Australia and Israel, and some of the national traits that make us such good friends. The informality. The energy. The humour. The diversity. We figure you don’t need the speeches, the flags, or the national anthems to celebrate this closest of friendships.
First published as a blog post in the Times of Israel, 20 September 2016 http://blogs.timesofisrael.com/rocking-a-new-diplomacy-with-ozraeli/

Digital Diplomacy: What Could Possibly Go Wrong?

Several weeks ago I participated in a Digital Diplomacy Conference hosted by Israel’s Ministry of Foreign Affairs. It was really quite a good event: participants from around the world, and both academics and practitioners.

I was given (or perhaps this is how I chose to interpret my role) the task of pouring some cold water on the buzz – to talk about some of the challenges and pitfalls in putting all the enthusiasm and good ideas into action.

As you may have noticed from my previous posts, I’m a big believer in the promise of social media for diplomats. I think it’s essential if diplomacy is to reinvent itself and remain relevant in the modern age. Diplomacy is about the exertion of influence, at the end of the day, and social media tools, used wisely, enable diplomats to wield greater influence.

But I’m not so naive as to believe that such activity is without risks, to both you personally and your government. Sometimes the evangelists (and I count myself amongst them), in our enthusiastic efforts to recruit disciples, tend to gloss over the possibility that a digital diplomacy effort might all end horribly, in a veritable train wreck.

As someone at the conference said quite sensibly (Chatham House rules prevent me from identifying them), part of the trick with social media is that you need to “seek the edge”. There is no point using new media to just broadcast old media messages. You need to be interesting, insightful and relevant if you are to build a platform of influence. You need to give personally. Sometimes you need to be controversial. At the very least you need to be prepared to weigh in on the controversial issues.

But when you are out there, always seeking the edge, at times you will inevitably find yourself dangling perilously over it. With that in mind, here are some maxims I try to keep in mind when using social media as a diplomat. (I can’t call them rules as such, as I break them too often. But they do provide some guidance.)

Firstly, remember your limits.

As a diplomat, you are an actor, not a commentator. You represent a government. Tempting as it is, you can’t just weigh in on a trending topic and vent your personal views. This is a particularly fraught area when it comes to domestic politics. Like all diplomats stationed here, I have my own views and judgements about political developments in Israel. But these are for conveying privately, to my capital. Unless Australia has a particular equity at stake in the debate, it’s not my job to weigh in publicly and applaud or criticise.

You are also jurisdictionally limited. It’s your job to defend, explain, sell and provide context for your own country and your country’s policies, but only to the extent they relate to or are relevant for the country in which you are stationed. You are not some sort of super-spokesperson at large. It’s perfectly appropriate for me, as Australia’s ambassador to Israel, to articulate our long-standing support for a two-state solution. But it’s not my role to comment on terrorist attacks in Turkey or the US presidential race – that’s for my colleagues in Ankara and Washington.

Remember also that social media is for communicating current policy, but not for policy-making. If you want to change the policy, you’ll need to do it through the normal channels and processes, and make the case through your headquarters. You can’t just announce it via Twitter.

Secondly, acknowledge the risks.

Some of these risks are the same as for other forms of media engagement. There’s the risk that, in your efforts to package policy in the most compelling way for a local audience, you’ll inadvertently create “daylight” between you and your capital. And there are few stories the media love more than seemingly inconsistent messages.

There’s the risk that, by engaging with a negative story, you might give it a new lease of life, rather than letting it die a natural death.

And then there’s the risk particular to social media: that you’ll engage with your critics and trolls in a way that quickly becomes unedifying and undignified. No matter how right you might think you are, and how ill-informed your critics, it’s nearly always best just to let it go.

Someone at the conference claimed that the “half-life” of digital mistakes was far shorter than those committed in the old, analogue world. Reflecting upon that assertion, I could not disagree more. As those harrowing stories of careers ruined by ill-advised social media commentary testify, a digital mistake has an almost omnipresent quality. It can live and scar your life forever.

Thirdly, don’t delude yourself that foreign ministries are anything other than conservative by nature.

There will be digital czars in every one of them telling you that the culture has changed, that experimentation is encouraged, that mistakes will be tolerated, and that a hundred flowers should bloom. They mean well by this. But until social media is embraced as a mainstream platform for diplomacy, rather than seen as a sideline activity for those eager and inclined, they will not have your back.

When I think of the digital diplomatic doyens out there, I struggle to find evidence that they have gained in career terms from their significant digital impact. Tom Fletcher, the UK’s former ambassador to Lebanon, has left the foreign service. Gerard Araud, France’s ambassador to the United States, is old enough and senior enough to get away with testing the limits (as he says himself, he has nothing to lose as this is his last job: http://www.ft.com/intl/cms/s/0/9b49c0a0-6e9b-11e5-8171-ba1968cf791a.html#slide0).

But for those of us in more modest professional positions, we need to be patient.

Test the limits, but do not seek to destroy them. Do what you can to encourage digital diplomacy to become more mainstream, and make it an integral part of career progression. Help identify champions and role models. And seize upon the young people in your organisations, whose digital literacy and enthusiasm is a force to be harnessed for change.

Sykes-Picot and the modern Middle East

Two mid-ranking diplomats from the early twentieth century, each of whom died in relatively obscurity, have received an astonishing amount of bad press of late. Their names? Mark Sykes and Francois Georges-Picot, the British and French negotiators of the infamous Sykes-Picot agreement.

Reading some accounts, you could be forgiven for concluding that these two gentlemen are the sole authors of the current turmoil, tragedy and deep instability plaguing the Middle East. There have been countless calls from informed commentators urging a ‘re-negotiation’ of Sykes-Picot as a panacea for the region.

It is true that the compact at the heart of Sykes-Picot, later elaborated and codified in the Treaties of Sevres and Lausanne, partitioned the Ottoman Empire into constituent ethnic and national units. In this sense, the legacy of Sykes-Picot lives on, for better and for worse, in today’s map of the Middle East.

But before we seize on the ghost of Sykes-Picot as both sinner and saviour, some context is called for.

The defeat of the Ottoman Empire on the battlefields of World War One inevitably meant the dismemberment of that empire into nation-states, just as it did for the Austro-Hungarian empire. Without a doubt, the state boundaries drawn up by the victorious powers were artificial and sub-optimal in places. But to put the blame for the turmoil of today’s Middle East solely onto Sykes-Picot is a colossal analytical failure.

It is to misrepresent what is an epochal challenge to the very system of sovereign nation-states in the Middle East as a mere series of border disputes. And it is to mislead us into the conclusion that some tweaking of national boundaries, and possibly the creation of a new state here and there, would readily bring peace to the Middle East. Alas, the truth is much more inconvenient.

The dominant form of political order in the Middle East for millennia has been one based on empires – a metropolitan power ruling over other peoples and territories, in a hierarchical fashion – or one based on faith or religion. Egyptians, Assyrians, Babylonians, Greeks, Persians and Romans – all contested and ruled the Middle East as imperial powers, whilst the Byzantines, Umayyads, Abbasids, Crusaders and Ottomans ruled as imperial and religious powers.

So when, following the defeat and collapse of the Ottoman Empire, a Westphalian model of sovereign and equal nation-states was introduced into the Middle East, it was an entirely unfamiliar and foreign concept for the region.

States were brought into being that, for the most part, had never once previously existed as sovereign entities. People were brought under the rule of a capital or a ruling class to whom they had never previously been subject. And the concept of national identity, so familiar to Europeans, had to be consciously formed, learnt and inculcated.

Europe’s transition from an international system based on monarchies and empires to one based around nation-states as the core geopolitical unit was bloody and prolonged, taking hundreds of years and costing millions of lives. It is still not entirely resolved.

Little wonder, then, that the transition in the Middle East is not proving to be an easy one.

The nation-state system in the Middle East is a fragile one. National identity, never strongly-rooted to begin with, has been steadily weakened by failures of national leadership. Against this loss of legitimacy, older and more resilient forms of identity – religion, tribe, sect, ethnicity, and even gender – are re-asserting themselves as the basis for political order.

This is the real struggle underway today in the Middle East. It’s the struggle for the survival of the modern nation-state system, against deep and historic forces that seek the return of the older forms of political order.

This is why ISIS made such a show of demolishing a sand-berm on the Iraq-Syria border in 2014 and proclaiming it the death-knell of Sykes-Picot. They wish to erase the borders from the map, dismantle the nation-state system in the Middle East, and re-establish a caliphate.

You can disagree about where Sykes and Picot plotted state boundaries on the map. But seeking to adjust these boundaries is a folly, its simplicity misleading. Such a prospect will only fuel further conflict, whilst doing little to address the underlying driver of state weakness.

In a region as ethnically and religiously diverse as the Middle East, no map can be drawn that will satisfy every national ambition (unless we are prepared to countenance decades of bloodshed, persecution, and population displacement).

Instead, the current nation-state system, with all its imperfections, needs to be bolstered and made to work better.

The sovereignty and territorial integrity of the constituent states of the Middle East must be reaffirmed. Governments in the Middle East require help in earning the legitimacy and trust that can only come with providing their citizens a measure of security, dignity and opportunity. And, within the system of current nation-states, the rights of minorities need to be affirmed, and their security strengthened.

Stabilising and then strengthening the nation-state as the basic geopolitical unit of the Middle East is no easy task. It will take decades, require patience, and may well be beyond the scope of outside powers. But it, and not Sykes-Picot 2.0, is the only durable pathway ahead.

Published as an OpEd in the Times of Israel on 26 May 2016.

Disruption and #DigitalDiplomacy

I’ve talked before about how new technology is disrupting diplomacy, undermining some of the traditional monopolies inherent in the trade, and making it a much more contested vocation (see http://ausambisrael.com/2015/06/29/diplomacy-in-the-digital-age/). It seems clear to me that we all need to update our business model if diplomats are to remain relevant in the conduct of diplomacy. To survive, we need to conceive of ourselves in a new role: as part lobbyist, part spokesperson, and part thinktank.

I’ve since been giving thought, though, to how innovation and disruption might be harnessed as a positive force for transformation. In other words, beyond the threats, what are the opportunities for diplomacy inherent in this new world? This is necessarily a work-in-progress. But some decent answers to this question are integral to any credible articulation of ‘digital diplomacy’.

To start with first principles, I tend to think of successful disruptive innovations as falling into one of three categories.

Firstly, there are those innovations that disintermediate – which cut out layers of intermediaries and successfully bring producers and consumers, or buyers and sellers, closer together. This is your eBay, your Amazon for books, or indeed even the Internet at large. The intermediaries suffer, but the producers and consumers both benefit.

Secondly, there are those innovations which harness a previously underutilised or unexploited resource. This is the sharing economy. Outfits like Airbnb have harnessed the stock of underutilised housing to disrupt the hotels sector; Uber is doing the same for transport; Flexicar and others are doing the same for the car rental business; Snapgoods is doing it for high-end household appliances; and more creative platforms such as Expert 360 are doing it for the labour force – tapping skilled workers who don’t want the restrictions of a job but nonetheless have surplus labour to sell.

Thirdly, there are those innovations which create a genuinely new category of product, and which create a new demand or market entirely. Think of Snapchat or Facebook or Twitter here: who would have guessed there was such a latent demand, previously unknown and untapped, for communicating in this way?

If we take these three categories of disruptive innovation and apply them to how we think about diplomacy, where does it lead us?

Let’s start with disintermediation. Viewed on the downside, this is in fact one of the biggest threats to a diplomats role. The ability of Presidents, Prime Ministers and Foreign Ministers to text, telephone and direct message one another is a great example of disintermediation – they are disintermediating diplomats out of one of our traditional roles, as a conduit for communication.

But there is also an upside. New communication tools, and especially social media, allow us diplomats to engage directly with the public in the country we are trying to influence, often in quite a targeted fashion. We are no longer forced to work through intermediaries, such as the mainstream media or the foreign ministry. We can now take our case, our point of view, to the public direct. To do so takes a degree of bravery and media savvy. It requires a stomach for public debate and confrontation, and a thick skin towards the inevitable trolls. And it requires a supportive government at home. But the tools are now there to engage our target audience in a more direct and focused fashion than previously. Used smartly – and the best ambassadors around the world do use these tools smartly – this can be a huge asset.

How about an underutilised asset? Well, the backbone of any diplomatic service is its overseas presence. We own a lot of bricks-and-mortar infrastructure around the world. The flag and the chancery, the titles and the flummery, still count for a lot, as do the secure premises, secure communications, networks and contacts, and local expertise.

This – the infrastructure of our overseas network – is the great, underutilised resource. We need to broaden our conception of an embassy beyond just a vehicle for engaging in traditional diplomacy and the conduct of foreign relations. We need to move beyond the bread-and-butter stuff of third person notes, formal diplomatic exchanges and negotiations, and set-piece discussions, usually conducted with the host foreign ministry.

We should be utilising our overseas presence as a platform and enabler to advance interests across a much broader spectrum, and for a much broader set of stakeholders . Trade and commercial diplomacy have always been traditional partners in this respect, but we need to look much further afield. Australia’s decision to establish high-tech ‘Landing Pads’ in Tel Aviv and San Francisco, to help emerging entrepreneurs engage these high-tech ecosystems, is a great example of the sort of creative thinking needed. These Landing Pads are about exploiting and adapting a traditional embassy presence to support a whole new set of clients, in a way that is non-traditional but nonetheless firmly in the national interest.

Once you begin to think of the embassy network as a backbone of enabling government support for a whole lot of other, non-foreign ministry, interactions, your horizons open immediately. You might use the embassy to support collaborations in areas as varied as youth mental health, or medical marijuana, or surf life-saving (some areas where the Australian Embassy in Tel Aviv has been active). These areas will depend on the complementarities and opportunities that exist, but the trick is to think of the embassy as a facilitator of productive interaction and a broker of relationships, and to get more value out of the overseas network.

Lastly, new products. I think there is still a pretty pronounced tendency amongst us diplomats to consider the diplomatic cable or telegram – with its searing analysis and nuanced judgements – as the gold standard of our product. (We all secretly hope to produce the modern-day version of the George Kennan despatch from Moscow, which provided the intellectual underpinnings of the Cold War containment strategy.) Undoubtedly the cable still has its place, but the readership for this product, especially amongst senior decision-makers, has been in decline for years. We are in a much more competitive information environment these days, and we cannot rely on the supposed supremacy of our product alone to guarantee our views a hearing. People simply don’t have the time.

As a result, we need to embrace new ways of communicating important information and analysis to our political masters and stakeholders at home. Sometimes a Tweet can be enough to draw direct attention to an issue of importance. Sometimes a WhatsApp group is the best way to keep people updated on a developing issue. Sometimes Wickr is the most surefire way of getting a message through. Sometimes an Instagram photo says more than 1000 words could. And sometimes just sending on or re-posting a particularly good piece of news analysis – with a comment or two – is all that an issue requires, rather than seeking to reinvent the wheel. And then of course there are text messages, phone calls and emails – all legitimate methods of communication.

There is still, and will remain, a time and place and audience for well-considered and insightful diplomatic cables, but this should not be our default method of communications. For many issues, it is too slow, clunky, cumbersome and limited in its reach. Instead we need to embrace the full spectrum of communications and think about where our audience is and how best to reach them, and select our medium accordingly. Choosing how to say something is as important as choosing what to say.

My conclusion? The threats to the traditional practice of diplomacy are real. But the same forces of disruption that threaten the old business model also present opportunities. Seizing these opportunities, discarding some traditions, but remaining true to the underlying purpose of diplomacy – that is the challenge facing us today.

Innovation and Israel: Lessons for Australia

When Israel’s Chief Scientist, Avi Hasson, touches down in Australia tomorrow for a week of meetings and events, he will find a ready audience.

Avi, as well as his title as Chief Scientist, is also the head of Israel’s National Innovation Authority, and it is this title which more aptly describes his role in Israel. Avi is like the chief executive of Israel’s innovation system, an official appointed by statute but  who enjoys powers more closely resembling those of a Minister. His job is to ensure the Israeli economy, the ‘Start Up Nation’, remains one of the most innovative in the world.

Avi will find an Australian economy at a turning point. Though still strong, our economy is coming off the highs of an historic mining and commodities boom. We are searching for the next engine of growth – one that makes us of our highly-educated workforce, is export-oriented, pays sufficiently well to maintain our living standards, and harnesses our natural advantages as a nation. For this, we need a more innovative, creative and entrepreneurial economy. Innovation has become the new buzzword in Australia, with the Prime Minister due to deliver a major Innovation Statement next month.

This is why the experience of Israel is so relevant to our current economic debate.

Israel is indeed an innovation powerhouse, on any metric. 50% of Israel’s exports are in high-tech. Israel spends an OECD-high of 4.2% of GDP on research and development (R&D). Last year Israel attracted almost $2 billion in venture capital, more than any other country (including the US) on a per capita basis. Over 275 big multinationals have established R&D facilities in Israel, from Apple to Alcatel, Google to Philips. Israel has the highest density of start-ups in the world, with 1 for every 2000 people, and more NASDAQ listings than any country bar the US and China. For a small country, Israel punches way above its weight on innovation.

But – and this is where it gets interesting – Israel did not become like this overnight. Israel was not always destined to be an innovative, high-tech economy; quite the opposite, in fact. In the early 1990s, Israel’s economy was sclerotic, inefficient, and overly centralised.

Only as a result of conscious national decisions, taken from the early 1990s onwards, when staring down the barrel of a crisis, did Israel’s economy begin to change. Today, Israel has one of the most competitive and productive innovation ecosystems in the world. But this system has been built and engineered every step of the way. A start-up scene did not just emerge organically. National policy and national leadership brought about this transformation, harnessing strengths but within a coherent and consistent framework, where the incentives were all aligned and the obstacles and disincentives removed.

What are the secrets to Israel’s innovation system? It is a question I have spent the better part of two years in Israel thinking about. I think the answer can be broken down into four C’s: culture, capital, coherence and clusters.

Firstly, culture. It is true that Israel has some unique national circumstances which – though we would not wish them upon any country – nonetheless have contributed to Israel’s risk-taking culture. A small nation, lacking natural resources and surrounded by hostility, can only survive by dint of ingenuity, cleverness, and a degree of ‘chutzpah’. In Israel, ideas are prized, experimentation and creativity are encouraged. Failure is seen as valuable experience, not a character blemish. Social hierarchy is almost non-existent, so good ideas can come from anywhere within an organisation. Compulsory military service in a high-technology army, and the large degree of autonomy given to young soldiers in the field, further contribute. The small size of the Israeli market gives rise to a ‘global from day one’ perspective.

Secondly, capital. The ready availability of early-stage, high-risk venture capital drives a vibrant and thriving innovation ecosystem – without this, risky but disruptive ideas (the possible ‘unicorns’) never emerge from someone’s sketch on the back of a napkin. Israel is not naturally endowed with capital – it’s a small economy in a geopolitically risky environment. But it has managed to create a thriving venture capital sector through two major government initiatives. The first was the Yozma program in the early 1990s, which created Israel’s VC industry from scratch.

The second is the series of programs and funds now run by the Office of the Chief Scientist, which provides financial support to early stage start-ups without taking equity. This helps drive a sizeable pipeline of deals to feed the VC industry at the next stage of development. The Office of the Chief Scientist manages a budget in the order of $450 million per year (this equates to about $1.5 billion in Australian terms, given the relative size of our economy) to support industrial R&D and early-stage start-ups. This might look at first blush like generous corporate welfare. But in fact this spending delivers a very high return on investment when viewed across the economy. The Chief Scientist calculates that every dollar it spends to support R&D generates an additional $1.50 in private sector R&D expenditure and translates into an additional $5 – $10 of GDP generated. It is seen as a good use of public money.

Competitive tax policies and settings, which encourage and privilege venture capital over other forms of investment – in recognition of the outsized multiplier effect such investment has on the rest of the economy – also play a part. Getting the optimal policy settings in areas such as crowd-sourced equity funding, tax treatment of angel investors, and employee share ownership (ESOP) schemes has been critical to Israel’s success.

Thirdly, coherence. Creating an innovative ecosystem requires getting the incentives right and removing roadblocks across the policy sphere. Taxation, industry policy, science, education, financial regulation, immigration – all these policy areas need to be aligned. In Israel, Avi Hasson and his office provide the single point of accountability and responsibility within Israel for supporting innovation. He has a single mandate – to create the best environment for innovation in the world – and he has the authority to address the obstacles to making this a reality, and prevent new measures which would set it back. He is guardian and gatekeeper.

Fourthly, clusters. Israel is a small country, in size and population, with often no more than three degrees of separation. So clusters tend to form almost naturally. The military is a big part of life, and you often find people who served in the same military units then founding a start-up together. Beyond this, there is the connection between the academy and industry. Universities play a huge part in the innovation ecosystem, and do so enthusiastically. Researchers see potential commercial application as a vital partner in their work, not a distraction. Universities have in-house structures and specialists to help develop products and applications from research breakthroughs: they seek to value-add to their research before selling the IP out the door. Taken together, the close interaction between the military and industry and between the universities and the commercial world, and the characteristics of a small society, make for a high degree of collision and interaction. This is how ideas are formed, refined, improved and eventually commercialised. It’s like the whole country is a version of Silicon Valley. The government has taken steps to promote this – building a cyber hub in Beersheva, for instance.

What does all this mean for Australia? For me, the take-out is positive. Israel created a more innovative economy, and so can we.

Our baseline strengths to be a more innovative nation are good. We have strong research credentials and a highly-educated workforce. We have a sizeable and sophisticated capital market, supported by our large super funds. We embrace technology. Our population is still small enough to be manageable. We run a big migration program, meaning our country is also importing new talent and ideas. We too are a nation known for innovation and a healthy disregard for the usual way of doing things – disruption comes naturally to us. We are plugged into the growth markets of Asia, including through our network of recently-concluded FTAs and regional trade agreements.

Importantly, we have a high degree of political commitment and buy-in to now take the policy steps needed to realise our potential. Innovation has become a national priority, which means resources and political will can be mobilised behind it.

As we go about building a more innovative Australian economy, we need to ensure it remains uniquely Australian, and plays to our own natural strengths and advantages. We should not be seeking to replicate Israel or Silicon Valley or, indeed, anywhere else. ‘Cut and paste’ will not work. We will need to come up with our own policies and initiatives to foster more innovation.

But we can and should learn from the experiences of countries such as Israel, and adapt them to our own national circumstances.

Israel’s Chief Scientist, Avi Hasson, embarks on a one-week visit to Australia starting today (23 November 2015). He is visiting as a guest of the Department of Foreign Affairs and Trade, under the Special Visits Program.

Youth mental health, and what Israel has learnt from Australia

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Headspace: A New Australian/Israeli Start-Up

As we pass the first anniversary of the outbreak of last summer’s war with Gaza, people are quite properly remembering the suffering and pain that this war caused, in both Israel and Gaza.

Some of these scars are visible. Others, equally as painful, are hidden from the eye. We rightly remember the physical cost of this war. But the toll taken on mental health – and especially amongst young people – was equally high.

A few weeks back I attended the opening of the Headspace clinic in Bat Yam, the very first centre in Israel dedicated solely to treating youth mental health issues.

Any parent knows that the teenage and young adult years are some of the most difficult in a child’s life. It is a time of immense transition and challenge. Depression, anxiety, relationship breakdowns, bullying, military service, peer pressure, drug use, social isolation, self-image and sexuality – these are just some of the challenges faced.

Add to this the emotional toll of living in a state of war for over 50 days, and it is little wonder that youth mental health problems spiked in the aftermath of Operation Protective Edge.

Mental health issues are in fact the biggest health issue facing young people. One in four young people will experience a mental health problem by the age of 25. Suicide is the second most common cause of death amongst young people in Israel. Every day in Israel, on average, 17 Israelis attempt suicide. Hundreds more suicide attempts by teenagers go unreported.

These are sobering statistics, and they make a compelling case for improved mental health treatment for youth in Israel.

Headspace clinics were first established in Australia in 2006, with a view to improving the mental health of our youth population. The motto of Headspace is simple: “We help young people going through a tough time.”

There are now over one hundred Headspace centres operating around Australia, with more opening each year. The secret to the effectiveness of these centres is three-fold.

Firstly, mental health needs are just as acute and just as prevalent amongst youth populations as they are amongst the adult population.

Secondly, youth need their own treatment facilities for mental health. The stigma of mental health, insecurities, and family and societal pressures all mean that adult mental health facilities are not up to the task of dealing with young patients. A different environment and approach is needed – one that is friendly, accessible, private and non-judgemental.

Thirdly, early identification and treatment of mental health issues is essential. If options for early treatment are not available, mistakes and decisions are often made which have long-term and damaging consequences. The impact on the lives of those involved, their families, and society at large, can be immense, and stretch for decades. And the costs to the public health system are orders of magnitude larger.

In six short months only, Headspace Bat Yam has learnt these lessons and more. It has conducted over three hundred consultations and treated over two hundred patients. It has tapped a previously unmet and unmeasured demand for youth mental health services in Israel. And its early intervention model promises better lives and better public health outcomes.

Australia has been a proud supporter of these efforts. Not only has Headspace Australia helped establish the model here in Israel, but many Australian Jewish families – the Pratt, Lowy, Gandel, Saunders and Smorgon families – have provided financial support to this Israeli pilot.

We have taken to heart the view that the best way to ensure the future success of Israel is to help invest in Israel’s youth.

Headspace is a genuine example of an Australian/Israeli Start-Up – disruptive, innovative, consumer-driven, results-oriented, and life-transformative.