Country survey VI: Australia

Australia is a geographically large country, with the world's longest national coastline to defend, but a relatively small economy of some 17.5 million people. Since World War II, Australia has faced the dilemma of how to structure defence policy in the absence of an identifiable threat. Its policy of self‐reliance aims to permit Australia to conduct defensive operations in the event of low/medium level threats without depending immediately on its allies. This is to be achieved through the technological sophistication of defence equipment, a highly professional but small defence force and local industry support.

The burden of defence, measured as the share of defence outlay in GDP declined from about 3% in 1971–72 to about 2.3% in 1993–94. It has been the Government's policy to encourage the development of local defence‐related industry, in particular in areas such as: electronics/optics; communications and information technology; aerospace; shipbuilding and repair, munitions; and land vehicles. However, defence procurement has a small impact on the Australian economy as a whole.     

Kazakhstan's Nuclear Decision Making, 1991–92

This article examines Kazakhstani nuclear decision making from December 1991 to May 1992. The study is based on unique archival data and reveals how Kazakhstan's policy makers solved a nuclear dilemma that the nation faced in its first years of independence. The article reconstructs the internal policy-making process behind the decision made by President Nursultan Nazarbayev and his circle of advisors to accept non-nuclear status. The author argues that Almaty elaborated a deliberately ambivalent strategy toward the republic's nuclear status with the aim of maximizing the state's strategic interests. The article reviews external pressures affecting Nazarbayev's course of action and discusses policy options articulated during this period.     

Country survey XVII: New zealand's defence policy

New Zealand's current defence strategy, first expressed in NZ Government (1991), is one of "self-reliance in partnership". We outline the country's defence policy in historical context, examine its current defence expenditure and capabilities, and document the genesis of recent major changes in security policy. We pay particular attention to the role of explicit economic analysis and advice in the formation of these policy changes.     

Managing China's hegemonic ascension: Engagement from Southeast Asia

How to deal with China's hegemonic ascension is a matter of pressing policy concern and growing academic interest. With the premise that managing China's growing power is a security concern for other parties concerned and China itself, this article discusses how China and members of the Association for Southeast Asian Nations (ASEAN) have taken care to manage an increasingly stronger China through a combination of bilateral diplomacy and multilateral networks. The evidence suggests that ASEAN's engagement policy has largely been successful. The article then delineates an ASEAN‐style engagement strategy and draws some implications for the debate about how to cope with China in general.     

The future of European defence policy: An economic perspective

European defence policy has been dominated by politics. This paper shows how economic principles can be used to derive guidelines for the formulation of European defence policy. The inefficiencies of the EU's existing defence arrangements are identified. It is shown that there is scope for efficiency improvements in the EU's Armed Forces and its defence industries.     

The right place at the right time,or the right person in the right place?

South Africa's military has, since the First World War, been an oft-used and effective tool in the conduct of South African foreign policy, but this role has not always translated into power for Defence Department principals in its formulation. South African Defence Ministers for most of the country's history have played a minor role in the making of foreign policy; despite a change in this dynamic between approximately 1975–1990, the post-apartheid era has once again seen a diminishment of Defence's power in this arena. This article examines why Defence Ministers have generally been such weak players, with an eye toward disaggregating whether this was a product of interpersonal relationships with Cabinet and – most importantly – the Head of State, or whether this influence (or lack thereof) was more a function of South Africa's international standing. While determining who has influence on this process is difficult given the primacy of the national leader in making foreign policy and a lack of insider accounts by participants in the process, this article relies upon several interviews with participants and knowledgeable observers that help illuminate the process and Defence's role in it.     

Shielding the ‘Hot Gates’: Submarine Warfare and Japanese Naval Strategy in the Cold War and Beyond (1976–2006)

The build-up of Japan's military apparatus in the 1990s and 2000s has been often regarded by security analysts as indicative of a departure from the country's Cold War strategic posture. Japan appears to be engaged in a process of militarisation that is eroding the foundations of its ‘exclusively defence-oriented’ policy. In the case of the archipelago's naval strategy, such assessments overlook the longstanding significance of a core feature of its defence policy, namely the surveillance of maritime crossroads delivering the wealth of the country. The paper reassesses the evolution of the Japanese strategy since the Cold War by examining the development of the Japanese Maritime Self-Defence Force's submarine force, one of the key components of the defensive shield for these crossroads. The paper argues that with the changes in the security environment of the 1990s, Japan already fielded a mature force with state-of-the-art submarines, and that the rise of a new naval competitor aiming at controlling key strategic points along Japan's sea lanes reconfirmed the critical importance of submarine operations to Japanese national security.     

Dynamic regulation on innovation and adoption of green technology with information asymmetry

This study investigates a regulator's dynamic policy to motivate firms' research on and adoption of green technology. In the proposed model, a firm makes unobservable efforts and can hide the technology's arrival from the regulator to avoid adoption costs. We find that the optimal policy follows a simple structure and induces part-time efforts, rather than the maximal effort reported in previous studies. In particular, the regulator should offer no subsidy before the arrival of a technology report, provide a one-time subsidy contingent upon that report, and always set a termination deadline. At the deadline, the firm is forced to select an external option that is associated with social costs. The optimal report-based subsidy decreases with time. Under the optimal policy, the firm works until an effort deadline, makes no effort thereafter, and reports the technology as soon as it arrives. This study also characterizes the necessary and sufficient conditions under which the optimal policy reduces to one that leads, in terms of throughout time, to effort that is maximal or minimal. Our results indicate that policymakers should implement a policy that compensates firms more in the present and less in the future.     

Preventing the ‘Smiling Buddha’: British-Indian nuclear relations and the Commonwealth Nuclear force, 1964–68

This article examines two related issues: the policy objectives pursued by the British government to prevent India from developing nuclear weapons and the challenges presented to the Indian government in balancing Gandhian idealism with the reality of nuclear diplomacy. Building on recent research, the following issues are explored: the implementation of Anglo-American non-proliferation policy in Asia, the provision of security guarantees for India and Pakistan and the UK proposal to establish a Commonwealth Nuclear force as a means of maintaining British influence in the region. The analysis is placed within the context of Britain's overall defence policy during the 1960s focusing particularly on the British withdrawal from East of Suez and the development of nuclear-sharing arrangements within NATO. The article argues that the Wilson government regarded security guarantees for India as an obstacle towards the successful conclusion of a non-proliferation agreement. Britain's primary objective in advancing the concept of a Commonwealth Nuclear Force was not to increase Indian security in the face of Chinese nuclear threats but to explore possible options to internationalise Britain's nuclear forces after initial plans for a NATO nuclear force had failed.     

UNDERSTANDING CHINA'S ANTISATELLITE TEST

In discussing China's January 2007 hit-to-kill intercept of the Chinese weather satellite FengYun-1C, most American analysts sought the “message” for the United States—either by asserting that China's test was a deliberate step toward a comprehensive counterspace capability to offset U.S. conventional military superiority or an attempt to force the United States to the negotiating table on “the prevention of an arms race in outer space.” Chinese officials, after a long silence, eventually claimed the test was an “experiment” that was “not targeted at any country.” We traveled to China several times in 2007 and had a series of conversations with Chinese individuals knowledgeable about the history of this particular antisatellite program and with access to information about the decision-making process prior to and after the final test. These discussions were off the record, not for attribution, given the sensitivity of the subject. They reflected the views of some of the key institutions involved in the test from the State, the Communist Party, the People's Liberation Army, and aerospace experts involved in debris calculations. The information conveyed to us suggests that American commentators tend to place much greater importance on the United States as a driver in China's decision to develop the technology and conduct the test than do the Chinese.     

Impact of tax reduction policies on consumer purchase of new automobiles: An analytical investigation with real data‐based experiments

We investigate and compare the impact of the tax reduction policies implemented in the United States and China to stimulate consumer purchase of new automobiles and improve manufacturers' profits. The U.S. policy provides each qualifying consumer with a federal income tax deduction on state and local sales and excise taxes paid on the purchase price (up to a cutoff level), whereas the Chinese policy reduces the vehicle sales tax rate for consumers. We observe that these policy designs are consistent with the tax management system and the economic environment in the respective country. We analytically determine the effects of the two tax reduction policies on the automobile sales and the manufacturer's and the retailer's profits. Numerical examples are then used to provide insights on the importance of certain factors that influence the effects of the two policies. Finally, a numerical experiment with sensitivity analysis based on real data is conducted to compare the merits and characteristics of the two policies under comparable conditions. We find that the U.S. policy is better than the Chinese policy in stimulating the sales of high‐end automobiles, whereas the Chinese policy is better than the U.S. policy in improving the sales of low‐end automobiles. The U.S. policy is slightly more effective in increasing the profitability of the automobile supply chain; but, in general, the Chinese policy is more cost effective. The methodology developed herein can be used to evaluate other tax reduction policies such as those related to the purchase of energy‐saving vehicles and to serve as a decision model to guide the choice of alternative tax reduction policies. © 2014 Wiley Periodicals, Inc. Naval Research Logistics, 61: 577–598, 2014     

General models for the supplier's all-unit quantity discount policy

The purpose of this article is to investigate some managerial insights related to using the all-unit quantity discount policies under various conditions. The models developed here are general treatments that deal with four major issues: (a) one buyer or multiple buyers, (b) constant or price-elastic demand, (c) the relationship between the supplier's production schedule or ordering policy and the buyers' ordering sizes, and (d) the supplier either purchasing or manufacturing the item. The models are developed with two objectives: the supplier's profit improvement or the supplier's increased profit share analysis. Algorithms are developed to find optimal decision policies. Our analysis provides the supplier with both the optimal all-unit quantity discount policy and the optimal production (or ordering) strategy. Numerical examples are provided. © 1993 John Wiley & Sons. Inc.     

Saudi Arabia's defence offset programmes: Progress,policy and performance

This paper discusses the performance of Saudi Arabia's defence offset programmes. The Kingdom is involved in some of the World's biggest defence offset agreements and a review of the problems it has faced and the policies it has introduced provides a useful insight into that part of the international defence market where trade and development meet.

The paper reviews the origins and development of Saudi Arabia's major defence offset programmes. Saudi policies towards defence offsets are outlined before assessing the practical impact of the programmes themselves. The author concludes that Saudi Arabia's offset projects have had only a minor impact on the Kingdom's economy to date and makes a number of policy recommendations which are designed to enhance the utility of the programmes in the Kingdom's drive to enhance and diversify the technological base of its economy.     

The Indo–French strategic dialogue: bilateralism and world perceptions

Shared willingness to develop a stronger relationship, articulated by President Chirac during his visit to India in 1998, was not weakened by India's ensuing nuclear tests. Looking for enhanced power and global recognition, India and France share a common approach to realpolitik, and India's foreign policy is still searching for fresh opportunities to maximize influence in a new global order.     

The Chinese and Asian impact on Russian nuclear policy

Asia, where nuclear powers already interact (including North Korea), exerts a growing influence on the thinking and policy underlying Russia's current and future nuclear (and overall defense) posture. China's rise is forcing Russia into a greater reliance on strategic offensive weapons and tactical nuclear weapons. These in turn will reinforce its opposition to US missile defenses, not only in Europe but also in Asia. Russia must now entertain the possibility of nuclear use in regional conflicts that would otherwise remain purely conventional. It cannot be postulated blindly that nuclear weapons serve no discernible purpose other than to deter nuclear attacks by other nuclear powers. The strategic equation in Asia and in the Russian Far East convincingly demonstrates the falsity of this approach. Nuclear weapons will be the essential component of Russia's regional defense policy if not of its overall policies – and this also includes contingencies in Europe.     

Countering insurgency: Turkey’s policy toward the PKK’s transnational dynamics in Europe

Insurgents often develop international connections and benefit from external assistance from a variety of sources. Support from diaspora communities has long been considered one of the critical external factors in the persistence of insurgent groups. Yet how the counterinsurgent state addresses external support from transnational ethnic communities and what factors influence the state's policies remain understudied. By focusing on the transnational political practices of the Kurdish community and the PKK in Western Europe, this paper examines how Turkey has addressed the diasporic support for the PKK since the 1980s. It shows that three major factors – the composition of foreign policy decision-makers, their ideological contestation over the Kurdish question, and the European political context – have affected Turkey's policy regarding the PKK's transnational dynamics in Europe.     

A sequential dynamic pricing model and its applications

Consider a sequential dynamic pricing model where a seller sells a given stock to a random number of customers. Arriving one at a time, each customer will purchase one item if the product price is lower than her personal reservation price. The seller's objective is to post a potentially different price for each customer in order to maximize the expected total revenue. We formulate the seller's problem as a stochastic dynamic programming model, and develop an algorithm to compute the optimal policy. We then apply the results from this sequential dynamic pricing model to the case where customers arrive according to a continuous‐time point process. In particular, we derive tight bounds for the optimal expected revenue, and develop an asymptotically optimal heuristic policy. © 2004 Wiley Periodicals, Inc. Naval Research Logistics, 2004.     

Croatia's bitter harvest: Total National Defence's role in the Croatian War of Independence

Croatia's successful bid for independence was one of the defining moments of the immediate post-Cold War period. Nevertheless, the means that Croatia used to obtain independence remains relatively unexamined by academics. This article focuses on the early period of Croatia's bid for secession, and specifically the role that Yugoslavia's policy of Total National Defence played in facilitating its independence. Unlike in Slovenia, where the legacies of Total National Defence facilitated Slovenia's bid for secession, in Croatia the decision of its political leaders meant that the country largely neglected its positive legacies, resulting in a protracted four-year struggle.     

Acceptance sampling,imperfect production,and the optimality of zero defects

Acceptance sampling is often used to monitor the quality of raw materials and components when product testing is destructive, time-consuming, or expensive. In this paper we consider the effect of a buyer-imposed acceptance sampling policy on the optimal batch size and optimal quality level delivered by an expected cost minimizing supplier. We define quality as the supplier's process capability, i.e., the probability that a unit conforms to all product specifications, and we assume that unit cost is an increasing function of the quality level. We also assume that the supplier faces a known and constant “pass-through” cost, i.e., a fixed cost per defective unit passed on to the buyer. We show that the acceptance sampling plan has a significant impact on the supplier's optimal quality level, and we derive the conditions under which zero defects (100% conformance) is the policy that minimizes the supplier's expected annual cost. © 1997 John Wiley & Sons, Inc. Naval Research Logistics 44: 515–530, 1997     

‘Calmly critical’: Evolving Russian views of US hegemony

Russia has consistently opposed US hegemony since the early 1990s. Moscow has sought to create a world overseen by the UN Security Council and several power centres supporting an anti-hegemonic axis. Until recently, Russia's resources have been very limited. Russian opposition therefore was largely conceptual or a work in progress. Russian policy was largely reactive – and non-confrontational. However, the failure of the Russia-US relationship to develop practically has highlighted negative views of US hegemony, and the greater wealth generated through high energy prices is supporting an increasingly active Russian policy.