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National Security Long Term Insights Briefing – Submission to DPMC

Guest Post: Dr Reuben Steff – University of Waikato

In my opinion, a bunch of the topics relevant to our national security are mentioned in the consultation document (borders, terrorism, foreign interference, cyber, etc). I don’t engage each of these below; my notes are as much ‘food for thought’ as anything else. They may spark a thought or two down in Wellington. If there is anything you’d like to discuss further, please do not hesitate to get in touch with me.

I will also simply refer to my publications at points (and include the reference details) for those that wish to follow them up.

Specific comments:

(1) Ever-greater levels of instability, unpredictability and negative interdependencies

  • The international system is moving inextricably towards a greater period of instability and uncertainty. I’ll elaborate: COVID has proven to be a long-overdue systemic-level ‘wake up call’ for NZ – we are positively and negatively interdependent with the international system. Many trends, right now, are headed in the wrong direction at a time where the global community, such as it is, is either unwilling or unable to do not much to address them.
  • The trends I refer to include a weakening rules-based international order, shift in power and emergence of multipolarity (at both the global level but also, and perhaps more importantly, within a number of regional system); extreme weather events; economic decoupling in high-tech industries; backsliding democracies; cultural fragmentation in the Western world (albeit to varying degrees in different countries); ever-growing levels of economic inequality, and increased tensions over regional Indo-Pacific ‘flashpoints’ (including the South China Seas, Taiwan and North Korea) and the inevitable emergence of new flashpoints and likelihood of growing numbers of proxy conflicts.
  • When we combine the sheer number of interconnections, activity, complexity, and New Zealand’s over-dependence on international connections/logistics chains to drive its economy, all of this add up to a recipe for more global shocks on a more regular basis in the years to come. It is not outside the realm of possibility that the confluence of negative trends, great power competition, and more predictable and unpredictable global events or developments (including ‘black swans’ like COVID; a pandemic that was far from unpredictable but that was not being actively built into state calculations) could occur and intersect to threaten our seemingly secure and stable position down here and challenge our growth-led way of life.
  • This has implications for New Zealand’s foreign policy strategy, our national security (and related capabilities), interests, values and social and material resilience. And, as far as I can tell, we are far behind the ball both intellectually and materially in responding to it.

(2) Recognising the structural and systemic features of US-China great power competition/International relationships and institutions (such as the United Nations and stability in the Indo-Pacific).

  • The emerging neo-Cold War between the US and China cuts across all the topics identified in the long-term briefing; substantive global cooperation will wax and wane depending upon the state of US-China bilateral relations.
  • NZ’s long-term planning needs to recognise the outbreak of great power competition between the US (including its friends and allies) and China in the Indo-Pacific is a new long-term structural reality.
  • I’ve written and spoken on this topic. Refer to:

(3) Weak state capacity

  • Perhaps the greatest vulnerability NZ confronts is self-imposed; weak state capacity and resiliency. This is compounded by a number of domestic trends headed in the wrong direction, including growing inequality, a poor environmental record, low/moderate GDP growth/poor productivity growth, and economic reliance on dairy and tourism. Additionally, the costs of living are going up due to ever-increasing house prices and inflation (the International Monetary Fund forecasts that by 2025 real GDP and average incomes in New Zealand will be lower than 2019).[1]
  • Our weakness is revealed by our COVID-response: our health sector can barely deal with a relatively small COVID-outbreak and we could easily find our resources and capacities outstripped if/when a few different (whether international or domestic) crises break out in coming years/decades. A growing likelihood of this is increased given the cross-cutting overlapping trends identified in (1) above. Our low-tax economy, small military, teetering infrastructure and tendency to do things ‘on the cheap’ all contributes to a long-term vulnerability – we have little ‘surge’ capacity for times of crisis. 
  • While complete self-sufficiency for New Zealand is not realistic, investment in domestic manufacturing capabilities is prudent and increasing its storage capability in a wide number of areas (for example strategic fuel reserves, pharmaceuticals, fertilisers, basic food gains, munitions, etc) is essential in case international contingencies or developments cut off the flow of critical resources.

(3a) Emerging technology issues (for example artificial intelligence)

(3b) Emerging technology issues (technological decoupling)

  • I have an NZUS Council ‘Issues Paper’ on this topic coming out shortly. It outlines recent efforts by the US and China to use industrial policy to bolster domestic technological industries; the reduction of high-tech trade between them; explains that a digital Berlin Wall is rising between the US and China as both seek carve out spheres of influence pertaining to data and AI; forecasts different future scenarios and what each means for New Zealand.
  • It also cites statistics that show that digital/data trade is growing significantly in NZ which makes US-China decoupling in this area an issue of immense strategic significance to NZ.

(3b) Emerging technology issues (lack of domestic investment)

  • Investing in AI and robotics systems as part of our defence strategy and national resilience strategy is critical. If we do not do so, we will be forced to rely on outside parties rather than drawing on our own capability; an indigenous capability has multiple benefits, from providing solid logistical support, operational independence, EEZ coverage, a potential source for export revenue, etc.
  • AI and unmanned systems are logical for a small nation that has severe material deficiencies. At the ‘harder’ edge of power considerations, there will be no competition in a conflict between high-tech adversaries and NZ’s current defence capabilities. At the softer and peacetime end of the scale, AI and robotics have immense potential for environmental and humanitarian (post-disaster/search and rescue) operations and activities. 
  • As a small country with a massive EEZ, decent intellectual resources and solid manufacturing capability it is a no-brainer we should be investing considerable resources into modern robotics and software.
  • As I understand it, New Zealand is capable of developing, building and deploying such capabilities within New Zealand, both in the air and on/under the sea. But this capability is thin and necessitates government attention/prioritisation. Here, politics intervenes with fears of PR around ‘killer drones’ abounding. NZ’s politicians need to get over this, to explain the greater array of challenges that are emerging, and the clear benefits of acquiring unmanned systems and investing in an indigenous robotics industry.
  • A robust indigenous robotic industry would benefit NZ immensely across the board – economic development for non-conflict environments fisheries protection, sea exploration, search and rescue, etc, has the potential to transform the economy towards high-value technologies. If we don’t do this soon, we’ll miss out on getting a foothold in the value chains of the Fourth Industrial Revolution and our ability to deal with many of the issues identified in the long-term briefing will be undermined.  
  • Given the trajectory of US and Australian relations, and their increasing commitment to high-technologies, the window for NZ involvement to get in the door early on critical emerging techs could soon close. Given our exclusion from AUKUS (the technological co-operation aspects of it), it’s possible the horse has already bolted

[1] “IMF’s Fiscal Forecasts Make Grim Reading for NZ,” 21 October 2020. Available at https://www. nzinitiative.org.nz/reports-and-media/opinion/imf-fiscal-forecasts-make-grim-reading-for-nz/