The Turbulent Flight of Japan Airlines

I’m in Japan now on transit after a pretty turbulent Japan Airlines (JAL) flight. But that pales in comparison to the company’s own financial turbulence over the last few years.

Most began to notice the fledgling airline’s troubling trajectory in 2010, when its multi-trillion yen bust triggered one of the largest corporate failures in Japanese history.

In fact, the airline’s wings had been clipped much earlier. As early as the 1990s, once other Japanese airline companies ANA and JAS were authorized by the government to compete with JAL on both domestic and international route, and Japan endured an economic downturn, the company began posting operating losses. Key reasons for its declining profitability included rising pension and payroll costs as well as serving several unprofitable routes.

The company underwent several efforts to increase its profitability. It cut thousands of jobs and transferred parts of its operations to a new subsidiary in the 1990s, merged with JAS in 2002, an joined the Oneworld Alliance founded by several large airlines in 2007. Yet, since 2001, the company has received four major government bailouts and has struggled to stay afloat.

Since the bankruptcy in 2010, JAL has taken radical steps pull off a turnaround. It has drastically cut its flights, slashed pensions for employees and culled thousands of jobs. And, after a tortuous negotiation process, it entered into a joint business arrangement with American Airlines to offer customers greater benefits and travel options across the Pacific which began just last month. It also plans to launch a new route between Tokyo’s Narita International Airport and Boston Logan International Airport starting next April, making it the only carrier to link Asia and Boston directly with non-stop service.

Yet questions still remain over whether these measures will work in the longer-term. This year, for the first time, All Nippon Airways (ANA) overtook Japan Airlines to become the most popular Japanese carrier in terms passenger traffic. While ANA witnessed an increase of 1.6 percent in passenger volume, JAL saw a sharp decline of 12.6 percent. ANA’s massive investments in new technology and improved facilities and efforts to create Japan’s first low-cost carrier may see it steal an even larger market share in the next few years and further stall JAL’s rehabilitation efforts. If so, the airline should fasten its seat belts and prepare for a turbulent future ahead.

Thinking About US Strategy in Pakistan and Afghanistan

Following the siege on Pakistan’s naval airbase in Karachi, the voices calling for isolating or punishing Pakistan are growing ever louder. Hopefully, cooler heads will prevail.

From what has been revealed thus far, it is probably true that the militants penetrated the high-security naval facility with insider information; and perhaps even assistance from ex-servicemen or serving military personnel. This pattern of jihadist activity supported by elements of the Pakistani state is deeply troubling and all too familiar, given the recent killing of Osama bin Laden by American forces less than two miles from a prestigious military academy and sixty miles from the capital. The incident is also worrying because it illustrates that jihadists seem increasingly bent on targeting crucial parts of the Pakistani state, which raises questions about the security of the country’s nuclear arsenal.

Despite all this, those calling for the United States to isolate Pakistan, cut off assistance, or strong-arm Pakistan into ‘neutralizing’ its nuclear arsenal (whatever that means), are wrong. Like it or not, history has shown us that sanctions and isolation towards Pakistan only exacerbate mistrust, increase anti-Americanism and deepen Islamabad’s insecurity and consequent reliance on jihadist groups.

Furthermore, as others have argued, the jihadist strategy in Pakistan is designed to create the perception that the country’s security forces are unable to protect an increasingly failed state, thereby prompting the United States to increase its own military footprint in the country and increase pressure on Islamabad. This would further fan the flames of anti-Americanism, fill the ranks of jihadist groups and commit Washington to yet another quagmire. The United States should not take the bait, even if some hotheads inadvertently are.

A more nuanced strategy for the US in Pakistan needs to begin with a firm grasp of Washington’s interests in Pakistan and South Asia more generally. Washington not only wants to avoid Pakistan serving as a base for terrorist groups to attack the US or an actor in further illicit WMD proliferation, but sees its future economic and political development and further cooperation with India as a crucial part of a stable South Asian region. Realizing these interests requires an approach that achieves balance in geographic focus, time horizon and dimension. If the elements of the strategy outlined below seem trite, that is because they are. Most reports on US-Pakistan relations (see for example here and here) contain roughly the same recommendations, and there is a risk that they oversimplify complex policy problems and complicated ground realities. They are nonetheless worth noting to ensure the right mindset moving forward.

Simply put, the strategy the US should pursue in Pakistan has three parts: contain extremism; construct a long-term relationship with Pakistan; and create the space for regional peace and development.

First, the US should help Pakistan contain extremism to ensure that it does not act as a breeding ground for terrorist attacks in the US, cause a collapse or severe disruption of the Pakistani state, undermine the security of Islamabad’s nuclear arsenal, or stoke tensions and potential conflict with India. Given the divisions within the Pakistani state, divergent interests and deep distrust between the US and Pakistan, and the dominance of anti-Americanism in the country, this will likely be pursued through a range of alternatives, including military assistance, information-sharing, targeted drone strikes and and other covert or clandestine operations.

Second, the seeds must be sown for a broader long-term partnership between the US and Pakistan to promote trust and to further the interests of both countries. Potential avenues for cooperation should include new initiatives such as an agreement in US Congress to grant preferential market access to Pakistani textiles, increasing IMET program opportunities for Pakistani military officers, and reforming the way US assistance is disbursed and the programs it targets so that is is more transparent and effective.

Third, since the roots of jihadist extremism lie in Pakistan’s insecurities vis-a-vis other countries in its neighborhood (eg. the potential threat of a two front war with India and Afghanistan), any sustainable solution needs to have a strong regional component. That includes trying to foster peace between India and Pakistan, continuing to forge a strong partnership with India, and encouraging greater regional economic cooperation.

Perhaps most critically, even as it draws down from Afghanistan, Washington must ensure that the Afghan security forces are adequately equipped, and that political reform is sufficiently broad-based, in order to prevent civil war or the return of a Taliban-dominated state that could further destabilize Pakistan and lead to conflict between New Delhi and Islamabad. While policymakers are quick to point out that spending billions of dollars a month in Afghanistan is not sustainable for the United States, they should also remember that neglecting Afghanistan is not a sustainable solution either, since that approach in the 1980s turned the country into a breeding ground for terrorism and led to September 11. And while it is easy to be pessimistic about Afghanistan, there is growing evidence that pursuing negotiation may be a workable option, and that Afghans are feeling more positive about their country than they did in past.

In David Ignatius’ new work of fiction, Bloodmoney, the director general of Pakistan’s notorious Inter-Services Intelligence (ISI), General Mohammed Malik, muses about how Americans’ specialty is lying to themselves. The seething resentment toward Pakistan and the knee-jerk aversion to further resource commitments in the AfPak region in Washington may prevent the United States from pursuing a multi-dimensional, long-term strategy in Pakistan today. But US policymakers should not mislead themselves into thinking that anything short of such an approach will fix a fraught US-Pakistan relationship and lead to a more stable South Asia tomorrow.

Is Israeli Society Moving Away from Peace?

Israeli Prime Minister Benjamin Netanyahu addresses Congress today, 15 years since he last did so as prime minister. What has changed in Israel since then?

In his latest piece for Foreign Affairs, Daniel Levy notes some interesting statistics and trends within Israel over the past two decades that might affect the prospects for Arab-Israeli peace.

The article is valuable for two reasons. First, on an issue as sensitive as this one, it is important to try to unearth numbers to back up your claims regardless of how difficult that task might be. Mr. Levy has at least attempted to do so. Second, more time should be spent understanding the changing societal realities within Israel and the Palestinian territories rather than just focusing on the role of outside actors and domestic politics, lest grand strategy become out of touch with ground realities.

For these two reasons, I will quote extensively and directly from Mr. Levy’s article (available here) based on his research. Some of the trends he has found include:

• Righward shift: Over the last 15 years, Israel’s parliament, politics and public discourse have all shifted to the right.

• Demographic rise of Arabs and Haredi: The two fastest growing population groups are the Palestinian Arab community and the ultra-Orthodox Jews (known as the Haredi). The Haredi population has grown more than threefold over only 20 years, from 3 percent of the population in 1990 to 10 percent today. Estimates suggest that by 2028, Haredim will represent a quarter of all children in Israel under 14 and a third of Jewish children that age.

• Worries about ‘Democratic Frailty’: Many older, more established elite groups in the Israeli secular political establishment, academia, and media have a growing concern over what they see as Israel’s fragile democracy, driven by a sense that Israel lacks a set of universally shared democratic values among its increasingly self-segregated population. The influence of the Russian population on democracy, in his view, is especially worth noting. Almost 20 percent of Israeli citizens are immigrants from the former Soviet Union who have arrived over the past two decades. This Russian-speaking community, coming from authoritarian states, is relatively less at home with democratic politics.

• Expansion of Shas schools: There has been a rapid expansion of the state-funded but independent education system established by the ultra-Orthodox Shas party. Over the past 20 years, the number of Jewish primary school students enrolled at ultra-Orthodox schools has grown from just over 7 percent to more than 28 percent. This has great implications for Israeli society and its economy: the Shas system and other ultra Orthodox schools teach a narrowly religious curriculum that is less geared to providing pupils with the necessary skills to compete in a modern economy.

• Integration/Employment of Haredis and Palestinian Arabs: A combination of state policies and cultural norms has meant that both Haredi and Palestinian-Arab communities have low rates of labor-force participation: for example, only 40 percent of Haredi men and 19 percent of Palestinian-Arab women work. To compound the strain on Israel’s economy, Haredi men often spend a lifetime in state-subsidized religious education centers or yeshivot. One think tank report warns that if no state efforts are made to integrate these two populations, they will “deal a blow to Israel’s future as a developed and prosperous state”.

• Greater resonance of exclusivist policies: The tendency for politicians to exploit Jewish-Arab relations for political gain with anti-democratic and at times unashamedly racist legislative initiatives targeting the Palestinian-Arab community has found great resonance in the Israeli public. According to a 2010 survey by the Israel Democracy Institute, 86 percent of the Jewish public believe that decisions critical to the state should be undertaken only by a Jewish majority; 53 percent support the government’s right to encourage Arabs to emigrate from Israel; and 55 percent say greater resources should be allocated to Jewish communities than to Arab ones.

• Rise of ultra-orthodox settlement orientation: In the last 15 years, the population of Israeli settlers in the West Bank alone has more than doubled, from 142,000 in 1996 to over 300,000 today. The settler population in East Jerusalem, meanwhile, has grown from 160,000 to over 200,000 in the same period. The demographic makeup of the settlements themselves has also changed. While settlements catering to the ultra-Orthodox population barely existed in 1996, the two fastest-growing settlements today – Modiin Illit and Beitar Illit – are both ultra-Orthodox (their combined population is 80,000 today, compared to 10,000 in 1996). It is worth noting that the average age in Moddin Illit is ten years old, the lowest of any Israeli city. Clearly the political influence of the ultra-Orthodox settlers will only grow in the coming decades.

• Rise of Religion in the IDF: The Israeli Defense Forces, the state body responsible for the security of those settlements, has undergone quite a transformation. Since the 1990s, the number of religious soldiers in infantry units and among the officer class has grown steadily, such that a third of all IDF officers today are religious.

I’ll let readers decide and debate what the implications of these trends might be for Arab-Israeli peace, and to what extent they are worrying.