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Cyprus: The Mediterranean Pivot

CyprusBy Chiara Proietti Silvestri

In recent years the Eastern Mediterranean has increased its international strategic importance following significant discoveries of hydrocarbons. In this region the recent offshore findings of natural gas are radically changing its geostrategic and economic status. But before achieving the ambitious objective of becoming a net exporter of energy, the countries of the Eastern Mediterranean, and Cyprus in particular, must confront regional challenges and interests of the major powers in the area – be they economic, politico-strategic, or due to the required energy infrastructure.

Two years after the great discoveries of the Leviathan and Tamar fields off the Israeli coast in 2009, it was, in December 2011, Cyprus’ turn. The U.S. company Noble Energy reported an initial discovery of offshore gas in block 12 of Aphrodite, with an energy potential estimated at between 5-8 trillion cubic feet (140-230 billion cubic meters). Evidence suggests that this area is an extension of the Levant basin: it is still the subject of an initial exploratory phase, and these initial estimates are considered conservative, with the prospect of rising in the coming years. There is therefore a potential wealth for the island of enormous proportions. According to some experts, Cyprus could potentially be sitting on a goldmine of at least 60 trillion cubic feet (1.7 trillion cubic meters) of gas. Not considering the possibility of petroleum it could generate revenues of up to $400 billion once commercially exploited.

The declared objective of the government of Nicosia is to use the geo-strategic position of Cyprus, between Europe and the Middle East, to make the country a true energy hub, with a central role in commercial transit and in the provision of European energy. This is a perspective, however, that does not consider the tensions and several unresolved questions that could hinder the energy development of the island, essential in reviving an economy itself in deep crisis.

Cyprus oil concessionsFirst, the strong political destabilization resulting from the 1974 Turkish military invasion, which produced a de facto division of the island between the Turkish-Cypriot north and the Greek-Cypriot south. The discovery of energy resources in the southern part of Cyprus, as well as an absence of results from research conducted thus far into the offshore areas of the north, have added a new and relevant source of friction in relations between Nicosia and Ankara. The island’s peculiar political situation could therefore constitute a brake on the development of the country’s economy, capable of affecting decisions regarding investment by foreign companies, especially those who have strong interests in Turkey. The latter, in fact, threatened repercussions for those companies that intend to enter into agreements to exploit resources with the Cypriot government. Such is the case for Eni S.p.A. which has seen the suspension of all projects undertaken with Turkey, due to its exploration agreement signed with Nicosia in January. Ankara, in fact, maintains that such energy resources are located in international waters and that they should benefit all of the island’s inhabitants, and not only Greek-Cypriots. Turkish interests, profoundly connected to energy, therefore emerge. Furthermore, relations between Cyprus and Israel, in particular those relating to a possible project for the liquefaction of gas for export, feed the prospect of an energy partnership. This could provide an alternate route for transporting gas to Europe and Asia, obstructing the great Turkish mission to become a regional energy hub. According to several analysts, this prospect was one of the reasons behind the rapprochement between Turkey and Israel, which enabled the former to maintain its centrality as the country of transit, and the latter to optimize conditions for its gas exports. While in the long-term the economic advantages of cooperation between Nicosia, Tel Aviv, Athens, and Ankara might be more convincing, in the short-term, energy pressures feed tensions in an already established hot spot.

It is probable that Turkey’s firm stance on the Cyprus question is one of the reasons behind the Russian decision not to accept the bailout plan hastily proposed by Nicosia in exchange for licenses for the exploitation of gas fields. To this must be added, among others, the European position and the special relationship between Berlin and Moscow, sealed by the agreement on the Nord Stream gas line, which might have suffered setbacks if Putin had decided to approve a bailout plan for a member country within the EU. Moscow’s position, then, is understandable when considering the multiplicity of interests that the country shares with other regional players, such as Germany, Greece, and Turkey: these can be safeguarded only by a strategy of ambiguous realpolitik. Although the issue of the Cypriot bailout has put pressure on the relationship between Nicosia and Moscow, it is difficult to imagine a rupture of relations between the two countries, instead of a redefinition in the interests that still bind them. Moscow, in fact, has long-standing ties with the island of Aphrodite, ranging from banking and finance to real estate and military strategy. There are strong suspicions, for example, regarding the role played by Cyprus in the trafficking of weapons from Russia to Damascus.

Brussels, for its part, seems determined to impose comprehensive change on the Cypriot business model and on its banking system, thus affecting its status as a tax haven for the offshore investments of Russian magnates. Discoveries of gas in the Cypriot Sea represent a great opportunity for Europe to diversify energy supplies, with respect to Russia’s dominant role. Cyprus’s economic problems, however, which have led to the forced levy on bank deposits, also herald strong domestic discontent: the EU should not exacerbate the economic situation because, as the multiple demonstrations on the island show, anti-European sentiment is particularly widespread among the population and could become a source of political instability. This could obstruct a possible solution to the conflict with Turkey, a central obstacle in Ankara’s access to Brussels.

The framework outlined above seems far from optimistic given that, at least in the short- to medium-term, the European controls on bank accounts, the withdrawal of Russian support, and Turkish pressure all clamp the island in a vice that will only increase internal malaise and aggravate the downturn in the national economy. A situation which seems as if it will not improve until exploitation of the energy resources of the Aphrodite gas field is at full capacity, something that might require several years.

On the contrary, within an extended timescale the need for cooperation between the main players involved only increases due to pressures deriving from the stabilization of the Cypriot economy and the gradual exploitation of the rich intra-European gas fields. Turkey has already signaled to this effect: conscious of its role as transit towards international markets, Ankara has proposed to Nicosia its help in the development of gas, as long as the benefits of such discoveries should, as noted previously, be shared by all the inhabitants of the island. In conclusion, one aspect is more certain than others: without a resolution of the dispute over sovereignty of the island, an issue that has dragged on for 40 years now, eventual regional cooperation seems difficult to envisage.

Chiara holds the position of Junior Analyst in the energy consulting firm RIE (Industrial Research and Energy) of Bologna and collaborates with Energy Magazine. She holds a degree in International and Diplomatic Sciences from the University of Bologna (Forlì campus). Her interests mainly relate to energy issues, including energy policies in the Middle East, nuclear energy, and the processes of public debate and consensus. You can follow her on LinkedIn and Twitter (@ orienta_giovani).

This article was cross-posted by permission and appeared in its original form at TheRiskyShift.com.

The Falklands: The Carrier

 

Skis Up!
                                     Skis Up!

By Ben Brockschmidt

It has been over a month since Argentine President Cristina Fernandez de Kirchner called for the U.K. to give up the Falkland Islands to Argentina. While this could have been nothing more than an attempted distraction by President Kirchner from a multitude of domestic issues, the dispute over the islands is constant background noise for both countries. In the meantime a referendum on the future sovereignty of the islands is scheduled for March. What this latest uptick allows is an opportunity to look at the logistics of fighting on the other side of the world and the role of aircraft carriers in modern conflict.

During the Falkland Islands conflict in 1982, the UK deployed two aircraft carriers and a sizable fleet to the South Atlantic. Since then, the end of the Cold War and shifting priorities have changed the composition of military forces for both Argentina and the UK. There is ample research comparing the naval forces of 1982 with those of today, but the lack of a British aircraft carrier remains of particular concern. This disadvantage was evident during the intervention in Libya. The absence of a mobile platform to launch aircraft contributed to a more expensive conflict as RAF sorties were flown out of airfields in Southern Europe. The result was longer flight times, fewer missions, and higher rates of fatigue.

With the exception of the facilities maintained in the Falklands themselves, the region is as far away as the U.K. can get from its bases, and it won’t have the benefit of friendly airfields and support sites nearby. While the U.K. has significantly increased the units deployed in defense of the islands, its airfields are known targets.

During the gap between carriers (The first of the two new Queen Elizabeth-class carriers isn’t expected to undergo sea trials for at least a year), questions remain about the functionality of the future ships. The carriers in development lack capabilities that existed during the first Falklands conflict, such as aerial refueling, that are essential for lengthy engagements.

What turns aircraft carriers into a truly formidable force are the carrier strike groups and support craft. By themselves, carriers are offensive weapons and have limited operations. Strike groups combine a carrier with a mix of frigates, destroyers, supply ships, and other vessels. These ships ensure non-stop air operations while protecting the carriers from land-, air-, and sea-based threats. Under its current makeup the Royal Navy, while smaller than it used to be, still maintains a modern and efficient force with all the pieces of a carrier strike group in place, minus the carrier.

The next round of predictions on the Falklands Islands won’t start until after the referendum in March. Until then, the UK needs to identify how it plans to projects its power and defends its interests abroad – both while short a carrier, and in view of the carriers’ limitations.

A 2006 graduate of Illinois State University, Ben Brockschmidt moved to Washington, D.C., on a whim in 2007. Concurrent internships in the U.S. House of Representatives and U.S. Senate, Ben worked for Congressman Tim Johnson of Illinois (retired) who was a senior member of the Transportation and Infrastructure Committee (T&I). He is a 2012 CDE graduate of the U.S. Naval War College and today is the Executive Director of the Infrastructure Council and Director of Federal Affairs for the Illinois Chamber of Commerce.

This article appeared in its original form at TheRiskyShift.com

 

Read more with LT Kurt Albaugh’s examination of the effects the Falklands’ “Tyranny of Distance” had on the outcome of the war.

China’s Growing Role in Counter-Piracy Operations

China’s diplomacy at sea

By Jack Moore

The People’s Liberation Army Navy (PLAN) has maintained a counter-piracy presence in the Indian Ocean for four years. This begs the question: why is China becoming increasingly cooperative in counter-piracy operations?

The rise of China is one of the prominent issues of the day for scholars of International Relations of the day and it will continue remain so for the foreseeable future. The PLAN counter-piracy deployment is a fascinating component of the wider China debate, as it represents the first time that Chinese vessels have conducted a ‘far-seas’ operation to protect Chinese interests since the fifteenth century. Even more remarkable is the fact that the typically isolationist and paranoid Chinese Communist Party (CCP) is now openly cooperating with a variety of traditional foes in the area of counter-piracy; states such as India, Japan and the U.S. are now closely communicating and operating in conjunction with their PLAN counterparts in the Indian Ocean.

This raises a series of intriguing questions. From a Chinese perspective, what are the motivating factors behind this operation? Is it economic, political or geostrategic concerns that have driven the PLAN to cooperate in the Indian Ocean? Is this deployment merely benign in nature or does it imply an element of self-interest? Why is China cooperating over the issue of piracy when it refuses to align itself with international norms in other areas, for instance, human rights?

PLAN Deployment

The PLAN counter-piracy deployment did not arise out of a policy vacuum; when Hu Jintao replaced Jiang Zemin as China’s paramount leader in 2002, he affirmed that the PLAN must develop ‘far-seas defence, enhancing the far-seas manoeuvring operations capabilities.’ In the years since Hu’s statement, there has been a significant evolution in PLAN capacity from a ‘near-seas active defence’ strategy (jinhai jiji fangyu) to ‘far-seas operations’ strategy (yuanhai zuozhan). Chinese defence expenditure has enlarged year after year in line with its burgeoning economy; official figures show that, prior to the PLAN counter-piracy operation began, defence expenditure rose to RMB417.876 billion (USD65.71 billion) in 2008, representing an increase of 17.5% upon the previous year. Thus, with an enlarged budget and a new ‘far-seas’ doctrine, the naval modernisation observed in the PLAN has certainly influenced the Chinese decision to join the international response in the Indian Ocean.

Traditionally, the East and South China Seas have been the significant regional chokepoints that had a strategic bearing on Chinese interests; however, as mentioned in the introduction, the Indian Ocean has now become a crucial expanse for China due to piracy, rising energy demand and trade interdependence. Hijackings, such as the Tianyu 8 and Zhenhua 4 incidents, are appropriate examples of how piracy is detrimental for Chinese trade.

Subsequently, the passing of UN Security Council resolutions 1814, 1816 and 1838 provided the PLAN with the supranational authority it required and it joined the international counter-piracy effort on 26 December 2008, becoming fully operational on 6 January 2009. In searching for legitimacy to conduct this operation, it is expected that the presence of the EU, NATO and CTF-151 counter-piracy task forces had a positive influence upon China’s decision.

Chinese caution towards a potential deployment can be explained by the realpolitik that remains embedded in a post-Mao China and an enduring belief in the adages of Deng Xiaoping. A former PRC leader himself, Deng recommended that the Chinese leadership ‘bide time’, maintain a low profile and take advantage of international opportunities to gradually maximise its power and position in the world. China seemingly aspires to take advantage of the unique situation of Somali piracy rather than become an established torch-bearer of international peace and security. By participating in counter-piracy operations, China is afforded the opportunity to deploy into the far-seas without an immediately hostile reaction from the international community.

Counter-Piracy Cooperation

The PLAN signified upon the initiation of the deployment that its undertaking would primarily consist of the independent escort of Chinese and foreign vessels. Despite its underdeveloped operational capabilities in comparison with other naval forces, it is clear that China wishes to be both seen and consulted as an equal within the international counter-piracy effort. China is not comfortable with communicating openly with institutions such as the EU and NATO as they do not represent a single voice but a multitude of perspectives; Beijing much prefers to conduct dialogue on a bilateral basis.

In the wider operational dimension, China has repeatedly declined proposals to integrate with the collective maintenance of the International Recommended Transit Corridor (IRTC). Again, China does not wish to integrate itself within a multinational command structure. Instead, China conducts its escort operations approximately ‘five nautical miles north and south of the IRTC’ rather than within the box system. Whilst the PLAN is still a ‘green-water’ navy and their model of participation is not unusual among the other independent actors, the refusal to participate in the IRTC indicates that China is not prepared to truly contribute to the ‘global good’ in a manner that is harmonious with the Western world, as much as its rhetoric suggests otherwise.

However, there are now signals that China’s actions in the Indian Ocean might begin to match their rhetoric; their counter-piracy strategy is outwardly evolving to incorporate a greater degree of coordination with the broader counter-piracy coalition. The first year of the PLAN was characterised by unilateralism, but the De Xin Hai hijacking on 19 October 2009 served to alter PLAN perceptions on counter-piracy cooperation when maritime cooperation could have prevented such an episode. It is widely agreed that only rigorous cooperation and coordination can help the international community to deal with the problem of piracy in an efficient way at sea.

Accordingly, the PLAN has taken progressive steps to enhance coordination with other navies in the Indian Ocean. Firstly, the key to successful and effective coordination is to communication and consequently, a web-based communication system entitled Mercury has been introduced amongst all naval forces apart from Iran. Secondly, China concluded an agreement in January 2012 with its traditional enemies, Japan and India, to strengthen coordination and adjust each other’s escort schedules to achieve maximum efficiency in the fight against piracy.

Lastly, and most importantly, are the coordination mechanisms of the Contact Group on Piracy off the Coast of Somalia (CGPCS) and the Shared Awareness and Deconfliction (SHADE) group. China was a founding member of the CGPCS as it is based around ‘voluntary cooperation’ in counter-piracy rather than under the command of another power or institution. SHADE is a scheme that assembles the wider counter-piracy community for regular meetings in Bahrain. China has now participated in the rotating chairmanship of the SHADE meetings and even expressed an interest in a co-chair position, usually held by the EU, CMF or NATO. However, this initial interest never materialised.

Nevertheless, it is patently clear that China is unwilling to enhance collaborative efforts with the wider counter-piracy community. Reasons for collaborative deficiency in Chinese foreign policy vary from a lack of operational experience to a lack of political will; it is true that much mistrust remains over ideological differences and issues such as human rights and Taiwan.

PLAN Motives

This defensive position is reflected in the PLAN’s counter-piracy deployment and their coordination with the international effort in several ways: firstly, the Indian Ocean represents a vital strategic arena in which China’s energy security is increasingly vulnerable. Secondly, China has evidently taken extra care not to arouse the ‘China threat’ theorem in its counter-piracy and wider foreign policies. Secondly, China is clearly endeavouring to protect Chinese national interests through the PLAN deployment and their naval modernisation. Thirdly, Chinese naval diplomacy in the Indian Ocean signifies a defensive policy, not one of aggression. Lastly, China is practicing ‘security through cooperation’ unilaterally with traditional foes.

What is clear is that the Indian Ocean is a vital arena for China; every year some 100,000 cargo ships pass through the Indian Ocean, as well as 66% of the world’s oil shipments. The significance of this expanse becomes apparent upon learning that Chinese total energy consumption from 2005 to 2012 has risen 60% and is predicted to increase a further 72.9% between now and 2035. Accordingly, there is now a growing energy demand within China to sustain its economic growth and, as the majority of China’s oil imports derive from Africa (Angola, Sudan) and the Middle East (Saudi Arabia), it is obvious that the Indian Ocean is the critical route for its external energy requirements.

China has been determined to dispel the ‘China threat’ theory. Before the PLAN deployed in the Indian Ocean, they waited patiently to gauge the international reaction to the counter-piracy mission. They also ensured that the deployment had the authorisation of both the Somali government and the UN. In line with the maxims of Deng Xiaoping, China knows that any sign of aggressive behaviour would be criticised by the international community and potentially harm their development. Thus, China is essentially employing a neo-Bismarckian strategy, manoeuvring peacefully towards Great Power status without provoking the international community into a counter-balancing reaction.

This is embodied within China’s ‘peaceful rise’ policy. Chinese actions and rhetoric attest to this guiding principle in the CCP’s foreign policy; the counter-piracy operation in aid of the global commons allows China to justify their naval modernisation, along with the opportune location of the piracy problem. China speaks of a foreign policy that pursues ‘peace and promotes friendly cooperation with all countries on the basis of the Five Principles of Peaceful Coexistence’, in addition to Hu Jintao’s ‘harmonious world’ vision.

Moreover, Chinese counter-piracy policy is distinctly aimed towards the protection of Chinese national interests. There is an evident gap between China’s defensive interests and its actual capabilities; therefore, it is aiming to close this gap through the advancement of the PLAN’s operational capabilities, increased field experience and the acquisition of modern naval assets. For example, China has now acquired its first ever aircraft carrier, the ex-Soviet Varyag, and it is expected to become operational by the end of 2012.

By coordinating in the counter-piracy effort, China is able to learn how a ‘far-seas’ fleet is operated, offer PLAN personnel invaluable experience for future expeditions, and gain knowledge from other international naval forces. Thus, China has evolved its naval strategy to meet the demands of its expanding interests in the Indian Ocean and it can therefore be deduced that the PLAN deployment is an extension of this defensive strategy.

Joining the symposium circuit

As a result of the PLAN’s new ‘far-seas’ mantra, the counter-piracy deployment has also increased Beijing’s diplomatic network across the Indian Ocean. After each task force rotation, the PLAN ‘sails along the East coast of Africa and visits Kenya, Tanzania, Mozambique, South Africa, Madagascar and the Seychelles’ to parade the Chinese flag and to foster goodwill within these countries. Further Chinese engagement with the Indian Ocean littoral states consists of port and refuelling developments at Gwadar in Pakistan, Hambantota in Sri Lanka and Chittagong in Bangladesh with the Seychelles also offering China an invitation to establish a military presence on the islands.

Yet, by cooperating to some extent with traditional regional adversaries, China hopes that it can begin to assuage their doubts about their growth as a power and hopefully continue along the path of development. On cooperation in counter-piracy and the wider Indian Ocean region it is imperative that China ‘go along to get along’ in protecting their national interests.

As Donald Rumsfeld proffered, it is ‘the mission that determines the coalition’ and the issue of piracy has clearly determined China’s participation and cooperation with the international community in the Indian Ocean. From a Chinese perspective, they have participated out of self-interest; on a wider scale, their participation has been facilitated by the ad-hoc regime that has emerged. For China to protect its national interests and continue on its path towards a ‘peaceful rise’ it now appreciates that ‘problems will be global – and solutions will be, too’; this is what truly accounts for Chinese cooperation in counter-piracy operations in the Indian Ocean.

Jack Moore is a postgraduate student of the War Studies department, King’s College London. He is the founder of World Outline (worldoutline.co.uk) and his postgraduate thesis focuses on the implications of China’s growing involvement in counter-piracy operations in the Indian Ocean.

This article appeared in original form at TheRiskyShift.com

No South EU Sea

 

 

Rafale fighters launch from the deck of the French aircraft carrier Charles de Gaulle

By Peter Solomon

The South China Sea contains the second busiest trading route in the world: the Straight of Malacca. Vital to meeting the energy demand of China, Japan, Taiwan, and South Korea, the supply flow through this region is comprised mainly of crude oil, liquefied natural gas, coal, and iron ore. On account of the territorial claim disputes that afflict the South China Sea, several militaries have been busy modernizing, namely China, the Philippines, and Malaysia. Overall, six nations claim partial or entire territorial rights over the South China Sea: China, the Philippines, Malaysia, Vietnam, Taiwan, and Brunei. What’s at stake in the region is more than trade routes – a 2006 estimate by the United States Energy Information Administration revealed proven reserves of 26.7 billion barrels of oil in the South China Sea (about the same quantity as Oman, Qatar, Syria, and Yemen’s oil reserves combined), and proven reserves of natural gas amounting to 7.9 trillion cubic meters (about the same quantity as Saudi Arabia or the United States’ reserves). Due to the considerable value of the oil and natural gas, the potential for disagreement is exceptionally high and, therefore, the possibility of conflict over territory in the South China Sea cannot be understated.

 

Due to the magnitude of trade and investment conducts the European Union (EU) with Japan and South Korea, and the great prospects for enhancing economic relations, the EU has a great stake in the security of East Asia. About 18.1% (251.5 bn. Euros) of the EU’s exports are destined for East Asia, while a mere 3.3% go to other destinations in Asia. Additionally, the EU imports about 30.1% (452 bn. Euros) of its goods from East Asia compared to just 4.2% for the rest of Asia. It is easy to see that a good deal of the EU’s economic health depends upon trade with East Asia. Therefore, a key EU foreign policy security goal is to promote peace and stability in East Asia.

 

China is in the process of modernizing its People’s Liberation Army Navy (PLAN) to exert Chinese influence in the region. It is no secret that China is building up its power projection capabilities to counter-balance the presence of the United States defense forces in the Western Pacific. Due to Japan and South Korea’s geographic location and security ties, any conflict or disruption to stability in the South China Sea could have major impacts on East Asia. The EU’s concern, however, is in regards to Europe’s economic stake in the region and the EU’s identity as a normative power. Despite the EU’s promotion of peace and stability in East Asia, the institution’s lack of credible power projection capabilities in the region belie the EU’s ability to intervene in security issues in the region. 

 

Although an EU-led military operation would be unlikely in the Western Pacific, the importance of the region would compel individual nations to act to maintain law and order, or to preserve maritime safety, safeguarding their commercial interests in the region. In the event of a conflict it is entirely possible that EU member states would engage the region through the North Atlantic Treaty Alliance (NATO). Recent counter-piracy operations off the coast of Africa have set a precedent for maritime military action far from the traditional European area of operations. Additionally, Great Britain and France can still act on their own if it is in their best interests as both maintain competent navies with power projection capabilities, including the ability to deploy their own aircraft carriers.

 

In the case of a South China Sea conflict, Japan would be most certainly directly involved as its tankers transport 70% of Japan’s oil through this region. A confrontation would force Japan’s oil tankers to circumvent a conflict in the South China Sea by navigating around Indonesia into the Pacific Ocean. However, this option would be both expensive and laborious. Additionally, two-thirds of South Korean natural gas is shipped through the South China Sea on its way to the Korean peninsula. In regards to the European Union’s economic interests in East Asia, maritime security is crucial for Europe.

 

Currently, EU military capabilities consist of 13 battlegroups, which are “rapid response units” that consist of 1,500 troops each. EU member states rotate the responsibility of provisioning these units, two of which have always been on stand by since 2007. However, this force has never been deployed and it is difficult to say how the debt crisis will affect the EU’s research and development into new military capabilities. Given the budget cuts and focus on internal issues, the EU will likely continue to place the burden on the United States to maintain the status quo in the Western Pacific region. In the event of a crisis in the South China Sea, it would be the effects on the EU’s East Asian trading partners that would create the most potential to draw in the maritime forces of individual EU member states.

 

Whether or not the EU will cooperate in joint military expeditions with Japan or South Korea in the future is unknown. With regard to economics, EU-Japan and EU-South Korea economic ties are substantial, and significant cooperation in both relationships has led to the emergence of global economic partnerships via Free Trade Agreements with both nations. Through Japan and South Korea, the EU has established a gateway into East Asia’s vast markets and developed a role as a player in security issues, albeit a minimal role for the time being. Despite the EU’s current internal focus it cannot forget about its strategic partnership with Japan and South Korea.

 

This post is from our British partners at TheRiskyShift.com and can be found in its original form here.

Peter Solomon is a Master of Arts in International Political Economy candidate at King’s College London. Peter earned a bachelors degree from the University of Connecticut in English and Political Science.