Global Developments and Analysis: Weekly Monitor, 24 August - 30 August 2020
Prerna Gandhi, Associate Fellow, VIF
Economic
White House Announces $1 Billion Plan to Create AI, Quantum Institutes

The White House on Aug 26 announced that federal agencies and their private sector partners are committing more than $1 billion over the next five years to establish 12 new research institutes focused on artificial intelligence and quantum information sciences. The effort is designed to ensure the U.S. remains globally competitive in AI and quantum technologies, administration officials said. The National Science Foundation and other federal agencies including the U.S. Department of Agriculture will invest $140 million in seven institutes focused on AI, while the Energy Department will supervise and invest $625 million in the five institutes focused on quantum information sciences, which includes quantum computing. The DOE’s investment will be matched by $300 million in private contributions, part of which comes in the form of technology-services donations from International Business Machines Corp., Microsoft Corp., and other companies. Click here to read....

US, China agree to ensure 'success' in partial trade deal: USTR

Top U.S. and Chinese trade negotiators affirmed progress in the implementation of their partial trade deal that took effect in February and committed to ensure its "success," the Office of the U.S. Trade Representative said on Aug 24. The deal requires discussions on the development of the agreement every six months. The United States and China reportedly planned to hold a video conference on Aug. 15, but U.S. President Donald Trump said last week that he had delayed it. Chinese state-run Xinhua News Agency said on Aug 25 in Beijing that the two sides had a "constructive dialogue" and agreed to "create conditions and atmosphere to continue pushing forward the implementation of the trade deal." Click here to read....

RCEP states make 'significant' progress in trade talks without India

Ministers from 15 Asia-Pacific countries negotiating a sprawling free trade agreement said on Aug 27 they have made "significant progress" toward the signing of the deal in November, while whether India will stay on as a member of the framework remains uncertain. The Regional Comprehensive Economic Partnership "remains open for India given that not only had it participated in the RCEP negotiations since they were launched in 2012 but also in recognition of the potential of India to contribute to the region's prosperity," said a joint statement. The ministers released the document after a videoconference held in the absence of India. They welcomed "the significant progress" made toward finalizing the deal for signing at the summit of RCEP leaders in November 2020, the statement said. Click here to read....

Japan, US agree to closely coordinate for WTO reforms

Foreign Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer agreed on Aug 26 by telephone to continue close coordination for reforming the World Trade Organization, including its dispute settlement system, the Foreign Ministry said. The telephone talks, held at the request of the U.S. side, came as the WTO is facing a crisis, with Washington blocking the appointment of new judges to fill vacancies on a seven-person panel that has final say on resolving trade disagreements. U.S. President Donald Trump has often criticized the Geneva-based organization as ineffective at its job of enforcing rules on international tradeClick here to read....

Japan to establish intel unit to counter economic espionage

"The need for intelligence capabilities is broadening beyond sensitive military-related information to a wide range of private-sector data," said LDP heavyweight Akira Amari at a meeting on Aug 26 of a party task force covering the issue. Creating a new body specifically to investigate and analyze economic security issues -- something Japan's intelligence agencies reportedly lack -- is expected to be a centrepiece of the LDP recommendations, which will be submitted this year. The U.S. Central Intelligence Agency and the U.K.'s MI6 both have specialized economic intelligence teams that exchange information with businesses and academic institutions. Click here to read....

Japan to establish intel unit to counter economic espionage

"The need for intelligence capabilities is broadening beyond sensitive military-related information to a wide range of private-sector data," said LDP heavyweight Akira Amari at a meeting on Aug 26 of a party task force covering the issue. Creating a new body specifically to investigate and analyze economic security issues -- something Japan's intelligence agencies reportedly lack -- is expected to be a centrepiece of the LDP recommendations, which will be submitted this year. The U.S. Central Intelligence Agency and the U.K.'s MI6 both have specialized economic intelligence teams that exchange information with businesses and academic institutions. Click here to read....

China pushes Pakistan to open trade routes with Afghanistan

U.S. special representative for Afghanistan Zalmay Khalilzad in recent meetings has asked Pakistan to open the Torkham and Chaman borders, but Pakistani officials admitted that the opening of the three other crossings (Ghulam Khan, Angoor Adda and Kharlachi)were decided in the Beijing-initiated China-Afghanistan-Pakistan Trilateral Vice Foreign Ministers' Strategic Dialogue, which was set up to ease tensions between Kabul and Islamabad.In their recent virtual meeting in July, senior officials of three countries discussed the Afghan situation and agreed to explore "new ways of deepening cooperation, including advancing connectivity under the [Belt and Road Initiative], and other regional economic initiatives." Despite the escalation of tension with India, Pakistan also announced in July it would resume Afghan exports to India through eastern Wagah border crossing to "facilitate Afghanistan's transit trade." Click here to read....

China's global yuan push makes inroads in Asia and Africa

China's international yuan payment network is expected to reach 1,000 participants by the end of 2020, as Beijing aggressively woos new members in Asia and along its Belt and Road Initiative in a challenge to America's supremacy in global finance. As of the end of July, 984 financial institutions -- 48 more than at the end of 2019 -- from 97 countries and regions were part of the Cross-Border Interbank Payment System. The system was created in 2015 to help globalize the yuan, by providing an easier way for participants to settle and clear Yuan-denominated payments. Members can choose to either take part in CIPS directly, meaning they maintain their own accounts within the system, or indirectly, meaning they work through direct members. Japanese participants include big banks such as Mizuho Bank and MUFG Bank, as well as large regional institutions like Chiba Bank. Click here to read....

Grand theft aqua: Up to HALF of world’s water supply is being stolen, new report claims

New research suggests that somewhere between 30 to 50 percent of the world's water supply is being illegally siphoned off and is not being paid for or counted, reviving debate about how we define water. In their paper, the researchers argue that a lack of any widely-accepted definition of what constitutes water theft, or whether it can even exist at all, precludes coordinated effort from governments, regulators and communities and therefore hamstrings any efforts at enforcement and policing of water resources. The study points the blame squarely at the political, legal and institutional establishments which it says are fundamentally flawed and incapable of protecting one of the planet's most precious resources. Some define access to water as a human right, rendering the concept of water theft null and void. Others see it as a commodity to which value ought to be assigned, so that the price control mechanism can do its job in maintaining efficiency and sustainability of distribution. Click here to read....

TikTok Talks Could Face Hurdle as China Tightens Tech Export Rules

China announced new restrictions on artificial-intelligence technology exports that could further complicate the sale of TikTok’s U.S. operations, while intensifying the tech battle between the world’s two largest economies. The new restrictions, unveiled on Aug 28 by China’s ministries in charge of commerce and science and technology, cover such computing and data-processing technologies as text analysis, content recommendation, speech modelling and voice-recognition. Technologies on the list can’t be exported without a license from local commerce authorities. The new restrictions could throw a wrench into talks between Chinese tech firm ByteDance Ltd. and potential buyers, as the owner of TikTok faces pressure from the White House to quickly sell the popular short-video app’s U.S. operations or face an effective ban. Click here to read....

China, Russia eye closer partnership in technology innovations

Chinese President Xi Jinping and Russian President Vladimir Putin on Aug 26 respectively sent congratulatory letters to the opening of the Year of Scientific and Technological Innovation between the two countries, according to the Xinhua News Agency. There is huge potential for the two countries to develop cooperation in the high-tech sector, and both should seize the opportunity of the year of innovation to give full play to their respective advantages and deepen their bilateral ties, experts say. Russia specializes in aviation and aerospace, engines, new materials, laser techniques and so on, while 5G telecommunications and artificial intelligence (AI) are burgeoning in China. Click here to read....

Fed unveils major policy shift to maximize job growth

The US central bank rolled out a major policy change on Aug 27 that gives greater weight to its mission of maximizing employment for the benefit of lower income families, while ratcheting back its emphasis on fighting inflation. Federal Reserve Chair Jerome Powell said the aim is to correct the "shortfalls" in achieving the Fed's full employment goal while recognizing that with changes in the global economy, a tight job market does not necessarily drive prices higher. In practice, the change has no impact in the near-term but will keep borrowing rates low for much longer than in prior economic expansions ― something President Donald Trump has loudly demanded, though for more political reasons. "This change reflects our appreciation for the benefits of a strong labour market, particularly for many in low- and moderate-income communities," Powell said in a speech unveiling the policy. Click here to read....

Strategic
Czech delegation visits Taiwan despite China's protest

A delegation from the Czech Republic led by the Senate speaker and including business people arrived in Taiwan on Aug 30 for a six-day official visit to the island, despite China's protest against official contact with the self-governed island. Senate President Milos Vystrcil will be the highest-level Czech politician to visit Taiwan to date, and follows a high-ranking U.S. official's trip earlier this month that angered China. Taiwan and the Czech Republic have no formal diplomatic relations. China regards the island as a renegade province to be brought under its control, by force if necessary, and opposes official contact between Taiwan and countries with whom Beijing has diplomatic ties. Click here to read....

Russian navy conducts major manoeuvers near Alaska

The Russian navy conducted major war games near Alaska involving dozens of ships and aircraft, the military said on Aug 28, the biggest such drills in the area since Soviet times. Russia's navy chief, Adm. Nikolai Yevmenov, said that more than 50 warships and about 40 aircraft were taking part in the exercise in the Bering Sea, which involved multiple practice missile launches."We are holding such massive drills there for the first time ever," Yevmenov said in a statement released by the Russian Defense Ministry. It wasn't immediately clear when the exercises began or if they had finished. The Russian military has rebuilt and expanded numerous facilities across the polar region in recent years, revamping runways and deploying additional air defense assets. Click here to read....

Chinese military fires ‘aircraft-carrier killer’ missile into South China Sea in ‘warning to the United States’

China launched two missiles, including an “aircraft-carrier killer”, into the South China Sea on Aug 26 morning, a source close to the Chinese military said, sending a clear warning to the United States. The move came one day after China said a US U-2 spy plane entered a no-fly zone without permission during a Chinese live-fire naval drill in the Bohai Sea off its north coast. One of the missiles, a DF-26B, was launched from the north-western province of Qinghai, while the other, a DF-21D, lifted off from Zhejiang province in the east. Both were fired into an area between Hainan province and the Paracel Islands, the source said. The DF-26 dual-capable missile is a type of weapon banned by the Intermediate-Range Nuclear Forces Treaty signed by the US and Soviet Union towards the end of the Cold War. When the US withdrew from the treaty last year, it cited China’s deployment of such weapons as justification. Click here to read....

US blacklists Belt and Road builder for role in South China Sea

The U.S. on Aug 26 blacklisted one of China's biggest construction companies which helped build islands in the South China Sea, as part of broader sanctions against individuals and companies deemed involved in advancing Beijing's claims in the contested waters. Subsidiaries of China Communications Construction Co. (CCCC), which has built thousands of miles of roads and bridges and dozens of ports in countries along Beijing's Belt and Road, are among the 24 Chinese state-owned enterprises added to the Commerce Department's Entity List, barring them from receiving U.S. exports without a license. Also, as part of the Aug 26 action, individuals -- who have already been identified by the State Department -- and possibly their immediate family members will no longer be admissible into the U.S. Click here to read....

It's US against most of UN council on Iran sanctions

The United States and most of the rest of the U.N. Security Council dug in their heels on Aug 27 on diametrically opposed positions over the restoration of international sanctions on Iran. In increasingly intense rhetorical terms, U.S. officials insisted they had acted legitimately in triggering a so-called "snapback" mechanism that would re-impose all U.N. sanctions Iran next month. They said the re-imposition of sanctions is a done deal and nothing can stop it. The 2015 Iran nuclear deal allows "a JCPOA participant state" to trigger the "snapback" mechanism. The U.S. insists that as an original JCPOA participant it has the legal right even though it ceased participating in 2018. Click here to read....

Iran & IAEA reveal deal on inspections day after UNSC president dismisses US sanctions 'snap back' bid

Tehran has struck a deal with the UN’s nuclear watchdog to allow inspectors into two suspected former nuclear sites. The breakthrough comes just days after Washington demanded the UN slap Iran with fresh sanctions. In a joint press statement, the International Atomic Energy Agency (IAEA) said on Aug 26 that “Iran is voluntarily providing the IAEA with access” to the two sites. Inspectors believe that these sites still contain nuclear material, but an Iranian official told Reuters that this information is “fabricated.”" Iran, like before, is ready to cooperate with the IAEA," Iranian President Hassan Rouhani said on state television after the announcement. Click here to read....

Sweden steps up its defense activities in Baltic Sea region

Sweden is stepping up its defense activities in the Baltic Sea region due to what a high-ranking official called "a deteriorating security situation" as Russia and NATO conduct military operations in the area. The Swedish armed forces said on Aug 25 that they initiated a "high-readiness action" in the south-eastern and southern Baltic Sea due to the "current, extensive military activity" in the region. Sweden is not a member of NATO. The armed forces gave no details about the deployment but said the goal "is to strengthen maritime surveillance in the Baltic Sea at sea and from the air." The Baltic News Service reported on Aug 25 that four Russian naval ships were detected near Latvian territorial waters. Click here to read....

Japan PM Abe announces resignation over worsening health; Ruling party LDP to pick new leader by Sept. 15

Following Shinzo Abe's decision to step down, the LDP has begun preparations to vote for its next leader by Sept. 15. The party's General Council will meet Sept 01 to decide how and when the process will take place.Chief Cabinet Secretary Yoshihide Suga, Abe's right-hand man, has decided to seek the top spot, Nikkei has learned. The party's powerful factions are starting to throw their support behind him. LDP Secretary-General Toshihiro Nikai said over the weekend that he would support Suga in the party leadership race. A senior member of the Hosoda faction, the largest grouping in the LDP, described Suga as "a leading candidate." The chief cabinet secretary, as the head of the cabinet secretariat, sits atop Japan's powerful Kasumigaseki bureaucracy. All of the current career bureaucrats leading the ministries have been installed by the Abe-Suga team, and the influence Suga enjoys is unrivalled by the other candidates. Click here to read....

Xi says China to step up efforts to fight 'splittism' in Tibet

China must build an "impregnable fortress" to maintain stability in Tibet, protect national unity and educate the masses in the struggle against "splittism", President Xi Jinping told senior leaders, state media said on Aug 29.China seized control over Tibet in 1950 in what it describes as a "peaceful liberation" that helped the remote Himalayan region throw off its "feudalist" past. But critics, led by exiled spiritual leader the Dalai Lama, say Beijing's rule amounts to "cultural genocide". At a senior Communist Party meeting on Tibet's future governance, Xi lauded achievements made and praised frontline officials but said more efforts were needed to enrich, rejuvenate and strengthen unity in the region. Click here to read....

Fearing Hong Kong’s Fate, Taiwan Moves to Bolster Its Military Against China

Beijing’s crushing of pro-democracy forces in Hong Kong has deepened Taiwanese fear and resentment of China’s Communist Party, injecting new energy into the island democracy’s efforts to build up its military defences. In recent weeks, Taiwanese President Tsai Ing-wen has unveiled her self-ruled island’s largest-ever military budget and pledged closer security cooperation with the U.S. and other democracies, as Beijing enforced a new national security law in Hong Kong and conducted sabre-rattling military manoeuvers in the Taiwan Strait. “After Hong Kong, Taiwan stands increasingly on the front lines of freedom and democracy,” Ms. Tsai said in remarks to the Australian Strategic Policy Institute broadcast online Thursday. Taiwan is strengthening its defences, she said, because “we know that in terms of our current situation, strength can be correlated with deterrence. Click here to read....

Sudan rebels agree key peace deal to end 17-year conflict: Report

Sudan's main rebel alliance has agreed on a peace deal with the government aimed at ending 17 years of conflict, official news agency SUNA said on Aug 30. The Sudan Revolutionary Front (SRF), an alliance of rebel groups from the western region of Darfur and the southern states of South Kordofan and Blue Nile, inked a peace agreement with the government late on Saturday. A formal signing ceremony is planned for Monday in Juba, the capital of neighbouring South Sudan, which has hosted and helped mediate the long-running talks since late 2019. Click here to read....

Medical
In the World’s Coronavirus Blind Spot, Fears of a Silent Epidemic

The global scramble to thwart the coronavirus has a vast blind spot: sub-Saharan Africa. The paucity of data—combined with reports from several nations of spikes in deaths from respiratory illnesses—is raising fears that a silent epidemic could be raging in parts of the continent. Official coronavirus cases in sub-Saharan Africa have doubled in the past month to more than one million, but the official death rate—at 20,000—remains significantly lower than those of less-populous Europe and the U.S., according to World Health Organization data. The World Bank says these unknowns could prevent African economies from reopening fully for years, aggravating an economic emergency the United Nations has warned is already pushing tens of millions of people into hunger and shrinking the continent’s newly minted middle class. Click here to read....

Chinese Covid-19 Vaccine Maker in Talks With Countries on Early Approval

A Chinese pharmaceutical maker is in talks with several countries to get emergency approval to use an experimental Covid-19 vaccine, developed with the Chinese military, before the completion of large-scale safety and effectiveness trials, according to a senior executive at the company. Early distribution by CanSino Biologics Inc. would give the company a head start over rivals by making its vaccine the first to go into public use internationally outside of clinical trials, although initial doses would likely be directed at health-care workers and others deemed essential, such as military personnel and police. The effort shows the intensity of the race to become the first to develop a vaccine, though public-health experts say immunizing people widely before large-scale tests are completed could present serious health risks. Click here to read....

Chinese Covid-19 Vaccine Maker in Talks With Countries on Early Approval

A Chinese pharmaceutical maker is in talks with several countries to get emergency approval to use an experimental Covid-19 vaccine, developed with the Chinese military, before the completion of large-scale safety and effectiveness trials, according to a senior executive at the company. Early distribution by CanSino Biologics Inc. would give the company a head start over rivals by making its vaccine the first to go into public use internationally outside of clinical trials, although initial doses would likely be directed at health-care workers and others deemed essential, such as military personnel and police. The effort shows the intensity of the race to become the first to develop a vaccine, though public-health experts say immunizing people widely before large-scale tests are completed could present serious health risks. Click here to read....

A Stable Blood Supply Is Critical in the COVID-19 Era

In the early days of the COVID era, as schools closed and offices emptied, the American Red Cross warned that blood shortages would be severe. A few months later, with no relief in sight, officials there predicted a “staggering” drop in blood supplies. “We're basically looking at a new world,” a blood centre spokesperson in Texas said. In normal times, the American blood system is a model of efficiency, shuttling millions of units of blood from donor arms to patient arms every year. Yet that very efficiency leaves it with slim margins when something goes wrong, RAND researchers found when they looked at the strength of the U.S. blood supply. One of the biggest risks they identified: a global pandemic. Click here to read....

Journal Papers
Foreign Affairs- The Revolutionary Guards Are Poised to Take Over Iran

A new saying is making the rounds in Iran: power is being sucked away from heads to toes, which is to say, from men who wear turbans to men who wear boots. Iran’s new parliament furnishes the most recent evidence. Its speaker, Mohammad Bagher Ghalibaf, is a former brigadier general of the Islamic Revolutionary Guard Corps. Two-thirds of the parliament’s presiding board are either former members or still affiliated with the IRGC and its auxiliary organizations. Many in Iran and in the United States have long foreseen an IRGC takeover of the Iranian government; the next step toward that outcome would be for a candidate affiliated with the IRGC to be elected president in 2021. Click here to read....

Nikkei Asian Review- Why tourism in Asia will never be the same?

UNCTAD estimates that global tourism's sudden collapse could cause losses of up to $3.3 trillion this year when other affected sectors are taken into account -- 4.2% of global gross domestic product. And that is if the downturn only lasts 12 months. "For most parts of the world [including Asia], travel has become, from this huge economic driver, a small shell of its former self," said Chetan Kapoor, co-founder of Videc, an analytics company focusing on the travel industry. Tourist businesses in most countries are trying to weather the storm with a combination of government support and ingenuity: Michelin-starred restaurants are now doing takeout, while Thailand has rearranged and increased public holidays to encourage domestic tourism. Meanwhile, luxury quarantine was not an industry until four months ago. Now, Thailand has just under 5,000 private hotel rooms, providing a sumptuous alternative to more austere state-paid facilities. "We pioneered an alternative to state quarantine by offering true hotel services," Huber says. Click here to read....

Foreign Policy- The Pakistan Army’s Belt and Road Putsch

Pakistan is adding an emphasis on economic development to a relationship that had been largely confined to the diplomatic and military realms. The scheme paved the way for a surge in aid and investment from Beijing, and by giving Pakistan’s democratically elected civilian leadership the power to determine how tens of billions of dollars in Chinese aid and investment would be directed, it also gave the civilians a big say in the country’s most vital strategic relationship. That never quite sat well with the Army—in part because the prime minister at the time was Nawaz Sharif, a man the military twice deposed from office. Click here to read....

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