Global Developments and Analysis: Weekly Monitor (21-27 Aug)
Prerna Gandhi, Associate Fellow, VIF


U.S. commerce secretary rejects Chinese appeal to ease export controls

U.S. Commerce Secretary Gina Raimondo said she rebuffed an appeal Aug 29 by Chinese leaders to reduce U.S. export controls on technology with possible military uses but the two governments agreed to have experts meet to discuss disputes over protecting trade secrets. During a visit to revive frosty relations, Raimondo said she conveyed complaints to officials including China’s No. 2 leader, Premier Li Qiang, about Chinese restrictions on U.S. technology companies. She said conditions for foreign companies are getting worse following an expansion of an anti-spying law and raids on consulting firms. Raimondo joined a series of American officials including Treasury Secretary Janet Yellen who have visited Beijing in the past three months. They are trying to restore relations that are at their lowest level in decades due to disputes over technology, security, Taiwan and other issues. A key Chinese complaint is limits on access to processor chips and other U.S. technology on security grounds. That threatens to hamper the ruling Communist Party’s ambition to develop artificial intelligence and other industries. The curbs crippled the smartphone business of Huawei Technologies Ltd., China’s first global tech brand. “Their asks were to reduce export controls on technology” with possible military uses and to retract an order by President Joe Biden that restricts U.S. investment in Chinese companies that might be involved in military development, Raimondo said. Click here to read

China’s cotton output set to fall 1 year after US’ Xinjiang ban as focus shifts to food security, quality

One year after a US import ban was implemented, China has grown less cotton in its Xinjiang Uygur autonomous region, with a significant drop in output expected this year amid a quality push and food security drive. China, which provides over 20 per cent of the world’s cotton, mostly from the western region of Xinjiang, may see its production fall by more than 10 per cent as it places an emphasis on quality over quantity and makes room for crops, according to analysts and farmers. Climate shocks over the past few months are also likely to contribute to decreased yields in the region, whose products are being redirected to countries that are part of China’s Belt and Road Initiative following a US-led boycott for alleged forced labour. Beijing has consistently denied the allegations. The US’ Uygur Forced Labour Prevention Act, which went into effect in June 2022, has effectively blocked American imports of all products wholly or partially sourced from Xinjiang. “The government has been committing to high quality development of the cotton industry for years, and achieved visible progress in the past year, as fields believed not to be best for the growth of cotton are switched to other crops,” said a statement from Beijing Cotton Outlook Consulting. Click here to read

Malaysia offers new perks for Country Garden's $100bn project

Malaysia will create a "special financial zone" in embattled Chinese developer Country Garden's $100 billion project in the Southeast Asian nation and offer incentives to attract investments, Prime Minister Anwar Ibrahim said. The massive Forest City project is being built across four reclaimed islands in the state of Johor, near Singapore. Meant to house 700,000 people by 2035, it will also include office towers, malls and schools. The planned incentives for Forest City come with Country Garden facing deep financial woes. Forest City, the Chinese company's largest overseas development, is a joint venture with Esplanade Danga 88, a private Malaysian company backed by the Johor government and the sultan of Johor, Sultan Ibrahim ibni Almarhum Sultan Iskandar. New incentives to be offered at Forest City include a special income tax rate of 15% for skilled workers and multiple entry visas, Anwar said in a statement released on Aug 25. Country Garden did not immediately respond to a request for comment on the Malaysian government's plan. The "special financial zone" -- to be implemented in the near future -- will lower the cost of doing business in Forest City, state news agency Bernama reported, citing the premier. Country Garden, China's largest private developer, earlier this month missed two dollar coupon payments totaling $22.5 million, raising fears that the country's deepening property debt crisis will hamper the financial sector and a broader economic recovery. Click here to read

Xi blindsides Japan with outcry over Fukushima water release

China's response to the release of treated radioactive water from the Fukushima Daiichi nuclear power plant has been much harsher than Japan had anticipated, sending Tokyo officials scrambling to deal with the fallout. "I thought China would respond somehow, but I wasn't expecting it to go this far," a senior Japanese official who asked to remain anonymous said shortly after China decided Aug 24 to ban all seafood imports from Japan. Around 20%, or 87.1 billion yen ($597 million), of Japan's seafood exports headed to China in 2022 -- more than to any other country or region. A blanket ban would have an immeasurable impact on Japan's fishing industry. President Xi Jinping's government is also turning down talks with Japan for the time being. Natsuo Yamaguchi, who heads Japanese ruling coalition partner Komeito, was supposed to visit China from Aug 28 to Aug 30. But the trip was postponed at the last minute after the Chinese side essentially pulled out, saying it was not the appropriate time. Public opinion in China is turning against Japan as well. Japanese individuals and organizations that have nothing to do with the water release are receiving phone calls of protest from China, while Japanese cosmetics face an online boycott. Click here to read

Japan to draw up stimulus package as soon as September

Japanese Prime Minister Fumio Kishida will direct his government to draft a set of economic stimulus measures as early as next month, aiming to boost the country's growth potential and counteract the downside risks of inflation. The package is expected to include measures to encourage businesses to invest in cutting-edge fields and boost worker pay to counter the steady decline in real, inflation-adjusted wages. These measures would fit with the aims of Kishida's "new capitalism" initiative, which seeks to create a "virtuous cycle of growth and distribution" with sustained wage gains that outpace price rises. The cabinet will begin work on the stimulus plan after a reshuffle slated for September. A supplementary budget will be drafted and submitted to parliament at this fall's extraordinary session. "We will keep an eye on price and economic trends and their impact on people's lives, and respond flexibly if necessary," Economic and Fiscal Policy Minister Shigeyuki Goto told reporters Aug 25. Tokyo will consider various approaches to helping small and midsize businesses boost wages, including subsidies and moves to make it easier to pass on costs to customers. For workers, the focus will be on retraining and enabling smooth transitions into growth fields. Click here to read

Western arms suppliers shift Asian HQs to Japan

Major defense contractors around the world are shifting the center of gravity of their Asian operations to Japan, as Tokyo prepares to sharply boost defense spending in the face of East Asia's worsening security situation. BAE Systems, a leading British aerospace and arms company, will shift the supervisory functions for its Asian operations to Japan from Malaysia by the end of this year, while Lockheed Martin of the U.S. has recently completed the transfer. BAE, which founded a subsidiary in Japan in January 2022, will install a managing director who will be in charge of overseeing its business strategies in the entire Asian region from Japan. The London-based company is playing a core role in the Global Combat Air Program (GCAP), created by Japan, Britain and Italy to jointly develop a next-generation jet fighter. It will strengthen its cooperation with Japan's Mitsubishi Heavy Industries and other companies involved in the trilateral project. After transferring its supervisory functions for the Asian market, BAE will increase the number of employees at the Japanese subsidiary to reinforce its business foundation. Lockheed Martin has moved its Asian strategic headquarters to Japan from Singapore. It formerly oversaw operations in Southeast Asian nations, which are exposed to frequent armed conflicts, from Singapore, where English is one of the official languages. Click here to read

Iran’s Raisi inaugurates South Pars gasfield after foreign companies exit

Iran’s President Ebrahim Raisi has inaugurated the last phase of a major gasfield that has been reportedly built by local contractors after their foreign counterparts pulled out due to sanctions. The president on Aug 28 travelled to Asaluyeh in the southern province of Bushehr and visited Phase 11 of the South Pars gasfield after landing on the rig via a helicopter. He spoke with officials and engineers at the platform and commended them for relying on their expertise to complete a project that had been lagging for nearly 20 years due to sanctions over Iran’s nuclear programme. France’s TotalEnergies and the China National Petroleum Corporation (CNPC) pulled out of the project in 2018, shortly after then-US President Donald Trump unilaterally withdrew from Iran’s 2015 nuclear deal with world powers and imposed harsh sanctions. Earlier sanctions imposed prior to the implementation of the nuclear deal – which had lifted sanctions in exchange for curbs on Iran’s nuclear capabilities – had initially left the project dormant. The project was then awarded to local counterparts, which operated under the auspices of the National Iranian Oil Company (NIOC). Raisi said in addition to having been completed indigenously, the project stands out in other ways, including by crossing the finish line some four years earlier than initially projected. Click here to read

China Emerges As A Global LNG Trading Power

China is expanding its presence in the global LNG trading world, with Chinese traders setting up new or expanding their trading desks in Singapore and London, Reuters writes. This would put China in direct competition with LNG trade leaders including Shell, BP, TotalEnergies, and Equinor, the report pointed out. The trading presence expansion comes even as China secures more long-term supply of the superchilled fuel, the latest deals coming from Qatar and the United States. Even so, Chinese importers are not relying on long-term deals only, even if they have swelled to some 40 million tons annually since last year. The amount represents a 50% increase. Per the Reuters report, more than 10 Chinese energy trading companies are hiring more traders or expanding their trading desks while state-owned CNOOC plans to open an office in London. Speaking of CNOOC, the Chinese major said this month that Novatek’s Arctic LNG 2 project will start production as scheduled before the end of this year. CNOOC has a 10% stake in the Russian project. "We're going to see a paradigm shift in Chinese companies from being total net importers to (being) more international and domestic trading players," said Trident LNG head of global trading, Toby Copson, as quoted by Reuters. Click here to read

Saudi Arabia considering Chinese bid to build nuclear plant, report says

Saudi Arabia is considering a Chinese bid to build a nuclear power plant in the kingdom amid frustration over the United States’ stipulations for supporting Riyadh’s quest for nuclear power, the Wall Street Journal has reported. China National Nuclear Corporation (CNNC), a state-owned firm, has proposed the construction of a nuclear plant near the border with Qatar and the United Arab Emirates, the newspaper reported on Aug 24, citing unnamed Saudi officials. Saudi officials hope the Chinese bid will push US President Joe Biden’s administration to loosen its conditions for aiding the kingdom’s nascent nuclear industry, including commitments not to enrich uranium or mine their own uranium deposits, the newspaper said. China is unlikely to require Riyadh to adhere to such requirements, which are intended to prevent the proliferation of nuclear weapons, the newspaper said. CNNC and the foreign ministries of China and Saudi Arabia did not immediately respond to requests for comment made by the Reuters news agency.Saudi Arabia and China have deepened their ties in recent years, raising concern in Washington. Chinese President Xi Jinping visited the kingdom in December and the two countries in June announced investment deals worth $10bn during the two-day Arab-China business summit in Riyadh. Click here to read

Turkey makes bigger than expected interest rate hike, targets inflation

Turkey’s central bank on Aug 24 raised the interest rate to 25 percent in a surprise move that signals a continued move away from previous policy, which focused on keeping interest rates low. The hike of 7.5 percentage points follows a raise to 17.5 percent from 15 percent last month. Most economists had expected the bank to increase its policy rate Aug 24 to just 20 percent. “Recent indicators point to a continued increase in the underlying trend of inflation,” the central bank said. “Monetary tightening will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in the inflation outlook is achieved,” it said. The Turkish lira gained 1.5 percent against the dollar after the bank’s clear signal that it was stepping up its fight against inflation and attempts to support the troubled currency. Capital Economics analyst Liam Peach said that the rate increase was “much larger-than-expected” and “will go a long way towards reassuring investors that the shift back to policy orthodoxy is on track”. Many economists disagreed with Turkish President Recep Tayyip Erdogan’s previous monetary policy, which was regarded as unorthodox. However, Erdogan infused his government with market-friendly faces after winning a difficult May election that came in the heat of one of Turkey’s most dire economic crises in decades. Click here to read

Western firms ignoring G7’s Russian oil ‘price cap’ – Bloomberg

Exports of Russian oil using Western-insured tankers are continuing despite the fact that the price of Urals grade has jumped above the $60 per barrel cap set by the Group of Seven (G7) countries and the EU, Bloomberg reported on Aug 22. According to the news agency, about 40% of vessels carrying crude from Russia’s Baltic and Black Sea ports were either owned or insured by companies based in countries that signed up to the price cap. Urals was trading at about $71 a barrel on Aug 18 at Russia’s ports, according to Argus Media. About half of the tankers taking on Russian oil were Western-owned before the limit was breached, with a large number of vessels having insurance routed through London, the outlet said. The price cap on Russian seaborne oil exports of $60 per barrel was introduced by the EU, G7 countries, and Australia on December 5. It bans Western companies from providing insurance and other services to shipments of Russian oil unless the cargo is purchased at or below the set price. “Though technically the price of Russian oil needs to be $60 or less in order for companies in the US, EU or G7 to provide services such as vessels and insurance, all the firms need to do so in practice is receive a written pledge – called an attestation – that the cargo was purchased below that threshold,” the outlet wrote. Click here to read

China flags new visa-free travel agreement with Russia

Russian tourists may no longer require a visa to travel to China, the country’s consular attache in Kazan told TASS news agency last weekend. “We have already canceled visas for tourists in a group,” Chen Borui told the outlet on the sidelines of the sixth Global Forum of Young Diplomats on Aug 19. He added that a completely visa-free arrangement between the two countries would “definitely happen in the future.” The diplomat stressed, however, that in order to implement such a deal, a number of issues related to security and migration would first have to be resolved, particularly in Russia’s Far East region. “In order to control the situation, it is necessary to resolve issues in these areas,” Chen said. Earlier this month, Russia and China reinstated a reciprocal visa-free travel agreement that allows organized tourist groups consisting of between five and 50 people to visit their respective countries without a visa. That deal had originally been signed in 2000, but was suspended in 2020 due to the Covid-19 pandemic. Moscow has also established a similar agreement with Iran and extended a proposal to sign such a deal with India as well. Additionally, on August 1, Russia also rolled out a new scheme that allows foreign citizens from 55 countries to obtain an electronic visa, which is valid for 60 days and allows tourists to visit the country for up to 16 days. Click here to read

Pakistan Seeks to Reduce Electricity Prices After Mass Protests

Pakistan is drawing up a strategy to reduce power tariff after nationwide protests against rising electricity bills over the weekend, a move that was agreed with the International Monetary Fund for a $3 billion bailout. Interim Prime Minister Anwaar-ul-Haq Kakar told the government officials to come up with steps to reduce the power bills, according to a statement by Prime Minister Office on Aug 27. Kakar called the meeting after mass protests and said the government will not take any decision in haste that can harm the nation’s finances. Pakistan unexpectedly froze fuel prices last year that stalled the IMF’s loan program. The protests over electricity bills is the first challenge for Kakar’s two-week old caretaker administration, which was installed as a constitutional requirement to supervise national elections in three months of the dissolution of Parliament in early August. The previous government of Shehbaz Sharif agreed with the IMF to raise taxes and power prices in June for the bailout that helped the nation avoid a default. Any change in electricity prices can stall the program. “Pakistan is part of an international agreement and it has to adhere to it whether it likes it or not,” Kaiser Bengali, an economist who has advised multiple previous governments said by phone. “It doesn’t go well that we sign and then default on that agreement.” Click here to read

Are We Ready for a $100 Billion Catastrophe? How About $200 Billion?

Worldwide insured losses from natural disasters have reached $120 billion, adjusted for inflation, in five of the past six years—a threshold only hit twice in the first 16 years of this century, according to Aon. “The industry needs to be talking about the plausibility of $200 billion nominal loss years, which might be more of a near-term possibility than we realize,” says Steve Bowen, chief science officer at brokerage Arthur J. Gallagher & Co.’s Gallagher Re. The net result, says catastrophe-modeling veteran Karen Clark, is that the industry is facing a turning point akin to Andrew’s wake. And she would know: Back in 1992, Clark faxed around an estimate for Andrew’s loss based on a computer model she had developed that was twice what other industry sources at the time were saying. Her number proved to be the right one. Insurers’ struggle today to price what she calls “frequency peril” risks like wildfires are “a déjà vu moment,” Clark says. “I never thought I would see a disrupted market like after Andrew. But here we are.” Part of the challenge has been insurers or their clients relying on models like those developed in the 1990s for hurricanes or earthquakes to understand other kinds of risks, including secondary perils like wildfires or “social” risks like litigation. There has also been a glut of capital in the insurance industry, which has helped depress risk pricing. Click here to read

Germany Is Losing Its Mojo. Finding It Again Won’t Be Easy.

Two decades ago, Germany revived its moribund economy and became a manufacturing powerhouse of an era of globalization. Times changed. Germany didn’t keep up. Now Europe’s biggest economy has to reinvent itself again. But its fractured political class is struggling to find answers to a dizzying conjunction of long-term headaches and short-term crises, leading to a growing sense of malaise. Germany will be the world’s only major economy to contract in 2023, with even sanctioned Russia experiencing growth, according to the International Monetary Fund. Germany’s reliance on manufacturing and world trade has made it particularly vulnerable to recent global turbulence: supply-chain disruptions during the Covid-19 pandemic, surging energy prices after Russia invaded Ukraine, and the rise in inflation and interest rates that have led to a global slowdown. At Germany’s biggest carmaker Volkswagen, top executives shared a dire assessment on an internal conference call in July, according to people familiar with the event. Exploding costs, falling demand and new rivals such as Tesla and Chinese electric-car makers are making for a “perfect storm,” a divisional chief told his colleagues, adding: “The roof is on fire.” The problems aren’t new. Germany’s manufacturing output and its gross domestic product have stagnated since 2018, suggesting that its long-successful model has lost its mojo. Click here to read


BRICS invites 6 countries including Saudi Arabia, Iran into group

The BRICS bloc of developing nations agreed on Aug 24 to admit Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates in a move aimed at accelerating its push to reshuffle a world order it sees as outdated. The group's leaders left the door open to future enlargement, potentially paving the way for the admission of dozens more countries motivated by a desire to level a global playing field they consider rigged against them. The expansion adds economic heft to BRICS, whose current members are China, the world's second largest economy, as well as Brazil, Russia, India and South Africa. It could also amplify its declared ambition to become a champion of the Global South. But long-standing tensions could linger between members who want to forge the grouping into a counterweight to the West - notably China and Russia - and those that continue to nurture close ties to the United States and Europe. "This membership expansion is historic," Chinese President Xi Jinping, the bloc's most stalwart proponent of enlargement, said. "It shows the determination of BRICS countries for unity and cooperation with the broader developing countries." The six new candidates will formally become members on Jan. 1, 2024, South African President Cyril Ramaphosa said when he named the countries during a three-day leaders' summit he is hosting in Johannesburg. Click here to read

East Asia’s ‘seismic shift’: why China sees the Camp David summit as the start of a de facto military alliance

As Washington inches closer to a de facto military alliance with Tokyo and Seoul, pundits have warned of the destabilising impact it could have on the regional power balance amid fears over escalating tensions between China and the US. US President Joe Biden hailed the “new era” of a close security partnership between the three powers at a landmark trilateral summit held at Camp David over the weekend. While Biden also insisted the summit was not targeted at Beijing, a joint statement from the three powers voiced concerns about China’s “dangerous and aggressive behaviour” in the South China Sea and its policy towards Taiwan. On Aug 21, Chinese foreign ministry spokesman Wang Wenbin lashed out at the summit, which he said had “smeared and attacked China” and was “a deliberate attempt to sow discord between China and our neighbours”. He compared the partnership to other US-led alliances such as Aukus with Britain and Australia and the Quad with India, Japan and Australia. “We see two trajectories in the Asia-Pacific [region] today,” Wang said. “One features efforts to advance solidarity, cooperation and economic integration. The other features attempts to stoke division and confrontation and revive the Cold War mentality.” The trio also agreed to set up a new hotline to share military intelligence, pledged to share real-time data on North Korea’s missile launches and discussed measures to de-risk global supply chains from exposure to China. Click here to read

The Ramaswamy Doctrine- WSJ Editorial

Millions of voters met Vivek Ramaswamy for the first time in Aug 23 night’s Republican debate, and they’re right to like the 38-year-old’s message about restoring America’s common purpose and identity. But the young entrepreneur’s foreign policy is a different story, and it’s worth taking its implications more seriously than Mr. Ramaswamy apparently has. Ukraine is “not a priority for the United States of America,” Mr. Ramaswamy said on Wednesday evening, with the hoary line that America should focus on its own border, not Russia’s with Ukraine. Nothing about shipping Stingers abroad precludes the U.S. government from fixing immigration chaos, and Mr. Ramaswamy knows this. He’s repackaging a Bernie Sanders applause line, with the border replacing social welfare. Mr. Ramaswamy has called the Russia-China axis “the single greatest military threat” to the United States, which is true. But his conceit is that with a “modern Monroe doctrine,” as he said in a recent speech at the Richard Nixon Presidential Library, the U.S. could evict all threats in the Western hemisphere and live unperturbed at home. This isn’t a new idea. It’s an updated version of the “spheres of influence” doctrine that would cede Asia to China and Europe to Russia. Click here to read

U.K. foreign minister visits China as report slams Beijing

British Foreign Secretary James Cleverly met Chinese Vice President Han Zheng and will hold a meeting with Foreign Minister Wang Yi in Beijing on Aug 23 as London seeks to reengage with the Asian superpower amid growing disagreements and distrust. Cleverly told Han that the two countries should meet face-to-face more regularly to avoid misunderstandings and address differences of opinion. Han said he hoped mutual respect and cooperation would help improve bilateral ties. But in a sign that British politicians are divided on how to approach China, an influential parliamentary panel separately published a report earlier in the day that criticized the government for an incoherent approach to China and called on London to develop "deterrence diplomacy" to "protect the self-determination of the people of Taiwan." It also said the U.K. should apply to join the Quad, the strategic security dialogue between Australia, India, Japan and the U.S. Cleverly is the first British foreign secretary to visit China in more than five years, and his trip also comes after Beijing started enforcing in Hong Kong its National Security Law, which the U.K. has been highly critical of. Cleverly's remit in China is to engage directly in hopes of improving and stabilizing relations, but he will raise the issue of national security around technology as a key item on his agenda. Click here to read

Taiwan’s former battleground Quemoy becomes a new arena in the fight for the presidency

Taiwan’s once war-torn Quemoy island has become a fierce battleground for presidential hopefuls to present themselves as the candidate best placed to reducing cross-strait hostility and bringing peace. Since May, the former heavily militarised outpost – also known as Kinmen – has seen a flurry of visits by presidential hopefuls from the main opposition Kuomintang (KMT), the ruling Democratic Progressive Party (DPP), and the smaller Taiwan People’s Party (TPP). Observers said the symbolism of Quemoy as an ex-war zone as well as its proximity to the Chinese mainland had prompted the hopefuls to use it to tout their cross-strait peace overtures ahead of the crucial January election. Lying roughly 10km (6 miles) east of the mainland city of Xiamen, Quemoy has been bombarded by the mainland twice – once in 1954 and again in 1958, commonly known as the First and Second Taiwan Strait Crises. The KMT government, or the Nationalists who fled to Taiwan in 1949 after losing the Chinese civil war on the mainland, managed to hold firm against the bombardment in both crises. Speaking on Aug 23 to mark the 65th anniversary of the 1958 crisis, KMT presidential candidate and New Taipei mayor Hou Yu-ih called for an improvement in relations with the mainland as well as peace, stability and prosperity between the two sides. Click here to read

Who is Srettha Thavisin, Thailand's next prime minister?

Srettha Thavisin was elected Thailand's 30th prime minister on Aug 22, capping a monthslong road to power for the former property tycoon who was not warmly received by either his party's most ardent supporters -- or the conservative establishment that he relied on to put him in office. As the country's first prime minister in nearly a decade without a military background, the 61-year-old will be positioning himself as Thailand's salesman-in-chief. On the campaign trail and in interviews with Nikkei Asia, he often spoke of pursuing free trade agreements to catch up with neighboring Indonesia and Vietnam, which have pacts with key importers and investors like the European Union, and to capture new export markets in the Middle East and Africa. But the first priority for Srettha will be to keep a number of lofty economic promises to his Pheu Thai Party's base. Born in Bangkok and educated in the U.S., Srettha worked at Proctor & Gamble Thailand until 1990, when he became president of Sansiri, a property developer founded by his mother's family. Sansiri listed on the Stock Exchange of Thailand in 1995 and pioneered lifestyle-oriented property development in the country, before expanding overseas through acquisitions like that of Standard International hotel group. Click here to read

Japan eyes 6 nations to receive security aid in fiscal 2024

To bolster deterrence capabilities against China, the Foreign Ministry plans to offer security aid of about 5 billion yen ($34.1 million) to six “like-minded” countries, including Vietnam and Indonesia, in fiscal 2024, sources said. That is double the amount earmarked for four nations in the current fiscal year. The aid will be offered in official security assistance (OSA), which was introduced this fiscal year to help countries that share diplomatic and other goals improve warning and surveillance capabilities over their territories as well as in areas of anti-terrorism and anti-piracy. Specifically, the program will provide defense equipment, such as satellite communication systems, radar equipment and patrol boats, and offer other forms of aid, such as building ports for military-civilian use, free of charge. The government hopes to help enhance the defense capabilities of these friendly countries, primarily developing nations, as a bulwark against an increasingly assertive China. In the current fiscal year, the Philippines, Malaysia, Bangladesh and Fiji are expected to receive aid, and 2 billion yen has been allocated in the initial government budget. The Foreign Ministry expects to secure about 5 billion yen in fiscal 2024, including 2.1 billion yen it will request by the Aug. 31 deadline, sources said. Click here to read

Largest Hunger Strike in Bahrain’s History Fuels Unrest

More than 700 prisoners are staging the largest hunger strike in Bahrain’s history, catalyzing rare street protests and raising concerns in Washington about stability in a key Persian Gulf ally. The hunger strike is unfolding in Bahrain’s Jau prison, which has a population of more than 2,600 and holds many dissidents including people sentenced for their role in protests dating back to the country’s 2011 uprising during the Arab Spring. Prisoners launched the protest earlier in August over what they say are degrading conditions in the facility. Bahrain is a U.S. ally that hosts the U.S. Navy’s Fifth Fleet base. Earlier this month, a State Department spokesman said the U.S. was “aware of and concerned about reports of this hunger strike.” The prisoners are demanding an end to solitary confinement, more time outside their cells than the current limit of an hour a day, access to adequate medical care and the right to pray together in groups. In response, authorities have started isolating prisoners on strike and have refused medical services for several of them until they end the strike, said the Bahraini opposition party, al-Wefaq, which the kingdom has banned. Some prisoners say guards have met the protests with violence. Click here to read

Iran Unveils Armed Drone Resembling US’ MQ-9 Reaper

Iran's Defense Ministry unveiled a drone on Aug 22 resembling America's armed MQ-9 Reaper, claiming that the aircraft is capable of staying airborne for 24 hours and has the range to reach the country's archenemy Israel. Iran's state-run IRNA news agency published a photograph of the drone, called the Mohajer-10, on display at a conference marking Defense Industry Day with what appeared to be smoke-machine fog underneath it. “Mohajer” means “immigrant” in Farsi and has been a drone line manufactured by the Islamic Republic since 1985. IRNA said the drone is able to fly up to 24,000 feet with a speed of 210 kph (130 mph), carrying a bomb payload of up to 300 kilograms (660 pounds). It also said the drone could carry electronic surveillance equipment and a camera. Iran's hard-line President Ebrahim Raisi, a protégé of Supreme Leader Ayatollah Ali Khamenei, also viewed the drone on Aug 22. “Today, we can firmly introduce Iran as an advanced and technologic nation to the world,” Raisi said in comments aired on state television. He reiterated Iran’s stance about friendly relations with “all countries in the world,” adding that Iran’s armed forces will cut off any hand that will reaches out in an attempt to invade Iran, state TV reported. Click here to read

North Korea warns of ‘thermonuclear war’

Washington’s close military ties with South Korea are bringing the region closer to a nuclear war, Pyongyang claimed on Aug 22. The state-run Korean Central News Agency (KCNA) argued that the ongoing 11-day US-South Korean exercise ‘Ulchi Freedom Shield’ was a rehearsal for “an actual war to invade the North,” and that “the aggressive character of the drill is becoming ever more conspicuous.” Pyongyang further insisted that if during the current drill the US and its allies implement the principles agreed last week at Camp David, Maryland, “the possibility of outbreak of a thermonuclear war on the Korean Peninsula will become more realistic.” President Joe Biden hosted his South Korean counterpart Yoon Suk-yeol and Japanese Prime Minister Fumio Kishida at Camp David on Aug 18. In a joint statement, the three leaders vowed to increase military ties and “bring our trilateral security cooperation to new heights.” They also condemned Pyongyang’s “unprecedented number” of ballistic missile tests and accused it of cyberattacks. North Korea traditionally considers US exercises with South Korea and Japan a threat. Washington, meanwhile, says the maneuvers are purely defensive in nature. The drill, which kicked off on Aug 21, consists of over 30 separate exercises, combining computer-simulated wargames with field training. Click here to read

Putin comments on Prigozhin plane crash

Evgeny Prigozhin was a man of many talents who made a “significant contribution” to the struggle against neo-Nazis in Ukraine, Russian President Vladimir Putin said on Aug 24, commenting on the plane crash that reportedly killed the Wagner Group head. Speaking with journalists at the Kremlin, Putin said that he had known Prigozhin since the early 1990s and described him as “a man of complicated destiny.” “He’d made serious mistakes in his life, but also got results. For himself as well as our common cause, when I asked it of him in these last months,” Putin added. He described Prigozhin as “a talented businessman” who worked in Russia as well as Africa dealing in oil, gas, precious metals and gems. Putin said Prigozhin had apparently just returned from Africa and had met with some Russian officials. Prigozhin was on the passenger manifest of the Embraer private jet that crashed on Aug 23 in the Tver Region, en route from Moscow to St. Petersburg. All seven passengers and three crew members perished. Authorities are still working to identify the bodies, but Prigozhin is presumed to be among them, along with six other Wagner leaders. Putin expressed his sincere condolences to their families and vowed that the investigation into the crash would be thorough. Click here to read

Niger military rulers order France ambassador to leave the country

Niger’s military leadership asked the French ambassador to depart the country – a move further escalating the international crisis in the West African nation after a coup that deposed the democratically elected president. Niger’s military government also authorised troops from neighbouring Mali and Burkina Faso on Aug 25 to come to its defence, raising the stakes in a standoff with other West African nations threatening force to reinstate Niger’s democratically elected president. French Ambassador Sylvain Itte was asked to leave Niger within 48 hours in a letter that accused him of ignoring an invitation for a meeting with the foreign ministry. The letter dated Aug 25, also cited “actions of the French government contrary to the interests of Niger” as among the reasons for Itte’s expulsion. France’s foreign ministry on Aug 25 said Niger’s “putschists have no authority” to ask its ambassador in Niamey to leave. “The ambassador’s approval comes solely from the legitimate elected Nigerien authorities,” AFP news agency quoted an unnamed official as saying. Niger, a former French colony, was France’s partner before last month’s coup in the fight against armed groups. A growing wave of anti-French sentiment has followed recent coups in the region with some locals accusing the European country of interfering in their affairs. Click here to read

Analysis: Tunisia isolated, but migration realpolitik keeps Europe onside

President Kais Saied has made a mark since coming into office in 2019, from his suspension of parliament and dismissal of the government in 2021 – seen by his opponents as a “coup” – to the imprisonment of many opposition leaders, reduction of the independence of the judiciary and rhetoric that has been blamed for a wave of anti-refugee and -migrant violence in Tunisia. Over his time in office, the economy has continued to weaken. Prices have risen, and the subsidised food that many rely on is scarce. Refugees of all stripes continue to depart in their thousands, trying to get to Europe on treacherous boats. Saied had the constitution redrafted to put more power in the hands of the president. It passed in a referendum but set a record for low voter turnout. International observers have been paying close attention to the developments, watching as the country transformed from the hope of the Arab Spring protests in 2011 to a place rights groups repeatedly warn about as democratic freedoms are curtailed and people are increasingly at risk of hunger. The country’s currency, the dinar, currently stands at a fraction of its former value, and Tunisia continues to operate with a budget deficit. As of March, government debt stood at $37.7bn. Click here to read

Rights groups condemn Taliban’s new curbs on women’s education, movement

Human rights groups have condemned the Taliban’s latest restrictions on Afghan women’s education and movement after it barred them from visiting one of Afghanistan’s most popular national parks and stopped them from leaving for the United Arab Emirates to study on academic scholarships. Amnesty International said it denounced the Taliban’s latest action prohibiting female students from travelling to Dubai to start their university studies. “This preposterous decision is a flagrant violation of the right to education and freedom of movement and demonstrates the continued gender persecution against women and girls in Afghanistan,” the rights group said in a post on X, formerly Twitter. “The Taliban de-facto authorities must immediately reverse their decision and allow these female students to travel and study.” The head of a Dubai-based conglomerate said Taliban authorities had stopped about 100 women from travelling to the UAE, where he said he had sponsored their university educations. Khalaf Ahmad al-Habtoor, founding chairman of Al Habtoor Group, said in a video posted on X that he had planned to sponsor the female students to attend university and a plane he had paid for had been due to fly them to the UAE on Aug 23. Click here to read

Bangladesh election observer controversy casts new doubt on polls

As Bangladesh gears up for a general election due early next year, a list of observers has cast fresh doubt on the legitimacy of polls they are tasked with monitoring. The Election Commission this month published names of 68 approved observers online. Their presence is supposed to ensure voting will be conducted fairly. But rather than easing fears among the opposition and international critics that the election may be manipulated, the list has only deepened suspicion of the government's intentions. Local media investigations found that nearly half the observers are just "names" with no track record of monitoring elections or have strong links to the ruling Awami League party, in clear violation of election laws. Nikkei Asia contacted a number of the observers and found similar issues. One entity, named "Shishu Prativa Bikash Kendra," is led by Mizanur Rahman, a former president of the ruling party's student wing and a ruling committee member of a ward in the capital, Dhaka. When contacted, Rahman conceded that his organization has no experience observing local or national elections, though he claimed that it has the "full capacity" to be an observer without elaborating. Election Commission officials acknowledged the controversy and said there is still scope for amending the list, promising to consider written complaints against any of the names. Click here to read


Nearly 2 million excess deaths followed China’s sudden end of COVID curbs--study

China’s abrupt move to dismantle its strict COVID-19 regime, which unleashed the virus onto its 1.4 billion residents, could have led to nearly 2 million excess deaths in the following two months, a new U.S. study shows. The study by the federally funded Fred Hutchinson Cancer Center in Seattle was taken from a sample of mortality data published by some universities in China and internet searches. It found an estimated 1.87 million excess deaths from all causes occurred among people over 30 years of age between December 2022 and January 2023, and were observed in all provinces in mainland China except Tibet. China’s decision last December to end the three-year zero-COVID policy, which included mass-testing and stringent and persistent quarantine lockdowns, led to a massive surge in hospitalizations and deaths that health experts say were largely unreported by the government. The study, published on Aug 24 in JAMA Network Open, said the number of excess deaths far exceeded official Chinese government estimates in January that 60,000 people with COVID-19 had died in hospital since the zero-COVID policy was abandoned a month earlier. In the study, researchers performed statistical analysis using information from published obituaries and data from searches on Baidu, a popular Chinese internet search engine. Click here to read

Alzheimer’s drug lecanemab set to soon be approved for use in Japan

A medication that could help treat early stages of Alzheimer's disease is on track to be approved for manufacturing and sales in Japan after being endorsed by a health ministry expert panel on Aug. 21. Eisai Co. and U.S. partner Biogen Inc. developed lecanemab, the first medication designed to remove a protein believed to cause Alzheimer's, a type of dementia. It will be commercially available by the end of the year, at the earliest, pending approval from the health minister. The medication is targeted at patients with mild Alzheimer’s disease and those with mild cognitive impairment, a slight decline in mental abilities, such as memory loss, that is less severe than mild dementia. It is not expected to be effective for patients at an advanced stage of Alzheimer's because it is difficult to regenerate damaged nerve cells. About 6 million people have dementia in Japan, and hundreds of thousands of patients can potentially benefit from a lecanemab-type medication, experts said. U.S. authorities gave full approval to lecanemab, sold as Leqembi, in July. When a person develops Alzheimer’s disease, nerve cells in the brain break down, and cognitive functions gradually decline. Scientists believe the disease is caused when a protein called amyloid beta accumulates in the brain. Click here to read

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