Global Developments and Analysis: Weekly Monitor, 04 April 2022 - 10 April 2022

Economic

US sanctions threat if China aids Russia stirs fear in Beijing about forex assets

Washington’s financial sanctions on Russia for invading Ukraine have raised concern in China over its large exposure to US government bonds, although experts say there is no real alternative for the country to invest its foreign exchange reserves. In recent weeks, former central bank adviser Yu Yongding and former vice-chairman of the Bank of China, Wang Yongli, have issued warnings about the effect that Western sanctions could have on China’s investment in foreign securities, amid US threats of “consequences” if Beijing helps Russia evade sanctions. “If China also encounters similar sanctions against Russia, its overseas assets may even face the danger of turning to zero,” said Yu, a prominent Chinese economist, in a blog post last week. A country like China that runs a trade surplus has to invest in foreign assets and there are few other choices but US bonds, said Michael Pettis, a professor of finance at Peking University and a veteran China observer. Last year, China’s trade surplus with the rest of the world rose 29 per cent from a year earlier to US$676.43 billion – the highest since records began in 1950. China has been reducing its exposure to US government bonds since 2015, although it has not been able to find a similar replacement. Click here to read... [2]

Ukraine war disruptions send food prices to their highest ever

World food prices hit an all-time high in March following Russia’s invasion of agricultural powerhouse Ukraine, a United Nations agency said on April 08, adding to concerns about the risk of hunger around the world. The disruption in export flows resulting from the February 24 invasion and international sanctions against Russia has spurred fears of a global hunger crisis, especially across the Middle East and Africa, where the knock-on effects are already playing out. Russia and Ukraine, whose vast grain-growing regions are among the world’s main breadbaskets, account for a huge share of the globe’s exports in several major commodities, including wheat, vegetable oil and corn, their prices reached their highest levels ever last month. Ukrainian ports have been blocked by a Russian blockade and there is concern about this year’s harvest as the war rages on during the sowing season. The UN Food and Agriculture Organization (FAO) said its Food Price Index, which tracks monthly changes in international prices for a basket of commodities, averaged 159.3 points last month, up 12.6 percent from February. As it is, the February index was the highest level since its inception in 1990. FAO said the war in Ukraine was largely responsible for the 17.1 percent rise in the price of grains, including wheat and others like oats, barley and cornClick here to read... [3]

Ukraine war's impact on Asian economies splits global lenders

Two major global development banks are split on the impact of the Ukraine war on Asian economies: the World Bank is pessimistic, while the Asian Development Bank is confident that growth in the region will "continue to be strong." In its economic outlook for 2022 published April 05, the World Bank projects that the East Asia and Pacific region will grow 5%, down from the 5.4% it previously projected in October. The lender warned that the Ukraine war threatens an uneven recovery from the pandemic in the region. But the Asian Development Bank, which put out its latest outlook report on April 06, forecast growth in Asia at 5.2% in 2022, despite headwinds such as the disruptions of commodity supply chains triggered by the Ukraine war. "There's no doubt that the Ukraine war is going to delay the recovery," Aaditya Mattoo, chief economist of the East Asia and Pacific Region of the World Bank, told Nikkei Asia in a recent interview. Mattoo said that the region faces a series of shocks that will set back growth momentum. The first is the Ukraine war, which is disrupting food and fuel supplies and has already led to big spikes in prices. "It's going to increase financial volatility, reduce confidence and hurt global growth as well," he added. Other shocks include the slowdown in China stemming from lockdowns to quell a surge in COVID cases and the U.S. responding to accelerated inflation through monetary tightening, Mattoo said. Click here to read... [4]

U.S. aims to launch new Indo-Pacific framework as early as May

The U.S. could launch its new Indo-Pacific Economic Framework as early as May, a key trade official said April 06, as Washington seeks stronger trade and supply chain ties with Japan and Southeast Asia to counter China's economic influence in the region. "We are hopeful that in the next month or so we should be in a position ... to potentially launch" the IPEF, said Pamela Phan, deputy assistant secretary for Asia in the U.S. Commerce Department, at a two-day conference hosted by the Center for Strategic and International Studies. The U.S. is working out the details with a range of countries in the region, including Japan, Singapore, Malaysia, New Zealand, South Korea and India. The IPEF will focus on four main pillars: trade facilitation, supply chain resilience, infrastructure and decarbonization, and taxation and anti-corruption. The U.S. plans to enter into agreements with different sets of countries for each pillar, but those seeking trade facilitation will be expected to sign on to all four. "We're not doing a traditional trade agreement," U.S. Trade Representative Katherine Tai has said of the IPEF. Unlike the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the new framework will not lower tariffs or otherwise expand market access. Click here to read... [5]

Russia halts plan to nationalize foreign firms – reports

The Russian government has suspended work on the recently proposed bill to nationalize foreign firms that have chosen to end their operations in the country amid Ukraine-related Western sanctions, Izvestia newspaper reported on April 11, citing sources. Last month, a government commission on legislative activity approved a draft law, which would allow for the introduction of external management in firms, at least 25%-owned by residents of “unfriendly states,” or of countries that have placed sanctions on Russia. The initiative was proposed in response to a mass exodus of foreign companies from the country due to Western sanctions related to the conflict in Ukraine. The measure was aimed at preventing these firms’ bankruptcies and the loss of jobs in Russia. According to Izvestia, the draft document has not yet been submitted to the government. One of the unnamed sources cited by the publication explained that “it does not make sense to launch such a serious mechanism at this stage” because foreign companies are increasingly expressing interest in negotiating the terms of their exit with Russian authorities, and many of them plan to resume work in Russia in April-May. “For the majority of companies, we do not yet see any actual steps, except for declarations. Even those who have suspended their activities, for example, closed shops or restaurants, often do not break lease agreements and continue to pay wages to their employees,” another source told the newspaper. Click here to read... [6]

Ukraine war: one possible casualty may be Beijing’s economic relationship with Kyiv

A new metro line in Kyiv. A US$50 million revamp of a shipping port in Mariupol. A large wind farm on the Black Sea coast. Since Ukraine signed on in 2017 to Beijing’s Belt and Road Initiative (BRI) – a sweeping trade and investment plan to bolster China’s economic ties with the rest of the world – Chinese contractors and lenders have embarked on numerous ambitious infrastructure projects in the eastern European state. Those projects are in keeping with Ukrainian President Volodymyr Zelensky’s ambition for his nation to serve as a “bridge to Europe” for Chinese investment, as he told Chinese President Xi Jinping last year. Russia’s invasion of Ukraine has now thrust that future into doubt, according to economists and BRI experts. Not only has the conflict disrupted projects in Ukraine and threatened Russia’s role as a critical BRI artery, but Beijing’s refusal also to condemn Russia’s invasion – or even recognise the attack as an invasion – has frustrated Kyiv and led some in Ukraine to question whether Beijing should remain its primary economic partner. China’s nominal neutrality was “de facto” support for Russia, argued Vasyl Yurchyshyn, director of economic and social programmes at the Razumkov Centre, a leading think tank in Kyiv. Click here to read... [7]

EU fails to agree Russian energy ban

The European Union’s foreign ministers have not agreed on a ban on Russian oil and natural gas imports, Head Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell said on April 10, adding that discussions on the issue will continue. The energy ban was expected to be part of the latest EU sanctions package against Moscow. “We discussed, first of all, how to ensure the effectiveness of the existing sanctions in order to avoid gaps in their implementation. But we also discussed new steps we can take, including sanctions against oil and gas,” Borrell said. “We have not made decisions regarding such sanctions, we agreed to continue the discussion.” While the European Union agreed numerous sanctions against Moscow, member states have been at loggerheads over banning Russian energy imports. That’s because many EU countries are heavily dependent on Russian energy. Thus, Hungary has placed a veto on a total ban of Russian gas imports, saying it was the only option, as the country is landlocked and wouldn’t be able to directly receive liquefied gas from the US. Borell stressed the importance of EU countries becoming less reliant on Russian energy, arguing that buying gas from Moscow is “financing the war.” Click here to read... [8]

Japan to phase out imports of Russian coal and oil

Japan announced April 08 it is expelling eight Russian diplomats and trade officials and will phase out imports of Russian coal and oil, with Prime Minister Fumio Kishida saying Moscow must be held accountable for “war crimes” in Ukraine. Kishida said Japan will also ban imports of Russian lumber, vodka and other goods, and will prohibit new Japanese investment in Russia. It will also step-up financial sanctions against Russian banks and freeze assets of about 400 more individuals and groups, including military-linked organizations, Kishida said at a news conference. He said atrocities against civilians and attacks on nuclear facilities in Ukraine are “severe violations of international law and are absolutely impermissible." “We are at a critical moment in our efforts to get Russia to stop its cruel invasion of Ukraine and restore peace. Everyone, please cooperate," Kishida said, referring to the sanctions' impact on Japan, such as higher prices for gasoline, electricity and food. Earlier April 08, the Foreign Ministry announced it is expelling eight Russian diplomats and trade officials. Kishida said the expulsion is based on a “comprehensive decision taking into consideration Russia's invasion of Ukraine.” He added that Japan will do utmost to ensure safety of Japanese nationals and companies still in Russia in case of a retaliation. Click here to read... [9]

With Bonds in a ‘Coma,’ Buy Commodities: Bridgewater’s Patterson

Investors should get out of bonds as rates rise and diversify their portfolios with exposure to commodities such as agricultural products, oil and metals facing supply disruptions due to the war in Ukraine, according to Rebecca Patterson, chief investment strategist for Bridgewater Associates. “You should absolutely have commodities in your portfolio,” Patterson said during an interview April 08 with David Westin on Bloomberg Television. “We don’t know if bonds as a diversifier are dead or in a coma. I think they’re probably in a coma,” she said on “Wall Street Week.” Stocks and bonds swung wildly this week as investors sought clues to the economy’s direction, Federal Reserve policy and the impact of the war in Ukraine. The Bloomberg US Aggregate Bond Index is down 7.9% this year through April 08, compared with a 5.8% loss for the S&P 500 Index. Bridgewater Associates, which oversees $150 billion, posted a 16.3% return in the first quarter as macro funds benefited from volatility in global markets. Gregory Peters, co-chief investment officer at PGIM Fixed Income, said bonds are getting more attractive as yields rise and provide protection against a potential recession. “Bonds are increasingly attractive here, not less attractive,” Peters, whose firm had almost $1 trillion under management as of Dec. 31, told Westin. Click here to read... [10]

Founder Ren Zhengfei urges Huawei to step up patent licensing as telecoms giant seeks to remake itself amid US sanctions

Chinese telecoms giant Huawei Technologies Co is stepping up efforts to turn its vast pool of patents into revenue via “reasonable pricing”, founder Ren Zhengfei said in an internal meeting, as the company continues a drive to diversify its sales mix while still subject to crippling US sanctions. “Previously our intellectual property [efforts] were made for self-defence and to keep our own business safe,” Ren told the company’s IP team in an internal meeting in March, with an internal memo documenting the meeting posted on Huawei’s employee forum last week. Ren noted that royalty charges “should not be too low” as that could have the effect of curbing innovation and the willingness to invest in R&D within society, and he also warned the company to prepare for a “protracted battle” to make patent licensing a success for Huawei. Huawei held a total of 110,000 active patents across 45,000 patent families by the end of last year, and in 2021 alone the company ranked number one for the number of granted patents in both China and Europe, according to the company’s annual results filing. Ren urged the company to update its IP strategies and bring out the “commercial value” of these confidential technology results by licensing them to external partners. Click here to read... [11]

Samsung caught between rock and a hard place on Russia

Even as multinational companies have flooded out of Russia in response to the war in Ukraine, Samsung Electronics has yet to take a clear stance on the matter, fearing it could lose some substantial smartphone and television market share to Chinese rivals. When asked about pulling back from Russia at last month's general shareholders meeting, CEO Han Jong-hee said only that the company "will monitor the situation and respond while minimizing the impact on our business." Amid a flurry of exits from Russia following the Feb. 24 invasion, Samsung stopped shipping products there in early March, citing supply chain issues. Later that month, it renamed handsets such as the Galaxy Z Fold in certain markets, as the letter "Z" has become a symbol of support for the invasion. But the South Korean electronics maker has been less proactive than others in distancing itself from Russia, pointing to outside factors in its decisions, and has not made its position clear on the war itself. Samsung moved early into Russia after the fall of the Soviet Union, seeing promise in its wealth of natural resources. It spent heavily on marketing mobile phones, TVs and appliances, and the TV factory, started up in 2007, helped it amass further market share. It would be difficult for the company to leave just as it is recouping its investments. Click here to read... [12]

China accelerates inward economic pivot with plan to create a ‘unified domestic market’

China has doubled down on its strategy to make the economy less dependent on the outside world by releasing plans for a “unified domestic market”, as geopolitical tensions and domestic coronavirus outbreaks add to supply chain disruptions. The strategy aims to promote more efficient production, distribution, circulation and consumption, while making China an even bigger magnet for global companies and investment, according to guidelines released on April 10 by the Central Committee of the Communist Party and the State Council. “[We should] step up building a unified national market that is highly efficient, rules-based, fair for competition and fully open, and push China’s market shift from big to strong,” said the guidelines, which have only just been made public after being approved by President Xi Jinping in mid-December. Analysts said the policy aims to tackle market fragmentation, while the business community has raised concerns about administrative interference and called for more concrete details. Publication of the text comes as lockdowns in Shanghai and other Chinese cities pile pressure on domestic logistics operations and Russia’s invasion of Ukraine weighs on the global supply chain, driving up prices for commodities like food, energy and fertilisers. The new guidelines vowed to clean up preferential policies that disadvantage foreign companies and introduce fair competition review of newly issued policies. Click here to read... [13]

Chinese chipmakers see rising inquiries from Russia

Chinese chip producers are looking at increasing inquiries from Russian firms cautiously, with no concrete progress made due to a series of factors ranging from the threat of US sanctions to payment issues, an industry source told the Global Times. "There is indeed a pick-up in demand from Russia for various types of electromechanical equipment, and we are also trying to match up demand and supply, but domestic manufacturers are more cautious, and we have not learned that there is any substantial progress" from current inquiries, a senior industry expert familiar with the situation told the Global Times on April 10. Increased inquiries are being seen from Russian businesses amid Western sanctions related to the Russia-Ukraine conflict. Notably, Russia's card payment system is reportedly soliciting "a couple of Chinese suppliers" for microchips used in the Russian Mir payment system, according to Reuters. Russian companies are also looking at ploughs, valves, meters, machine tools, spare parts for excavators and wind drums, according to notices posted on the official WeChat account of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCMB) in recent days. Semiconductors are on a list of products Russian companies are seeking. CCCMB reportedly plans to hold a business-to-business meeting with Russian companies in May and June. Click here to read... [14]

China to build SW China's Beibu Gulf urban cluster into base for energy storage, boosting trade with ASEAN

China on April 07 launched a roadmap to construct the Beibu Gulf urban cluster in Southwest China, indicating more policy support for the region that would be key in facilitating commodity trade with neighboring Southeast Asian Nations (ASEAN) economies, and laying the ground for a more integrated industrial chain. The roadmap, seen in the 14th Five-Year Plan (2021-25) of the region, lists a range of detailed development plans highlighting industries from energy storage, marine economy to infrastructure connectivity and digitalization. A particular focus goes to energy. As the plan noted that relying on current facilities such as the Beihai liquefied natural gas (LNG) receiving terminal, the region will be built into an offshore natural gas hub and oil and gas storage base. The region also vows to expand imports of resource products, improve capacity of the agricultural products imports, develop crude oil, ore, coal and other commodity distribution transactions and supply chains, and strengthen cooperation with ASEAN. The region also plans to launch a China-ASEAN bilateral local currency business innovation experiment, and build an ASEAN-oriented yuan pricing and trading platform. China's total LNG imports stood at nearly 80 million tons in 2021, making it the world's largest LNG importer, according to customs data. Click here to read... [15]

Positive Drug Tests Among U.S. Workers Hit Two-Decade High

The percentage of working Americans testing positive for drugs hit a two-decade high last year, driven by an increase in positive marijuana tests, as businesses might have loosened screening policies amid nationwide labor shortages. Of the more than six million general workforce urine tests that Quest Diagnostics Inc., one of the country’s largest drug-testing laboratories, screened for marijuana last year, 3.9% came back positive, an increase of more than 8% from 2020, according to Quest’s annual drug-testing index. That figure is up 50% since 2017. Since then, the number of states that legalized marijuana for recreational use grew to 18 from eight, plus the District of Columbia. Despite the increase in positivity last year, fewer companies tested their employees for THC, the substance in marijuana primarily responsible for its effects, than in recent years, said Barry Sample, Quest’s senior science consultant. The shifting legal backdrop and changing cultural attitudes have prompted some employers to stop testing for marijuana while companies in some states are barred from factoring the test results into hiring decisions, according to Dr. Sample. And those trends accelerated last year amid the recent shortage of workers, especially in states where recreational marijuana is legal, Dr. Sample added. Click here to read... [16]

Strategic

China Is Accelerating Its Nuclear Buildup Over Rising Fears of U.S. Conflict

China has accelerated an expansion of its nuclear arsenal because of a change in its assessment of the threat posed by the U.S., people with knowledge of the Chinese leadership’s thinking say, shedding new light on a buildup that is raising tension between the two countries. The Chinese nuclear effort long predates Russia’s invasion of Ukraine, but the U.S.’s wariness about getting directly involved in the war there has likely reinforced Beijing’s decision to put greater emphasis on developing nuclear weapons as a deterrent, some of these people say. Chinese leaders see a stronger nuclear arsenal as a way to deter the U.S. from getting directly involved in a potential conflict over Taiwan. Among recent developments, work has accelerated this year on more than 100 suspected missile silos in China’s remote western region that could be used to house nuclear-tipped missiles capable of reaching the U.S., according to analysts that study satellite images of the area. American leaders have said the thinking behind China’s nuclear advance is unclear. The people close to the Chinese leadership said China’s increased focus on nuclear weapons is also driven by fears Washington might seek to topple Beijing’s Communist government following a more hawkish turn in U.S. policy toward China under the Trump and Biden administrations. Click here to read... [17]

Russia seeks to end US-dominated world order – Lavrov

Russia's military action in Ukraine is meant to put an end to the US-dominated world order, Russian Foreign Minister Sergey Lavrov has explained. Washington has been seeking supremacy by imposing ad-hoc rules and violating international law, he claimed, in an interview aired by Russian television on April 11. He was referring to America's attempts to impose its own so-called “rules-based international order,” which have met with strong resistance from Moscow and China. “Our special military operation is meant to put an end to the unabashed expansion [of NATO] and the unabashed drive towards full domination by the US and its Western subjects on the world stage,” Lavrov told Rossiya 24 news channel. “This domination is built on gross violations of international law and under some rules, which they are now hyping so much and which they make up on a case-by-case basis,” he added. Russia is among the nations who would not submit to Washington’s will, the Russian diplomat added. It will only be part of an international community of equals and will not allow Western nations to ignore its legitimate security concerns, Lavrov said. Lavrov blasted EU foreign policy chief Josep Borrell for appearing to encourage more fighting in Ukraine. Click here to read... [18]

US launches cybersecurity bureau

The US Bureau of Cyberspace and Digital Policy (CDP) has begun operating, the State Department announced on April 04. The bureau is subdivided into three branches dedicated to “cyberspace security,” “international information and communications policy,” and “digital freedom.” Principal Deputy Assistant Secretary Jennifer Bachus, a career diplomat, will lead the bureau until an ambassador-at-large is confirmed to take her place. Bachus previously served in the Czech Republic, Kosovo, France, Vietnam, and Jamaica. In prepared remarks announcing the launch of the bureau, US State Secretary Antony Blinken said, “Democracies must together answer the question of whether universal rights and democratic values will be at the center of our digital lives.” During the Trump administration’s overhaul of the State Department in 2017, then State Secretary Rex Tillerson abolished the Office for the Coordination of Cyber Issues, which was created during the Obama administration to handle US diplomatic efforts at negotiating the rules and expectations of cyberspace, assigning cybersecurity responsibilities to the much broader Bureau of Economic and Business Affairs. The CDP Bureau’s inauguration is one more indicator that cybersecurity remains front and center in international affairs as the US and its allies compete with adversaries like Russia and China. Click here to read... [19]

Nato chief Stoltenberg says bloc planning permanent military presence on eastern border

Nato Secretary General Jens Stoltenberg said military commanders are working on plans for a permanent troop presence on the alliance’s eastern border in response to Russia’s invasion of Ukraine, The Telegraph reported, citing an interview. Stoltenberg said Nato is envisaging a “reset” that would shift the role of troops in eastern European member countries from serving as a tripwire in case of a Russian attack to becoming a full-fledged deterrent, according to the newspaper. Decisions are expected at a summit of Nato countries in June, he said. “We have the time now until the summit to make more longer-term decisions,” Stoltenberg was quoted as saying. “This is part of the reset which we have to make, which is to move from tripwire deterrence – which is the current concept – to something that is more about deterrence by denial or defence.” Mark Milley, chairman of the US joint chiefs of staff, told a congressional hearing on April 05 that he could envisage permanent Nato bases in countries such as Poland, Romania and the Baltic republics to host a rotating troop presence. US Defence Secretary Lloyd Austin said this week there’s no decision on “permanent basing forward or additional rotational forces in and out” or a combination of both. “These are things that have to be worked out” and “we’ll work with Nato on this,” he told a Senate hearing in Washington on April 07. Click here to read... [20]

South Korea’s president-elect wants U.S. nuclear bombers, submarines to return

Advisers to South Korea’s president-elect sought redeployment of U.S. strategic assets, such as nuclear bombers and submarines, to the Korean peninsula during talks held on a visit to Washington, one of the advisers said on April 06. The team of foreign policy and security aides to incoming president Yoon Suk-yeol met U.S. national security adviser Jake Sullivan as Yoon seeks a more constant security presence to deter threats from North Korea as it steps up weapons tests. “Deploying the strategic assets is an important element of reinforcing the extended deterrence, and the issue naturally came up during the discussions,” Park Jin, a four-term lawmaker who led the delegation, told reporters. He added that both sides explored ways to bolster U.S. extended nuclear deterrence at the talks on coordinating efforts against the North Korean threat held on a trip that also aimed to secure an early summit with President Joe Biden. A White House official asked about such talks, and whether Washington supported the deployments to South Korea, responded that both sides had “discussed generally” the U.S. defense commitments, but did not elaborate. Yoon, set to be sworn in on May 10, is mapping out his foreign policy agenda after winning the March 9 election. Click here to read... [21]

Yemen’s President Cedes Power Amid International Efforts to End Civil War

Yemen’s president handed over his powers to a leadership council on April 07 in a Saudi-backed move aimed at reviving negotiations with the Houthi rebels to end the country’s seven-year civil war. President Abed Rabbo Mansour Hadi also dismissed his vice president before leaving his own position. Both men were seen as obstacles by the Iran-allied Houthis and some of Saudi Arabia’s coalition partners to United Nations-led efforts to find a diplomatic solution to the conflict, which the international body says has caused the world’s worst humanitarian crisis. In a series of stage-managed moves early April 07, Saudi Arabia endorsed Yemen’s new leadership, urged the start of peace talks and released a video of Crown Prince Mohammed bin Salman receiving the eight-man council at his palace in Riyadh. The country announced $3 billion of direct economic aid and $300 million for the U.N. humanitarian response. The fighting has devastated Yemen—sparking famine, a cholera outbreak and killing tens of thousands of civilians, including from errant coalition airstrikes. Houthi spokesman and chief negotiator Mohammed Abdel Salam said Yemen’s present and future would be determined inside the country. “Any activity outside its borders amounts to farcical theatrics and recreational games practiced by the aggressor countries,” he said on Telegram. Click here to read... [22]

Terrorist Attacks in Israel, Jerusalem Tensions Challenge Palestinian Strategy

A burst of terrorist attacks on civilians and rising religious tensions in Jerusalem are testing Israel’s U.S.-backed policy of eschewing peace talks and trying instead to improve Palestinian quality of life while building deeper ties with Arab countries aligned against Iran. A rare spate of violence against civilians within central and southern Israel has left 14 victims dead in four apparently unconnected attacks in different cities. The latest attack was April 07 night in central Tel Aviv, when a gunman opened fire at a bar, killing two immediately, and a third who died of his wounds on April 08. Israeli authorities are worried about the next two weeks when Jews and Muslims will seek to pray at the same sites in Jerusalem during an unusual convergence of the Jewish holiday Passover and Islam’s holy month, Ramadan. The presence of Jewish and Muslim worshipers has been combustible in the past, and Israeli security forces have already scuffled with Palestinians in recent days near the Old City. The mounting tensions highlight the vulnerabilities of a paradigm shift in Israeli-Palestinian relations that has accelerated in recent years: That peace talks, moribund for almost a decade, aren’t necessary for Israel to be embraced in the Arab world, and that Israel can manage its century-old conflict with the Palestinians through trust-building and economic measures. Click here to read... [23]

In Africa, U.S.-Trained Militaries Are Ousting Civilian Governments in Coups

A flurry of military coups across Africa has disrupted the U.S. strategy of enlisting local armies to counter Islamist extremists and other security threats. The U.S. has trained thousands of African soldiers, from infantrymen rehearsing counterterrorism raids on the edge of the Sahara to senior commanders attending the U.S. Military Academy at West Point. The programs are a linchpin of U.S. policy on the continent, intended to help African allies professionalize their armed forces to fight armed opponents both foreign and domestic. But U.S. commanders have watched with dismay over the past year as military leaders in several African allies—including officers with extensive American schooling—have overthrown civilian governments and seized power for themselves, triggering laws that forbid the U.S. government from providing them with weapons or training. The strategic setback was apparent in recent weeks here at Fort Benning, where the U.S. Army hosted its annual gathering of top ground-force commanders from around Africa. The Army withheld invitations from coup leaders in Mali and Burkina Faso, West African countries engaged in existential struggles with al Qaeda and Islamic State. Guinean soldiers, who in September toppled the West African nation’s civilian government, were left out of the Fort Benning events and are no longer included in U.S.-led special-operations exercises. Click here to read... [24]

China delivered FK-3 missile system to Serbian military, state media says

China’s air force flew 12 covert sorties to Serbia at the weekend, which state media said delivered three Chinese anti-aircraft missile systems in the biggest overseas airlift involving its Y-20 transport planes. Six Y-20As headed westward towards Serbia on April 09 with a stop at Baku in Azerbaijan before crossing the airspace of Nato members Turkey and Bulgaria, according to flight tracking website Flightradar24. They were reportedly delivering the new FK-3 medium-range missile system to the Serbian military. Another group of six planes followed a similar path on April 10. Associated Press reported that cargo planes with People’s Liberation Army markings had landed at the Belgrade Nikola Tesla Airport early on April 09. Chinese state-backed tabloid Global Times said it had confirmed the FK-3 cargo, without citing a source. The cargo on the Y-20As could not be independently verified. The airlift has renewed concerns in the Balkans about the military build-up of Serbia, which is widely considered a close ally of Russia, and about Chinese military presence in the region often called “Europe’s backyard”. “China in recent days sent air force transport aircraft to Serbia to deliver regular military resources,” Chinese foreign ministry spokesman Zhao Lijian said in Beijing on April 11, without confirming or denying whether that included the FK-3 systems. Click here to read... [25]

South China Sea issues handled 'properly,' Xi tells Duterte

Seeking to put a positive spin on a relationship that never quite produced the hoped-for benefits, Chinese leader Xi Jinping told outgoing Philippine President Rodrigo Duterte on April 08 that the two nations have "properly" handled the sensitive issue of the disputed South China Sea. Xi made his remarks in a phone conversation with Duterte, who nurtured closer ties with Beijing after taking office in 2016. Despite cozier relations, however, sporadic territorial spats have persisted and Beijing has had limited success separating the Philippines from its treaty ally, the United States. Xi made no mention of disputes, saying the sides "have adhered to the important consensus reached, adhered to good-neighborly and friendly cooperation, insisted on properly handling differences, and insisted on working together for common development." "The proper handling of the South China Sea issue by both sides has provided an important foundation for China-Philippines friendly cooperation, benefited the two peoples, and effectively safeguarded regional peace and stability," Xi was quoted as saying by the official Xinhua News Agency. Xi also took a swipe at Manila's security pact with Washington, saying that recent developments showed that "regional security cannot be achieved by strengthening military alliances." Click here to read... [26]

Japan, Philippines seek pact to further defense cooperation

Japan and the Philippines agreed April 09 to start talks toward a possible defense agreement that would allow closer cooperation between their militaries amid regional tensions with China and Russia's invasion of Ukraine. Japanese Foreign Minister Yoshimasa Hayashi and Defense Minister Nobuo Kishi and their Philippine counterparts, Teodoro Locsin and Delfin Lorenzana, in their first so-called “2+2” security meeting agreed to begin formal discussions about a possible reciprocal access agreement — a defense pact that would allow their troops to visit each other’s countries for training and to exchange defense equipment to increase interoperability and cooperation. Japan and the Philippines, both U.S. allies, have in recent years stepped up joint exercises and defense cooperation. In 2020, Tokyo and Manila agreed on the export of Japanese air radar systems to the Philippine military. On April 09, the four ministers strongly opposed “actions that may increase tensions” in the East and South China seas and affirmed their commitment to a rules-based approach to resolving competing claims under international law. They also said Russia's aggression in Ukraine affects not only Europe but also Asia under the international order, which does not accept any unilateral change to internationally recognized borders by force. Click here to read... [27]

NATO, Asia-Pacific partners agree to bolster cooperation

NATO members agreed on April 07 to increase "practical and political cooperation" with Australia, Japan, New Zealand and South Korea, in response to China's failure to condemn Russia's war in Ukraine. "We agreed to step up cooperation with our partners in the Asia-Pacific, because the crisis has global ramifications," NATO Secretary-General Jens Stoltenberg said at a news conference, concluding two days of meetings of foreign ministers from the military alliance. The four Asia-Pacific countries were invited to attend the NATO gathering in Brussels. China's unwillingness to condemn Russia, and Beijing "join[ing] Moscow in questioning the right of nations to choose their own path" represent "a serious challenge to us all," Stoltenberg said. "It makes it even more important that we stand together to protect our values," he said. Areas of cooperation with the Asia-Pacific partners will include cyber defense, new technologies and countering disinformation. "We will also work more closely together in other areas such as maritime security, climate change and resilience because global challenges demand global solutions," Stoltenberg said. Australia, Japan, New Zealand and South Korea had first participated in a NATO foreign ministers meeting during December 2020. Click here to read... [28]

U.S., U.K., Australia announce cooperation on hypersonic weapons

The U.S., U.K. and Australia will cooperate in developing hypersonic missiles and electronic warfare technology, the three countries announced in a statement April 05, as the trilateral alliance tries to respond to China's military rise in the Indo-Pacific. The security alliance will "commence new trilateral cooperation on hypersonics and counter-hypersonics, and electronic warfare capabilities, as well as to expand information sharing and to deepen cooperation on defense innovation," the statement said. Hypersonic weapons are gaining attention in the arms development race, with Russia claiming it used one such weapon in attacks on Ukraine in March. While the U.S. and Australia had already promised to work together in developing the technology, the U.K. now joins the fold. The statement suggests the scope of cooperation may be expanded to invite other nations. "As our work progresses on these and other critical defense and security capabilities, we will seek opportunities to engage allies and close partners," it said. The alliance also made clear its attention to the region would not falter as the war in Ukraine heightens geopolitical tensions. Click here to read... [29]

Iran rejects US’ nuclear demands

Iran's foreign minister said April 10 that Washington is "imposing new conditions" in the negotiations to restore the 2015 nuclear agreement. "On the issue of lifting sanctions, they [the Americans] are interested in proposing and imposing new conditions outside the negotiations," state news agency IRNA quoted Hossein Amir-Abdollahian as saying. "In the last two or three weeks, the American side has made excessive demands that contradict some paragraphs of the text," he added. Iran has been engaged for a year in negotiations with France, Germany, Britain, Russia and China directly, and the US indirectly in the Austrian capital to revive the deal, known formally as the Joint Comprehensive Plan of Action (JCPOA). "The Americans keep talking about the need for direct negotiations, but we have not seen the benefit of direct talks with the United States," Amir-Abdollahian said. The 2015 agreement gave Iran sanctions relief in exchange for curbs on its nuclear program to guarantee that Tehran could not develop a nuclear weapon - something it has always denied wanting to do. "We seek the lifting of sanctions, but with dignity and with a lasting agreement," the foreign minister said, adding that "Iran has stood and will stand by its red lines." Click here to read... [30]

Russia’s war in Ukraine highlights UN fault lines

While Europe, the United States, Canada, Australia and Japan have strongly condemned Russia's war in Ukraine, many nations don’t really want to choose sides. China, apparently, is one of them, along with India, the Gulf states and many African countries. But faced with various UN votes on Russia’s invasion of its neighbour, some have already shifted position. The United Arab Emirates and Senegal, for example, first abstained but then subsequently voted in favour of condemning Russia. China and India consistently abstained. The UN General Assembly votes are the only ones where all 193 UN member countries could vote, with no state having a veto power, as in the UN Security Council. According to Thierry Vircoulon, a researcher at the French Institute for International Relations (IFRI), there are a number of reasons for the high level of African abstentions, including Russia’s growing influence on the continent. Especially after Russia’s 2014 annexation of Crimea which brought the first international sanctions, Moscow has sought to increase its clout in Africa, notably by selling arms and providing private security in conflict countries like the Central African Republic and Mali. North African countries like Egypt and Algeria are also heavily dependent on Russian wheat exports for food, with other clients including Nigeria, South Africa, Sudan and Tanzania. Click here to read... [31]

Medical

WHO: Two-thirds of people in Africa may have had COVID

More than two-thirds of people living in Africa may have contracted COVID-19 over the past two years, about 97 times more than the number of reported infections, a World Health Organization (WHO) report has suggested. Laboratory tests have detected 11.5 million COVID-19 cases and 252,000 fatalities across the African continent. But according to the report released on April 07, some 800 million people could have already been infected by last September. Officials at the WHO’s Africa region said the study – which is still being peer-reviewed – suggests the officially confirmed numbers were “likely only scratching the surface of the real extent of coronavirus infections in Africa”. “A new meta-analysis of standardised sero-prevalence study revealed that the true number of infections could be as much as 97 times higher than the number of confirmed reported cases,” said WHO Africa boss Matshidiso Moeti. “This suggests that more than two-thirds of all Africans have been exposed to the COVID-19 virus,” she added. The report analysed more than 150 studies published between January 2020 and December last year. Click here to read... [32]

Surgery by flashlight, not enough drugs: Sri Lankan doctors make life-death decisions as economic crisis deepens

Across Sri Lanka, doctors are being forced to make triage decisions on who gets to live or die as the supply of essential drugs runs dangerously low amid a debilitating economic crisis. The debt-laden country has been struggling to pay for imports, including medical supplies, due to a shortage of foreign exchange, and even financial support from India and China has failed to alleviate the situation. The International Monetary Fund has warned the government’s total foreign debt of US$35 billion is “unsustainable” and ratings agencies have warned of a potential default. Dr Minoli de Silva, a medical officer working in the emergency department of a teaching hospital in the country’s Western Province, said she was now having to choose which patients to treat. “In my hospital, only 10 more vials of an essential drug used for treating heart attacks and strokes are left,” Dr de Silva said this week. “So now we have to look at factors like age and prognosis and decide which patient has a better chance of surviving after taking the drug before starting treatments. If there are two patients, we may have to choose to treat one of them,” she said. Recent supply shortages led to a quota for certain essential drugs, meaning not everyone who needed them would be given them. Click here to read... [33]