Global Developments and Analysis: Weekly Monitor (12-18 February 2024)

Economic

China puts high expectations on ‘new productive forces’ in search for sustainable growth engines

In recent communications, China’s leaders and media have frequently used the phrase “new productive forces” when discussing how to revitalise and transform the economy – itself a hot topic in a period where growth has slowed and officials have been struggling to find momentum. The expression took on greater prominence after President Xi Jinping referred to the concept as a “leading factor” for “promoting high-quality development” of the Chinese economy. In traditional political economy, “productive forces” describes the union of necessary infrastructure with the capacity of the labour force – the essential base elements for production. What, then, are the “new productive forces”, and what does this change of rhetoric look like in practice? Why does China need ‘new productive forces’? China has long identified high-quality development and technological innovation as new engines in its growth strategy to help advance the world’s second-largest economy up the global value chain. But the past year has been especially difficult for China’s economy, which has been heavily dependent on the manufacturing and real estate sectors. The country has been rattled by an ailing property market, falls in private investment and ageing demographics - all of which have hampered a strong recovery after three years of stringent pandemic control policies came to an end. Click here to read… [2]

China Reports Smallest Foreign Investment Increase in Over Two Decades

China reported the smallest amount of annual foreign direct investment since the 1990s last year, amid capital outflow pressure and challenges attracting foreign capital due to tensions with the West. China’s direct investment liabilities, a broad measure of FDI that includes foreign companies’ retained earnings in the country, rose by $33 billion in 2023, down 81.7% from 2022, according to data from the State Administration of Foreign Exchange released Feb 18. This is the smallest annual increase since 1998, according to Wind, a local data provider that cited official figures. In the final quarter of last year, the gauge increased $17.5 billion, after recording its first ever quarterly deficit in the third quarter, according to data released by SAFE. The slowing growth momentum, uncertain business environment as well as low interest rates compared with other markets have prompted companies to pull money out of China. Meanwhile, SAFE also reported Feb 18 that China’s current account surplus stood at $264.2 billion in 2023, which is around 1.5% of the nation’s gross domestic product. China recorded a $608 billion goods trade surplus in 2023, the second-highest on record, and a $229.4 billion in service deficit. Click here to read… [3]

NATO Defense Spending Rises to Half of Global Total, IISS Says

Russian President Vladimir Putin’s war in Ukraine helped pushed global defense spending up 9% to a record 2.2 trillion dollars, with NATO member states accounting for half the total, the International Institute for Strategic Studies said. The collective defense budgets of China, Russia, India and North Atlantic Treaty Organization nations make up more than 70% of global military spending, the London-based research group said in the 2024 edition of its “Military Balance,” released Feb 13. Expenditure by non-US NATO members has risen by 32% since Russia’s 2014 invasion of Crimea. “Russia’s aggression spurred European countries to boost defense spending and has strengthened NATO, with Finland adding combat power,” the IISS said. “The pace of ammunition expenditure in the war between Russia and Ukraine has also caused a reckoning in the West that production capacities have atrophied, with countries scrambling to rectify shortcomings from years of underinvestment.” The US and European nations have taken over from Middle Eastern and Asian ones as the key driver of the growth in global military spending, according to Fenella McGerty, a senior fellow for defense economics at the IISS. The war in Ukraine will continue to be a major driver for defense budgets globally, she said. Click here to read… [4]

Iran’s Rise as Global Arms Supplier Vexes U.S. and Its Allies

Iran’s arms industry is growing rapidly, turning the country into a large-scale exporter of low-cost, high-tech weapons whose clients are vexing the U.S. and its partners in the Middle East, Ukraine and beyond. The transformation of the industry, accelerated by Russia’s 2022 purchase of thousands of drones that altered the battlefield in Ukraine, has helped Tehran scale up its support of militia allies in Middle East conflicts that have intensified alongside Israel’s war with Hamas in Gaza. One of Iran’s top arms exports, a Shahed suicide drone, designed to carry explosives and crash into its target, was used to kill three American service members in Jordan in an attack by an Iraqi militia group on Jan. 28, U.S. officials said. The same day, the U.S. Coast Guard confiscated over 200 packages of weapons originating from Iran and bound for Yemen, the U.S. said Feb 15. U.S. Central Command, which is responsible for U.S. military operations in the Middle East, said the shipment was headed for territory controlled by Iran’s Houthi allies, a group whose attacks on Red Sea shipping lanes have disrupted global commerce and drawn airstrikes by the U.S. and U.K., including on a drone-control station in Yemen. Click here to read… [5]

Yellen Discussed Russian Asset Seizure With European Leaders

Treasury Secretary Janet Yellen said she discussed the potential seizure of Russian assets with European leaders in recent days but had no progress to report on convincing key skeptics of the plan to move ahead. “Everyone involved in these conversations sees the potential benefit of finding a way that’s legal, domestically and internationally, to tap the economic value of those assets on an ongoing basis to provide support for Ukraine,” Yellen told reporters Feb 14 in Detroit. Yellen had lunch with ECB President Christine Lagarde Feb 12 in Washington and met with German Chancellor Olaf Scholz week earlier alongside President Joe Biden. The ECB and Germany have both signaled concerns about such a step. Asked whether Scholz or Lagarde had expressed openness to the seizure of the frozen assets, Yellen said she was not prepared to reveal details of the talks. “These are topics I’ve discussed,” she said. “I’m not going to elaborate on private conversations, but all of us recognize that an ongoing, committed support for Ukraine is essential.” The Biden administration has backed legislation that would grant the White House authority to seize sovereign Russian assets in the US. But the majority of the more than €250 billion in Russian central bank assets are frozen in the European Union. Click here to read… [6]

Trump Legal Fees Threaten to Cause Cash Crunch by July

Donald Trump will likely drain his war chest for legal fees this summer, leaving the GOP frontrunner crunched for cash just as his presidential campaign ramps up spending for an expected rematch with President Joe Biden. Trump spent $51.2 million in 2023 on legal expenses, and can tap another $23.5 million, most of it stashed in an allied super political action committee that he can use to pay his lawyers. But as his four criminal cases ramp up, those funds are expected to run out at a critical time — around July, when the Republican National Convention triggers the official start to the general election campaign. That leaves Trump with only a few — unappealing — options to keep paying for his defense. He could compel the Republican National Committee, which faces its own cash woes, to pay his bills, leaving the group with less money to support his campaign. He could siphon off more money from his army of small-dollar donors to his leadership PAC, Save America, which is financing his defense in multiple criminal and civil proceedings. Trump already diverts 10% of online contributions made to his reelection toward Save America for legal bills — a move which accounted for $9.9 million in 2023. To pay his legal fees, Trump is relying on federal laws governing leadership PACs, which allow politicians to raise money that can support travel, fundraising and other political expenses. Click here to read… [7]

Number of Western firms that left Russia revealed

Only about 20% of the large companies from Europe and 16% from the US have left Russia in light of Western sanctions pressure, Russian Deputy Prime Minister Denis Manturov has revealed. Many enterprises that remained in Russia continue to increase investment, according to Manturov, who also serves as the trade and industry minister. “This figure is from the Association of European Businesses. Of the 500 large European companies – I do not take those with a turnover of less than half a billion rubles a year – only 100 have officially left so far, which is 20%,” the minister said on Feb 14 while visiting the exhibition-forum ‘Russia’ in Moscow. The deputy prime minister also highlighted that 66 out of the 350 (about 19%) large American companies in Russia had left. “This suggests that our market and our potential is of interest, particularly taking into account the cost of energy resources. You see what is happening in Europe where enterprises are gradually shrinking,” Manturov said. The Russian government will continue to attract foreign investment and will create the necessary conditions for foreign specialists, as well as investors and business owners, according to Manturov. “This applies to both unfriendly and friendly countries. We are always open to reasonable dialogue and investors.” Click here to read… [8]

Famine looms in Sudan

Ten months into Sudan’s civil war between the RSF and the Sudanese army, the country is facing acute hunger, aid groups and famine experts told Al Jazeera. The United Nations estimates that about 18 million people are facing emergency levels of hunger – double the figure from last year. A recent internet blackout across the country compounded the crisis by suspending money transfers, which the diaspora relies on to support loved ones in the country. As famine looms, aid agencies are calling for $4.1bn in funding to avert a catastrophe in Sudan and countries hosting Sudanese refugees. “Even if [hunger levels stay where they are], hundreds of thousands of children will die by next year,” said Alex de Waal, an expert on famines and the executive director of the World Peace Foundation at the Fletcher School of Law and Diplomacy at Tufts University. “That’s what a year-long [food] emergency for millions of people will cause,” he told Al Jazeera. Malnourishment is already affecting millions of people in Darfur, according to Doctors without Borders (Medecins sans Frontieres or MSF in French). On February 5, the aid group declared that hunger kills two children every hour in the Zamzam displacement camp in North Darfur. Click here to read… [9]

Grid Expansion About to Become Biggest Transition Problem

In September last year, the European Union's electric utility industry association, Eurelectric, warned that the bloc needed what Reuters called "unprecedented" investments in grid upgrades. Otherwise, Eurelectric said, the EU could well miss its energy transition targets. A month later, the Biden administration announced a $3.5-billion grant pot for grid upgrade projects, including building new transmission lines to connect more wind and solar installations. The transition leaders are in a rush to bolster their grids. Because without this, there will be no transition. But they may well be late already. Bloomberg reported earlier this month that in 2023, investments in grid expansion on a global scale rose by 5% from the prior year to $310 billion. The publication called the development "welcome news in a period that otherwise saw increased grid congestion and longer interconnection queues." Not only this, but the United States was in the lead for a change, spending $87 billion on things like grid resilience improvement and distribution grid expansion to accommodate more so-called distributed power sources, meaning wind and solar. In Europe, investments in grid upgrades and expansion stood at $60 billion. These are some impressive numbers right there, but they won't be enough to hit 2030 targets that both the European Union and the Biden administration have made perhaps a little too ambitious. Click here to read… [10]

Southeast Europe's "Vertical Corridor" to Reshape Gas Transit

Countries in southeastern and central Europe have begun working together to create a new gas transit route to help compensate for the loss of Russian gas exports to Europe following Russia's invasion of Ukraine. If realized, the "Vertical Corridor" would offer Azerbaijan a new route to export its gas to east and central European markets and, as such, could help Baku to meet its pledge to the European Union to double its gas exports to Europe to 20 billion cubic meters a year by 2027. The planned new route would mainly utilize existing pipelines connecting the gas transit systems of Greece, Bulgaria, Romania, Moldova and Ukraine but would require capacity expansion of some sections and of the cross-border connections. As such the "Vertical Corridor" would be able to provide valuable new sources of gas for Moldova and Ukraine, which since the Russian invasion have experienced problems meeting domestic demand. No less significantly it would also be able to feed gas into Ukraine's existing major east-west gas transmission system which has been largely unused since Russia's invasion of that country in 2022 and the subsequent halting of gas transit to Europe. The project was kick-started at a January 19 meeting in Athens of energy ministers from southeastern and central Europe under the European Union's Central and South Eastern Europe Energy Connectivity initiative (CESEC). Click here to read… [11]

Saudi Arabia Says Energy Transition Drove Decision to Halt Capacity Expansion

The decision of Saudi Arabia to abandon plans to expand its crude oil production capacity is a result of the energy transition, Saudi Energy Minister, Prince Abdulaziz bin Salman, said on Feb 12. At the end of last month, Saudi Arabia surprised the oil market by announcing a shift in production capacity strategy. State oil giant Aramco said it was ordered by the Kingdom’s leadership to stop work on expanding its maximum sustainable capacity to 13 million barrels per day, instead keeping it at 12 million bpd. The world’s biggest oil firm said in a statement that it would update its capital spending plans for the year in March when it announces its 2023 financial results. Prince Abdulaziz bin Salman put the record straight behind the decision and said at a conference in Saudi Arabia today, as carried by Bloomberg, “We are transitioning and transitioning means that our oil company, which is a hydrocarbons company, now is becoming an energy company, with investments that go into all areas like oil, gas and petrochemicals and others.” Speculation has flourished about the reasons behind the Saudi decision. First, analysts speculate that the outlook on long-term oil demand has come into question. Then there is the belief that the surprise announcement from Saudi Aramco could support oil prices for longer. Click here to read… [12]

Australia Set to Unveil Billions in Clean Energy Subsidies

Australia’s government is preparing to announce a major multi-billion support scheme to attract more investment in clean energy and curb outflows of capital to the U.S. and Europe, which already have massive subsidy initiatives to develop green energy solutions, the Australian Financial Review reported on Feb 16, citing unnamed sources. “You can see that in the unprecedented investments the United States and the EU and Japan and Korea are making in their industrial bases,” Australia’s Prime Minister Anthony Albanese is expected to say in a speech later on Feb 16. The U.S. Inflation Reduction Act IRA has nearly $370 billion in climate and clean energy provisions, including investment and production credits for solar, wind, storage, critical minerals, funding for energy research, and credits for clean energy technology manufacturing such as wind turbines and solar panels. The IRA is spurring a land rush for development sites and giving impetus to clean energy equipment manufacturing in the United States, which could see annual renewable capacity additions triple to 110 gigawatts (GW) in ten years, according to Wood Mackenzie. The EU responded to President Biden’s legislation with its own Green Deal Industrial Plan to preserve Europe’s competitiveness and prevent an exodus of production to the U.S. Click here to read… [13]

Recession has struck some of the world’s top economies. The U.S. keeps defying expectations

As some of the world’s biggest economies stumble into recession, the United States keeps chugging along. Both Japan and the United Kingdom said Feb 15 their economies likely weakened during the final three months of 2023. For each, it would be the second straight quarter that’s happened, which fits one lay definition for a recession. Yet in the United States, the economy motored ahead in last year’s fourth quarter for a sixth straight quarter of growth. It’s blown past many predictions coming into last year that a recession seemed inevitable because of high interest rates meant to slow the economy and inflation. Give much of the credit to U.S. households, who have continued to spend at a solid rate despite many challenges. Their spending makes up the majority of the U.S. economy. Government stimulus helped households weather the initial stages of the pandemic and a jump in inflation, and now pay raises are helping them catch up to high prices for the goods and services they need. On Feb 15, a report showed that fewer U.S. workers filed for unemployment benefits last week. It’s the latest signal of a remarkably solid job market, even though a litany of layoff announcements has grabbed attention recently. Continued strength there should help prop up the economy. Click here to read… [14]

South Korean doctors rally against government plans to increase the number of medical students

Hundreds of South Korean doctors rallied in the capital, Seoul, and other cities on Feb 15 against a government plan to boost the number of medical students. Doctors’ groups say increasing the number of medical students by 2,000 starting in 2025 is too steep. They want officials to instead use available resources to raise medical fees they say are set too low. Authorities say South Korea needs more doctors. It’s among the lowest numbers of doctors relative to the size of the population among developed countries despite growing demands for medical services fueled by a fast-aging society. South Korea also has one of the world’s lowest birth rates and has been grappling with shortages of doctors in some key professions, including obstetrics and pediatrics, and in rural regions outside the greater capital area. South Korea’s quota of medical students has stood at 3,058 since 2006. Doctors have successfully resisted several government attempts to increase the number of students in past years, including during the COVID-19 pandemic. While doctors’ groups have threatened strikes, the Health Ministry has downplayed the possibility of huge walkouts that would disrupt medical services. Hundreds of doctors marched amid rain in streets in front of Seoul’s presidential office, holding banners and signs that read “We oppose with our lives an increase in medical students without consent of the medical sector.” Click here to read… [15]

Wages rose a paltry 10% over Japan’s ‘lost three decades’

Wages in Japan rose only 10 percent in nominal terms between 1991 and 2020, trailing well behind the pay increases in other industrialized countries, according to labor ministry calculations. In the 1990s, after the asset-inflated economic boom of the late 1980s, wages in Japan were said to be among the highest levels in the world. During the subsequent years of economic stagnation, however, labor unions refrained from seeking substantial wage hikes and instead prioritized stability of employment. But now, following the “lost three decades” since the bursting of the bubble economy, Japanese labor unions are demanding record-level hikes in the annual spring wage negotiations. According to the labor ministry’s calculations, based on statistics from the Organization of Economic Cooperation and Development, nominal wages jumped 180 percent in the United States, 170 percent in Britain, and 80 percent in Italy between 1991 and 2020. Real wages, which are adjusted for inflation, rose a meager 3 percent in Japan during the 30-year period, while they zoomed up nearly 50 percent in the United States and Britain and increased about 30 percent in France and Germany. Click here to read… [16]

Strategic

Big Prabowo Win Elevates Unpredictable Ex-Soldier to World Stage

At a Singapore security forum last year, Indonesian Defense Minister Prabowo Subianto left onlookers stunned when he delivered what appeared to be an impromptu peace plan to end the war in Ukraine. The proposal, floated by the 72-year-old ex-general set to become Indonesia’s next president after a landslide election win on Feb 14, would’ve allowed Russia to keep its territorial gains it’s made — similar to a Chinese peace blueprint to end the conflict. European diplomats attacked the suggestion, while Ukraine’s foreign minister said it “sounds like a Russian plan.” Officials from Southeast Asia sought to clarify Prabowo’s remarks, highlighting how the war has become a global wedge issue. “You’ve got to understand that Pak Prabowo spoke as someone who has seen conflict firsthand,” Singapore Defense Minister Ng Eng Hen told reporters at the time. “His heart is in the right place.” It later emerged that Prabowo hadn’t sought approval for the peace plan from Indonesian President Joko Widodo, popularly known as Jokowi, who asked for a clarification. Soon it disappeared from public discourse altogether. The episode shows how a Prabowo presidency, which would start in October, is likely to be much more uncertain than that of his predecessor, even though they are broadly aligned in sticking with Indonesia’s longstanding policy of neutrality in international relations. Click here to read… [17]

Macron and Zelensky sign military deal

France and Ukraine signed a bilateral security pact on Feb 16 during President Vladimir Zelensky’s visit to Paris. While President Emmanuel Macron did not offer Kiev any ironclad military commitments, he promised another €3 billion in aid over the rest of 2024, as well as “cooperation” in the area of artillery. The agreement states that France views the prospect of Ukraine’s accession to NATO positively, as “a useful contribution to peace and stability in Europe.” The largely symbolic deal is designed to help “pave the way towards Ukraine’s future integration into the EU and NATO,” French media noted, citing officials. The pact follows a similar agreement struck with Germany earlier in the day, and another signed with the UK last month. All three are set to last ten years. Last month, Macron announced that France would supply Kiev with 40 more SCALP-EG long-range cruise missiles and “hundreds of bombs,” promising to finalize the bilateral security agreement on an upcoming trip to Kiev. The trip, which was to run from February 13-14, was called off by the French side due to security concerns, according to French media. Zelensky is set to ask Western sponsors for more financing at the Munich Security Conference on Feb 17, while the situation on the front lines of the Ukraine-Russia conflict is escalating, with Kiev facing severe personnel and ammo shortages. Click here to read… [18]

Frontline situation ‘difficult’ – Ukraine’s new top general

Ukrainian troops are facing “very difficult and tense” conditions on the frontline of the conflict with Russia, Kiev's newly appointed top military commander, Aleksandr Syrsky, acknowledged on Feb 14. The general described his impressions in a post on social media, after visiting the east of the country with Defense Minister Rustem Umerov. The general previously told German media that Kiev is changing its approach to the fighting, and will be less willing to suffer losses to defend positions than under the previous leadership. Syrsky offered few details about Ukraine’s military movements, focusing mostly on the Russian advantage in manpower and munitions. The Russians “are ramping up their efforts and have a numerical advantage in troops,” he said. Syrsky, who replaced Valery Zaluzhny as Ukraine’s most senior commander last week, has earned a reputation as a “butcher” for showing an apparent disregard for casualty rates, Politico reported last week. He is known for “leading forces into a meat grinder in Bakhmut [called Artyomovsk in Russia], sending wave after wave of troops to face opposition fire,” the magazine said in its profile of the general. Soldiers have also given him the nickname ‘General 200’, a reference to the Soviet military code for soldiers killed in action. Click here to read… [19]

Why is Japan hosting a conference for Ukraine reconstruction when it’s still at war?

Japan is hosting a conference for Japanese and Ukrainian officials to discuss reconstruction of Ukraine just ahead of the two-year anniversary of Russia’s invasion, while the U.S. and other Western countries are still focusing on military aid for the battlefield. Hundreds of senior officials and executives are attending the Japan-Ukraine Conference for Promotion of Economic Growth and Reconstruction in Tokyo. AP explains the event, its purpose, who’s attending and the projects being discussed. WHO’S ATTENDING? The conference is co-organized by the Japanese and Ukrainian governments, Japan’s powerful business organization Keidanren, and the Japan External Trade Organization, or JETRO. Ukraine’s Prime Minister Denys Shmyhal is heading his country’s delegation of more than 100 government and corporate officials. First Deputy Prime Minister Yuliia Svyrydenko, Finance Minister Serhiy Marchenko and Environmental Protection and Natural Resources Minister Ruslan Strilets also were to attend. Prime Minister Fumio Kishida is leading Japan’s side, joined by Foreign Minister Yoko Kamikawa, Keidanren chair Masakazu Tokura, among many others. About 100 officials from Japanese companies, the majority of them startups but from also leading companies like Kawasaki Heavy Industry, farming equipment makers Yanmar Holdings and Kubota Co., and telecoms company Rakuten Symphony also are attending. Japan hopes the conference will help build support for Ukraine as the war drags on after two years, at a time when attention has been diverted to the situation in Gaza. Click here to read… [20]

US border and immigration chief impeached

The US House of Representatives has voted to impeach Secretary of Homeland Security Alejandro Mayorkas, accusing him of failing to deal with the influx of migrants illegally crossing the Mexico border. The motion to bring impeachment charges against Mayorkas passed in a 214-213 vote on Feb 13, with only three Republicans joining all Democrats in voting against the measure. In a 22-page motion, lawmakers said Mayorkas had refused to obey federal court decisions regarding the border crisis, saying he is responsible for the massive surge at the southern border. The filing also accused the official of misleading Congress, claiming he has “demonstrated he will remain a threat to national and border security” and “acted in a manner grossly incompatible with his duties and the rule of law.” “Throughout his tenure as Secretary of Homeland Security, Alejandro N. Mayorkas has repeatedly violated laws enacted by Congress regarding immigration and border security,” the impeachment motion said. “In large part because of his unlawful conduct, millions of aliens have illegally entered the United States on an annual basis with many unlawfully remaining in the United States.” Mayorkas survived an earlier impeachment effort last week in a narrow 214-216 vote, in which four GOP members sided with Democrats. Click here to read… [21]

ICJ to hold hearings on Israel’s occupation of Palestinian territories

The United Nations’s highest court is set to open historic hearings into the legality of Israel’s 57-year occupation of the Palestinian territories. The week-long proceedings, which begin at the International Court of Justice (ICJ) in The Hague on Feb 19, come as Israel continues its devastating war on Gaza. The assault has killed more than 29,000 Palestinians since October 7. The case is separate from the genocide complaint South Africa filed at the ICJ against Israel for its alleged violations in the ongoing war. It focuses instead on Israel’s occupation of the West Bank, Gaza and East Jerusalem since 1967. The Palestinians seek all three areas for an independent state. Palestinian representatives, who speak first on Feb 19, will argue that the Israeli occupation is illegal because it has violated three key tenets of international law, the Palestinian legal team told reporters on Feb 14. They say Israel has violated the prohibition on territorial conquest by annexing large swathes of occupied land, violated Palestinians’ right to self-determination and imposed a system of racial discrimination and apartheid. “We want to hear new words from the court,” said Omar Awadallah, the head of the UN organizations department in the Palestinian Foreign Ministry. “They’ve had to consider the word genocide in the South Africa case,” he said, referring to the separate case before the court. “Now we want them to consider apartheid.” Click here to read… [22]

Satellite photos show Egypt building Gaza wall as Israel’s Rafah push looms

Egypt is building a fortified buffer zone near its border with the Gaza Strip as fears mount of an imminent Israeli ground invasion of the southern city of Rafah, which could displace hundreds of thousands of Palestinians across the frontier, according to satellite images and media reports. Footage from the site in the Sinai desert and satellite photos show that an area that could offer basic shelter to tens of thousands of Palestinians is being constructed with concrete walls being set up on the Egyptian side of the Rafah crossing, the only non-Israeli-controlled crossing to and from Gaza. The new compound is part of contingency plans if large numbers of Palestinians manage to cross into Egypt and could accommodate more than 100,000 people, The Wall Street Journal reported on Feb 15, citing Egyptian officials. It is surrounded by concrete walls and far from any Egyptian settlements. Large numbers of tents have been delivered to the site, the report said. Videos taken by the United Kingdom-based Sinai Foundation for Human Rights show trucks and bulldozers clearing debris from a plot of land of about 8sq miles (21sq km), according to The Washington Post, which obtained satellite images that show 2sq miles (5sq km) was cleared between Feb 6 and Feb 14. Click here to read… [23]

Afghan-like retreat debacle looms in Pacific islands

You think America’s tail-between-its-legs departure from Afghanistan was bad? Something even worse is coming in the Pacific, albeit more quietly. US defenses in the Asia-Pacific center on a defense line running from Japan to Philippines to Taiwan and on to Borneo. The so-called First Island Chain. Try defending against China along the first island chain without a secure rear area in the Central Pacific. And suppose it’s the Chinese in the rear. American control of the Central Pacific depends on treaties – known as Compacts of Free Association (COFA) – with three nations: Palau, Federated States of Micronesia and Republic of the Marshall Islands. These nations and their huge maritime territory comprise most of an east-west corridor from Hawaii to the western edge of the Pacific which is essential for US control and military operations in the region. The COFAs give the United States the legal authority to operate freely and to keep other nations’ militaries out. In other words, military access and control. As part of the agreements, the three nations receive American financial and other support including their citizens’ right to reside and work in America. And one should never forget that COFA state citizens serve in the US military at higher per-capita rates than residents of almost all US states. Click here to read… [24]

US Air Force urgently ‘reoptimizing’ to compete with China

The US Department of the Air Force (DAF) plans a sweeping reorganization of the Air Force and Space Force for “great power competition” with China, a “reoptimizing” drive of at least 24 organizational changes to be implemented over the next year, senior US officials said. The service’s budget request for fiscal years 2024 and 2025 does not include any funds for the re-optimization and budget reprogramming authorities will allocate funds as required, US Air Force Secretary Frank Kendall was quoted as saying in a Breaking Defense report. The bulk of the reorganization will target the US Air Force, with 15 significant changes ranging from a different approach to nuclear weapons management to new warrant officer programs. Considerable changes will involve how the Air Force deploys its airmen by adjusting how its wings are structured while others will target education and training, with plans to expand the Air Education Training Command and rename it Airman Development Command. Moreover, the Breaking Defense report says that the US Air Force is looking to embark on more large-scale exercises to simulate the conditions of a fight with a peer adversary such as China. Under the reorganization, the US Air Force’s secretariat civilian leadership will set up three new offices: an Integrated Capabilities Office, an Office of Competitive Activities and an Office for Program Analysis and Evaluation. Click here to read… [25]

Myanmar's military government activates conscription law

Myanmar’s military government on Feb 10 activated for the first time a decade-old conscription law that makes young men and women subject to at least two years of military service if called up, effective immediately. The announcement of the measure on state television amounts to a major, though tacit, admission that the army is struggling to contain the nationwide armed resistance against its rule. Under the 2010 People’s Military Service Law, passed under a previous military government, men aged 18 to 45 and women 18 to 35 can be drafted into the armed forces for two years, extendable to five years during national emergencies. The upper age of people in the population at large subject to conscription is 35 for men and 27 for women, and the higher age ranges apply to men and women in certain professional categories, such as medical doctors and engineers, and their service term is three years. The current ruling military council, called the State Administration Council, came to power in 2021 after ousting the elected civilian government of Aung San Suu Kyi. The law has been activated in the wake of the army’s biggest setbacks since the countrywide conflict erupted after the takeover. A surprise offensive launched last October by an alliance of armed ethnic organization in less than three months captured a large swathe of territory in northeastern Myanmar along the Chinese border. Click here to read… [26]

Kim Jong Un's sister seen shaking up Japan-U.S.-South Korea ties

A rare overture for a summit with Japan by the sister of the North Korean leader is widely seen as an attempt to drive a wedge into the three-way alliance among Japan, the U.S. and South Korea. Kim Yo Jong's statement, issued by state media on Feb 15, urges Japan to drop "the already settled abduction issue" so that Japanese Prime Minister Fumio Kishida can visit North Korea, referring to the past abductions of Japanese nationals by Pyongyang agents. Japan has said it cannot accept such a condition. Kim Jong Un's sister is a senior official in the ruling Workers' Party of Korea in charge of operations regarding the South. She issued a statement criticizing South Korea in January, but it is unusual for her to get involved in diplomatic efforts involving Japan. While clarifying that it was just her "personal view," Kim Yo Jong said in the Feb 15 statement that if Japan "does not lay such a stumbling block ... the day of the prime minister's Pyongyang visit might come." The statement also cautioned that North Korea's leadership "still has no idea of repairing the DPRK-Japan relations and has no interest in contact," using North Korea's official name, the Democratic People's Republic of Korea. Japan has taken note of Kim Yo Jong's remarks, Chief Cabinet Secretary Yoshimasa Hayashi told a news conference Feb 16. Click here to read… [27]

South Korea forms diplomatic ties with Cuba, Pyongyang's old friend

South Korea has established diplomatic relations with Cuba, one of North Korea's Cold War-era allies, the South Korean Foreign Ministry said on Feb 14. With their United Nations representatives exchanging letters in New York, the two countries have agreed to open diplomatic relations at the ambassadorial level, the ministry said in a statement. Cuba continues to maintain close relations with North Korea, which were established in 1960, with their shared socialist ideology and their hostility toward the United States helping to bind them together. Cuba maintains an embassy in Pyongyang. North Korean leader Kim Jong Un has called late Cuban leader Fidel Castro a "comrade-in-arms," according to North Korean state media. North Korea observed three days of official mourning in 2016 when Castro died at age 90. The new diplomatic ties between Seoul and Havana mark an "important turnaround" for South Korea in its efforts to strengthen its diplomacy in the Latin American region, the Foreign Ministry said in its statement. Click here to read… [28]

Pakistan vote elevates Belt and Road critic in key port of Gwadar

Pakistan's elections have cemented the rise of a local rights activist in the southwestern port of Gwadar, potentially affecting China's Belt and Road Initiative projects in the area. In the Gwadar constituency of the Balochistan provincial assembly, voters elected Maulana Hidayat ur Rehman, leader of the Gwadar Rights Movement. The organization contends that the needs and grievances of the local population have been ignored by Islamabad, and that the benefits of the Belt and Road have not trickled down. Gwadar's port is considered the heart of the China-Pakistan Economic Corridor (CPEC), the $50 billion Pakistani component of the Belt and Road. At times, Rehman has been a thorn in the side of both Islamabad and Beijing, and analysts say his new position in public office could alter the dynamics. Nasir Sohrabi, president of the Rural Community Development Council of Gwadar, believes there is a perception in Gwadar that local voices are not taken into account when making decisions about the CPEC. "[Rehman] will aim to make CPEC projects in Gwadar people-centric, and his stance will matter," he told Nikkei Asia. This follows tumultuous elections that were marred by violence as well as allegations of manipulation, which the election commission denies. Click here to read… [29]

Chinese village construction in disputed zone outpaces China-Bhutan border talks

In a remote village in the Himalayas, inside a border zone that has long been disputed by China and Bhutan, 18 new Chinese residents stood waiting to enter their newly built homes. Each carried a freshly framed portrait of China’s President Xi Jinping – large enough to leave only their heads and lower legs exposed – while behind them a bright red banner welcomed them in Chinese and Tibetan script. It was December 28 and they were the first batch of people – made up of 38 households from the Tibetan city of Shigatse – to move in to the newly expanded Tamalung village, the Tibet Federation of Industry and Commerce said on WeChat. The village is one of at least three built by China inside the disputed zone. Local governments in the Tibet autonomous region led a rapid expansion of border villages last year, with Tamalung doubling in size in the latter half of 2023. Satellite imagery – taken by US-based Maxar Technologies seven days before the residents moved in – shows 147 new houses. Local media reports said the village expansion was designed to accommodate 235 households, in addition to the 200 people who were living there in just 70 homes at the end of 2022. The villages were part of China’s state-led poverty alleviation scheme to provide better living conditions but they doubled as “citadels” to strengthen national security, officials have said. Click here to read… [30]

China and ‘good friend’ Hungary shore up policing and security ties

China and Hungary have pledged to deepen collaboration and cooperation in policing and security, signing a series of agreements on improving cooperation in the areas. In a meeting with Hungarian Prime Minister Viktor Orban in Budapest on Feb 16, Chinese Public Security Minister Wang Xiaohong said the two countries should also “deepen mutual political trust … and strengthen communication and collaboration in international and regional affairs”. According to a Chinese statement on Feb 18, Wang told Orban that Hungary was “a good friend and companion who has stood the test of time”. “It is hoped that the two sides will deepen cooperation in areas such as counter-terrorism, combating transnational crime, the security of Belt and Road [Initiative projects] and law enforcement capacity-building, and turn law enforcement and security cooperation into a new highlight of bilateral relations,” Wang said while in the Hungarian capital for a bilateral law enforcement conference. The Budapest Times quoted Bertalan Havasi, the prime minister’s press chief, as saying Orban told Wang that ties between Hungary and China were based on respect, “an otherwise dwindling commodity in international diplomacy”. The two sides also stressed the importance of security and stability as a basis for the development of economic and trade ties, Havasi said. Click here to read… [31]

Pakistan Closer to a Sharif Government After PM Consensus

Pakistan moved a step closer to getting a new government after Shehbaz Sharif was named as the country’s next prime minister candidate, a breakthrough after no political party achieved an outright majority but one that could lead to a weak and unstable administration. Nawaz Sharif, who heads the Pakistan Muslim League-N party, nominated his younger sibling Shehbaz on Feb 13 for the post after his main rival Bilawal Bhutto Zardari dropped out of the race for the top job, party spokeswoman Marriyum Aurangzeb said in an X post. Bhutto Zardari said earlier in the day his party would support Sharif’s candidate and the new government, but it will not join the cabinet. “Revolutionary steps are needed to take Pakistan out of the economic crisis and they can’t be possible without mutual understanding and consensus,” said Shehbaz Sharif in a press conference earlier today. “I invite everybody to a charter of economy.” Sharif’s first task will be to lead negotiations with the International Monetary Fund for a new loan program. Sharif said the nation will need to secure a program quickly, indicating the new administration will have to hurry to tackle the country’s economic crisis. Pakistan’s current $3 billion IMF program is set to end in April, and the nation faces $25 billion of external debt payments in the fiscal year starting July, about three times its foreign-exchange reserves. Click here to read… [32]

Health

Tuberculosis Rebounds in England, Threatens Eradication Push

Tuberculosis cases in England jumped 11% last year, rebounding to a level higher than before the Covid-19 pandemic. The new figures, based on provisional data from the UK Health Security Agency, adds to evidence that the World Health Organization’s goal to eradicate the disease in the coming decades may prove elusive. “We need collective action to tackle TB and we are working with partners across the health system to understand how we can best refocus efforts to stamp out this preventable and treatable infection,” Esther Robinson, head of the TB unit at the health agency, said in a statement Feb 15. TB is caused by a bacteria that usually affects the lungs and ranks as the top infectious-disease killer worldwide. The latest data from Europe indicates that deaths from TB are increasing. The Health Security Agency noted a shift in the patients’ demographics. Where previously the proportion of TB diagnoses steadily rose in people born outside the UK, in 2023 the increase also affected people born in Britain. The largest gains were seen in urban centers such as London. Click here to read… [33]